Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

Filing Tax Amendments

Free State Tax OnlineH&rblockIrs Extention FormsWhat Can I Write Off On My Taxes As A Student1040ez Income Tax FormAmending Your TaxesForm 1040x 20132011 Tax Forms And Instructions 1040How Do I File My 2012 Taxes For Free2010 1040 Tax FormIrs Form 1040ez 2011File 2012 Taxes For Free OnlineIrs Gov Form 1040x1040ez Filing InstructionsE File Back TaxesHow Do I File 2010 Taxes2010 Tax File Free1040ez 2011 Form PdfFederal Income Tax Instructions 1040ezTurbotax Login IntuitFile 1040 Ez Online FreeFree Tax PrepI Need A 1040x FormFree Federal And State Tax Filing 2012How To File Your State TaxesH And R Block Free StateH&rblock Com2005 TaxesIrs 1040 FormAmending 2012 Federal Tax ReturnH&r Block 1040ezHow To File For Self Employment On Taxes2010 Form 1040I Need To Amend My 2009 Tax ReturnSoftware To File 1040nrState Tax Forms 2013Free State Tax Filing OnlineFile Taxes If UnemployedNeed To Amend Tax ReturnIrs Amended Tax Form

Filing Tax Amendments

Filing tax amendments 1. Filing tax amendments   Overview of Depreciation Table of Contents Introduction Useful Items - You may want to see: What Property Can Be Depreciated?Property You Own Property Used in Your Business or Income-Producing Activity Property Having a Determinable Useful Life Property Lasting More Than One Year What Property Cannot Be Depreciated?Land Excepted Property When Does Depreciation Begin and End?Placed in Service Idle Property Cost or Other Basis Fully Recovered Retired From Service What Method Can You Use To Depreciate Your Property?Property You Placed in Service Before 1987 Property Owned or Used in 1986 Intangible Property Corporate or Partnership Property Acquired in a Nontaxable Transfer Election To Exclude Property From MACRS What Is the Basis of Your Depreciable Property?Cost as Basis Other Basis Adjusted Basis How Do You Treat Repairs and Improvements? Do You Have To File Form 4562? How Do You Correct Depreciation Deductions?Filing an Amended Return Changing Your Accounting Method Introduction Depreciation is an annual income tax deduction that allows you to recover the cost or other basis of certain property over the time you use the property. Filing tax amendments It is an allowance for the wear and tear, deterioration, or obsolescence of the property. Filing tax amendments This chapter discusses the general rules for depreciating property and answers the following questions. Filing tax amendments What property can be depreciated? What property cannot be depreciated? When does depreciation begin and end? What method can you use to depreciate your property? What is the basis of your depreciable property? How do you treat repairs and improvements? Do you have to file Form 4562? How do you correct depreciation deductions? Useful Items - You may want to see: Publication 534 Depreciating Property Placed in Service Before 1987 535 Business Expenses 538 Accounting Periods and Methods 551 Basis of Assets Form (and Instructions) Sch C (Form 1040) Profit or Loss From Business Sch C-EZ (Form 1040) Net Profit From Business 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses 3115 Application for Change in Accounting Method 4562 Depreciation and Amortization See chapter 6 for information about getting publications and forms. Filing tax amendments What Property Can Be Depreciated? You can depreciate most types of tangible property (except land), such as buildings, machinery, vehicles, furniture, and equipment. Filing tax amendments You also can depreciate certain intangible property, such as patents, copyrights, and computer software. Filing tax amendments To be depreciable, the property must meet all the following requirements. Filing tax amendments It must be property you own. Filing tax amendments It must be used in your business or income-producing activity. Filing tax amendments It must have a determinable useful life. Filing tax amendments It must be expected to last more than one year. Filing tax amendments The following discussions provide information about these requirements. Filing tax amendments Property You Own To claim depreciation, you usually must be the owner of the property. Filing tax amendments You are considered as owning property even if it is subject to a debt. Filing tax amendments Example 1. Filing tax amendments You made a down payment to purchase rental property and assumed the previous owner's mortgage. Filing tax amendments You own the property and you can depreciate it. Filing tax amendments Example 2. Filing tax amendments You bought a new van that you will use only for your courier business. Filing tax amendments You will be making payments on the van over the next 5 years. Filing tax amendments You own the van and you can depreciate it. Filing tax amendments Leased property. Filing tax amendments   You can depreciate leased property only if you retain the incidents of ownership in the property (explained below). Filing tax amendments This means you bear the burden of exhaustion of the capital investment in the property. Filing tax amendments Therefore, if you lease property from someone to use in your trade or business or for the production of income, you generally cannot depreciate its cost because you do not retain the incidents of ownership. Filing tax amendments You can, however, depreciate any capital improvements you make to the property. Filing tax amendments See How Do You Treat Repairs and Improvements later in this chapter and Additions and Improvements under Which Recovery Period Applies in chapter 4. Filing tax amendments   If you lease property to someone, you generally can depreciate its cost even if the lessee (the person leasing from you) has agreed to preserve, replace, renew, and maintain the property. Filing tax amendments However, if the lease provides that the lessee is to maintain the property and return to you the same property or its equivalent in value at the expiration of the lease in as good condition and value as when leased, you cannot depreciate the cost of the property. Filing tax amendments Incidents of ownership. Filing tax amendments   Incidents of ownership in property include the following. Filing tax amendments The legal title to the property. Filing tax amendments The legal obligation to pay for the property. Filing tax amendments The responsibility to pay maintenance and operating expenses. Filing tax amendments The duty to pay any taxes on the property. Filing tax amendments The risk of loss if the property is destroyed, condemned, or diminished in value through obsolescence or exhaustion. Filing tax amendments Life tenant. Filing tax amendments   Generally, if you hold business or investment property as a life tenant, you can depreciate it as if you were the absolute owner of the property. Filing tax amendments However, see Certain term interests in property under Excepted Property, later. Filing tax amendments Cooperative apartments. Filing tax amendments   If you are a tenant-stockholder in a cooperative housing corporation and use your cooperative apartment in your business or for the production of income, you can depreciate your stock in the corporation, even though the corporation owns the apartment. Filing tax amendments   Figure your depreciation deduction as follows. Filing tax amendments Figure the depreciation for all the depreciable real property owned by the corporation in which you have a proprietary lease or right of tenancy. Filing tax amendments If you bought your cooperative stock after its first offering, figure the depreciable basis of this property as follows. Filing tax amendments Multiply your cost per share by the total number of outstanding shares, including any shares held by the corporation. Filing tax amendments Add to the amount figured in (a) any mortgage debt on the property on the date you bought the stock. Filing tax amendments Subtract from the amount figured in (b) any mortgage debt that is not for the depreciable real property, such as the part for the land. Filing tax amendments Subtract from the amount figured in (1) any depreciation for space owned by the corporation that can be rented but cannot be lived in by tenant-stockholders. Filing tax amendments Divide the number of your shares of stock by the total number of outstanding shares, including any shares held by the corporation. Filing tax amendments Multiply the result of (2) by the percentage you figured in (3). Filing tax amendments This is your depreciation on the stock. Filing tax amendments   Your depreciation deduction for the year cannot be more than the part of your adjusted basis in the stock of the corporation that is allocable to your business or income-producing property. Filing tax amendments You must also reduce your depreciation deduction if only a portion of the property is used in a business or for the production of income. Filing tax amendments Example. Filing tax amendments You figure your share of the cooperative housing corporation's depreciation to be $30,000. Filing tax amendments Your adjusted basis in the stock of the corporation is $50,000. Filing tax amendments You use one half of your apartment solely for business purposes. Filing tax amendments Your depreciation deduction for the stock for the year cannot be more than $25,000 (½ of $50,000). Filing tax amendments Change to business use. Filing tax amendments   If you change your cooperative apartment to business use, figure your allowable depreciation as explained earlier. Filing tax amendments The basis of all the depreciable real property owned by the cooperative housing corporation is the smaller of the following amounts. Filing tax amendments The fair market value of the property on the date you change your apartment to business use. Filing tax amendments This is considered to be the same as the corporation's adjusted basis minus straight line depreciation, unless this value is unrealistic. Filing tax amendments The corporation's adjusted basis in the property on that date. Filing tax amendments Do not subtract depreciation when figuring the corporation's adjusted basis. Filing tax amendments   If you bought the stock after its first offering, the corporation's adjusted basis in the property is the amount figured in (1), above. Filing tax amendments The fair market value of the property is considered to be the same as the corporation's adjusted basis figured in this way minus straight line depreciation, unless the value is unrealistic. Filing tax amendments   For a discussion of fair market value and adjusted basis, see Publication 551. Filing tax amendments Property Used in Your Business or Income-Producing Activity To claim depreciation on property, you must use it in your business or income-producing activity. Filing tax amendments If you use property to produce income (investment use), the income must be taxable. Filing tax amendments You cannot depreciate property that you use solely for personal activities. Filing tax amendments Partial business or investment use. Filing tax amendments   If you use property for business or investment purposes and for personal purposes, you can deduct depreciation based only on the business or investment use. Filing tax amendments For example, you cannot deduct depreciation on a car used only for commuting, personal shopping trips, family vacations, driving children to and from school, or similar activities. Filing tax amendments    You must keep records showing the business, investment, and personal use of your property. Filing tax amendments For more information on the records you must keep for listed property, such as a car, see What Records Must Be Kept in chapter 5. Filing tax amendments    Although you can combine business and investment use of property when figuring depreciation deductions, do not treat investment use as qualified business use when determining whether the business-use requirement for listed property is met. Filing tax amendments For information about qualified business use of listed property, see What Is the Business-Use Requirement in chapter 5. Filing tax amendments Office in the home. Filing tax amendments   If you use part of your home as an office, you may be able to deduct depreciation on that part based on its business use. Filing tax amendments For information about depreciating your home office, see Publication 587. Filing tax amendments Inventory. Filing tax amendments   You cannot depreciate inventory because it is not held for use in your business. Filing tax amendments Inventory is any property you hold primarily for sale to customers in the ordinary course of your business. Filing tax amendments   If you are a rent-to-own dealer, you may be able to treat certain property held in your business as depreciable property rather than as inventory. Filing tax amendments See Rent-to-own dealer under Which Property Class Applies Under GDS in chapter 4. Filing tax amendments   In some cases, it is not clear whether property is held for sale (inventory) or for use in your business. Filing tax amendments If it is unclear, examine carefully all the facts in the operation of the particular business. Filing tax amendments The following example shows how a careful examination of the facts in two similar situations results in different conclusions. Filing tax amendments Example. Filing tax amendments Maple Corporation is in the business of leasing cars. Filing tax amendments At the end of their useful lives, when the cars are no longer profitable to lease, Maple sells them. Filing tax amendments Maple does not have a showroom, used car lot, or individuals to sell the cars. Filing tax amendments Instead, it sells them through wholesalers or by similar arrangements in which a dealer's profit is not intended or considered. Filing tax amendments Maple can depreciate the leased cars because the cars are not held primarily for sale to customers in the ordinary course of business, but are leased. Filing tax amendments If Maple buys cars at wholesale prices, leases them for a short time, and then sells them at retail prices or in sales in which a dealer's profit is intended, the cars are treated as inventory and are not depreciable property. Filing tax amendments In this situation, the cars are held primarily for sale to customers in the ordinary course of business. Filing tax amendments Containers. Filing tax amendments   Generally, containers for the products you sell are part of inventory and you cannot depreciate them. Filing tax amendments However, you can depreciate containers used to ship your products if they have a life longer than one year and meet the following requirements. Filing tax amendments They qualify as property used in your business. Filing tax amendments Title to the containers does not pass to the buyer. Filing tax amendments   To determine if these requirements are met, consider the following questions. Filing tax amendments Does your sales contract, sales invoice, or other type of order acknowledgment indicate whether you have retained title? Does your invoice treat the containers as separate items? Do any of your records state your basis in the containers? Property Having a Determinable Useful Life To be depreciable, your property must have a determinable useful life. Filing tax amendments This means that it must be something that wears out, decays, gets used up, becomes obsolete, or loses its value from natural causes. Filing tax amendments Property Lasting More Than One Year To be depreciable, property must have a useful life that extends substantially beyond the year you place it in service. Filing tax amendments Example. Filing tax amendments You maintain a library for use in your profession. Filing tax amendments You can depreciate it. Filing tax amendments However, if you buy technical books, journals, or information services for use in your business that have a useful life of one year or less, you cannot depreciate them. Filing tax amendments Instead, you deduct their cost as a business expense. Filing tax amendments What Property Cannot Be Depreciated? Certain property cannot be depreciated. Filing tax amendments This includes land and certain excepted property. Filing tax amendments Land You cannot depreciate the cost of land because land does not wear out, become obsolete, or get used up. Filing tax amendments The cost of land generally includes the cost of clearing, grading, planting, and landscaping. Filing tax amendments Although you cannot depreciate land, you can depreciate certain land preparation costs, such as landscaping costs, incurred in preparing land for business use. Filing tax amendments These costs must be so closely associated with other depreciable property that you can determine a life for them along with the life of the associated property. Filing tax amendments Example. Filing tax amendments You constructed a new building for use in your business and paid for grading, clearing, seeding, and planting bushes and trees. Filing tax amendments Some of the bushes and trees were planted right next to the building, while others were planted around the outer border of the lot. Filing tax amendments If you replace the building, you would have to destroy the bushes and trees right next to it. Filing tax amendments These bushes and trees are closely associated with the building, so they have a determinable useful life. Filing tax amendments Therefore, you can depreciate them. Filing tax amendments Add your other land preparation costs to the basis of your land because they have no determinable life and you cannot depreciate them. Filing tax amendments Excepted Property Even if the requirements explained in the preceding discussions are met, you cannot depreciate the following property. Filing tax amendments Property placed in service and disposed of in the same year. Filing tax amendments Determining when property is placed in service is explained later. Filing tax amendments Equipment used to build capital improvements. Filing tax amendments You must add otherwise allowable depreciation on the equipment during the period of construction to the basis of your improvements. Filing tax amendments See Uniform Capitalization Rules in Publication 551. Filing tax amendments Section 197 intangibles. Filing tax amendments You must amortize these costs. Filing tax amendments Section 197 intangibles are discussed in detail in Chapter 8 of Publication 535. Filing tax amendments Intangible property, such as certain computer software, that is not section 197 intangible property, can be depreciated if it meets certain requirements. Filing tax amendments See Intangible Property , later. Filing tax amendments Certain term interests. Filing tax amendments Certain term interests in property. Filing tax amendments   You cannot depreciate a term interest in property created or acquired after July 27, 1989, for any period during which the remainder interest is held, directly or indirectly, by a person related to you. Filing tax amendments A term interest in property means a life interest in property, an interest in property for a term of years, or an income interest in a trust. Filing tax amendments Related persons. Filing tax amendments   For a description of related persons, see Related Persons, later. Filing tax amendments For this purpose, however, treat as related persons only the relationships listed in items (1) through (10) of that discussion and substitute “50%” for “10%” each place it appears. Filing tax amendments Basis adjustments. Filing tax amendments   If you would be allowed a depreciation deduction for a term interest in property except that the holder of the remainder interest is related to you, you generally must reduce your basis in the term interest by any depreciation or amortization not allowed. Filing tax amendments   If you hold the remainder interest, you generally must increase your basis in that interest by the depreciation not allowed to the term interest holder. Filing tax amendments However, do not increase your basis for depreciation not allowed for periods during which either of the following situations applies. Filing tax amendments The term interest is held by an organization exempt from tax. Filing tax amendments The term interest is held by a nonresident alien individual or foreign corporation, and the income from the term interest is not effectively connected with the conduct of a trade or business in the United States. Filing tax amendments Exceptions. Filing tax amendments   The above rules do not apply to the holder of a term interest in property acquired by gift, bequest, or inheritance. Filing tax amendments They also do not apply to the holder of dividend rights that were separated from any stripped preferred stock if the rights were purchased after April 30, 1993, or to a person whose basis in the stock is determined by reference to the basis in the hands of the purchaser. Filing tax amendments When Does Depreciation Begin and End? You begin to depreciate your property when you place it in service for use in your trade or business or for the production of income. Filing tax amendments You stop depreciating property either when you have fully recovered your cost or other basis or when you retire it from service, whichever happens first. Filing tax amendments Placed in Service You place property in service when it is ready and available for a specific use, whether in a business activity, an income-producing activity, a tax-exempt activity, or a personal activity. Filing tax amendments Even if you are not using the property, it is in service when it is ready and available for its specific use. Filing tax amendments Example 1. Filing tax amendments Donald Steep bought a machine for his business. Filing tax amendments The machine was delivered last year. Filing tax amendments However, it was not installed and operational until this year. Filing tax amendments It is considered placed in service this year. Filing tax amendments If the machine had been ready and available for use when it was delivered, it would be considered placed in service last year even if it was not actually used until this year. Filing tax amendments Example 2. Filing tax amendments On April 6, Sue Thorn bought a house to use as residential rental property. Filing tax amendments She made several repairs and had it ready for rent on July 5. Filing tax amendments At that time, she began to advertise it for rent in the local newspaper. Filing tax amendments The house is considered placed in service in July when it was ready and available for rent. Filing tax amendments She can begin to depreciate it in July. Filing tax amendments Example 3. Filing tax amendments James Elm is a building contractor who specializes in constructing office buildings. Filing tax amendments He bought a truck last year that had to be modified to lift materials to second-story levels. Filing tax amendments The installation of the lifting equipment was completed and James accepted delivery of the modified truck on January 10 of this year. Filing tax amendments The truck was placed in service on January 10, the date it was ready and available to perform the function for which it was bought. Filing tax amendments Conversion to business use. Filing tax amendments   If you place property in service in a personal activity, you cannot claim depreciation. Filing tax amendments However, if you change the property's use to use in a business or income-producing activity, then you can begin to depreciate it at the time of the change. Filing tax amendments You place the property in service in the business or income-producing activity on the date of the change. Filing tax amendments Example. Filing tax amendments You bought a home and used it as your personal home several years before you converted it to rental property. Filing tax amendments Although its specific use was personal and no depreciation was allowable, you placed the home in service when you began using it as your home. Filing tax amendments You can begin to claim depreciation in the year you converted it to rental property because its use changed to an income-producing use at that time. Filing tax amendments Idle Property Continue to claim a deduction for depreciation on property used in your business or for the production of income even if it is temporarily idle (not in use). Filing tax amendments For example, if you stop using a machine because there is a temporary lack of a market for a product made with that machine, continue to deduct depreciation on the machine. Filing tax amendments Cost or Other Basis Fully Recovered You stop depreciating property when you have fully recovered your cost or other basis. Filing tax amendments You recover your basis when your section 179 and allowed or allowable depreciation deductions equal your cost or investment in the property. Filing tax amendments See What Is the Basis of Your Depreciable Property , later. Filing tax amendments Retired From Service You stop depreciating property when you retire it from service, even if you have not fully recovered its cost or other basis. Filing tax amendments You retire property from service when you permanently withdraw it from use in a trade or business or from use in the production of income because of any of the following events. Filing tax amendments You sell or exchange the property. Filing tax amendments You convert the property to personal use. Filing tax amendments You abandon the property. Filing tax amendments You transfer the property to a supplies or scrap account. Filing tax amendments The property is destroyed. Filing tax amendments If you included the property in a general asset account, see How Do You Use General Asset Accounts in chapter 4 for the rules that apply when you dispose of that property. Filing tax amendments What Method Can You Use To Depreciate Your Property? You must use the Modified Accelerated Cost Recovery System (MACRS) to depreciate most property. Filing tax amendments MACRS is discussed in chapter 4. Filing tax amendments You cannot use MACRS to depreciate the following property. Filing tax amendments Property you placed in service before 1987. Filing tax amendments Certain property owned or used in 1986. Filing tax amendments Intangible property. Filing tax amendments Films, video tapes, and recordings. Filing tax amendments Certain corporate or partnership property acquired in a nontaxable transfer. Filing tax amendments Property you elected to exclude from MACRS. Filing tax amendments The following discussions describe the property listed above and explain what depreciation method should be used. Filing tax amendments Property You Placed in Service Before 1987 You cannot use MACRS for property you placed in service before 1987 (except property you placed in service after July 31, 1986, if MACRS was elected). Filing tax amendments Property placed in service before 1987 must be depreciated under the methods discussed in Publication 534. Filing tax amendments For a discussion of when property is placed in service, see When Does Depreciation Begin and End , earlier. Filing tax amendments Use of real property changed. Filing tax amendments   You generally must use MACRS to depreciate real property that you acquired for personal use before 1987 and changed to business or income-producing use after 1986. Filing tax amendments Improvements made after 1986. Filing tax amendments   You must treat an improvement made after 1986 to property you placed in service before 1987 as separate depreciable property. Filing tax amendments Therefore, you can depreciate that improvement as separate property under MACRS if it is the type of property that otherwise qualifies for MACRS depreciation. Filing tax amendments For more information about improvements, see How Do You Treat Repairs and Improvements , later and Additions and Improvements under Which Recovery Period Applies in chapter 4. Filing tax amendments Property Owned or Used in 1986 You may not be able to use MACRS for property you acquired and placed in service after 1986 if any of the situations described below apply. Filing tax amendments If you cannot use MACRS, the property must be depreciated under the methods discussed in Publication 534. Filing tax amendments For the following discussions, do not treat property as owned before you placed it in service. Filing tax amendments If you owned property in 1986 but did not place it in service until 1987, you do not treat it as owned in 1986. Filing tax amendments Personal property. Filing tax amendments   You cannot use MACRS for personal property (section 1245 property) in any of the following situations. Filing tax amendments You or someone related to you owned or used the property in 1986. Filing tax amendments You acquired the property from a person who owned it in 1986 and as part of the transaction the user of the property did not change. Filing tax amendments You lease the property to a person (or someone related to this person) who owned or used the property in 1986. Filing tax amendments You acquired the property in a transaction in which: The user of the property did not change, and The property was not MACRS property in the hands of the person from whom you acquired it because of (2) or (3) above. Filing tax amendments Real property. Filing tax amendments   You generally cannot use MACRS for real property (section 1250 property) in any of the following situations. Filing tax amendments You or someone related to you owned the property in 1986. Filing tax amendments You lease the property to a person who owned the property in 1986 (or someone related to that person). Filing tax amendments You acquired the property in a like-kind exchange, involuntary conversion, or repossession of property you or someone related to you owned in 1986. Filing tax amendments MACRS applies only to that part of your basis in the acquired property that represents cash paid or unlike property given up. Filing tax amendments It does not apply to the carried-over part of the basis. Filing tax amendments Exceptions. Filing tax amendments   The rules above do not apply to the following. Filing tax amendments Residential rental property or nonresidential real property. Filing tax amendments Any property if, in the first tax year it is placed in service, the deduction under the Accelerated Cost Recovery System (ACRS) is more than the deduction under MACRS using the half-year convention. Filing tax amendments For information on how to figure depreciation under ACRS, see Publication 534. Filing tax amendments Property that was MACRS property in the hands of the person from whom you acquired it because of (2) above. Filing tax amendments Related persons. Filing tax amendments   For this purpose, the following are related persons. Filing tax amendments An individual and a member of his or her family, including only a spouse, child, parent, brother, sister, half-brother, half-sister, ancestor, and lineal descendant. Filing tax amendments A corporation and an individual who directly or indirectly owns more than 10% of the value of the outstanding stock of that corporation. Filing tax amendments Two corporations that are members of the same controlled group. Filing tax amendments A trust fiduciary and a corporation if more than 10% of the value of the outstanding stock is directly or indirectly owned by or for the trust or grantor of the trust. Filing tax amendments The grantor and fiduciary, and the fiduciary and beneficiary, of any trust. Filing tax amendments The fiduciaries of two different trusts, and the fiduciaries and beneficiaries of two different trusts, if the same person is the grantor of both trusts. Filing tax amendments A tax-exempt educational or charitable organization and any person (or, if that person is an individual, a member of that person's family) who directly or indirectly controls the organization. Filing tax amendments Two S corporations, and an S corporation and a regular corporation, if the same persons own more than 10% of the value of the outstanding stock of each corporation. Filing tax amendments A corporation and a partnership if the same persons own both of the following. Filing tax amendments More than 10% of the value of the outstanding stock of the corporation. Filing tax amendments More than 10% of the capital or profits interest in the partnership. Filing tax amendments The executor and beneficiary of any estate. Filing tax amendments A partnership and a person who directly or indirectly owns more than 10% of the capital or profits interest in the partnership. Filing tax amendments Two partnerships, if the same persons directly or indirectly own more than 10% of the capital or profits interest in each. Filing tax amendments The related person and a person who is engaged in trades or businesses under common control. Filing tax amendments See section 52(a) and 52(b) of the Internal Revenue Code. Filing tax amendments When to determine relationship. Filing tax amendments   You must determine whether you are related to another person at the time you acquire the property. Filing tax amendments   A partnership acquiring property from a terminating partnership must determine whether it is related to the terminating partnership immediately before the event causing the termination. Filing tax amendments For this rule, a terminating partnership is one that sells or exchanges, within 12 months, 50% or more of its total interest in partnership capital or profits. Filing tax amendments Constructive ownership of stock or partnership interest. Filing tax amendments   To determine whether a person directly or indirectly owns any of the outstanding stock of a corporation or an interest in a partnership, apply the following rules. Filing tax amendments Stock or a partnership interest directly or indirectly owned by or for a corporation, partnership, estate, or trust is considered owned proportionately by or for its shareholders, partners, or beneficiaries. Filing tax amendments However, for a partnership interest owned by or for a C corporation, this applies only to shareholders who directly or indirectly own 5% or more of the value of the stock of the corporation. Filing tax amendments An individual is considered to own the stock or partnership interest directly or indirectly owned by or for the individual's family. Filing tax amendments An individual who owns, except by applying rule (2), any stock in a corporation is considered to own the stock directly or indirectly owned by or for the individual's partner. Filing tax amendments For purposes of rules (1), (2), or (3), stock or a partnership interest considered to be owned by a person under rule (1) is treated as actually owned by that person. Filing tax amendments However, stock or a partnership interest considered to be owned by an individual under rule (2) or (3) is not treated as owned by that individual for reapplying either rule (2) or (3) to make another person considered to be the owner of the same stock or partnership interest. Filing tax amendments Intangible Property Generally, if you can depreciate intangible property, you usually use the straight line method of depreciation. Filing tax amendments However, you can choose to depreciate certain intangible property under the income forecast method (discussed later). Filing tax amendments You cannot depreciate intangible property that is a section 197 intangible or that otherwise does not meet all the requirements discussed earlier under What Property Can Be Depreciated. Filing tax amendments Straight Line Method This method lets you deduct the same amount of depreciation each year over the useful life of the property. Filing tax amendments To figure your deduction, first determine the adjusted basis, salvage value, and estimated useful life of your property. Filing tax amendments Subtract the salvage value, if any, from the adjusted basis. Filing tax amendments The balance is the total depreciation you can take over the useful life of the property. Filing tax amendments Divide the balance by the number of years in the useful life. Filing tax amendments This gives you your yearly depreciation deduction. Filing tax amendments Unless there is a big change in adjusted basis or useful life, this amount will stay the same throughout the time you depreciate the property. Filing tax amendments If, in the first year, you use the property for less than a full year, you must prorate your depreciation deduction for the number of months in use. Filing tax amendments Example. Filing tax amendments In April, Frank bought a patent for $5,100 that is not a section 197 intangible. Filing tax amendments He depreciates the patent under the straight line method, using a 17-year useful life and no salvage value. Filing tax amendments He divides the $5,100 basis by 17 years to get his $300 yearly depreciation deduction. Filing tax amendments He only used the patent for 9 months during the first year, so he multiplies $300 by 9/12 to get his deduction of $225 for the first year. Filing tax amendments Next year, Frank can deduct $300 for the full year. Filing tax amendments Patents and copyrights. Filing tax amendments   If you can depreciate the cost of a patent or copyright, use the straight line method over the useful life. Filing tax amendments The useful life of a patent or copyright is the lesser of the life granted to it by the government or the remaining life when you acquire it. Filing tax amendments However, if the patent or copyright becomes valueless before the end of its useful life, you can deduct in that year any of its remaining cost or other basis. Filing tax amendments Computer software. Filing tax amendments   Computer software is generally a section 197 intangible and cannot be depreciated if you acquired it in connection with the acquisition of assets constituting a business or a substantial part of a business. Filing tax amendments   However, computer software is not a section 197 intangible and can be depreciated, even if acquired in connection with the acquisition of a business, if it meets all of the following tests. Filing tax amendments It is readily available for purchase by the general public. Filing tax amendments It is subject to a nonexclusive license. Filing tax amendments It has not been substantially modified. Filing tax amendments   If the software meets the tests above, it may also qualify for the section 179 deduction and the special depreciation allowance, discussed later. Filing tax amendments If you can depreciate the cost of computer software, use the straight line method over a useful life of 36 months. Filing tax amendments    Tax-exempt use property subject to a lease. Filing tax amendments   The useful life of computer software leased under a lease agreement entered into after March 12, 2004, to a tax-exempt organization, governmental unit, or foreign person or entity (other than a partnership), cannot be less than 125% of the lease term. Filing tax amendments Certain created intangibles. Filing tax amendments   You can amortize certain intangibles created on or after December 31, 2003, over a 15-year period using the straight line method and no salvage value, even though they have a useful life that cannot be estimated with reasonable accuracy. Filing tax amendments For example, amounts paid to acquire memberships or privileges of indefinite duration, such as a trade association membership, are eligible costs. Filing tax amendments   The following are not eligible. Filing tax amendments Any intangible asset acquired from another person. Filing tax amendments Created financial interests. Filing tax amendments Any intangible asset that has a useful life that can be estimated with reasonable accuracy. Filing tax amendments Any intangible asset that has an amortization period or limited useful life that is specifically prescribed or prohibited by the Code, regulations, or other published IRS guidance. Filing tax amendments Any amount paid to facilitate an acquisition of a trade or business, a change in the capital structure of a business entity, and certain other transactions. Filing tax amendments   You must also increase the 15-year safe harbor amortization period to a 25-year period for certain intangibles related to benefits arising from the provision, production, or improvement of real property. Filing tax amendments For this purpose, real property includes property that will remain attached to the real property for an indefinite period of time, such as roads, bridges, tunnels, pavements, and pollution control facilities. Filing tax amendments Income Forecast Method You can choose to use the income forecast method instead of the straight line method to depreciate the following depreciable intangibles. Filing tax amendments Motion picture films or video tapes. Filing tax amendments Sound recordings. Filing tax amendments Copyrights. Filing tax amendments Books. Filing tax amendments Patents. Filing tax amendments Under the income forecast method, each year's depreciation deduction is equal to the cost of the property, multiplied by a fraction. Filing tax amendments The numerator of the fraction is the current year's net income from the property, and the denominator is the total income anticipated from the property through the end of the 10th taxable year following the taxable year the property is placed in service. Filing tax amendments For more information, see section 167(g) of the Internal Revenue Code. Filing tax amendments Films, video tapes, and recordings. Filing tax amendments   You cannot use MACRS for motion picture films, video tapes, and sound recordings. Filing tax amendments For this purpose, sound recordings are discs, tapes, or other phonorecordings resulting from the fixation of a series of sounds. Filing tax amendments You can depreciate this property using either the straight line method or the income forecast method. Filing tax amendments Participations and residuals. Filing tax amendments   You can include participations and residuals in the adjusted basis of the property for purposes of computing your depreciation deduction under the income forecast method. Filing tax amendments The participations and residuals must relate to income to be derived from the property before the end of the 10th taxable year after the property is placed in service. Filing tax amendments For this purpose, participations and residuals are defined as costs which by contract vary with the amount of income earned in connection with the property. Filing tax amendments   Instead of including these amounts in the adjusted basis of the property, you can deduct the costs in the taxable year that they are paid. Filing tax amendments Videocassettes. Filing tax amendments   If you are in the business of renting videocassettes, you can depreciate only those videocassettes bought for rental. Filing tax amendments If the videocassette has a useful life of one year or less, you can currently deduct the cost as a business expense. Filing tax amendments Corporate or Partnership Property Acquired in a Nontaxable Transfer MACRS does not apply to property used before 1987 and transferred after 1986 to a corporation or partnership (except property the transferor placed in service after July 31, 1986, if MACRS was elected) to the extent its basis is carried over from the property's adjusted basis in the transferor's hands. Filing tax amendments You must continue to use the same depreciation method as the transferor and figure depreciation as if the transfer had not occurred. Filing tax amendments However, if MACRS would otherwise apply, you can use it to depreciate the part of the property's basis that exceeds the carried-over basis. Filing tax amendments The nontaxable transfers covered by this rule include the following. Filing tax amendments A distribution in complete liquidation of a subsidiary. Filing tax amendments A transfer to a corporation controlled by the transferor. Filing tax amendments An exchange of property solely for corporate stock or securities in a reorganization. Filing tax amendments A contribution of property to a partnership in exchange for a partnership interest. Filing tax amendments A partnership distribution of property to a partner. Filing tax amendments Election To Exclude Property From MACRS If you can properly depreciate any property under a method not based on a term of years, such as the unit-of-production method, you can elect to exclude that property from MACRS. Filing tax amendments You make the election by reporting your depreciation for the property on line 15 in Part II of Form 4562 and attaching a statement as described in the instructions for Form 4562. Filing tax amendments You must make this election by the return due date (including extensions) for the tax year you place your property in service. Filing tax amendments However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within six months of the due date of the return (excluding extensions). Filing tax amendments Attach the election to the amended return and write “Filed pursuant to section 301. Filing tax amendments 9100-2” on the election statement. Filing tax amendments File the amended return at the same address you filed the original return. Filing tax amendments Use of standard mileage rate. Filing tax amendments   If you use the standard mileage rate to figure your tax deduction for your business automobile, you are treated as having made an election to exclude the automobile from MACRS. Filing tax amendments See Publication 463 for a discussion of the standard mileage rate. Filing tax amendments What Is the Basis of Your Depreciable Property? To figure your depreciation deduction, you must determine the basis of your property. Filing tax amendments To determine basis, you need to know the cost or other basis of your property. Filing tax amendments Cost as Basis The basis of property you buy is its cost plus amounts you paid for items such as sales tax (see Exception , below), freight charges, and installation and testing fees. Filing tax amendments The cost includes the amount you pay in cash, debt obligations, other property, or services. Filing tax amendments Exception. Filing tax amendments   You can elect to deduct state and local general sales taxes instead of state and local income taxes as an itemized deduction on Schedule A (Form 1040). Filing tax amendments If you make that choice, you cannot include those sales taxes as part of your cost basis. Filing tax amendments Assumed debt. Filing tax amendments   If you buy property and assume (or buy subject to) an existing mortgage or other debt on the property, your basis includes the amount you pay for the property plus the amount of the assumed debt. Filing tax amendments Example. Filing tax amendments You make a $20,000 down payment on property and assume the seller's mortgage of $120,000. Filing tax amendments Your total cost is $140,000, the cash you paid plus the mortgage you assumed. Filing tax amendments Settlement costs. Filing tax amendments   The basis of real property also includes certain fees and charges you pay in addition to the purchase price. Filing tax amendments These generally are shown on your settlement statement and include the following. Filing tax amendments Legal and recording fees. Filing tax amendments Abstract fees. Filing tax amendments Survey charges. Filing tax amendments Owner's title insurance. Filing tax amendments Amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions. Filing tax amendments   For fees and charges you cannot include in the basis of property, see Real Property in Publication 551. Filing tax amendments Property you construct or build. Filing tax amendments   If you construct, build, or otherwise produce property for use in your business, you may have to use the uniform capitalization rules to determine the basis of your property. Filing tax amendments For information about the uniform capitalization rules, see Publication 551 and the regulations under section 263A of the Internal Revenue Code. Filing tax amendments Other Basis Other basis usually refers to basis that is determined by the way you received the property. Filing tax amendments For example, your basis is other than cost if you acquired the property in exchange for other property, as payment for services you performed, as a gift, or as an inheritance. Filing tax amendments If you acquired property in this or some other way, see Publication 551 to determine your basis. Filing tax amendments Property changed from personal use. Filing tax amendments   If you held property for personal use and later use it in your business or income-producing activity, your depreciable basis is the lesser of the following. Filing tax amendments The fair market value (FMV) of the property on the date of the change in use. Filing tax amendments Your original cost or other basis adjusted as follows. Filing tax amendments Increased by the cost of any permanent improvements or additions and other costs that must be added to basis. Filing tax amendments Decreased by any deductions you claimed for casualty and theft losses and other items that reduced your basis. Filing tax amendments Example. Filing tax amendments Several years ago, Nia paid $160,000 to have her home built on a lot that cost her $25,000. Filing tax amendments Before changing the property to rental use last year, she paid $20,000 for permanent improvements to the house and claimed a $2,000 casualty loss deduction for damage to the house. Filing tax amendments Land is not depreciable, so she includes only the cost of the house when figuring the basis for depreciation. Filing tax amendments Nia's adjusted basis in the house when she changed its use was $178,000 ($160,000 + $20,000 − $2,000). Filing tax amendments On the same date, her property had an FMV of $180,000, of which $15,000 was for the land and $165,000 was for the house. Filing tax amendments The basis for depreciation on the house is the FMV on the date of change ($165,000), because it is less than her adjusted basis ($178,000). Filing tax amendments Property acquired in a nontaxable transaction. Filing tax amendments   Generally, if you receive property in a nontaxable exchange, the basis of the property you receive is the same as the adjusted basis of the property you gave up. Filing tax amendments Special rules apply in determining the basis and figuring the MACRS depreciation deduction and special depreciation allowance for property acquired in a like-kind exchange or involuntary conversion. Filing tax amendments See Like-kind exchanges and involuntary conversions. Filing tax amendments under How Much Can You Deduct? in chapter 3 and Figuring the Deduction for Property Acquired in a Nontaxable Exchange in chapter 4. Filing tax amendments   There are also special rules for determining the basis of MACRS property involved in a like-kind exchange or involuntary conversion when the property is contained in a general asset account. Filing tax amendments See How Do You Use General Asset Accounts in chapter 4. Filing tax amendments Adjusted Basis To find your property's basis for depreciation, you may have to make certain adjustments (increases and decreases) to the basis of the property for events occurring between the time you acquired the property and the time you placed it in service. Filing tax amendments These events could include the following. Filing tax amendments Installing utility lines. Filing tax amendments Paying legal fees for perfecting the title. Filing tax amendments Settling zoning issues. Filing tax amendments Receiving rebates. Filing tax amendments Incurring a casualty or theft loss. Filing tax amendments For a discussion of adjustments to the basis of your property, see Adjusted Basis in Publication 551. Filing tax amendments If you depreciate your property under MACRS, you also may have to reduce your basis by certain deductions and credits with respect to the property. Filing tax amendments For more information, see What Is the Basis for Depreciation in chapter 4. Filing tax amendments . Filing tax amendments Basis adjustment for depreciation allowed or allowable. Filing tax amendments   You must reduce the basis of property by the depreciation allowed or allowable, whichever is greater. Filing tax amendments Depreciation allowed is depreciation you actually deducted (from which you received a tax benefit). Filing tax amendments Depreciation allowable is depreciation you are entitled to deduct. Filing tax amendments   If you do not claim depreciation you are entitled to deduct, you must still reduce the basis of the property by the full amount of depreciation allowable. Filing tax amendments   If you deduct more depreciation than you should, you must reduce your basis by any amount deducted from which you received a tax benefit (the depreciation allowed). Filing tax amendments How Do You Treat Repairs and Improvements? If you improve depreciable property, you must treat the improvement as separate depreciable property. Filing tax amendments Improvement means an addition to or partial replacement of property that adds to its value, appreciably lengthens the time you can use it, or adapts it to a different use. Filing tax amendments You generally deduct the cost of repairing business property in the same way as any other business expense. Filing tax amendments However, if a repair or replacement increases the value of your property, makes it more useful, or lengthens its life, you must treat it as an improvement and depreciate it. Filing tax amendments Example. Filing tax amendments You repair a small section on one corner of the roof of a rental house. Filing tax amendments You deduct the cost of the repair as a rental expense. Filing tax amendments However, if you completely replace the roof, the new roof is an improvement because it increases the value and lengthens the life of the property. Filing tax amendments You depreciate the cost of the new roof. Filing tax amendments Improvements to rented property. Filing tax amendments   You can depreciate permanent improvements you make to business property you rent from someone else. Filing tax amendments Do You Have To File Form 4562? Use Form 4562 to figure your deduction for depreciation and amortization. Filing tax amendments Attach Form 4562 to your tax return for the current tax year if you are claiming any of the following items. Filing tax amendments A section 179 deduction for the current year or a section 179 carryover from a prior year. Filing tax amendments See chapter 2 for information on the section 179 deduction. Filing tax amendments Depreciation for property placed in service during the current year. Filing tax amendments Depreciation on any vehicle or other listed property, regardless of when it was placed in service. Filing tax amendments See chapter 5 for information on listed property. Filing tax amendments A deduction for any vehicle if the deduction is reported on a form other than Schedule C (Form 1040) or Schedule C-EZ (Form 1040). Filing tax amendments Amortization of costs if the current year is the first year of the amortization period. Filing tax amendments Depreciation or amortization on any asset on a corporate income tax return (other than Form 1120S, U. Filing tax amendments S. Filing tax amendments Income Tax Return for an S Corporation) regardless of when it was placed in service. Filing tax amendments You must submit a separate Form 4562 for each business or activity on your return for which a Form 4562 is required. Filing tax amendments Table 1-1 presents an overview of the purpose of the various parts of Form 4562. Filing tax amendments Employee. Filing tax amendments   Do not use Form 4562 if you are an employee and you deduct job-related vehicle expenses using either actual expenses (including depreciation) or the standard mileage rate. Filing tax amendments Instead, use either Form 2106 or Form 2106-EZ. Filing tax amendments Use Form 2106-EZ if you are claiming the standard mileage rate and you are not reimbursed by your employer for any expenses. Filing tax amendments How Do You Correct Depreciation Deductions? If you deducted an incorrect amount of depreciation in any year, you may be able to make a correction by filing an amended return for that year. Filing tax amendments See Filing an Amended Return , next. Filing tax amendments If you are not allowed to make the correction on an amended return, you may be able to change your accounting method to claim the correct amount of depreciation. Filing tax amendments See Changing Your Accounting Method , later. Filing tax amendments Filing an Amended Return You can file an amended return to correct the amount of depreciation claimed for any property in any of the following situations. Filing tax amendments You claimed the incorrect amount because of a mathematical error made in any year. Filing tax amendments You claimed the incorrect amount because of a posting error made in any year. Filing tax amendments You have not adopted a method of accounting for property placed in service by you in tax years ending after December 29, 2003. Filing tax amendments You claimed the incorrect amount on property placed in service by you in tax years ending before December 30, 2003. Filing tax amendments Adoption of accounting method defined. Filing tax amendments   Generally, you adopt a method of accounting for depreciation by using a permissible method of determining depreciation when you file your first tax return, or by using the same impermissible method of determining depreciation in two or more consecutively filed tax returns. Filing tax amendments   For an exception to this 2-year rule, see Revenue Procedure 2011-14 on page 330 of the Internal Revenue Bulletin 2011-4, available at www. Filing tax amendments irs. Filing tax amendments gov/pub/irs-irbs/irb11-04. Filing tax amendments pdf. Filing tax amendments (Note. Filing tax amendments Revenue Procedure 2011-14 is clarified and modified by Revenue Procedure 2012-20. Filing tax amendments For more information, see Revenue Procedure 2012-20 on page 700 of the Internal Revenue Bulletin 2012-14, available at www. Filing tax amendments irs. Filing tax amendments gov/pub/irs-irbs/irb12-14. Filing tax amendments pdf. Filing tax amendments )   For a safe harbor method of accounting to treat rotable spare parts as depreciable assets and procedures to obtain automatic consent to change to the safe harbor method of accounting, see Revenue Procedure 2007-48 on page 110 of Internal Revenue Bulletin 2007-29, available at www. Filing tax amendments irs. Filing tax amendments gov/pub/irs-irbs/irb07-29. Filing tax amendments pdf. Filing tax amendments When to file. Filing tax amendments   If an amended return is allowed, you must file it by the later of the following. Filing tax amendments 3 years from the date you filed your original return for the year in which you did not deduct the correct amount. Filing tax amendments A return filed before an unextended due date is considered filed on that due date. Filing tax amendments 2 years from the time you paid your tax for that year. Filing tax amendments Changing Your Accounting Method Generally, you must get IRS approval to change your method of accounting. Filing tax amendments You generally must file Form 3115, Application for Change in Accounting Method, to request a change in your method of accounting for depreciation. Filing tax amendments The following are examples of a change in method of accounting for depreciation. Filing tax amendments A change from an impermissible method of determining depreciation for depreciable property, if the impermissible method was used in two or more consecutively filed tax returns. Filing tax amendments A change in the treatment of an asset from nondepreciable to depreciable or vice versa. Filing tax amendments A change in the depreciation method, period of recovery, or convention of a depreciable asset. Filing tax amendments A change from not claiming to claiming the special depreciation allowance if you did not make the election to not claim any special allowance. Filing tax amendments A change from claiming a 50% special depreciation allowance to claiming a 30% special depreciation allowance for qualified property (including property that is included in a class of property for which you elected a 30% special allowance instead of a 50% special allowance). Filing tax amendments Changes in depreciation that are not a change in method of accounting (and may only be made on an amended return) include the following. Filing tax amendments An adjustment in the useful life of a depreciable asset for which depreciation is determined under section 167. Filing tax amendments A change in use of an asset in the hands of the same taxpayer. Filing tax amendments Making a late depreciation election or revoking a timely valid depreciation election (including the election not to deduct the special depreciation allowance). Filing tax amendments If you elected not to claim any special allowance, a change from not claiming to claiming the special allowance is a revocation of the election and is not an accounting method change. Filing tax amendments Generally, you must get IRS approval to make a late depreciation election or revoke a depreciation election. Filing tax amendments You must submit a request for a letter ruling to make a late election or revoke an election. Filing tax amendments Any change in the placed in service date of a depreciable asset. Filing tax amendments See section 1. Filing tax amendments 446-1(e)(2)(ii)(d) of the regulations for more information and examples. Filing tax amendments IRS approval. Filing tax amendments   In some instances, you may be able to get approval from the IRS to change your method of accounting for depreciation under the automatic change request procedures generally covered in Revenue Procedure 2011-14. Filing tax amendments If you do not qualify to use the automatic procedures to get approval, you must use the advance consent request procedures generally covered in Revenue Procedure 97-27, 1997-1 C. Filing tax amendments B. Filing tax amendments 680. Filing tax amendments Also see the Instructions for Form 3115 for more information on getting approval, including lists of scope limitations and automatic accounting method changes. Filing tax amendments Additional guidance. Filing tax amendments    For additional guidance and special procedures for changing your accounting method, automatic change procedures, amending your return, and filing Form 3115, see Revenue Procedure 2011-14 on page 330 of the Internal Revenue Bulletin 2011-4, available at www. Filing tax amendments irs. Filing tax amendments gov/pub/irs-irbs/irb11-04. Filing tax amendments pdf. Filing tax amendments (Note. Filing tax amendments Revenue Procedure 2011-14 is clarified and modified by Revenue Procedure 2012-20. Filing tax amendments For more information, see Revenue Procedure 2012-20 on page 700 of the Internal Revenue Bulletin 2012-14, available at www. Filing tax amendments irs. Filing tax amendments gov/pub/irs-irbs/irb12-14. Filing tax amendments pdf. Filing tax amendments )   For a safe harbor method of accounting to treat rotable spare parts as depreciable assets, see Revenue Procedure 2007-48 on page 110 of Internal Revenue Bulletin 2007-29, available at www. Filing tax amendments irs. Filing tax amendments gov/pub/irs-irbs/irb07-29. Filing tax amendments pdf. Filing tax amendments Table 1-1. Filing tax amendments Purpose of Form 4562 This table describes the purpose of the various parts of Form 4562. Filing tax amendments For more information, see Form 4562 and its instructions. Filing tax amendments Part Purpose I • Electing the section 179 deduction • Figuring the maximum section 179 deduction for the current year • Figuring any section 179 deduction carryover to the next year II • Reporting the special depreciation allowance for property (other than listed property) placed in service during the tax year • Reporting depreciation deductions on property being depreciated under any method other than Modified Accelerated Cost Recovery System (MACRS) III • Reporting MACRS depreciation deductions for property placed in service before this year • Reporting MACRS depreciation deductions for property (other than listed property) placed in service during the current year IV • Summarizing other parts V • Reporting the special depreciation allowance for automobiles and other listed property • Reporting MACRS depreciation on automobiles and other listed property • Reporting the section 179 cost elected for automobiles and other listed property • Reporting information on the use of automobiles and other transportation vehicles VI • Reporting amortization deductions Section 481(a) adjustment. Filing tax amendments   If you file Form 3115 and change from an impermissible method to a permissible method of accounting for depreciation, you can make a section 481(a) adjustment for any unclaimed or excess amount of allowable depreciation. Filing tax amendments The adjustment is the difference between the total depreciation actually deducted for the property and the total amount allowable prior to the year of change. Filing tax amendments If no depreciation was deducted, the adjustment is the total depreciation allowable prior to the year of change. Filing tax amendments A negative section 481(a) adjustment results in a decrease in taxable income. Filing tax amendments It is taken into account in the year of change and is reported on your business tax returns as “other expenses. Filing tax amendments ” A positive section 481(a) adjustment results in an increase in taxable income. Filing tax amendments It is generally taken into account over 4 tax years and is reported on your business tax returns as “other income. Filing tax amendments ” However, you can elect to use a one-year adjustment period and report the adjustment in the year of change if the total adjustment is less than $25,000. Filing tax amendments Make the election by completing the appropriate line on Form 3115. Filing tax amendments   If you file a Form 3115 and change from one permissible method to another permissible method, the section 481(a) adjustment is zero. Filing tax amendments Prev  Up  Next   Home   More Online Publications
Español

Finding a Job

Government information and services to help you find a job.

American Job Center provides a single access point of key federal programs and local resources to help find a job, identify training opportunities and tap into resources to gain new skills.

For job seekers, students, businesses and career professionals looking for employment information and tools, explore CareerOneStop from the U.S. Department of Labor.

USAJOBS.gov, a free web-based job board, is the official Federal Government source for federal job listings and employment information and opportunities.

Find and Apply for Job Openings

Back to Top

Explore Careers

Resume and Interview Help

Back to Top

Help During Career Transitions

  • ReEmployment
    Get employment, training, and financial help after a layoff.
  • Unemployment Insurance
    Learn about unemployment benefits, eligibility requirements, and how to file a claim.

Avoiding Job Scams

  • Job Hunting Scams
    Get tips on job hunting scams from the Federal Trade Commission (FTC).
  • Work at Home Schemes
    Learn more about various schemes and the questions to ask before pursuing opportunities to work from home.
  • Employment Scams
    Beware of scams that target job seekers.
  • Job Opportunity Scams
    Learn more about job scam warnings from the Better Business Bureau (BBB), Federal Trade Commission (FTC) and more.

Back to Top

The Filing Tax Amendments

Filing tax amendments 8. Filing tax amendments   Foreign Insurance Taxes Table of Contents Premium. Filing tax amendments Tax is imposed on insurance policies issued by foreign insurers. Filing tax amendments Any person who makes, signs, issues, or sells any of the documents and instruments subject to the tax, or for whose use or benefit they are made, signed, issued, or sold, is liable for the tax. Filing tax amendments The following tax rates apply to each dollar (or fraction thereof) of the premium paid. Filing tax amendments Casualty insurance and indemnity, fidelity, and surety bonds: 4 cents. Filing tax amendments For example, on a premium payment of $10. Filing tax amendments 10, the tax is 44 cents. Filing tax amendments Life, sickness, and accident insurance, and annuity contracts: 1 cent. Filing tax amendments For example, on a premium payment of $10. Filing tax amendments 10, the tax is 11 cents. Filing tax amendments Reinsurance policies covering any of the taxable contracts described in items (1) and (2): 1 cent. Filing tax amendments However, the tax does not apply to casualty insurance premiums paid to foreign insurers for coverage of export goods in transit to foreign destinations. Filing tax amendments Premium. Filing tax amendments   Premium means the agreed price or consideration for assuming and carrying the risk or obligation. Filing tax amendments It includes any additional charge or assessment payable under the contract, whether in one sum or installments. Filing tax amendments If premiums are refunded, claim the tax paid on those premiums as an overpayment against tax due on other premiums paid or file a claim for refund. Filing tax amendments When liability attaches. Filing tax amendments   The liability for this tax attaches when the premium payment is transferred to the foreign insurer or reinsurer (including transfers to any bank, trust fund, or similar recipient designated by the foreign insurer or reinsurer) or to any nonresident agent, solicitor, or broker. Filing tax amendments A person can pay the tax before the liability attaches if the person keeps records consistent with that practice. Filing tax amendments Who must file. Filing tax amendments   The person who pays the premium to the foreign insurer (or to any nonresident person such as a foreign broker) must pay the tax and file the return. Filing tax amendments Otherwise, any person who issued or sold the policy, or who is insured under the policy, is required to pay the tax and file the return. Filing tax amendments    The person liable for this tax must keep accurate records that identify each policy or instrument subject to tax. Filing tax amendments These records must clearly establish the type of policy or instrument, the gross premium paid, the identity of the insured and insurer, and the total premium charged. Filing tax amendments If the premium is to be paid in installments, the records must also establish the amount and anniversary date of each installment. Filing tax amendments   The records must be kept at the place of business or other convenient location for at least 3 years after the later of the date any part of the tax became due, or the date any part of the tax was paid. Filing tax amendments During this period, the records must be readily accessible to the IRS. Filing tax amendments   The person having control or possession of a policy or instrument subject to this tax must keep the policy for at least 3 years after the date any part of the tax on it was paid. Filing tax amendments For information on reinsurance premiums paid from one foreign insurer to another foreign insurer, see Rev. Filing tax amendments Rul. Filing tax amendments 2008-15. Filing tax amendments You can find Rev. Filing tax amendments Rul. Filing tax amendments 2008-15 on page 633 of I. Filing tax amendments R. Filing tax amendments B. Filing tax amendments 2008-12 at www. Filing tax amendments irs. Filing tax amendments gov/pub/irs-irbs/irb08-12. Filing tax amendments pdf. Filing tax amendments Treaty-based positions under IRC 6114. Filing tax amendments   You may have to file an annual report disclosing the amount of premiums exempt from United States excise tax as a result of the application of a treaty with the United States that overrides (or otherwise modifies) any provision of the Internal Revenue Code. Filing tax amendments   Attach any disclosure statement to the first quarter Form 720. Filing tax amendments You may be able to use Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), as a disclosure statement. Filing tax amendments See the Instructions for Form 720 for information on how and where to file. Filing tax amendments   See Revenue Procedure 92-14 in Cumulative Bulletin 1992-1 for procedures you can use to claim a refund of this tax under certain U. Filing tax amendments S. Filing tax amendments treaties. Filing tax amendments Prev  Up  Next   Home   More Online Publications