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Form 1040ez 2012

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Form 1040ez 2012

Form 1040ez 2012 Publication 523 - Main Content Table of Contents Main HomeVacant land. Form 1040ez 2012 Factors used to determine main home. Form 1040ez 2012 Figuring Gain or LossSelling Price Amount Realized Adjusted Basis Amount of Gain or Loss Dispositions Other Than Sales Determining BasisCost As Basis Basis Other Than Cost Adjusted Basis Excluding the GainMaximum Exclusion Ownership and Use Tests Reduced Maximum Exclusion Nonqualified Use Business Use or Rental of HomeUnrecaptured section 1250 gain. Form 1040ez 2012 Property Used Partly for Business or Rental Reporting the SaleSeller-financed mortgage. Form 1040ez 2012 Individual taxpayer identification number (ITIN). Form 1040ez 2012 More information. Form 1040ez 2012 Comprehensive Examples Special SituationsException for sales to related persons. Form 1040ez 2012 Deducting Taxes in the Year of SaleForm 1099-S. Form 1040ez 2012 More information. Form 1040ez 2012 Recapturing (Paying Back) a Federal Mortgage Subsidy Recapture of First-Time Homebuyer CreditExample. Form 1040ez 2012 Worksheets How To Get Tax HelpLow Income Taxpayer Clinics Main Home This section explains the term “main home. Form 1040ez 2012 ” Usually, the home you live in most of the time is your main home and can be a: House, Houseboat, Mobile home, Cooperative apartment, or Condominium. Form 1040ez 2012 To exclude gain under the rules in this publication, you in most cases must have owned and lived in the property as your main home for at least 2 years during the 5-year period ending on the date of sale. Form 1040ez 2012 Land. Form 1040ez 2012   If you sell the land on which your main home is located, but not the house itself, you cannot exclude any gain you have from the sale of the land. Form 1040ez 2012 Example. Form 1040ez 2012 You buy a piece of land and move your main home to it. Form 1040ez 2012 Then, you sell the land on which your main home was located. Form 1040ez 2012 This sale is not considered a sale of your main home, and you cannot exclude any gain on the sale of the land. Form 1040ez 2012 Vacant land. Form 1040ez 2012   The sale of vacant land is not a sale of your main home unless: The vacant land is adjacent to land containing your home, You owned and used the vacant land as part of your main home, The separate sale of your home satisfies the requirements for exclusion and occurs within 2 years before or 2 years after the date of the sale of the vacant land, and The other requirements for excluding gain from the sale of a main home have been satisfied with respect to the vacant land. Form 1040ez 2012 If these requirements are met, the sale of the home and the sale of the vacant land are treated as one sale and only one maximum exclusion can be applied to any gain. Form 1040ez 2012 See Excluding the Gain , later. Form 1040ez 2012 The destruction of your home is treated as a sale of your home. Form 1040ez 2012 As a result, you may be able to meet these requirements if you sell vacant land used as a part of your main home within 2 years from the date of the destruction of your main home. Form 1040ez 2012 For information, see Publication 547. Form 1040ez 2012 More than one home. Form 1040ez 2012   If you have more than one home, you can exclude gain only from the sale of your main home. Form 1040ez 2012 You must include in income the gain from the sale of any other home. Form 1040ez 2012 If you have two homes and live in each of them, your main home is ordinarily the one you live in most of the time during the year. Form 1040ez 2012 Example 1. Form 1040ez 2012 You own two homes, one in New York and one in Florida. Form 1040ez 2012 From 2009 through 2013, you live in the New York home for 7 months and in the Florida residence for 5 months of each year. Form 1040ez 2012 In the absence of facts and circumstances indicating otherwise, the New York home is your main home. Form 1040ez 2012 You would be eligible to exclude the gain from the sale of the New York home but not of the Florida home in 2013. Form 1040ez 2012 Example 2. Form 1040ez 2012 You own a house, but you live in another house that you rent. Form 1040ez 2012 The rented house is your main home. Form 1040ez 2012 Example 3. Form 1040ez 2012 You own two homes, one in Virginia and one in New Hampshire. Form 1040ez 2012 In 2009 and 2010, you lived in the Virginia home. Form 1040ez 2012 In 2011 and 2012, you lived in the New Hampshire home. Form 1040ez 2012 In 2013, you lived again in the Virginia home. Form 1040ez 2012 Your main home in 2009, 2010, and 2013 is the Virginia home. Form 1040ez 2012 Your main home in 2011 and 2012 is the New Hampshire home. Form 1040ez 2012 You would be eligible to exclude gain from the sale of either home (but not both) in 2013. Form 1040ez 2012 Factors used to determine main home. Form 1040ez 2012   In addition to the amount of time you live in each home, other factors are relevant in determining which home is your main home. Form 1040ez 2012 Those factors include the following. Form 1040ez 2012 Your place of employment. Form 1040ez 2012 The location of your family members' main home. Form 1040ez 2012 Your mailing address for bills and correspondence. Form 1040ez 2012 The address listed on your: Federal and state tax returns, Driver's license, Car registration, and Voter registration card. Form 1040ez 2012 The location of the banks you use. Form 1040ez 2012 The location of recreational clubs and religious organizations of which you are a member. Form 1040ez 2012 Property used partly as your main home. Form 1040ez 2012   If you use only part of the property as your main home, the rules discussed in this publication apply only to the gain or loss on the sale of that part of the property. Form 1040ez 2012 For details, see Business Use or Rental of Home , later. Form 1040ez 2012 Figuring Gain or Loss To figure the gain or loss on the sale of your main home, you must know the selling price, the amount realized, and the adjusted basis. Form 1040ez 2012 Subtract the adjusted basis from the amount realized to get your gain or loss. Form 1040ez 2012     Selling price     − Selling expenses       Amount realized     − Adjusted basis       Gain or loss   Gain. Form 1040ez 2012   Gain is the excess of the amount realized over the adjusted basis of the property. Form 1040ez 2012 Loss. Form 1040ez 2012   Loss is the excess of the adjusted basis over the amount realized for the property. Form 1040ez 2012 Selling Price The selling price is the total amount you receive for your home. Form 1040ez 2012 It includes money and the fair market value of any other property or any other services you receive and all notes, mortgages or other debts assumed by the buyer as part of the sale. Form 1040ez 2012 Personal property. Form 1040ez 2012   The selling price of your home does not include amounts you received for personal property sold with your home. Form 1040ez 2012 Personal property is property that is not a permanent part of the home. Form 1040ez 2012 Examples are furniture, draperies, rugs, a washer and dryer, and lawn equipment. Form 1040ez 2012 Separately stated amounts you received for these items should not be shown on Form 1099-S (discussed later). Form 1040ez 2012 Any gains from sales of personal property must be included in your income, but not as part of the sale of your home. Form 1040ez 2012 Payment by employer. Form 1040ez 2012   You may have to sell your home because of a job transfer. Form 1040ez 2012 If your employer pays you for a loss on the sale or for your selling expenses, do not include the payment as part of the selling price. Form 1040ez 2012 Your employer will include it as wages in box 1 of your Form W-2 and you will include it in your income on Form 1040, line 7, or on Form 1040NR, line 8. Form 1040ez 2012 Option to buy. Form 1040ez 2012   If you grant an option to buy your home and the option is exercised, add the amount you receive for the option to the selling price of your home. Form 1040ez 2012 If the option is not exercised, you must report the amount as ordinary income in the year the option expires. Form 1040ez 2012 Report this amount on Form 1040, line 21, or on Form 1040NR, line 21. Form 1040ez 2012 Form 1099-S. Form 1040ez 2012   If you received Form 1099-S, box 2 (gross proceeds) should show the total amount you received for your home. Form 1040ez 2012   However, box 2 will not include the fair market value of any services or property other than cash or notes you received or will receive. Form 1040ez 2012 Instead, box 4 will be checked to indicate your receipt or expected receipt of these items. Form 1040ez 2012 Amount Realized The amount realized is the selling price minus selling expenses. Form 1040ez 2012 Selling expenses. Form 1040ez 2012   Selling expenses include: Commissions, Advertising fees, Legal fees, and Loan charges paid by the seller, such as loan placement fees or “points. Form 1040ez 2012 ” Adjusted Basis While you owned your home, you may have made adjustments (increases or decreases) to the basis. Form 1040ez 2012 This adjusted basis must be determined before you can figure gain or loss on the sale of your home. Form 1040ez 2012 For information on how to figure your home's adjusted basis, see Determining Basis , later. Form 1040ez 2012 Amount of Gain or Loss To figure the amount of gain or loss, compare the amount realized to the adjusted basis. Form 1040ez 2012 Gain on sale. Form 1040ez 2012   If the amount realized is more than the adjusted basis, the difference is a gain and, except for any part you can exclude, generally is taxable. Form 1040ez 2012 Loss on sale. Form 1040ez 2012   If the amount realized is less than the adjusted basis, the difference is a loss. Form 1040ez 2012 Generally, a loss on the sale of your main home cannot be deducted. Form 1040ez 2012 Jointly owned home. Form 1040ez 2012   If you and your spouse sell your jointly owned home and file a joint return, you figure your gain or loss as one taxpayer. Form 1040ez 2012 Separate returns. Form 1040ez 2012   If you file separate returns, each of you must figure your own gain or loss according to your ownership interest in the home. Form 1040ez 2012 Your ownership interest is generally determined by state law. Form 1040ez 2012 Joint owners not married. Form 1040ez 2012   If you and a joint owner other than your spouse sell your jointly owned home, each of you must figure your own gain or loss according to your ownership interest in the home. Form 1040ez 2012 Each of you applies the rules discussed in this publication on an individual basis. Form 1040ez 2012 Dispositions Other Than Sales Some special rules apply to other dispositions of your main home. Form 1040ez 2012 Foreclosure or repossession. Form 1040ez 2012   If your home was foreclosed on or repossessed, you have a disposition. Form 1040ez 2012 See Publication 4681 to determine if you have ordinary income, gain, or loss. Form 1040ez 2012 More information. Form 1040ez 2012   If part of a home is used for business or rental purposes, see Foreclosures and Repossessions in chapter 1 of Publication 544 for more information. Form 1040ez 2012 Publication 544 has examples of how to figure gain or loss on a foreclosure or repossession. Form 1040ez 2012 Abandonment. Form 1040ez 2012   If you abandon your home, see Publication 4681 to determine if you have ordinary income, gain, or loss. Form 1040ez 2012 Trading (exchanging) homes. Form 1040ez 2012   If you trade your home for another home, treat the trade as a sale and a purchase. Form 1040ez 2012 Example. Form 1040ez 2012 You owned and lived in a home with an adjusted basis of $41,000. Form 1040ez 2012 A real estate dealer accepted your old home as a trade-in and allowed you $50,000 toward a new home priced at $80,000. Form 1040ez 2012 This is treated as a sale of your old home for $50,000 with a gain of $9,000 ($50,000 − $41,000). Form 1040ez 2012 If the dealer had allowed you $27,000 and assumed your unpaid mortgage of $23,000 on your old home, your sales price would still be $50,000 (the $27,000 trade-in allowed plus the $23,000 mortgage assumed). Form 1040ez 2012 Transfer to spouse. Form 1040ez 2012   If you transfer your home to your spouse or you transfer it to your former spouse incident to your divorce, you in most cases have no gain or loss (unless the Exception, discussed next, applies). Form 1040ez 2012 This is true even if you receive cash or other consideration for the home. Form 1040ez 2012 As a result, the rules explained in this publication do not apply. Form 1040ez 2012   If you owned your home jointly with your spouse and transfer your interest in the home to your spouse, or to your former spouse incident to your divorce, the same rule applies. Form 1040ez 2012 You have no gain or loss. Form 1040ez 2012 Exception. Form 1040ez 2012   These transfer rules do not apply if your spouse or former spouse is a nonresident alien. Form 1040ez 2012 In that case, you generally will have a gain or loss. Form 1040ez 2012 More information. Form 1040ez 2012    See Property Settlements in Publication 504, Divorced or Separated Individuals, for more information. Form 1040ez 2012 Involuntary conversion. Form 1040ez 2012   You have a disposition when your home is destroyed or condemned and you receive other property or money in payment, such as insurance or a condemnation award. Form 1040ez 2012 This is treated as a sale and you may be able to exclude all or part of any gain from the destruction or condemnation of your home, as explained later under Special Situations (see Home destroyed or condemned ). Form 1040ez 2012 Determining Basis You need to know your basis in your home to figure any gain or loss when you sell it. Form 1040ez 2012 Your basis in your home is determined by how you got the home. Form 1040ez 2012 Generally, your basis is its cost if you bought it or built it. Form 1040ez 2012 If you got it in some other way (inheritance, gift, etc. Form 1040ez 2012 ), your basis is generally either its fair market value when you received it or the adjusted basis of the previous owner. Form 1040ez 2012 While you owned your home, you may have made adjustments (increases or decreases) to your home's basis. Form 1040ez 2012 The result of these adjustments is your home's adjusted basis, which is used to figure gain or loss on the sale of your home. Form 1040ez 2012 To figure your adjusted basis, you can use Worksheet 1, near the end of this publication. Form 1040ez 2012 Filled-in examples of that worksheet are included in the Comprehensive Examples , later. Form 1040ez 2012 Cost As Basis The cost of property is the amount you paid for it in cash, debt obligations, other property, or services. Form 1040ez 2012 Purchase. Form 1040ez 2012   If you bought your home, your basis is its cost to you. Form 1040ez 2012 This includes the purchase price and certain settlement or closing costs. Form 1040ez 2012 In most cases, your purchase price includes your down payment and any debt, such as a first or second mortgage or notes you gave the seller in payment for the home. Form 1040ez 2012 If you build, or contract to build, a new home, your purchase price can include costs of construction, as discussed later. Form 1040ez 2012 Seller-paid points. Form 1040ez 2012   If the person who sold you your home paid points on your loan, you may have to reduce your home's basis by the amount of the points, as shown in the following chart. Form 1040ez 2012    IF you bought your home. Form 1040ez 2012 . Form 1040ez 2012 . Form 1040ez 2012 THEN reduce your home's basis by the seller-paid points. Form 1040ez 2012 . Form 1040ez 2012 . Form 1040ez 2012 after 1990 but before April 4, 1994 only if you deducted them as home mortgage interest in the year paid. Form 1040ez 2012 after April 3, 1994 even if you did not deduct them. Form 1040ez 2012 Settlement fees or closing costs. Form 1040ez 2012   When you bought your home, you may have paid settlement fees or closing costs in addition to the contract price of the property. Form 1040ez 2012 You can include in your basis some of the settlement fees and closing costs you paid for buying the home, but not the fees and costs for getting a mortgage loan. Form 1040ez 2012 A fee paid for buying the home is any fee you would have had to pay even if you paid cash for the home (that is, without the need for financing). Form 1040ez 2012   Settlement fees do not include amounts placed in escrow for the future payment of items such as taxes and insurance. Form 1040ez 2012   Some of the settlement fees or closing costs that you can include in your basis are: Abstract fees (abstract of title fees), Charges for installing utility services, Legal fees (including fees for the title search and preparing the sales contract and deed), Recording fees, Survey fees, Transfer or stamp taxes, Owner's title insurance, and Any amounts the seller owes that you agree to pay, such as: Certain real estate taxes (discussed later), Back interest, Recording or mortgage fees, Charges for improvements or repairs, and Sales commissions. Form 1040ez 2012   Some settlement fees and closing costs you cannot include in your basis are: Fire insurance premiums, Rent for occupancy of the house before closing, Charges for utilities or other services related to occupancy of the house before closing, Any fee or cost that you deducted as a moving expense (allowed for certain fees and costs before 1994), Charges connected with getting a mortgage loan, such as: Mortgage insurance premiums (including funding fees connected with loans guaranteed by the Department of Veterans Affairs), Loan assumption fees, Cost of a credit report, Fee for an appraisal required by a lender, and Fees for refinancing a mortgage. Form 1040ez 2012 Real estate taxes. Form 1040ez 2012   Real estate taxes for the year you bought your home may affect your basis, as shown in the following chart. Form 1040ez 2012    IF. Form 1040ez 2012 . Form 1040ez 2012 . Form 1040ez 2012 AND. Form 1040ez 2012 . Form 1040ez 2012 . Form 1040ez 2012 THEN the taxes. Form 1040ez 2012 . Form 1040ez 2012 . Form 1040ez 2012 you pay taxes that the seller owed on the home up to the date of sale the seller does not reimburse you are added to the basis of your home. Form 1040ez 2012 the seller reimburses you do not affect the basis of your home. Form 1040ez 2012 the seller pays taxes for you (taxes owed beginning on the date of sale) you do not reimburse the seller are subtracted from the basis of your home. Form 1040ez 2012 you reimburse the seller do not affect the basis of your home. Form 1040ez 2012 Construction. Form 1040ez 2012   If you contracted to have your house built on land you own, your basis is: The cost of the land, plus The amount it cost you to complete the house, including: The cost of labor and materials, Any amounts paid to a contractor, Any architect's fees, Building permit charges, Utility meter and connection charges, and Legal fees directly connected with building the house. Form 1040ez 2012   Your cost includes your down payment and any debt such as a first or second mortgage or notes you gave the seller or builder. Form 1040ez 2012 It also includes certain settlement or closing costs. Form 1040ez 2012 You may have to reduce your basis by points the seller paid for you. Form 1040ez 2012 For more information, see Seller-paid points and Settlement fees or closing costs , earlier. Form 1040ez 2012 Built by you. Form 1040ez 2012   If you built all or part of your house yourself, its basis is the total amount it cost you to complete it. Form 1040ez 2012 Do not include in the cost of the house: The value of your own labor, or The value of any other labor you did not pay for. Form 1040ez 2012 Temporary housing. Form 1040ez 2012   If a builder gave you temporary housing while your home was being finished, you must reduce your basis by the part of the contract price that was for the temporary housing. Form 1040ez 2012 To figure the amount of the reduction, multiply the contract price by a fraction. Form 1040ez 2012 The numerator is the value of the temporary housing, and the denominator is the sum of the value of the temporary housing plus the value of the new home. Form 1040ez 2012 Cooperative apartment. Form 1040ez 2012   If you are a tenant-stockholder in a cooperative housing corporation, your basis in the cooperative apartment used as your home is usually the cost of your stock in the corporation. Form 1040ez 2012 This may include your share of a mortgage on the apartment building. Form 1040ez 2012 Condominium. Form 1040ez 2012   To determine your basis in a condominium apartment used as your home, use the same rules as for any other home. Form 1040ez 2012 Basis Other Than Cost You must use a basis other than cost, such as adjusted basis or fair market value, if you received your home as a gift, inheritance, a trade, or from your spouse. Form 1040ez 2012 These situations are discussed in the following pages. Form 1040ez 2012 Also, the instructions for Worksheet 1 (near the end of the publication) address each of these issues. Form 1040ez 2012 Other special rules may apply in certain situations. Form 1040ez 2012 If you converted the property, or some part of it, to business or rental use, see Property Changed to Business or Rental Use, in Publication 551. Form 1040ez 2012 Home received as gift. Form 1040ez 2012   Use the following chart to find the basis of a home you received as a gift. Form 1040ez 2012 IF the donor's adjusted basis at the time of the gift was. Form 1040ez 2012 . Form 1040ez 2012 . Form 1040ez 2012 THEN your basis is. Form 1040ez 2012 . Form 1040ez 2012 . Form 1040ez 2012 more than the fair market value of the home at that time the same as the donor's adjusted basis at the time of the gift. Form 1040ez 2012   Exception: If using the donor's adjusted basis results in a loss when you sell the home, you must use the fair market value of the home at the time of the gift as your basis. Form 1040ez 2012 If using the fair market value results in a gain, you have neither gain nor loss. Form 1040ez 2012 equal to or less than the fair market value at that time, and you received the gift before 1977 the smaller of the: • donor's adjusted basis, plus  any federal gift tax paid on  the gift, or • the home's fair market value  at the time of the gift. Form 1040ez 2012 equal to or less than the fair market value at that time, and you received the gift after 1976 the same as the donor's adjusted basis, plus the part of any federal gift tax paid that is due to the net increase in value of the home (explained next). Form 1040ez 2012 Fair market value. Form 1040ez 2012   The fair market value of property at the time of the gift is the value of the property as appraised for purposes of the federal gift tax. Form 1040ez 2012 If the gift was not subject to the federal gift tax, the fair market value is the value as appraised for the purposes of a state gift tax. Form 1040ez 2012 Part of federal gift tax due to net increase in value. Form 1040ez 2012   Figure the part of the federal gift tax paid that is due to the net increase in value of the home by multiplying the total federal gift tax paid by a fraction. Form 1040ez 2012 The numerator of the fraction is the net increase in the value of the home, and the denominator is the value of the home for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. Form 1040ez 2012 The net increase in the value of the home is its fair market value minus the donor's adjusted basis immediately before the gift. Form 1040ez 2012 Home acquired from a decedent who died before or after 2010. Form 1040ez 2012   If you inherited your home from a decedent who died before or after 2010, your basis is the fair market value of the property on the date of the decedent's death (or the later alternate valuation date chosen by the personal representative of the estate). Form 1040ez 2012 If an estate tax return was filed or required to be filed, the value of the property listed on the estate tax return is your basis. Form 1040ez 2012 If a federal estate tax return did not have to be filed, your basis in the home is the same as its appraised value at the date of death, for purposes of state inheritance or transmission taxes. Form 1040ez 2012 Surviving spouse. Form 1040ez 2012   If you are a surviving spouse and you owned your home jointly, your basis in the home will change. Form 1040ez 2012 The new basis for the interest your spouse owned will be its fair market value on the date of death (or alternate valuation date). Form 1040ez 2012 The basis in your interest will remain the same. Form 1040ez 2012 Your new basis in the home is the total of these two amounts. Form 1040ez 2012   If you and your spouse owned the home either as tenants by the entirety or as joint tenants with right of survivorship, you will each be considered to have owned one-half of the home. Form 1040ez 2012 Example. Form 1040ez 2012 Your jointly owned home (owned as joint tenants with right of survivorship) had an adjusted basis of $50,000 on the date of your spouse's death, and the fair market value on that date was $100,000. Form 1040ez 2012 Your new basis in the home is $75,000 ($25,000 for one-half of the adjusted basis plus $50,000 for one-half of the fair market value). Form 1040ez 2012 Community property. Form 1040ez 2012   In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), each spouse is usually considered to own half of the community property. Form 1040ez 2012 When either spouse dies, the total fair market value of the community property becomes the basis of the entire property, including the part belonging to the surviving spouse. Form 1040ez 2012 For this to apply, at least half the value of the community property interest must be includible in the decedent's gross estate, whether or not the estate must file a return. Form 1040ez 2012   For more information about community property, see Publication 555, Community Property. Form 1040ez 2012    If you are selling a home in which you acquired an interest from a decedent who died in 2010, see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, to determine your basis. Form 1040ez 2012 Home received as trade. Form 1040ez 2012   If you acquired your home as a trade for other property, in most cases, the basis of your home is the fair market value (at the time of the trade) of the property you gave up. Form 1040ez 2012 If you traded one home for another, you have made a sale and purchase. Form 1040ez 2012 In that case, you may have a gain. Form 1040ez 2012 See Trading (exchanging) homes under Dispositions Other Than Sales, earlier, for an example of figuring the gain. Form 1040ez 2012 Home received from spouse. Form 1040ez 2012   If you received your home from your spouse or from your former spouse incident to your divorce, your basis in the home depends on the date of the transfer. Form 1040ez 2012 Transfers after July 18, 1984. Form 1040ez 2012   If you received the home after July 18, 1984, there was no gain or loss on the transfer. Form 1040ez 2012 In most cases, your basis in this home is the same as your spouse's (or former spouse's) adjusted basis just before you received it. Form 1040ez 2012 This rule applies even if you received the home in exchange for cash, the release of marital rights, the assumption of liabilities, or other considerations. Form 1040ez 2012   If you owned a home jointly with your spouse and your spouse transferred his or her interest in the home to you, in most cases, your basis in the half interest received from your spouse is the same as your spouse's adjusted basis just before the transfer. Form 1040ez 2012 This also applies if your former spouse transferred his or her interest in the home to you incident to your divorce. Form 1040ez 2012 Your basis in the half interest you already owned does not change. Form 1040ez 2012 Your new basis in the home is the total of these two amounts. Form 1040ez 2012 Transfers before July 19, 1984. Form 1040ez 2012   If you received your home before July 19, 1984, in exchange for your release of marital rights, in most cases, your basis in the home is generally its fair market value at the time you received it. Form 1040ez 2012 More information. Form 1040ez 2012   For more information on property received from a spouse or former spouse, see Property Settlements in Publication 504. Form 1040ez 2012 Involuntary conversion. Form 1040ez 2012   If your home is destroyed or condemned, you may receive insurance proceeds or a condemnation award. Form 1040ez 2012 If you acquired a replacement home with these proceeds, the basis is its cost decreased by any gain not recognized on the conversion under the rules explained in: Publication 547, in the case of a home that was destroyed, or Chapter 1 of Publication 544, in the case of a home that was condemned. Form 1040ez 2012 Example. Form 1040ez 2012 A fire destroyed your home that you owned and used for only 6 months. Form 1040ez 2012 The home had an adjusted basis of $80,000 and the insurance company paid you $130,000 for the loss. Form 1040ez 2012 Your gain is $50,000 ($130,000 − $80,000). Form 1040ez 2012 You bought a replacement home for $100,000. Form 1040ez 2012 The part of your gain that is taxable is $30,000 ($130,000 − $100,000), the unspent part of the payment from the insurance company. Form 1040ez 2012 The rest of the gain ($20,000) is not taxable, so that amount reduces your basis in the new home. Form 1040ez 2012 The basis of the new home is figured as follows. Form 1040ez 2012 Cost of replacement home $100,000 Minus: Gain not recognized 20,000 Basis of the replacement home $80,000 More information. Form 1040ez 2012   For more information about basis, see Publication 551. Form 1040ez 2012 Adjusted Basis Adjusted basis is your cost or other basis increased or decreased by certain amounts. Form 1040ez 2012 To figure your adjusted basis, you can use Worksheet 1, found toward the end of this publication. Form 1040ez 2012 Filled-in examples of that worksheet are included in Comprehensive Examples , later. Form 1040ez 2012 Recordkeeping. Form 1040ez 2012 You should keep records to prove your home's adjusted basis. Form 1040ez 2012 Ordinarily, you must keep records for 3 years after the due date for filing your return for the tax year in which you sold your home. Form 1040ez 2012 But if you sold a home before May 7, 1997, and postponed tax on any gain, the basis of that home affects the basis of the new home you bought. Form 1040ez 2012 Keep records proving the basis of both homes as long as they are needed for tax purposes. Form 1040ez 2012 The records you should keep include: Proof of the home's purchase price and purchase expenses; Receipts and other records for all improvements, additions, and other items that affect the home's adjusted basis; Any worksheets or other computations you used to figure the adjusted basis of the home you sold, the gain or loss on the sale, the exclusion, and the taxable gain; Any Form 982 you filed to exclude any discharge of qualified principal residence indebtedness; Any Form 2119, Sale of Your Home, you filed to postpone gain from the sale of a previous home before May 7, 1997; and Any worksheets you used to prepare Form 2119, such as the Adjusted Basis of Home Sold Worksheet or the Capital Improvements Worksheet from the Form 2119 instructions, or other source of computations. Form 1040ez 2012 Increases to Basis These include the following. Form 1040ez 2012 Additions and other improvements that have a useful life of more than 1 year. Form 1040ez 2012 Special assessments for local improvements. Form 1040ez 2012 Amounts you spent after a casualty to restore damaged property. Form 1040ez 2012 Improvements. Form 1040ez 2012   These add to the value of your home, prolong its useful life, or adapt it to new uses. Form 1040ez 2012 You add the cost of additions and other improvements to the basis of your property. Form 1040ez 2012   The following chart lists some other examples of improvements. Form 1040ez 2012 Examples of Improvements That Increase Basis Additions Bedroom Bathroom Deck Garage Porch Patio Heating & Air Conditioning Heating system Central air conditioning Furnace Duct work Central humidifier Filtration system Lawn & Grounds Landscaping Driveway Walkway Fence  Retaining wall Sprinkler system Swimming pool  Miscellaneous Storm windows, doors New roof Central vacuum Wiring upgrades Satellite dish Security system  Plumbing Septic system Water heater Soft water system Filtration system  Interior Improvements Built-in appliances  Kitchen modernization  Flooring Wall-to-wall carpeting  Insulation Attic Walls Floors Pipes and duct work Improvements no longer part of home. Form 1040ez 2012   Your home's adjusted basis does not include the cost of any improvements that are replaced and are no longer part of the home. Form 1040ez 2012 Example. Form 1040ez 2012 You put wall-to-wall carpeting in your home 15 years ago. Form 1040ez 2012 Later, you replaced that carpeting with new wall-to-wall carpeting. Form 1040ez 2012 The cost of the old carpeting you replaced is no longer part of your home's adjusted basis. Form 1040ez 2012 Repairs. Form 1040ez 2012   These maintain your home in good condition but do not add to its value or prolong its life. Form 1040ez 2012 You do not add their cost to the basis of your property. Form 1040ez 2012 Examples. Form 1040ez 2012 Repainting your house inside or outside, fixing your gutters or floors, repairing leaks or plastering, and replacing broken window panes are examples of repairs. Form 1040ez 2012 Exception. Form 1040ez 2012   The entire job is considered an improvement if items that would otherwise be considered repairs are done as part of an extensive remodeling or restoration of your home. Form 1040ez 2012 For example, if you have a casualty and your home is damaged, increase your basis by the amount you spend on repairs that restore the property to its pre-casualty condition. Form 1040ez 2012 Decreases to Basis These include the following. Form 1040ez 2012 Discharge of qualified principal residence indebtedness that was excluded from income (but not below zero). Form 1040ez 2012 For details, see Publication 4681. Form 1040ez 2012 Some or all of the cancellation of debt income that was excluded due to your bankruptcy or insolvency. Form 1040ez 2012 For details, see Publication 4681. Form 1040ez 2012 Gain you postponed from the sale of a previous home before May 7, 1997. Form 1040ez 2012 Deductible casualty losses. Form 1040ez 2012 Insurance payments you received or expect to receive for casualty losses. Form 1040ez 2012 Payments you received for granting an easement or right-of-way. Form 1040ez 2012 Depreciation allowed or allowable if you used your home for business or rental purposes. Form 1040ez 2012 Energy-related credits allowed for expenditures made on the residence. Form 1040ez 2012 (Reduce the increase in basis otherwise allowable for expenditures on the residence by the amount of credit allowed for those expenditures. Form 1040ez 2012 ) Adoption credit you claimed for improvements added to the basis of your home. Form 1040ez 2012 Nontaxable payments from an adoption assistance program of your employer you used for improvements you added to the basis of your home. Form 1040ez 2012 Energy conservation subsidy excluded from your gross income because you received it (directly or indirectly) from a public utility after 1992 to buy or install any energy conservation measure. Form 1040ez 2012 An energy conservation measure is an installation or modification primarily designed either to reduce consumption of electricity or natural gas or to improve the management of energy demand for a home. Form 1040ez 2012 District of Columbia first-time homebuyer credit allowed on the purchase of a principal residence in the District of Columbia. Form 1040ez 2012 General sales taxes claimed as an itemized deduction on Schedule A (Form 1040) that were imposed on the purchase of personal property, such as a houseboat used as your home or a mobile home. Form 1040ez 2012 Discharges of qualified principal residence indebtedness. Form 1040ez 2012   You may be able to exclude from gross income a discharge of qualified principal residence indebtedness. Form 1040ez 2012 This exclusion applies to discharges made after 2006 and before 2014. Form 1040ez 2012 If you choose to exclude this income, you must reduce (but not below zero) the basis of your principal residence by the amount excluded from gross income. Form 1040ez 2012   File Form 982 with your tax return. Form 1040ez 2012 See the form's instructions for detailed information. Form 1040ez 2012    A decrease in basis due to a discharge of qualified principal residence indebtedness that is excluded from income occurs only if you retain ownership of the principal residence after a discharge. Form 1040ez 2012 In most cases, this would occur in a refinancing or a restructuring of the mortgage. Form 1040ez 2012 Excluding the Gain You may qualify to exclude from your income all or part of any gain from the sale of your main home. Form 1040ez 2012 This means that, if you qualify, you will not have to pay tax on the gain up to the limit described under Maximum Exclusion , next. Form 1040ez 2012 To qualify, you must meet the ownership and use tests described later. Form 1040ez 2012 You can choose not to take the exclusion by including the gain from the sale in your gross income on your tax return for the year of the sale. Form 1040ez 2012 This choice can be made (or revoked) at any time before the expiration of a 3-year period beginning on the due date of your return (not including extensions) for the year of the sale. Form 1040ez 2012 You can use Worksheet 2 (near the end of this publication) to figure the amount of your exclusion and your taxable gain, if any. Form 1040ez 2012 If you have any taxable gain from the sale of your home, you may have to increase your withholding or make estimated tax payments. Form 1040ez 2012 See Publication 505, Tax Withholding and Estimated Tax. Form 1040ez 2012 Maximum Exclusion You can exclude up to $250,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if all of the following are true. Form 1040ez 2012 You meet the ownership test. Form 1040ez 2012 You meet the use test. Form 1040ez 2012 During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home. Form 1040ez 2012 For details on gain allocated to periods of nonqualified use, see Nonqualified Use , later. Form 1040ez 2012 If you and another person owned the home jointly but file separate returns, each of you can exclude up to $250,000 of gain from the sale of your interest in the home if each of you meets the three conditions just listed. Form 1040ez 2012 You may be able to exclude up to $500,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if you are married and file a joint return and meet the requirements listed in the discussion of the special rules for joint returns, later, under Married Persons . Form 1040ez 2012 Ownership and Use Tests To claim the exclusion, you must meet the ownership and use tests. Form 1040ez 2012 This means that during the 5-year period ending on the date of the sale, you must have: Owned the home for at least 2 years (the ownership test), and Lived in the home as your main home for at least 2 years (the use test). Form 1040ez 2012 Exception. Form 1040ez 2012   If you owned and lived in the property as your main home for less than 2 years, you can still claim an exclusion in some cases. Form 1040ez 2012 However, the maximum amount you may be able to exclude will be reduced. Form 1040ez 2012 See Reduced Maximum Exclusion , later. Form 1040ez 2012 Example 1—home owned and occupied for at least 2 years. Form 1040ez 2012 Mya bought and moved into her main home in September 2011. Form 1040ez 2012 She sold the home at a gain in October 2013. Form 1040ez 2012 During the 5-year period ending on the date of sale in October 2013, she owned and lived in the home for more than 2 years. Form 1040ez 2012 She meets the ownership and use tests. Form 1040ez 2012 Example 2—ownership test met but use test not met. Form 1040ez 2012 Ayden bought a home, lived in it for 6 months, moved out, and never occupied the home again. Form 1040ez 2012 He later sold the home for a gain in June 2013. Form 1040ez 2012 He owned the home during the entire 5-year period ending on the date of sale. Form 1040ez 2012 He meets the ownership test but not the use test. Form 1040ez 2012 He cannot exclude any part of his gain on the sale unless he qualified for a reduced maximum exclusion (explained later). Form 1040ez 2012 Period of Ownership and Use The required 2 years of ownership and use during the 5-year period ending on the date of the sale do not have to be continuous nor do they both have to occur at the same time. Form 1040ez 2012 You meet the tests if you can show that you owned and lived in the property as your main home for either 24 full months or 730 days (365 × 2) during the 5-year period ending on the date of sale. Form 1040ez 2012 Example. Form 1040ez 2012 Naomi bought and moved into a house in July 2009. Form 1040ez 2012 She lived there for 13 months and then moved in with a friend. Form 1040ez 2012 She later moved back into her house and lived there for 12 months until she sold it in August 2013. Form 1040ez 2012 Naomi meets the ownership and use tests because, during the 5-year period ending on the date of sale, she owned the house for more than 2 years and lived in it for a total of 25 (13 + 12) months. Form 1040ez 2012 Temporary absence. Form 1040ez 2012   Short temporary absences for vacations or other seasonal absences, even if you rent out the property during the absences, are counted as periods of use. Form 1040ez 2012 The following examples assume that the reduced maximum exclusion (discussed later) does not apply to the sales. Form 1040ez 2012 Example 1. Form 1040ez 2012 David Johnson, who is single, bought and moved into his home on February 1, 2011. Form 1040ez 2012 Each year during 2011 and 2012, David left his home for a 2-month summer vacation. Form 1040ez 2012 David sold the house on March 1, 2013. Form 1040ez 2012 Although the total time David lived in his home is less than 2 years (21 months), he meets the use requirement and may exclude gain. Form 1040ez 2012 The 2-month vacations are short temporary absences and are counted as periods of use in determining whether David used the home for the required 2 years. Form 1040ez 2012 Example 2. Form 1040ez 2012 Professor Paul Beard, who is single, bought and moved into a house in December 2010, went abroad for a 1-year sabbatical leave in January 2012, returned to the house in January 2013, and sold it at a gain in February 2013. Form 1040ez 2012 Because his leave was not a short temporary absence, he cannot include the period of leave to meet the 2-year use test. Form 1040ez 2012 He cannot exclude any part of his gain because he did not use the residence for the required 2 years. Form 1040ez 2012 Ownership and use tests met at different times. Form 1040ez 2012   You can meet the ownership and use tests during different 2-year periods. Form 1040ez 2012 However, you must meet both tests during the 5-year period ending on the date of the sale. Form 1040ez 2012 Example. Form 1040ez 2012 Beginning in 2002, Helen Jones lived in a rented apartment. Form 1040ez 2012 The apartment building was later converted to condominiums, and she bought her same apartment on December 3, 2010. Form 1040ez 2012 In 2011, Helen became ill and on April 14 of that year she moved to her daughter's home. Form 1040ez 2012 On July 12, 2013, while still living in her daughter's home, she sold her condominium. Form 1040ez 2012 Helen can exclude gain on the sale of her condominium because she met the ownership and use tests during the 5-year period from July 13, 2008, to July 12, 2013, the date she sold the condominium. Form 1040ez 2012 She owned her condominium from December 3, 2010, to July 12, 2013 (more than 2 years). Form 1040ez 2012 She lived in the property from July 13, 2008 (the beginning of the 5-year period), to April 14, 2011 (more than 2 years). Form 1040ez 2012 The time Helen lived in her daughter's home during the 5-year period can be counted toward her period of ownership, and the time she lived in her rented apartment during the 5-year period can be counted toward her period of use. Form 1040ez 2012 Cooperative apartment. Form 1040ez 2012   If you sold stock as a tenant-shareholder in a cooperative housing corporation, the ownership and use tests are met if, during the 5-year period ending on the date of sale, you: Owned the stock for at least 2 years, and Lived in the house or apartment that the stock entitled you to occupy as your main home for at least 2 years. Form 1040ez 2012 Exceptions to Ownership and Use Tests The following sections contain exceptions to the ownership and use tests for certain taxpayers. Form 1040ez 2012 Exception for individuals with a disability. Form 1040ez 2012   There is an exception to the use test if: You become physically or mentally unable to care for yourself, and You owned and lived in your home as your main home for a total of at least 1 year during the 5-year period before the sale of your home. Form 1040ez 2012 Under this exception, you are considered to live in your home during any time within the 5-year period that you own the home and live in a facility (including a nursing home) licensed by a state or political subdivision to care for persons in your condition. Form 1040ez 2012   If you meet this exception to the use test, you still have to meet the 2-out-of-5-year ownership test to claim the exclusion. Form 1040ez 2012 Previous home destroyed or condemned. Form 1040ez 2012   For the ownership and use tests, you add the time you owned and lived in a previous home that was destroyed or condemned to the time you owned and lived in the replacement home on whose sale you wish to exclude gain. Form 1040ez 2012 This rule applies if any part of the basis of the home you sold depended on the basis of the destroyed or condemned home (see Involuntary Conversions in Publication 551). Form 1040ez 2012 Otherwise, you must have owned and lived in the same home for 2 of the 5 years before the sale to qualify for the exclusion. Form 1040ez 2012 Members of the uniformed services or Foreign Service, employees of the intelligence community, or employees or volunteers of the Peace Corps. Form 1040ez 2012   You can choose to have the 5-year test period for ownership and use suspended during any period you or your spouse serve on qualified official extended duty (defined later) as a member of the uniformed services or Foreign Service of the United States, or as an employee of the intelligence community. Form 1040ez 2012 You can choose to have the 5-year test period for ownership and use suspended during any period you or your spouse serve outside the United States either as an employee of the Peace Corps on qualified official extended duty (defined later) or as an enrolled volunteer or volunteer leader of the Peace Corps. Form 1040ez 2012 This means that you may be able to meet the 2-year use test even if, because of your service, you did not actually live in your home for at least the required 2 years during the 5-year period ending on the date of sale. Form 1040ez 2012   If this helps you qualify to exclude gain, you can choose to have the 5-year test period suspended by filing a return for the year of sale that does not include the gain. Form 1040ez 2012 Example. Form 1040ez 2012 John bought and moved into a home in 2005. Form 1040ez 2012 He lived in it as his main home for 2½ years. Form 1040ez 2012 For the next 6 years, he did not live in it because he was on qualified official extended duty with the Army. Form 1040ez 2012 He then sold the home at a gain in 2013. Form 1040ez 2012 To meet the use test, John chooses to suspend the 5-year test period for the 6 years he was on qualified official extended duty. Form 1040ez 2012 This means he can disregard those 6 years. Form 1040ez 2012 Therefore, John's 5-year test period consists of the 5 years before he went on qualified official extended duty. Form 1040ez 2012 He meets the ownership and use tests because he owned and lived in the home for 2½ years during this test period. Form 1040ez 2012 Period of suspension. Form 1040ez 2012   The period of suspension cannot last more than 10 years. Form 1040ez 2012 Together, the 10-year suspension period and the 5-year test period can be as long as, but no more than, 15 years. Form 1040ez 2012 You cannot suspend the 5-year period for more than one property at a time. Form 1040ez 2012 You can revoke your choice to suspend the 5-year period at any time. Form 1040ez 2012 Example. Form 1040ez 2012 Mary bought a home on April 1, 1997. Form 1040ez 2012 She used it as her main home until August 31, 2000. Form 1040ez 2012 On September 1, 2000, she went on qualified official extended duty with the Navy. Form 1040ez 2012 She did not live in the house again before selling it on July 31, 2013. Form 1040ez 2012 Mary chooses to use the entire 10-year suspension period. Form 1040ez 2012 Therefore, the suspension period would extend back from July 31, 2013, to August 1, 2003, and the 5-year test period would extend back to August 1, 1998. Form 1040ez 2012 During that period, Mary owned the house all 5 years and lived in it as her main home from August 1, 1998, until August 31, 2000, a period of more than 24 months. Form 1040ez 2012 She meets the ownership and use tests because she owned and lived in the home for at least 2 years during this test period. Form 1040ez 2012 Uniformed services. Form 1040ez 2012   The uniformed services are: The Armed Forces (the Army, Navy, Air Force, Marine Corps, and Coast Guard), The commissioned corps of the National Oceanic and Atmospheric Administration, and The commissioned corps of the Public Health Service. Form 1040ez 2012 Foreign Service member. Form 1040ez 2012   For purposes of the choice to suspend the 5-year test period for ownership and use, you are a member of the Foreign Service if you are any of the following. Form 1040ez 2012 A Chief of mission. Form 1040ez 2012 An Ambassador at large. Form 1040ez 2012 A member of the Senior Foreign Service. Form 1040ez 2012 A Foreign Service officer. Form 1040ez 2012 Part of the Foreign Service personnel. Form 1040ez 2012 Employee of the intelligence community. Form 1040ez 2012   For purposes of the choice to suspend the 5-year test period for ownership and use, you are an employee of the intelligence community if you are an employee of any of the following. Form 1040ez 2012 The Office of the Director of National Intelligence. Form 1040ez 2012 The Central Intelligence Agency. Form 1040ez 2012 The National Security Agency. Form 1040ez 2012 The Defense Intelligence Agency. Form 1040ez 2012 The National Geospatial-Intelligence Agency. Form 1040ez 2012 The National Reconnaissance Office and any other office within the Department of Defense for the collection of specialized national intelligence through reconnaissance programs. Form 1040ez 2012 Any of the intelligence elements of the Army, the Navy, the Air Force, the Marine Corps, the Federal Bureau of Investigation, the Department of Treasury, the Department of Energy, and the Coast Guard. Form 1040ez 2012 The Bureau of Intelligence and Research of the Department of State. Form 1040ez 2012 Any of the elements of the Department of Homeland Security concerned with the analyses of foreign intelligence information. Form 1040ez 2012 Qualified official extended duty. Form 1040ez 2012   You are on qualified official extended duty if you are on extended duty while: Serving at a duty station at least 50 miles from your main home, or Living in Government quarters under Government orders. Form 1040ez 2012   You are on extended duty when you are called or ordered to active duty for a period of more than 90 days or for an indefinite period. Form 1040ez 2012 Married Persons If you and your spouse file a joint return for the year of sale and one spouse meets the ownership and use tests, you can exclude up to $250,000 of the gain. Form 1040ez 2012 (But see Special rules for joint returns, next. Form 1040ez 2012 ) Special rules for joint returns. Form 1040ez 2012   You can exclude up to $500,000 of the gain on the sale of your main home if all of the following are true. Form 1040ez 2012 You are married and file a joint return for the year. Form 1040ez 2012 Either you or your spouse meets the ownership test. Form 1040ez 2012 Both you and your spouse meet the use test. Form 1040ez 2012 During the 2-year period ending on the date of the sale, neither you nor your spouse excluded gain from the sale of another home. Form 1040ez 2012 If either spouse does not satisfy all these requirements, the maximum exclusion that can be claimed by the couple is the total of the maximum exclusions that each spouse would qualify for if not married and the amounts were figured separately. Form 1040ez 2012 For this purpose, each spouse is treated as owning the property during the period that either spouse owned the property. Form 1040ez 2012 Example 1—one spouse sells a home. Form 1040ez 2012 Emily sells her home in June 2013 for a gain of $300,000. Form 1040ez 2012 She marries Jamie later in the year. Form 1040ez 2012 She meets the ownership and use tests, but Jamie does not. Form 1040ez 2012 Emily can exclude up to $250,000 of gain on a separate or joint return for 2013. Form 1040ez 2012 The $500,000 maximum exclusion for certain joint returns does not apply because Jamie does not meet the use test. Form 1040ez 2012 Example 2—each spouse sells a home. Form 1040ez 2012 The facts are the same as in Example 1 except that Jamie also sells a home in 2013 for a gain of $200,000 before he marries Emily. Form 1040ez 2012 He meets the ownership and use tests on his home, but Emily does not. Form 1040ez 2012 Emily can exclude $250,000 of gain and Jamie can exclude $200,000 of gain on the respective sales of their individual homes. Form 1040ez 2012 However, Emily cannot use Jamie's unused exclusion to exclude more than $250,000 of gain. Form 1040ez 2012 Therefore, Emily and Jamie must recognize $50,000 of gain on the sale of Emily's home. Form 1040ez 2012 The $500,000 maximum exclusion for certain joint returns does not apply because Emily and Jamie do not both meet the use test for the same home. Form 1040ez 2012 Sale of main home by surviving spouse. Form 1040ez 2012   If your spouse died and you did not remarry before the date of sale, you are considered to have owned and lived in the property as your main home during any period of time when your spouse owned and lived in it as a main home. Form 1040ez 2012   If you meet all of the following requirements, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home. Form 1040ez 2012 The sale or exchange took place after 2008. Form 1040ez 2012 The sale or exchange took place no more than 2 years after the date of death of your spouse. Form 1040ez 2012 You have not remarried. Form 1040ez 2012 You and your spouse met the use test at the time of your spouse's death. Form 1040ez 2012 You or your spouse met the ownership test at the time of your spouse's death. Form 1040ez 2012 Neither you nor your spouse excluded gain from the sale of another home during the last 2 years before the date of death. Form 1040ez 2012 The ownership and use tests were described earlier. Form 1040ez 2012 Example. Form 1040ez 2012 Harry owned and used a house as his main home since 2009. Form 1040ez 2012 Harry and Wilma married on July 1, 2013, and from that date they used Harry's house as their main home. Form 1040ez 2012 Harry died on August 15, 2013, and Wilma inherited the property. Form 1040ez 2012 Wilma sold the property on September 1, 2013, at which time she had not remarried. Form 1040ez 2012 Although Wilma owned and used the house for less than 2 years, Wilma is considered to have satisfied the ownership and use tests because her period of ownership and use includes the period that Harry owned and used the property before death. Form 1040ez 2012 Home transferred from spouse. Form 1040ez 2012   If your home was transferred to you by your spouse (or former spouse if the transfer was incident to divorce), you are considered to have owned it during any period of time when your spouse owned it. Form 1040ez 2012 Use of home after divorce. Form 1040ez 2012   You are considered to have used property as your main home during any period when: You owned it, and Your spouse or former spouse is allowed to live in it under a divorce or separation instrument and uses it as his or her main home. Form 1040ez 2012 Reduced Maximum Exclusion If you fail to meet the requirements to qualify for the $250,000 or $500,000 exclusion, you may still qualify for a reduced exclusion. Form 1040ez 2012 This applies to those who: Fail to meet the ownership and use tests, or Have used the exclusion within 2 years of selling their current home. Form 1040ez 2012 In both cases, to qualify for a reduced exclusion, the sale of your main home must be due to one of the following reasons. Form 1040ez 2012 A change in place of employment. Form 1040ez 2012 Health. Form 1040ez 2012 Unforeseen circumstances. Form 1040ez 2012 Qualified individual. Form 1040ez 2012   For purposes of the reduced maximum exclusion, a qualified individual is any of the following. Form 1040ez 2012 You. Form 1040ez 2012 Your spouse. Form 1040ez 2012 A co-owner of the home. Form 1040ez 2012 A person whose main home is the same as yours. Form 1040ez 2012 Primary reason for sale. Form 1040ez 2012   One of the three reasons above will be considered to be the primary reason you sold your home if either (1) or (2) is true. Form 1040ez 2012 You qualify under a “safe harbor. Form 1040ez 2012 ” This is a specific set of facts and circumstances that, if applicable, qualifies you to claim a reduced maximum exclusion. Form 1040ez 2012 Safe harbors corresponding to the reasons listed above are described later. Form 1040ez 2012 A safe harbor does not apply, but you can establish, based on facts and circumstances, that the primary reason for the sale is a change in place of employment, health, or unforeseen circumstances. Form 1040ez 2012  Factors that may be relevant in determining your primary reason for sale include whether: Your sale and the circumstances causing it were close in time, The circumstances causing your sale occurred during the time you owned and used the property as your main home, The circumstances causing your sale were not reasonably foreseeable when you began using the property as your main home, Your financial ability to maintain the property became materially impaired, The suitability of the property as your main home materially changed, and During the time you owned the property, you used it as your home. Form 1040ez 2012 Change in Place of Employment You may qualify for a reduced exclusion if the primary reason for the sale of your main home is a change in the location of employment of a qualified individual. Form 1040ez 2012 Employment. Form 1040ez 2012   For this purpose, employment includes the start of work with a new employer or continuation of work with the same employer. Form 1040ez 2012 It also includes the start or continuation of self-employment. Form 1040ez 2012 Distance safe harbor. Form 1040ez 2012   A change in place of employment is considered to be the reason you sold your home if: The change occurred during the period you owned and used the property as your main home, and The new place of employment is at least 50 miles farther from the home you sold than was the former place of employment (or, if there was no former place of employment, the distance between your new place of employment and the home sold is at least 50 miles). Form 1040ez 2012 Example. Form 1040ez 2012 Justin was unemployed and living in a townhouse in Florida he had owned and used as his main home since 2012. Form 1040ez 2012 He got a job in North Carolina and sold his townhouse in 2013. Form 1040ez 2012 Because the distance between Justin's new place of employment and the home he sold is at least 50 miles, the sale satisfies the conditions of the distance safe harbor. Form 1040ez 2012 Justin's sale of his home is considered to be because of a change in place of employment, and he is entitled to claim a reduced maximum exclusion of gain from the sale. Form 1040ez 2012 Health The sale of your main home is because of health if your primary reason for the sale is: To obtain, provide, or facilitate the diagnosis, cure, mitigation, or treatment of disease, illness, or injury of a qualified individual, or To obtain or provide medical or personal care for a qualified individual suffering from a disease, illness, or injury. Form 1040ez 2012 The sale of your home is not because of health if the sale merely benefits a qualified individual's general health or well-being. Form 1040ez 2012 For purposes of this reason, a qualified individual includes, in addition to the individuals listed earlier under Qualified individual , any of the following family members of these individuals. Form 1040ez 2012 Parent, grandparent, stepmother, stepfather. Form 1040ez 2012 Child, grandchild, stepchild, adopted child, eligible foster child. Form 1040ez 2012 Brother, sister, stepbrother, stepsister, half-brother, half-sister. Form 1040ez 2012 Mother-in-law, father-in-law, brother-in-law, sister-in-law, son-in-law, or daughter-in-law. Form 1040ez 2012 Uncle, aunt, nephew, niece, or cousin. Form 1040ez 2012 Example. Form 1040ez 2012 In 2012, Chase and Lauren, spouses, bought a house that they used as their main home. Form 1040ez 2012 Lauren's father has a chronic disease and is unable to care for himself. Form 1040ez 2012 In 2013, Chase and Lauren sold their home in order to move into Lauren's father's house to provide care for him. Form 1040ez 2012 Because the primary reason for the sale of their home was to provide care for Lauren's father, Chase and Lauren are entitled to a reduced maximum exclusion. Form 1040ez 2012 Doctor's recommendation safe harbor. Form 1040ez 2012   Health is considered to be the reason you sold your home if, for one or more of the reasons listed at the beginning of this discussion, a doctor recommends a change of residence. Form 1040ez 2012 Unforeseen Circumstances The sale of your main home is because of an unforeseen circumstance if your primary reason for the sale is the occurrence of an event that you could not reasonably have anticipated before buying and occupying that home. Form 1040ez 2012 You are not considered to have an unforeseen circumstance if the primary reason you sold your home was that you preferred to get a different home or because your finances improved. Form 1040ez 2012 Specific event safe harbors. Form 1040ez 2012   Unforeseen circumstances are considered to be the reason for selling your home if any of the following events occurred while you owned and used the property as your main home. Form 1040ez 2012 An involuntary conversion of your home, such as when your home is destroyed or condemned. Form 1040ez 2012 Natural or man-made disasters or acts of war or terrorism resulting in a casualty to your home, whether or not your loss is deductible. Form 1040ez 2012 In the case of qualified individuals (listed earlier under Qualified individual ): Death, Unemployment (if the individual is eligible for unemployment compensation), A change in employment or self-employment status that results in the individual's inability to pay reasonable basic living expenses (listed under Reasonable basic living expenses , later) for his or her household, Divorce or legal separation under a decree of divorce or separate maintenance, or Multiple births resulting from the same pregnancy. Form 1040ez 2012 An event the IRS determined to be an unforeseen circumstance in published guidance of general applicability. Form 1040ez 2012 For example, the IRS determined the September 11, 2001, terrorist attacks to be an unforeseen circumstance. Form 1040ez 2012 Reasonable basic living expenses. Form 1040ez 2012   Reasonable basic living expenses for your household include the following. Form 1040ez 2012 Amounts spent for food. Form 1040ez 2012 Amounts spent for clothing. Form 1040ez 2012 Housing and related expenses. Form 1040ez 2012 Medical expenses. Form 1040ez 2012 Transportation expenses. Form 1040ez 2012 Tax payments. Form 1040ez 2012 Court-ordered payments. Form 1040ez 2012 Expenses reasonably necessary to produce income. Form 1040ez 2012   Any of these amounts spent to maintain an affluent or luxurious standard of living are not reasonable basic living expenses. Form 1040ez 2012 Nonqualified Use Gain from the sale or exchange of the main home is not excludable from income if it is allocable to periods of nonqualified use. Form 1040ez 2012 Nonqualified use means any period after 2008 where neither you nor your spouse (or your former spouse) used the property as a main home, with certain exceptions (see next). Form 1040ez 2012 Exceptions. Form 1040ez 2012   A period of nonqualified use does not include: Any portion of the 5-year period ending on the date of the sale or exchange after the last date you (or your spouse) use the property as a main home; Any period (not to exceed an aggregate period of 10 years) during which you (or your spouse) are serving on qualified official extended duty: As a member of the uniformed services; As a member of the Foreign Service of the United States; or As an employee of the intelligence community; and Any other period of temporary absence (not to exceed an aggregate period of 2 years) due to change of employment, health conditions, or such other unforeseen circumstances as may be specified by the IRS. Form 1040ez 2012 Calculation. Form 1040ez 2012   To figure the portion of the gain allocated to the period of nonqualified use, multiply the gain (net of any depreciation allowed or allowable on the property for periods after May 6, 1997) by the following fraction:   Total nonqualified use during the period of ownership after 2008     Total period of ownership     This calculation can be found in Worksheet 2, line 10, later in this publication. Form 1040ez 2012   For examples of this calculation, see Business Use or Rental of Home , next. Form 1040ez 2012 Business Use or Rental of Home You may be able to exclude gain from the sale of a home you have used for business or to produce rental income if you meet the ownership and use tests. Form 1040ez 2012 Example 1. Form 1040ez 2012 On May 23, 2007, Amy, who is unmarried for all years in this example, bought a house. Form 1040ez 2012 She moved in on that date and lived in it until May 31, 2009, when she moved out of the house and put it up for rent. Form 1040ez 2012 The house was rented from June 1, 2009, to March 31, 2011. Form 1040ez 2012 Amy claimed depreciation deductions in 2009 through 2011 totaling $10,000. Form 1040ez 2012 Amy moved back into the house on April 1, 2011, and lived there until she sold it on January 31, 2013, for a gain of $200,000. Form 1040ez 2012 During the 5-year period ending on the date of the sale (January 31, 2008–January 31, 2013), Amy owned and lived in the house for more than 2 years as shown in the following table. Form 1040ez 2012 Five-Year Period Used as Home Used as Rental 1/31/08 – 5/31/09 16 months   6/01/09 – 3/31/11   22 months 4/01/11 – 1/31/13 22 months     38 months 22 months       During the period Amy owned the house (2,080 days), her period of nonqualified use was 668 days. Form 1040ez 2012 Because the gain attributable to periods of nonqualified use is $60,990, Amy can exclude $129,010 of her gain, as shown on Worksheet 2. Form 1040ez 2012 Example 2. Form 1040ez 2012 William owned and used a house as his main home from 2007 through 2010. Form 1040ez 2012 On January 1, 2011, he moved to another state. Form 1040ez 2012 He rented his house from that date until April 30, 2013, when he sold it. Form 1040ez 2012 During the 5-year period ending on the date of sale (May 1, 2008-April 30, 2013), William owned and lived in the house for more than 2 years. Form 1040ez 2012 Because it was rental property at the time of the sale, he must report the sale on Form 4797. Form 1040ez 2012 Because the period of nonqualified use does not include any part of the 5-year period after the last date William lived in the house, he has no period of nonqualified use. Form 1040ez 2012 Because he met the ownership and use tests, he can exclude gain up to $250,000. Form 1040ez 2012 However, he cannot exclude the part of the gain equal to the depreciation he claimed or could have claimed for renting the house, as explained next. Form 1040ez 2012 Depreciation after May 6, 1997. Form 1040ez 2012   If you were entitled to take depreciation deductions because you used your home for business purposes or as rental property, you cannot exclude the part of your gain equal to any depreciation allowed or allowable as a deduction for periods after May 6, 1997. Form 1040ez 2012 If you can show by adequate records or other evidence that the depreciation allowed was less than the amount allowable, then you may limit the amount of gain recognized to the depreciation allowed. Form 1040ez 2012 Unrecaptured section 1250 gain. Form 1040ez 2012   This is the part of any long-term capital gain from the sale of your home that is due to depreciation and cannot be excluded. Form 1040ez 2012 To figure the amount of unrecaptured section 1250 gain to be reported on Schedule D (Form 1040), you must also take into account certain gains or losses from the sale of property other than your home. Form 1040ez 2012 Use the Unrecaptured Section 1250 Gain Worksheet in the Schedule D instructions for this purpose. Form 1040ez 2012 Worksheet 2. Form 1040ez 2012 Taxable Gain on Sale of Home—Completed Example 1 for Amy Part 1. Form 1040ez 2012 Gain or (Loss) on Sale       1. Form 1040ez 2012   Selling price of home 1. Form 1040ez 2012     2. Form 1040ez 2012   Selling expenses (including commissions, advertising and legal fees, and seller-paid loan charges) 2. Form 1040ez 2012     3. Form 1040ez 2012   Subtract line 2 from line 1. Form 1040ez 2012 This is the amount realized 3. Form 1040ez 2012     4. Form 1040ez 2012   Adjusted basis of home sold (from Worksheet 1, line 13) 4. Form 1040ez 2012     5. Form 1040ez 2012   Gain or (loss) on the sale. Form 1040ez 2012 Subtract line 4 from line 3. Form 1040ez 2012 If this is a loss, stop here 5. Form 1040ez 2012 200,000   Part 2. Form 1040ez 2012 Exclusion and Taxable Gain       6. Form 1040ez 2012   Enter any depreciation allowed or allowable on the property for periods after May 6, 1997. Form 1040ez 2012 If none, enter -0- 6. Form 1040ez 2012 10,000   7. Form 1040ez 2012   Subtract line 6 from line 5. Form 1040ez 2012 If the result is less than zero, enter -0- 7. Form 1040ez 2012 190,000   8. Form 1040ez 2012   Aggregate number of days of nonqualified use after 2008. Form 1040ez 2012 If none, enter -0-. Form 1040ez 2012  If line 8 is equal to zero, skip to line 12 and enter the amount from line 7 on line 12 8. Form 1040ez 2012 668   9. Form 1040ez 2012   Number of days taxpayer owned the property 9. Form 1040ez 2012 2,080   10. Form 1040ez 2012   Divide the amount on line 8 by the amount on line 9. Form 1040ez 2012 Enter the result as a decimal (rounded to at least 3 places). Form 1040ez 2012 But do not enter an amount greater than 1. Form 1040ez 2012 00 10. Form 1040ez 2012 0. Form 1040ez 2012 321   11. Form 1040ez 2012   Gain allocated to nonqualified use. Form 1040ez 2012 (Line 7 multiplied by line 10) 11. Form 1040ez 2012 60,990   12. Form 1040ez 2012   Gain eligible for exclusion. Form 1040ez 2012 Subtract line 11 from line 7 12. Form 1040ez 2012 129,010   13. Form 1040ez 2012   If you qualify to exclude gain on the sale, enter your maximum exclusion (see Maximum Exclusion ). Form 1040ez 2012  If you qualify for a reduced maximum exclusion, enter the amount from Worksheet 3, line 7. Form 1040ez 2012 If you do  not qualify to exclude gain, enter -0- 13. Form 1040ez 2012 250,000   14. Form 1040ez 2012   Exclusion. Form 1040ez 2012 Enter the smaller of line 12 or line 13 14. Form 1040ez 2012 129,010   15. Form 1040ez 2012   Taxable gain. Form 1040ez 2012 Subtract line 14 from line 5. Form 1040ez 2012 Report your taxable gain as described under Reporting the Sale . Form 1040ez 2012 If the amount on line 6 is more than zero, complete line 16 15. Form 1040ez 2012 70,990   16. Form 1040ez 2012   Enter the smaller of line 6 or line 15. Form 1040ez 2012 Enter this amount on line 12 of the Unrecaptured Section 1250 Gain  Worksheet in the instructions for Schedule D (Form 1040) 16. Form 1040ez 2012 10,000 Property Used Partly for Business or Rental If you use property partly as a home and partly for business or to produce rental income, the treatment of any gain on the sale depends partly on whether the business or rental part of the property is part of your home or separate from it. Form 1040ez 2012 Part of Home Used for Business or Rental If the part of your property used for business or to produce rental income is within your home, such as a room used as a home office for a business, you do not need to allocate gain on the sale of the property between the business part of the property and the part used as a home. Form 1040ez 2012 In addition, you do not need to report the sale of the business or rental part on Form 4797. Form 1040ez 2012 This is true whether or not you were entitled to claim any depreciation. Form 1040ez 2012 However, you cannot exclude the part of any gain equal to any depreciation allowed or allowable after May 6, 1997. Form 1040ez 2012 See Depreciation after May 6, 1997, earlier. Form 1040ez 2012 Example 1. Form 1040ez 2012 Ray sold his main home in 2013 at a $30,000 gain. Form 1040ez 2012 He has no gains or losses from the sale of property other than the gain from the sale of his home. Form 1040ez 2012 He meets the ownership and use tests to exclude the gain from his income. Form 1040ez 2012 However, he used part of the home as a business office in 2012 and claimed $500 depreciation. Form 1040ez 2012 Because the business office was part of his home (not separate from it), he does not have to allocate the gain on the sale between the business part of the property and the part used as a home. Form 1040ez 2012 In addition, he does not have to report any part of the gain on Form 4797. Form 1040ez 2012 Because Ray was entitled to take a depreciation deduction, he must recognize $500 of the gain as unrecaptured section 1250 gain. Form 1040ez 2012 He reports his gain, exclusion, and the taxable gain of $500 on Form 8949 and Schedule D (Form 1040). Form 1040ez 2012 Example 2. Form 1040ez 2012 The facts are the same as in Example 1 except that Ray was not entitled to claim depreciation for the business use of his home. Form 1040ez 2012 Since Ray did not claim any depreciation, he can exclude the entire $30,000 gain. Form 1040ez 2012 Separate Part of Property Used for Business or Rental You may have used part of your property as your home and a separate part of it for business or to produce rental income. Form 1040ez 2012 Examples are: A working farm on which your house was located, A duplex in w
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Procurement Contracts

Federally Funded Research and Development Center (FFRDC) - contract is available for task order issuance for all Treasury Bureaus as well as other Government Agencies (upon approval by the IRS Contracting Officer). The focus of this technical support is for Total Enterprise Modernization in the areas of: 1) Strategic Management, 2) Procurement (Support & Evaluation), 3) Program and Project Management, 4) Technical Management, and 5) Evaluation and Audit (includes IV&V).

Land Mobile Radio (LMR) Subscriber Unit - contracts provide standards-based and standards-compliant LMR equipment to enable communications interoperability with similarly configured equipment. The TIA/EIA-102 suite of standards, also know as Project 25, provides the basis for the required LMR technical specifications.

Prime Modernization (TIRNO-99-D-00001) - This is an indefinite Delivery/Indefinite Quantity (IDIQ) type contract under which Cost Reimbursement, Time and Materials (T&M), Fixed Price, and Performance Based Task Orders may be issued.

Prime Contract Outreach Information - IRS Small Business Program Office from time to time hosts a Prime Contract Network Opportunity Session. The purpose of these events are to assist small businesses in meeting with the IRS Prime and Alliance partners to discuss potential subcontracting opportunities available under the IRS Prime Systems Integration Contract.

Treasury Commercial Vehicles (TCV) - Blanket Purchase Agreements are a series of acquisition vehicles structured to provide commercial-off-the shelf products for the IRS and Treasury bureaus. Six (6) BPA's were established to better serve our customers. TCV is available for use by any employee of the Treasury Department or any of its bureaus. The BPA's are very flexible with items regularly added to meet specific needs.

Total Information Processing Support Services (TIPSS-4) - Discover more about the wide spectrum of Information Technology services that TIPSS-4 offers. Included you will find guidance, and useful information to help you acquire the right services to support your program goals and objectives.


Questions about the Procurement information on this site, please contact the webmaster. Contact the Office of Procurement for other Procurement related questions.

Page Last Reviewed or Updated: 09-Sep-2013

The Form 1040ez 2012

Form 1040ez 2012 Publication 525 - Introductory Material Table of Contents Future Developments What's New Reminders IntroductionAssignment of income. Form 1040ez 2012 Ordering forms and publications. Form 1040ez 2012 Tax questions. Form 1040ez 2012 Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 525, such as legislation enacted after it was published, go to www. Form 1040ez 2012 irs. Form 1040ez 2012 gov/pub525. Form 1040ez 2012 What's New Health flexible spending arrangements (health FSAs) under cafeteria plans. Form 1040ez 2012  For plan years beginning after 2012, health FSAs are subject to a $2,500 limit on salary reduction contributions. Form 1040ez 2012 For plan years beginning after 2013, the $2,500 limit is subject to an inflation adjustment. Form 1040ez 2012 Itemized deduction for medical expenses. Form 1040ez 2012  Beginning in 2013, an itemized deduction is generally allowed for uncompensated medical expenses that exceed 10% of adjusted gross income (AGI). Form 1040ez 2012 If an individual or an individual’s spouse was born before January 2, 1949, the deduction is allowed for expenses that exceed 7. Form 1040ez 2012 5% of AGI. Form 1040ez 2012 Additional Medicare Tax. Form 1040ez 2012  Beginning in 2013, a 0. Form 1040ez 2012 9% Additional Medicare Tax applies to Medicare wages, railroad retirement (RRTA) compensation, and self-employment income that are more than: $125,000 if married filing separately, $250,000 if married filing jointly, or $200,000 if single, head of household, or qualifying widow(er). Form 1040ez 2012 For more information, see Form 8959 and its instructions. Form 1040ez 2012 Net Investment Income Tax (NIIT). Form 1040ez 2012  Beginning in 2013, the NIIT applies at a rate of 3. Form 1040ez 2012 8% to certain net investment income of individuals, estates and trusts that have income above the threshold amounts. Form 1040ez 2012 Individuals will owe the tax if they have net investment income and also have modified adjusted gross income over the following thresholds for their filing status: Married filing jointly, $250,000; Married filing separately, $125,000; Single, $200,000; Head of household (with qualifying person), $200,000; Qualifying widow(er) with dependent child, $250,000. Form 1040ez 2012 For more information, see Form 8960 and its instructions. Form 1040ez 2012 Reminders Terrorist attacks. Form 1040ez 2012  You can exclude from income certain disaster assistance, disability, and death payments received as a result of a terrorist or military action. Form 1040ez 2012 For more information, see Publication 3920, Tax Relief for Victims of Terrorist Attacks. Form 1040ez 2012 Gulf oil spill. Form 1040ez 2012  You are required to include in your gross income payments you received for lost wages, lost business income, or lost profits. Form 1040ez 2012 See Gulf oil spill under Other Income, later. Form 1040ez 2012 Qualified settlement income. Form 1040ez 2012 . Form 1040ez 2012  If you are a qualified taxpayer, you can contribute all or part of your qualified settlement income, up to $100,000, to an eligible retirement plan, including an IRA. Form 1040ez 2012 Contributions to eligible retirement plans, other than a Roth IRA or a designated Roth contribution, reduce the qualified settlement income that you must include in income. Form 1040ez 2012 See Exxon Valdez settlement income under Other Income, later. Form 1040ez 2012 Foreign income. Form 1040ez 2012  If you are a U. Form 1040ez 2012 S. Form 1040ez 2012 citizen or resident alien, you must report income from sources outside the United States (foreign income) on your tax return unless it is exempt by U. Form 1040ez 2012 S. Form 1040ez 2012 law. Form 1040ez 2012 This is true whether you reside inside or outside the United States and whether or not you receive a Form W-2, Wage and Tax Statement, or Form 1099 from the foreign payer. Form 1040ez 2012 This applies to earned income (such as wages and tips) as well as unearned income (such as interest, dividends, capital gains, pensions, rents, and royalties). Form 1040ez 2012 If you reside outside the United States, you may be able to exclude part or all of your foreign source earned income. Form 1040ez 2012 For details, see Publication 54, Tax Guide for U. Form 1040ez 2012 S. Form 1040ez 2012 Citizens and Resident Aliens Abroad. Form 1040ez 2012 Disaster mitigation payments. Form 1040ez 2012 . Form 1040ez 2012  You can exclude from income grants you use to mitigate (reduce the severity of) potential damage from future natural disasters that are paid to you through state and local governments. Form 1040ez 2012 For more information, see Disaster mitigation payments under Welfare and Other Public Assistance Benefits, later. Form 1040ez 2012 Qualified joint venture. Form 1040ez 2012  A qualified joint venture conducted by you and your spouse may not be treated as a partnership if you file a joint return for the tax year. Form 1040ez 2012 See Partnership Income under Business and Investment Income, later. Form 1040ez 2012 Photographs of missing children. Form 1040ez 2012  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Form 1040ez 2012 Photographs of missing children selected by the Center may appear in this publication on pages that otherwise would be blank. Form 1040ez 2012 You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Form 1040ez 2012 Introduction You can receive income in the form of money, property, or services. Form 1040ez 2012 This publication discusses many kinds of income and explains whether they are taxable or nontaxable. Form 1040ez 2012 It includes discussions on employee wages and fringe benefits, and income from bartering, partnerships, S corporations, and royalties. Form 1040ez 2012 It also includes information on disability pensions, life insurance proceeds, and welfare and other public assistance benefits. Form 1040ez 2012 Check the index for the location of a specific subject. Form 1040ez 2012 In most cases, an amount included in your income is taxable unless it is specifically exempted by law. Form 1040ez 2012 Income that is taxable must be reported on your return and is subject to tax. Form 1040ez 2012 Income that is nontaxable may have to be shown on your tax return but is not taxable. Form 1040ez 2012 Constructively received income. Form 1040ez 2012   You are generally taxed on income that is available to you, regardless of whether it is actually in your possession. Form 1040ez 2012    A valid check that you received or that was made available to you before the end of the tax year is considered income constructively received in that year, even if you do not cash the check or deposit it to your account until the next year. Form 1040ez 2012 For example, if the postal service tries to deliver a check to you on the last day of the tax year but you are not at home to receive it, you must include the amount in your income for that tax year. Form 1040ez 2012 If the check was mailed so that it could not possibly reach you until after the end of the tax year, and you otherwise could not get the funds before the end of the year, you include the amount in your income for the next tax year. Form 1040ez 2012 Assignment of income. Form 1040ez 2012   Income received by an agent for you is income you constructively received in the year the agent received it. Form 1040ez 2012 If you agree by contract that a third party is to receive income for you, you must include the amount in your income when the third party receives it. Form 1040ez 2012 Example. Form 1040ez 2012 You and your employer agree that part of your salary is to be paid directly to one of your creditors. Form 1040ez 2012 You must include that amount in your income when your creditor receives it. Form 1040ez 2012 Prepaid income. Form 1040ez 2012   In most cases, prepaid income, such as compensation for future services, is included in your income in the year you receive it. Form 1040ez 2012 However, if you use an accrual method of accounting, you can defer prepaid income you receive for services to be performed before the end of the next tax year. Form 1040ez 2012 In this case, you include the payment in your income as you earn it by performing the services. Form 1040ez 2012 Comments and suggestions. Form 1040ez 2012   We welcome your comments about this publication and your suggestions for future editions. Form 1040ez 2012   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Form 1040ez 2012 NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Form 1040ez 2012 Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Form 1040ez 2012   You can send your comments from www. Form 1040ez 2012 irs. Form 1040ez 2012 gov/formspubs/. Form 1040ez 2012 Click on “More Information” and then on “Comment on Tax Forms and Publications. Form 1040ez 2012 ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Form 1040ez 2012 Ordering forms and publications. Form 1040ez 2012   Visit www. Form 1040ez 2012 irs. Form 1040ez 2012 gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Form 1040ez 2012 Internal Revenue Service 1201 N. Form 1040ez 2012 Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Form 1040ez 2012   If you have a tax question, check the information available on IRS. Form 1040ez 2012 gov or call 1-800-829-1040. Form 1040ez 2012 We cannot answer tax questions sent to either of the above addresses. Form 1040ez 2012 Useful Items - You may want to see: Publication 334 Tax Guide for Small Business 523 Selling Your Home 527 Residential Rental Property 541 Partnerships 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 559 Survivors, Executors, and Administrators 575 Pension and Annuity Income 915 Social Security and Equivalent Railroad Retirement Benefits 970 Tax Benefits for Education 4681 Canceled Debts, Foreclosures, Repossessions, and Abandonments Form (and Instructions) 1040 U. Form 1040ez 2012 S. Form 1040ez 2012 Individual Income Tax Return 1040A U. Form 1040ez 2012 S. Form 1040ez 2012 Individual Income Tax Return 1040EZ Income Tax Return for Single and Joint Filers With No Dependents 1040NR U. Form 1040ez 2012 S. Form 1040ez 2012 Nonresident Alien Income Tax Return 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Form 1040ez 2012 W-2 Wage and Tax Statement  See How To Get Tax Help , near the end of this publication, for information about getting these publications. Form 1040ez 2012 Prev  Up  Next   Home   More Online Publications