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Free File 2011 Taxes Online

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Free File 2011 Taxes Online

Free file 2011 taxes online Publication 1212 - Introductory Material Table of Contents Future Developments Photographs of Missing Children IntroductionOrdering forms and publications. Free file 2011 taxes online Tax questions. Free file 2011 taxes online Useful Items - You may want to see: Future Developments For the latest information about developments related to Pub. Free file 2011 taxes online 1212, such as legislation enacted after it was published, go to www. Free file 2011 taxes online irs. Free file 2011 taxes online gov/pub1212. Free file 2011 taxes online Photographs of Missing Children The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Free file 2011 taxes online Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Free file 2011 taxes online 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. Free file 2011 taxes online Introduction This publication has two purposes. Free file 2011 taxes online Its primary purpose is to help brokers and other middlemen identify publicly offered original issue discount (OID) debt instruments they may hold as nominees for the true owners, so they can file Forms 1099-OID or Forms 1099-INT as required. Free file 2011 taxes online The other purpose of the publication is to help owners of publicly offered OID debt instruments determine how much OID to report on their income tax returns. Free file 2011 taxes online The list of publicly offered OID debt instruments (OID list) is on the IRS website. Free file 2011 taxes online The original issue discount tables, Sections I-A through III-F, are only available on the IRS website at www. Free file 2011 taxes online irs. Free file 2011 taxes online gov/pub1212 by clicking the link under Recent Developments. Free file 2011 taxes online The tables are posted to the website in late November or early December of each year. Free file 2011 taxes online The information on these lists come from the issuers of the debt instruments and from financial publications and is updated annually. Free file 2011 taxes online (However, see Debt Instruments Not on the OID List, later. Free file 2011 taxes online ) Brokers and other middlemen can rely on this list to determine, for information reporting purposes, whether a debt instrument was issued at a discount and the OID to be reported on information returns. Free file 2011 taxes online However, because the information in the list has generally not been verified by the IRS as correct, the following tax matters are subject to change upon examination by the IRS. Free file 2011 taxes online The OID reported by owners of a debt instrument on their income tax returns. Free file 2011 taxes online The issuer's classification of an instrument as debt for federal income tax purposes. Free file 2011 taxes online Instructions for issuers of OID debt instruments. Free file 2011 taxes online   In general, issuers of publicly offered OID debt instruments must, within 30 days after the issue date, report information about the instruments to the IRS on Form 8281, Information Return for Publicly Offered Original Issue Discount Instruments. Free file 2011 taxes online See the form instructions for more information. Free file 2011 taxes online Issuers should report errors in and omissions from the list in writing at the following address:  IRS OID Publication Project SE:W:CAR:MP:T  1111 Constitution Ave. Free file 2011 taxes online NW, IR-6526 Washington, D. Free file 2011 taxes online C. Free file 2011 taxes online 20224 REMIC and CDO information reporting requirements. Free file 2011 taxes online   Brokers and other middlemen must follow special information reporting requirements for real estate mortgage investment conduits (REMIC) regular, and collateralized debt obligations (CDO) interests. Free file 2011 taxes online The rules are explained in Publication 938, Real Estate Mortgage Investment Conduits (REMICs) Reporting Information (And Other Collateralized Debt Obligations (CDOs)). Free file 2011 taxes online   Holders of interests in REMICs and CDOs should see chapter 1 of Publication 550 for information on REMICs and CDOs. Free file 2011 taxes online Comments and suggestions. Free file 2011 taxes online   We welcome your comments about this publication and your suggestions for future editions. Free file 2011 taxes online   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Free file 2011 taxes online NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Free file 2011 taxes online Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Free file 2011 taxes online   You can send your comments from www. Free file 2011 taxes online irs. Free file 2011 taxes online gov/formspubs/. Free file 2011 taxes online Click on “More Information” and then on “Comment on Tax Forms and Publications. Free file 2011 taxes online ”   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. Free file 2011 taxes online Ordering forms and publications. Free file 2011 taxes online   Visit www. Free file 2011 taxes online irs. Free file 2011 taxes online 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. Free file 2011 taxes online Internal Revenue Service 1201 N. Free file 2011 taxes online Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Free file 2011 taxes online   If you have a tax question, check the information available on IRS. Free file 2011 taxes online gov or call 1-800-829-1040. Free file 2011 taxes online We cannot answer tax questions sent to any of the preceding addresses. Free file 2011 taxes online Useful Items - You may want to see: Publication 515 Withholding of Tax on Nonresident Aliens and Foreign Entities 550 Investment Income and Expenses 938 Real Estate Mortgage Investment Conduits (REMICs) Reporting Information (And Other Collateralized Debt Obligations (CDOs)). Free file 2011 taxes online Form (and Instructions) 1096 Annual Summary and Transmittal of U. Free file 2011 taxes online S. Free file 2011 taxes online Information Returns 1099-B Proceeds From Broker and Barter Exchange Transactions 1099-INT Interest Income 1099-OID Original Issue Discount 8949 Sales and Other Dispositions of Capital Assets Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends Schedule D (Form 1040) Capital Gains and Losses W-8 Instructions for the Requester of Forms W-8BEN, W-8ECI, W-8EXP, and W-8IMY See How To Get Tax Help near the end of this publication for information about getting publications and forms. Free file 2011 taxes online Prev  Up  Next   Home   More Online Publications
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SOI Tax Stats - Personal Wealth Statistics

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What is the Personal Wealth Study?

The Personal Wealth Study uses information reported on Form 706, United States Estate (and Generation Skipping Transfer) Tax Return, to estimate the wealth of the living population. These estimates, based on the Estate Multiplier technique, appear every three years. The estimates are limited to that segment of the population for whom personal wealth is at least equal to the estate tax filing threshold in effect for the estimation period.

For information about selected terms and concepts and a description of the data sources and limitations, please visit Personal Wealth Study Metadata.

SOI Data Tables SOI Bulletin Articles Research Papers
 
Additional Information

Compendium of Federal 
Estate Tax & Personal 
Wealth Studies: Volume 1
 

Compendium of Federal 
Transfer Tax & Personal 
Wealth Studies: Volume 2

 

SOI Data Tables

Included Items: Total and selected assets, debts and mortgages, and net worth.

All Top Wealthholders by Size of Net Worth

Female Top Wealthholders by Size of Net Worth

Male Top Wealthholders by Size of Net Worth

Female Top Wealthholders by Age

Male Top Wealthholders by Age

Top Wealthholders by State of Residence


SOI Bulletin Articles

The articles below contain detailed analysis, including some year-to-year comparisons, as well as an explanation of estimation methodology and data tables. All of the articles are in .pdf format. These articles were also published in the quarterly SOI Bulletin.

2007      2004      2001     1998     1995     1992      1989      1986

The Underlying Methodology of the Estate Multiplier Technique Recent Improvements for 1989

Preliminary Estimates of Personal Wealth, 1982: Composition of Assets

Estimates of Personal Wealth, 1982: A Second Look

Trends in Personal Wealth, 1976-1981


Research Papers

The following are research papers written by SOI analysts.  The papers below are in .pdf format.

Consider the Source: Differences in Estimates of Income and Wealth From Survey and Tax Data
Author: Barry W. Johnson                 Kevin Moore
Statistics of Income, IRS     Federal Reserve Board of Governors
This paper examines the comparability of administrative and survey data, focusing specifically on data from Federal income and estate tax returns collected by the Statistics of Income (SOI) Division of the U.S. Internal Revenue Service (IRS), and the Survey of Consumer Finances (SCF) sponsored by the Board of Governors of the Federal Reserve System.

 

Updating Techniques for Estimating Wealth from Federal Estate Tax Returns
Author: Barry W. Johnson
Statistics of Income, IRS
This paper documents the history and development of the estate multiplier technique, a statistical methodology for estimating the wealth of a living population using data reported on returns filed for wealthy decedents, with an emphasis on recent methodological improvements.

 


Additional Information

The Federal Reserve Board of Governor's triennial Survey of Consumer Finances, which is supported by the Statistics of Income Division, provides estimates of household finances, including wealth, income, and debts.  Analyses of survey results, as well as public-use data sets, can be accessed online at through the Federal Reserve.
 


File readers

Bulletin articles and research papers are available in Adobe PDF format, which requires the free Adobe Acrobat reader to view and print these files.  Data tables are available in Excel version 4.0.  A free Excel viewer is available for download, if needed.

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Page Last Reviewed or Updated: 31-Jan-2014

The Free File 2011 Taxes Online

Free file 2011 taxes online 6. Free file 2011 taxes online   Basis of Assets Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Cost BasisReal Property Allocating the Basis Uniform Capitalization Rules Adjusted BasisIncreases to Basis Decreases to Basis Basis Other Than CostTaxable Exchanges Involuntary Conversions Nontaxable Exchanges Property Received as a Gift Property Transferred From a Spouse Inherited Property Property Distributed From a Partnership or Corporation Introduction Your basis is the amount of your investment in property for tax purposes. Free file 2011 taxes online Use basis to figure the gain or loss on the sale, exchange, or other disposition of property. Free file 2011 taxes online Also use basis to figure depreciation, amortization, depletion, and casualty losses. Free file 2011 taxes online If you use property for both business or investment purposes and for personal purposes, you must allocate the basis based on the use. Free file 2011 taxes online Only the basis allocated to the business or investment use of the property can be depreciated. Free file 2011 taxes online Your original basis in property is adjusted (increased or decreased) by certain events. Free file 2011 taxes online For example, if you make improvements to the property, increase your basis. Free file 2011 taxes online If you take deductions for depreciation, or casualty losses, or claim certain credits, reduce your basis. Free file 2011 taxes online Keep accurate records of all items that affect the basis of your assets. Free file 2011 taxes online For information on keeping records, see chapter 1. Free file 2011 taxes online Topics - This chapter discusses: Cost basis Adjusted basis Basis other than cost Useful Items - You may want to see: Publication 535 Business Expenses 544 Sales and Other Dispositions of Assets 551 Basis of Assets 946 How To Depreciate Property See chapter 16 for information about getting publications and forms. Free file 2011 taxes online Cost Basis The basis of property you buy is usually its cost. Free file 2011 taxes online Cost is the amount you pay in cash, debt obligations, other property, or services. Free file 2011 taxes online Your cost includes amounts you pay for sales tax, freight, installation, and testing. Free file 2011 taxes online The basis of real estate and business assets will include other items, discussed later. Free file 2011 taxes online Basis generally does not include interest payments. Free file 2011 taxes online However, see Carrying charges and Capitalized interest in chapter 4 of Publication 535. Free file 2011 taxes online You also may have to capitalize (add to basis) certain other costs related to buying or producing property. Free file 2011 taxes online Under the uniform capitalization rules, discussed later, you may have to capitalize direct costs and certain indirect costs of producing property. Free file 2011 taxes online Loans with low or no interest. Free file 2011 taxes online   If you buy property on a time-payment plan that charges little or no interest, the basis of your property is your stated purchase price minus the amount considered to be unstated interest. Free file 2011 taxes online You generally have unstated interest if your interest rate is less than the applicable federal rate. Free file 2011 taxes online See the discussion of unstated interest in Publication 537, Installment Sales. Free file 2011 taxes online Real Property Real property, also called real estate, is land and generally anything built on, growing on, or attached to land. Free file 2011 taxes online If you buy real property, certain fees and other expenses you pay are part of your cost basis in the property. Free file 2011 taxes online Some of these expenses are discussed next. Free file 2011 taxes online Lump sum purchase. Free file 2011 taxes online   If you buy improvements, such as buildings, and the land on which they stand for a lump sum, allocate your cost basis between the land and improvements. Free file 2011 taxes online Allocate the cost basis according to the respective fair market values (FMVs) of the land and improvements at the time of purchase. Free file 2011 taxes online Figure the basis of each asset by multiplying the lump sum by a fraction. Free file 2011 taxes online The numerator is the FMV of that asset and the denominator is the FMV of the whole property at the time of purchase. Free file 2011 taxes online Fair market value (FMV). Free file 2011 taxes online   FMV is the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all necessary facts. Free file 2011 taxes online Sales of similar property on or about the same date may help in figuring the FMV of the property. Free file 2011 taxes online If you are not certain of the FMV of the land and improvements, you can allocate the basis according to their assessed values for real estate tax purposes. Free file 2011 taxes online Real estate taxes. Free file 2011 taxes online   If you pay the real estate taxes the seller owed on real property you bought, and the seller did not reimburse you, treat those taxes as part of your basis. Free file 2011 taxes online   If you reimburse the seller for taxes the seller paid for you, you generally can deduct that amount as a tax expense. Free file 2011 taxes online Whether or not you reimburse the seller, do not include that amount in the basis of your property. Free file 2011 taxes online Settlement costs. Free file 2011 taxes online   Your basis includes the settlement fees and closing costs for buying the property. Free file 2011 taxes online See Publication 551 for a detailed list of items you can and cannot include in basis. Free file 2011 taxes online   Do not include fees and costs for getting a loan on the property. Free file 2011 taxes online Also, do not include amounts placed in escrow for the future payment of items such as taxes and insurance. Free file 2011 taxes online Points. Free file 2011 taxes online   If you pay points to get a loan (including a mortgage, second mortgage, or line-of-credit), do not add the points to the basis of the related property. Free file 2011 taxes online You may be able to deduct the points currently or over the term of the loan. Free file 2011 taxes online For more information about deducting points, see Points in chapter 4 of Publication 535. Free file 2011 taxes online Assumption of a mortgage. Free file 2011 taxes online   If you buy property and assume (or buy the property subject to) an existing mortgage, your basis includes the amount you pay for the property plus the amount you owe on the mortgage. Free file 2011 taxes online Example. Free file 2011 taxes online If you buy a farm for $100,000 cash and assume a mortgage of $400,000, your basis is $500,000. Free file 2011 taxes online Constructing assets. Free file 2011 taxes online   If you build property or have assets built for you, your expenses for this construction are part of your basis. Free file 2011 taxes online Some of these expenses include the following costs: Land, Labor and materials, Architect's fees, Building permit charges, Payments to contractors, Payments for rental equipment, and Inspection fees. Free file 2011 taxes online   In addition, if you use your own employees, farm materials, and equipment to build an asset, do not deduct the following expenses. Free file 2011 taxes online You must capitalize them (include them in the asset's basis). Free file 2011 taxes online Employee wages paid for the construction work, reduced by any employment credits allowed. Free file 2011 taxes online Depreciation on equipment you own while it is used in the construction. Free file 2011 taxes online Operating and maintenance costs for equipment used in the construction. Free file 2011 taxes online The cost of business supplies and materials used in the construction. Free file 2011 taxes online    Do not include the value of your own labor, or any other labor you did not pay for, in the basis of any property you construct. Free file 2011 taxes online Allocating the Basis In some instances, the rules for determining basis apply to a group of assets acquired in the same transaction or to property that consists of separate items. Free file 2011 taxes online To determine the basis of these assets or separate items, there must be an allocation of basis. Free file 2011 taxes online Group of assets acquired. Free file 2011 taxes online   If you buy multiple assets for a lump sum, allocate the amount you pay among the assets. Free file 2011 taxes online Use this allocation to figure your basis for depreciation and gain or loss on a later disposition of any of these assets. Free file 2011 taxes online You and the seller may agree in the sales contract to a specific allocation of the purchase price among the assets. Free file 2011 taxes online If this allocation is based on the value of each asset and you and the seller have adverse tax interests, the allocation generally will be accepted. Free file 2011 taxes online Farming business acquired. Free file 2011 taxes online   If you buy a group of assets that makes up a farming business, there are special rules you must use to allocate the purchase price among the assets. Free file 2011 taxes online Generally, reduce the purchase price by any cash received. Free file 2011 taxes online Allocate the remaining purchase price to the other business assets received in proportion to (but not more than) their FMV and in a certain order. Free file 2011 taxes online See Trade or Business Acquired under Allocating the Basis in Publication 551 for more information. Free file 2011 taxes online Transplanted embryo. Free file 2011 taxes online   If you buy a cow that is pregnant with a transplanted embryo, allocate to the basis of the cow the part of the purchase price equal to the FMV of the cow without the implant. Free file 2011 taxes online Allocate the rest of the purchase price to the basis of the calf. Free file 2011 taxes online Neither the cost allocated to the cow nor the cost allocated to the calf is deductible as a current business expense. Free file 2011 taxes online Uniform Capitalization Rules Under the uniform capitalization rules, you must include certain direct and indirect costs in the basis of property you produce or in your inventory costs, rather than claim them as a current deduction. Free file 2011 taxes online You recover these costs through depreciation, amortization, or cost of goods sold when you use, sell, or otherwise dispose of the property. Free file 2011 taxes online Generally, you are subject to the uniform capitalization rules if you do any of the following: Produce real or tangible personal property, or Acquire property for resale. Free file 2011 taxes online However, this rule does not apply to personal property if your average annual gross receipts for the 3-tax-year period ending with the year preceding the current tax year are $10 million or less. Free file 2011 taxes online You produce property if you construct, build, install, manufacture, develop, improve, or create the property. Free file 2011 taxes online You are not subject to the uniform capitalization rules if the property is produced for personal use. Free file 2011 taxes online In a farming business, you produce property if you raise or grow any agricultural or horticultural commodity, including plants and animals. Free file 2011 taxes online Plants. Free file 2011 taxes online   A plant produced in a farming business includes the following items: A fruit, nut, or other crop-bearing tree; An ornamental tree; A vine; A bush; Sod; and The crop or yield of a plant that will have more than one crop or yield. Free file 2011 taxes online Animals. Free file 2011 taxes online   An animal produced in a farming business includes any stock, poultry or other bird, and fish or other sea life. Free file 2011 taxes online The direct and indirect costs of producing plants or animals include preparatory costs and preproductive period costs. Free file 2011 taxes online Preparatory costs include the acquisition costs of the seed, seedling, plant, or animal. Free file 2011 taxes online For plants, preproductive period costs include the costs of items such as irrigation, pruning, frost protection, spraying, and harvesting. Free file 2011 taxes online For animals, preproductive period costs include the costs of items such as feed, maintaining pasture or pen areas, breeding, veterinary services, and bedding. Free file 2011 taxes online Exceptions. Free file 2011 taxes online   In a farming business, the uniform capitalization rules do not apply to: Any animal, Any plant with a preproductive period of 2 years or less, or Any costs of replanting certain plants lost or damaged due to casualty. Free file 2011 taxes online   Exceptions (1) and (2) do not apply to a corporation, partnership, or tax shelter required to use an accrual method of accounting. Free file 2011 taxes online See Accrual Method Required under Accounting Methods in chapter 2. Free file 2011 taxes online   In addition, you can elect not to use the uniform capitalization rules for plants with a preproductive period of more than 2 years. Free file 2011 taxes online If you make this election, special rules apply. Free file 2011 taxes online This election cannot be made by a corporation, partnership, or tax shelter required to use an accrual method of accounting. Free file 2011 taxes online This election also does not apply to any costs incurred for the planting, cultivation, maintenance, or development of any citrus or almond grove (or any part thereof) within the first 4 years the trees were planted. Free file 2011 taxes online    If you elect not to use the uniform capitalization rules, you must use the alternative depreciation system for all property used in any of your farming businesses and placed in service in any tax year during which the election is in effect. Free file 2011 taxes online See chapter 7, for additional information on depreciation. Free file 2011 taxes online Example. Free file 2011 taxes online You grow trees that have a preproductive period of more than 2 years. Free file 2011 taxes online The trees produce an annual crop. Free file 2011 taxes online You are an individual and the uniform capitalization rules apply to your farming business. Free file 2011 taxes online You must capitalize the direct costs and an allocable part of indirect costs incurred due to the production of the trees. Free file 2011 taxes online You are not required to capitalize the costs of producing the annual crop because its preproductive period is 2 years or less. Free file 2011 taxes online Preproductive period of more than 2 years. Free file 2011 taxes online   The preproductive period of plants grown in commercial quantities in the United States is based on their nationwide weighted average preproductive period. Free file 2011 taxes online Plants producing the crops or yields shown in Table 6-1 have a nationwide weighted average preproductive period of more than 2 years. Free file 2011 taxes online Other plants (not shown in Table 6-1) may also have a nationwide weighted average preproductive period of more than 2 years. Free file 2011 taxes online More information. Free file 2011 taxes online   For more information on the uniform capitalization rules that apply to property produced in a farming business, see Regulations section 1. Free file 2011 taxes online 263A-4. Free file 2011 taxes online Table 6-1. Free file 2011 taxes online Plants With a Preproductive Period of More Than 2 Years Plants producing the following crops or yields have a nationwide weighted average preproductive period of more than 2 years. Free file 2011 taxes online Almonds Apples Apricots Avocados Blueberries Cherries Chestnuts Coffee beans Currants Dates Figs Grapefruit Grapes Guavas Kiwifruit Kumquats Lemons Limes Macadamia nuts Mangoes Nectarines Olives Oranges Peaches Pears Pecans Persimmons Pistachio nuts Plums Pomegranates Prunes Tangelos Tangerines Tangors Walnuts Adjusted Basis Before figuring gain or loss on a sale, exchange, or other disposition of property or figuring allowable depreciation, depletion, or amortization, you must usually make certain adjustments to the cost basis or basis other than cost (discussed later) of the property. Free file 2011 taxes online The adjustments to the original basis are increases or decreases to the cost basis or other basis which result in the adjusted basis of the property. Free file 2011 taxes online Increases to Basis Increase the basis of any property by all items properly added to a capital account. Free file 2011 taxes online These include the cost of any improvements having a useful life of more than 1 year. Free file 2011 taxes online The following costs increase the basis of property. Free file 2011 taxes online The cost of extending utility service lines to property. Free file 2011 taxes online Legal fees, such as the cost of defending and perfecting title. Free file 2011 taxes online Legal fees for seeking a decrease in an assessment levied against property to pay for local improvements. Free file 2011 taxes online Assessments for items such as paving roads and building ditches that increase the value of the property assessed. Free file 2011 taxes online Do not deduct these expenses as taxes. Free file 2011 taxes online However, you can deduct as taxes amounts assessed for maintenance or repairs, or for meeting interest charges related to the improvements. Free file 2011 taxes online If you make additions or improvements to business property, depreciate the basis of each addition or improvement as separate depreciable property using the rules that would apply to the original property if you had placed it in service at the same time you placed the addition or improvement in service. Free file 2011 taxes online See chapter 7. Free file 2011 taxes online Deducting vs. Free file 2011 taxes online capitalizing costs. Free file 2011 taxes online   Do not add to your basis costs you can deduct as current expenses. Free file 2011 taxes online For example, amounts paid for incidental repairs or maintenance are deductible as business expenses and are not added to basis. Free file 2011 taxes online However, you can elect either to deduct or to capitalize certain other costs. Free file 2011 taxes online See chapter 7 in Publication 535. Free file 2011 taxes online Decreases to Basis The following are some items that reduce the basis of property. Free file 2011 taxes online Section 179 deduction. Free file 2011 taxes online Deductions previously allowed or allowable for amortization, depreciation, and depletion. Free file 2011 taxes online Alternative motor vehicle credit. Free file 2011 taxes online See Form 8910. Free file 2011 taxes online Alternative fuel vehicle refueling property credit. Free file 2011 taxes online See Form 8911. Free file 2011 taxes online Residential energy efficient property credits. Free file 2011 taxes online See Form 5695. Free file 2011 taxes online Investment credit (part or all) taken. Free file 2011 taxes online Casualty and theft losses and insurance reimbursements. Free file 2011 taxes online Payments you receive for granting an easement. Free file 2011 taxes online Exclusion from income of subsidies for energy conservation measures. Free file 2011 taxes online Certain canceled debt excluded from income. Free file 2011 taxes online Rebates from a manufacturer or seller. Free file 2011 taxes online Patronage dividends received from a cooperative association as a result of a purchase of property. Free file 2011 taxes online See Patronage Dividends in chapter 3. Free file 2011 taxes online Gas-guzzler tax. Free file 2011 taxes online See Form 6197. Free file 2011 taxes online Some of these items are discussed next. Free file 2011 taxes online For a more detailed list of items that decrease basis, see section 1016 of the Internal Revenue Code and Publication 551. Free file 2011 taxes online Depreciation and section 179 deduction. Free file 2011 taxes online   The adjustments you must make to the basis of the property if you take the section 179 deduction or depreciate the property are explained next. Free file 2011 taxes online For more information on these deductions, see chapter 7. Free file 2011 taxes online Section 179 deduction. Free file 2011 taxes online   If you take the section 179 expense deduction for all or part of the cost of qualifying business property, decrease the basis of the property by the deduction. Free file 2011 taxes online Depreciation. Free file 2011 taxes online   Decrease the basis of property by the depreciation you deducted or could have deducted on your tax returns under the method of depreciation you chose. Free file 2011 taxes online If you took less depreciation than you could have under the method chosen, decrease the basis by the amount you could have taken under that method. Free file 2011 taxes online If you did not take a depreciation deduction, reduce the basis by the full amount of the depreciation you could have taken. Free file 2011 taxes online   If you deducted more depreciation than you should have, decrease your basis by the amount you should have deducted plus the part of the excess depreciation you deducted that actually reduced your tax liability for any year. Free file 2011 taxes online   See chapter 7 for information on figuring the depreciation you should have claimed. Free file 2011 taxes online   In decreasing your basis for depreciation, take into account the amount deducted on your tax returns as depreciation and any depreciation you must capitalize under the uniform capitalization rules. Free file 2011 taxes online Casualty and theft losses. Free file 2011 taxes online   If you have a casualty or theft loss, decrease the basis of the property by any insurance or other reimbursement. Free file 2011 taxes online Also, decrease it by any deductible loss not covered by insurance. Free file 2011 taxes online See chapter 11 for information about figuring your casualty or theft loss. Free file 2011 taxes online   You must increase your basis in the property by the amount you spend on clean-up costs (such as debris removal) and repairs that restore the property to its pre-casualty condition. Free file 2011 taxes online To make this determination, compare the repaired property to the property before the casualty. Free file 2011 taxes online Easements. Free file 2011 taxes online   The amount you receive for granting an easement is usually considered to be proceeds from the sale of an interest in the real property. Free file 2011 taxes online It reduces the basis of the affected part of the property. Free file 2011 taxes online If the amount received is more than the basis of the part of the property affected by the easement, reduce your basis in that part to zero and treat the excess as a recognized gain. Free file 2011 taxes online See Easements and rights-of-way in chapter 3. Free file 2011 taxes online Exclusion from income of subsidies for energy conservation measures. Free file 2011 taxes online   You can exclude from gross income any subsidy you received from a public utility company for the purchase or installation of an energy conservation measure for a dwelling unit. Free file 2011 taxes online Reduce the basis of the property by the excluded amount. Free file 2011 taxes online Canceled debt excluded from income. Free file 2011 taxes online   If a debt you owe is canceled or forgiven, other than as a gift or bequest, you generally must include the canceled amount in your gross income for tax purposes. Free file 2011 taxes online A debt includes any indebtedness for which you are liable or which attaches to property you hold. Free file 2011 taxes online   You can exclude your canceled debt from income if the debt is any of the following. Free file 2011 taxes online Debt canceled in a bankruptcy case or when you are insolvent. Free file 2011 taxes online Qualified farm debt. Free file 2011 taxes online Qualified real property business debt (provided you are not a C corporation). Free file 2011 taxes online Qualified principal residence indebtedness. Free file 2011 taxes online Discharge of certain indebtedness of a qualified individual because of Midwestern disasters. Free file 2011 taxes online If you exclude canceled debt described in (1) or (2), you may have to reduce the basis of your depreciable and nondepreciable property. Free file 2011 taxes online If you exclude canceled debt described in (3), you must only reduce the basis of your depreciable property by the excluded amount. Free file 2011 taxes online   For more information about canceled debt in a bankruptcy case, see Publication 908, Bankruptcy Tax Guide. Free file 2011 taxes online For more information about insolvency and canceled debt that is qualified farm debt or qualified principal residence indebtedness, see chapter 3. Free file 2011 taxes online For more information about qualified real property business debt, see Publication 334, Tax Guide for Small Business. Free file 2011 taxes online For more information about canceled debt in Midwestern disaster areas, see Publication 4492-B, Information for Affected Taxpayers in the Midwestern Disaster Areas. Free file 2011 taxes online Basis Other Than Cost There are times when you cannot use cost as basis. Free file 2011 taxes online In these situations, the fair market value or the adjusted basis of property may be used. Free file 2011 taxes online Examples are discussed next. Free file 2011 taxes online Property changed from personal to business or rental use. Free file 2011 taxes online   When you hold property for personal use and then change it to business use or use it to produce rent, you must figure its basis for depreciation. Free file 2011 taxes online An example of changing property from personal to business use would be changing the use of your pickup truck that you originally purchased for your personal use to use in your farming business. Free file 2011 taxes online   The basis for depreciation is the lesser of: The FMV of the property on the date of the change, or Your adjusted basis on the date of the change. Free file 2011 taxes online   If you later sell or dispose of this property, the basis you use will depend on whether you are figuring a gain or loss. Free file 2011 taxes online The basis for figuring a gain is your adjusted basis in the property when you sell the property. Free file 2011 taxes online Figure the basis for a loss starting with the smaller of your adjusted basis or the FMV of the property at the time of the change to business or rental use. Free file 2011 taxes online Then make adjustments (increases and decreases) for the period after the change in the property's use, as discussed earlier under Adjusted Basis . Free file 2011 taxes online Property received for services. Free file 2011 taxes online   If you receive property for services, include the property's FMV in income. Free file 2011 taxes online The amount you include in income becomes your basis. Free file 2011 taxes online If the services were performed for a price agreed on beforehand, it will be accepted as the FMV of the property if there is no evidence to the contrary. Free file 2011 taxes online Example. Free file 2011 taxes online George Smith is an accountant and also operates a farming business. Free file 2011 taxes online George agreed to do some accounting work for his neighbor in exchange for a dairy cow. Free file 2011 taxes online The accounting work and the cow are each worth $1,500. Free file 2011 taxes online George must include $1,500 in income for his accounting services. Free file 2011 taxes online George's basis in the cow is $1,500. Free file 2011 taxes online Taxable Exchanges A taxable exchange is one in which the gain is taxable, or the loss is deductible. Free file 2011 taxes online A taxable gain or deductible loss also is known as a recognized gain or loss. Free file 2011 taxes online A taxable exchange occurs when you receive cash or get property that is not similar or related in use to the property exchanged. Free file 2011 taxes online If you receive property in exchange for other property in a taxable exchange, the basis of the property you receive is usually its FMV at the time of the exchange. Free file 2011 taxes online Example. Free file 2011 taxes online You trade a tract of farmland with an adjusted basis of $2,000 for a tractor that has an FMV of $6,000. Free file 2011 taxes online You must report a taxable gain of $4,000 for the land. Free file 2011 taxes online The tractor has a basis of $6,000. Free file 2011 taxes online Involuntary Conversions If you receive property as a result of an involuntary conversion, such as a casualty, theft, or condemnation, figure the basis of the replacement property you receive using the basis of the converted property. Free file 2011 taxes online Similar or related property. Free file 2011 taxes online   If the replacement property is similar or related in service or use to the converted property, the replacement property's basis is the same as the old property's basis on the date of the conversion. Free file 2011 taxes online However, make the following adjustments. Free file 2011 taxes online Decrease the basis by the following amounts. Free file 2011 taxes online Any loss you recognize on the involuntary conversion. Free file 2011 taxes online Any money you receive that you do not spend on similar property. Free file 2011 taxes online Increase the basis by the following amounts. Free file 2011 taxes online Any gain you recognize on the involuntary conversion. Free file 2011 taxes online Any cost of acquiring the replacement property. Free file 2011 taxes online Money or property not similar or related. Free file 2011 taxes online   If you receive money or property not similar or related in service or use to the converted property and you buy replacement property similar or related in service or use to the converted property, the basis of the replacement property is its cost decreased by the gain not recognized on the involuntary conversion. Free file 2011 taxes online Allocating the basis. Free file 2011 taxes online   If you buy more than one piece of replacement property, allocate your basis among the properties based on their respective costs. Free file 2011 taxes online Basis for depreciation. Free file 2011 taxes online   Special rules apply in determining and depreciating the basis of MACRS property acquired in an involuntary conversion. Free file 2011 taxes online For information, see Figuring the Deduction for Property Acquired in a Nontaxable Exchange under Figuring Depreciation Under MACRS in chapter 7. Free file 2011 taxes online For more information about involuntary conversions, see chapter 11. Free file 2011 taxes online Nontaxable Exchanges A nontaxable exchange is an exchange in which you are not taxed on any gain and you cannot deduct any loss. Free file 2011 taxes online A nontaxable gain or loss also is known as an unrecognized gain or loss. Free file 2011 taxes online If you receive property in a nontaxable exchange, its basis is usually the same as the basis of the property you transferred. Free file 2011 taxes online Like-Kind Exchanges The exchange of property for the same kind of property is the most common type of nontaxable exchange. Free file 2011 taxes online For an exchange to qualify as a like-kind exchange, you must hold for business or investment purposes both the property you transfer and the property you receive. Free file 2011 taxes online There must also be an exchange of like-kind property. Free file 2011 taxes online For more information, see Like-Kind Exchanges in  chapter 8. Free file 2011 taxes online The basis of the property you receive generally is the same as the adjusted basis of the property you gave up. Free file 2011 taxes online Example 1. Free file 2011 taxes online You traded a truck you used in your farming business for a new smaller truck to use in farming. Free file 2011 taxes online The adjusted basis of the old truck was $10,000. Free file 2011 taxes online The FMV of the new truck is $30,000. Free file 2011 taxes online Because this is a nontaxable exchange, you do not recognize any gain, and your basis in the new truck is $10,000, the same as the adjusted basis of the truck you traded. Free file 2011 taxes online Example 2. Free file 2011 taxes online You trade a field cultivator (adjusted basis of $8,000) for a planter (FMV of $9,000). Free file 2011 taxes online You use both the field cultivator and the planter in your farming business. Free file 2011 taxes online The basis of the planter you receive is $8,000, the same as the field cultivator traded Exchange expenses. Free file 2011 taxes online   Exchange expenses generally are the closing costs that you pay. Free file 2011 taxes online They include such items as brokerage commissions, attorney fees, and deed preparation fees. Free file 2011 taxes online Add them to the basis of the like-kind property you receive. Free file 2011 taxes online Property plus cash. Free file 2011 taxes online   If you trade property in a like-kind exchange and also pay money, the basis of the property you receive is the adjusted basis of the property you gave up plus the money you paid. Free file 2011 taxes online Example. Free file 2011 taxes online You trade in a truck (adjusted basis of $3,000) for another truck (FMV of $7,500) and pay $4,000. Free file 2011 taxes online Your basis in the new truck is $7,000 (the $3,000 adjusted basis of the old truck plus the $4,000 cash). Free file 2011 taxes online Special rules for related persons. Free file 2011 taxes online   If a like-kind exchange takes place directly or indirectly between related persons and either party disposes of the property within 2 years after the exchange, the exchange no longer qualifies for like-kind exchange treatment. Free file 2011 taxes online Each person must report any gain or loss not recognized on the original exchange unless the loss is not deductible under the related party rules. Free file 2011 taxes online Each person reports it on the tax return filed for the year in which the later disposition occurred. Free file 2011 taxes online If this rule applies, the basis of the property received in the original exchange will be its FMV. Free file 2011 taxes online For more information, see chapter 8. Free file 2011 taxes online Exchange of business property. Free file 2011 taxes online   Exchanging the property of one business for the property of another business generally is a multiple property exchange. Free file 2011 taxes online For information on figuring basis, see Multiple Property Exchanges in chapter 1 of Publication 544. Free file 2011 taxes online Basis for depreciation. Free file 2011 taxes online   Special rules apply in determining and depreciating the basis of MACRS property acquired in a like-kind transaction. Free file 2011 taxes online For information, see Figuring the Deduction for Property Acquired in a Nontaxable Exchange under Figuring Depreciation Under MACRS in chapter 7. Free file 2011 taxes online Partially Nontaxable Exchanges A partially nontaxable exchange is an exchange in which you receive unlike property or money in addition to like-kind property. Free file 2011 taxes online The basis of the property you receive is the same as the adjusted basis of the property you gave up with the following adjustments. Free file 2011 taxes online Decrease the basis by the following amounts. Free file 2011 taxes online Any money you receive. Free file 2011 taxes online Any loss you recognize on the exchange. Free file 2011 taxes online Increase the basis by the following amounts. Free file 2011 taxes online Any additional costs you incur. Free file 2011 taxes online Any gain you recognize on the exchange. Free file 2011 taxes online If the other party to the exchange assumes your liabilities, treat the debt assumption as money you received in the exchange. Free file 2011 taxes online Example 1. Free file 2011 taxes online You trade farmland (basis of $100,000) for another tract of farmland (FMV of $110,000) and $30,000 cash. Free file 2011 taxes online You realize a gain of $40,000. Free file 2011 taxes online This is the FMV of the land received plus the cash minus the basis of the land you traded ($110,000 + $30,000 − $100,000). Free file 2011 taxes online Include your gain in income (recognize gain) only to the extent of the cash received. Free file 2011 taxes online Your basis in the land you received is figured as follows. Free file 2011 taxes online Basis of land traded $100,000 Minus: Cash received (adjustment 1(a)) − 30,000   $70,000 Plus: Gain recognized (adjustment 2(b)) + 30,000 Basis of land received $100,000 Example 2. Free file 2011 taxes online You trade a truck (adjusted basis of $22,750) for another truck (FMV of $20,000) and $10,000 cash. Free file 2011 taxes online You realize a gain of $7,250. Free file 2011 taxes online This is the FMV of the truck received plus the cash minus the adjusted basis of the truck you traded ($20,000 + $10,000 − $22,750). Free file 2011 taxes online You include all the gain in your income (recognize gain) because the gain is less than the cash you received. Free file 2011 taxes online Your basis in the truck you received is figured as follows. Free file 2011 taxes online Adjusted basis of truck traded $22,750 Minus: Cash received (adjustment 1(a)) −10,000   $12,750 Plus: Gain recognized (adjustment 2(b)) + 7,250 Basis of truck received $20,000 Allocation of basis. Free file 2011 taxes online   If you receive like-kind and unlike properties in the exchange, allocate the basis first to the unlike property, other than money, up to its FMV on the date of the exchange. Free file 2011 taxes online The rest is the basis of the like-kind property. Free file 2011 taxes online Example. Free file 2011 taxes online You traded a tractor with an adjusted basis of $15,000 for another tractor that had an FMV of $12,500. Free file 2011 taxes online You also received $1,000 cash and a truck that had an FMV of $3,000. Free file 2011 taxes online The truck is unlike property. Free file 2011 taxes online You realized a gain of $1,500. Free file 2011 taxes online This is the FMV of the tractor received plus the FMV of the truck received plus the cash minus the adjusted basis of the tractor you traded ($12,500 + $3,000 + $1,000 − $15,000). Free file 2011 taxes online You include in income (recognize) all $1,500 of the gain because it is less than the FMV of the unlike property plus the cash received. Free file 2011 taxes online Your basis in the properties you received is figured as follows. Free file 2011 taxes online Adjusted basis of old tractor $15,000 Minus: Cash received (adjustment 1(a)) − 1,000   $14,000 Plus: Gain recognized (adjustment 2(b)) + 1,500 Total basis of properties received $15,500 Allocate the total basis of $15,500 first to the unlike property—the truck ($3,000). Free file 2011 taxes online This is the truck's FMV. Free file 2011 taxes online The rest ($12,500) is the basis of the tractor. Free file 2011 taxes online Sale and Purchase If you sell property and buy similar property in two mutually dependent transactions, you may have to treat the sale and purchase as a single nontaxable exchange. Free file 2011 taxes online Example. Free file 2011 taxes online You used a tractor on your farm for 3 years. Free file 2011 taxes online Its adjusted basis is $22,000 and its FMV is $40,000. Free file 2011 taxes online You are interested in a new tractor, which sells for $60,000. Free file 2011 taxes online Ordinarily, you would trade your old tractor for the new one and pay the dealer $20,000. Free file 2011 taxes online Your basis for depreciating the new tractor would then be $42,000 ($20,000 + $22,000, the adjusted basis of your old tractor). Free file 2011 taxes online However, you want a higher basis for depreciating the new tractor, so you agree to pay the dealer $60,000 for the new tractor if he will pay you $40,000 for your old tractor. Free file 2011 taxes online Because the two transactions are dependent on each other, you are treated as having exchanged your old tractor for the new one and paid $20,000 ($60,000 − $40,000). Free file 2011 taxes online Your basis for depreciating the new tractor is $42,000, the same as if you traded the old tractor. Free file 2011 taxes online Property Received as a Gift To figure the basis of property you receive as a gift, you must know its adjusted basis (defined earlier) to the donor just before it was given to you. Free file 2011 taxes online You also must know its FMV at the time it was given to you and any gift tax paid on it. Free file 2011 taxes online FMV equal to or greater than donor's adjusted basis. Free file 2011 taxes online   If the FMV of the property is equal to or greater than the donor's adjusted basis, your basis is the donor's adjusted basis when you received the gift. Free file 2011 taxes online Increase your basis by all or part of any gift tax paid, depending on the date of the gift. Free file 2011 taxes online   Also, for figuring gain or loss from a sale or other disposition of the property, or for figuring depreciation, depletion, or amortization deductions on business property, you must increase or decrease your basis (the donor's adjusted basis) by any required adjustments to basis while you held the property. Free file 2011 taxes online See Adjusted Basis , earlier. Free file 2011 taxes online   If you received a gift during the tax year, increase your basis in the gift (the donor's adjusted basis) by the part of the gift tax paid on it due to the net increase in value of the gift. Free file 2011 taxes online Figure the increase by multiplying the gift tax paid by the following fraction. Free file 2011 taxes online Net increase in value of the gift Amount of the gift   The net increase in value of the gift is the FMV of the gift minus the donor's adjusted basis. Free file 2011 taxes online The amount of the gift is its value for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. Free file 2011 taxes online Example. Free file 2011 taxes online In 2013, you received a gift of property from your mother that had an FMV of $50,000. Free file 2011 taxes online Her adjusted basis was $20,000. Free file 2011 taxes online The amount of the gift for gift tax purposes was $36,000 ($50,000 minus the $14,000 annual exclusion). Free file 2011 taxes online She paid a gift tax of $7,320. Free file 2011 taxes online Your basis, $26,076, is figured as follows. Free file 2011 taxes online Fair market value $50,000 Minus: Adjusted basis −20,000 Net increase in value $30,000 Gift tax paid $7,320 Multiplied by ($30,000 ÷ $36,000) × . Free file 2011 taxes online 83 Gift tax due to net increase in value $6,076 Adjusted basis of property to your mother +20,000 Your basis in the property $26,076 Note. Free file 2011 taxes online If you received a gift before 1977, your basis in the gift (the donor's adjusted basis) includes any gift tax paid on it. Free file 2011 taxes online However, your basis cannot exceed the FMV of the gift when it was given to you. Free file 2011 taxes online FMV less than donor's adjusted basis. Free file 2011 taxes online   If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property. Free file 2011 taxes online Your basis for figuring gain is the donor's adjusted basis plus or minus any required adjustments to basis while you held the property. Free file 2011 taxes online Your basis for figuring loss is its FMV when you received the gift plus or minus any required adjustments to basis while you held the property. Free file 2011 taxes online (See Adjusted Basis , earlier. Free file 2011 taxes online )   If you use the donor's adjusted basis for figuring a gain and get a loss, and then use the FMV for figuring a loss and get a gain, you have neither gain nor loss on the sale or other disposition of the property. Free file 2011 taxes online Example. Free file 2011 taxes online You received farmland as a gift from your parents when they retired from farming. Free file 2011 taxes online At the time of the gift, the land had an FMV of $80,000. Free file 2011 taxes online Your parents' adjusted basis was $100,000. Free file 2011 taxes online After you received the land, no events occurred that would increase or decrease your basis. Free file 2011 taxes online If you sell the land for $120,000, you will have a $20,000 gain because you must use the donor's adjusted basis at the time of the gift ($100,000) as your basis to figure a gain. Free file 2011 taxes online If you sell the land for $70,000, you will have a $10,000 loss because you must use the FMV at the time of the gift ($80,000) as your basis to figure a loss. Free file 2011 taxes online If the sales price is between $80,000 and $100,000, you have neither gain nor loss. Free file 2011 taxes online For instance, if the sales price was $90,000 and you tried to figure a gain using the donor's adjusted basis ($100,000), you would get a $10,000 loss. Free file 2011 taxes online If you then tried to figure a loss using the FMV ($80,000), you would get a $10,000 gain. Free file 2011 taxes online Business property. Free file 2011 taxes online   If you hold the gift as business property, your basis for figuring any depreciation, depletion, or amortization deductions is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you hold the property. Free file 2011 taxes online Property Transferred From a Spouse The basis of property transferred to you or transferred in trust for your benefit by your spouse is the same as your spouse's adjusted basis. Free file 2011 taxes online The same rule applies to a transfer by your former spouse if the transfer is incident to divorce. Free file 2011 taxes online However, for property transferred in trust, adjust your basis for any gain recognized by your spouse or former spouse if the liabilities assumed plus the liabilities to which the property is subject are more than the adjusted basis of the property transferred. Free file 2011 taxes online The transferor must give you the records needed to determine the adjusted basis and holding period of the property as of the date of the transfer. Free file 2011 taxes online For more information, see Property Settlements in Publication 504, Divorced or Separated Individuals. Free file 2011 taxes online Inherited Property Your basis in property you inherited from a decedent, who died before January 1, 2010, or after December 31, 2010, is generally one of the following: The FMV of the property at the date of the decedent's death. Free file 2011 taxes online If a federal estate return is filed, you can use its appraised value. Free file 2011 taxes online The FMV on the alternate valuation date, if the personal representative for the estate elects to use alternate valuation. Free file 2011 taxes online For information on the alternate valuation, see the Instructions for Form 706. Free file 2011 taxes online The decedent's adjusted basis in land to the extent of the value that is excluded from the decedent's taxable estate as a qualified conservation easement. Free file 2011 taxes online If a federal estate tax return does not have to be filed, your basis in the inherited property is its appraised value at the date of death for state inheritance or transmission taxes. Free file 2011 taxes online Special-use valuation method. Free file 2011 taxes online   Under certain conditions, when a person dies, the executor or personal representative of that person's estate may elect to value qualified real property at other than its FMV. Free file 2011 taxes online If so, the executor or personal representative values the qualified real property based on its use as a farm or other closely held business. Free file 2011 taxes online If the executor or personal representative elects this method of valuation for estate tax purposes, this value is the basis of the property for the qualified heirs. Free file 2011 taxes online The qualified heirs should be able to get the necessary value from the executor or personal representative of the estate. Free file 2011 taxes online   If you are a qualified heir who received special-use valuation property, increase your basis by any gain recognized by the estate or trust because of post-death appreciation. Free file 2011 taxes online Post-death appreciation is the property's FMV on the date of distribution minus the property's FMV either on the date of the individual's death or on the alternate valuation date. Free file 2011 taxes online Figure all FMVs without regard to the special-use valuation. Free file 2011 taxes online   You may be liable for an additional estate tax if, within 10 years after the death of the decedent, you transfer the property or the property stops being used as a farm. Free file 2011 taxes online This tax does not apply if you dispose of the property in a like-kind exchange or in an involuntary conversion in which all of the proceeds are reinvested in qualified replacement property. Free file 2011 taxes online The tax also does not apply if you transfer the property to a member of your family and certain requirements are met. Free file 2011 taxes online   You can elect to increase your basis in special-use valuation property if it becomes subject to the additional estate tax. Free file 2011 taxes online To increase your basis, you must make an irrevocable election and pay interest on the additional estate tax figured from the date 9 months after the decedent's death until the date of payment of the additional estate tax. Free file 2011 taxes online If you meet these requirements, increase your basis in the property to its FMV on the date of the decedent's death or the alternate valuation date. Free file 2011 taxes online The increase in your basis is considered to have occurred immediately before the event that resulted in the additional estate tax. Free file 2011 taxes online   You make the election by filing, with Form 706-A, United States Additional Estate Tax Return, a statement that: Contains your (and the estate's) name, address, and taxpayer identification number; Identifies the election as an election under section 1016(c) of the Internal Revenue Code; Specifies the property for which you are making the election; and Provides any additional information required by the Form 706-A instructions. Free file 2011 taxes online   For more information, see Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, Form 706-A, and the related instructions. Free file 2011 taxes online Property inherited from a decedent who died in 2010. Free file 2011 taxes online   If you inherited property from a decedent who died in 2010, different rules may apply. Free file 2011 taxes online See Publication 4895, Tax Treatment of Property Acquired From a Decendent Dying in 2010, for details. Free file 2011 taxes online Property Distributed From a Partnership or Corporation The following rules apply to determine a partner's basis and a shareholder's basis in property distributed respectively from a partnership to the partner with respect to the partner's interest in the partnership and from a corporation to the shareholder with respect to the shareholder's ownership of stock in the corporation. Free file 2011 taxes online Partner's basis. Free file 2011 taxes online   Unless there is a complete liquidation of a partner's interest, the basis of property (other than money) distributed by a partnership to the partner is its adjusted basis to the partnership immediately before the distribution. Free file 2011 taxes online However, the basis of the property to the partner cannot be more than the adjusted basis of his or her interest in the partnership reduced by any money received in the same transaction. Free file 2011 taxes online For more information, see Partner's Basis for Distributed Property in Publication 541, Partnerships. Free file 2011 taxes online Shareholder's basis. Free file 2011 taxes online   The basis of property distributed by a corporation to a shareholder is its fair market value. Free file 2011 taxes online For more information about corporate distributions, see Distributions to Shareholders in Publication 542, Corporations. Free file 2011 taxes online Prev  Up  Next   Home   More Online Publications