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Free File 2012 Taxes

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Free File 2012 Taxes

Free file 2012 taxes Publication 600 - Main Contents Table of Contents Actual Expenses Optional Sales Tax Tables Instructions for the State and Local General Sales Tax Deduction WorksheetWhat if you lived in more than one state? What if you lived in more than one locality? What if your local general sales tax rate changed during 2006? What if you lived in more than one locality in the same state during 2006? Actual Expenses Generally, you can deduct the actual state and local general sales taxes (including compensating use taxes) you paid in 2006 if the tax rate was the same as the general sales tax rate. Free file 2012 taxes However, sales taxes on food, clothing, medical supplies, and motor vehicles are deductible as a general sales tax even if the tax rate was less than the general sales tax rate. Free file 2012 taxes If you paid sales tax on a motor vehicle at a rate higher than the general sales tax rate, you can deduct only the amount of tax that you would have paid at the general sales tax rate on that vehicle. Free file 2012 taxes Motor vehicles include cars, motorcycles, motor homes, recreational vehicles, sport utility vehicles, trucks, vans, and off-road vehicles. Free file 2012 taxes Also include any state and local general sales taxes paid for a leased motor vehicle. Free file 2012 taxes Do not include sales taxes paid on items used in your trade or business. Free file 2012 taxes To deduct your actual expenses, enter the amount on Schedule A, line 5, and enter “ST” on the dotted line to the left of the line 5 entry space. Free file 2012 taxes You must keep your actual receipts showing general sales taxes paid to use this method. Free file 2012 taxes Refund of general sales taxes. Free file 2012 taxes   If you received a refund of state or local general sales taxes in 2006 for amounts paid in 2006, reduce your actual 2006 state and local general sales taxes by this amount. Free file 2012 taxes If you received a refund of state or local general sales taxes in 2006 for prior year purchases, do not reduce your 2006 state and local general sales taxes by this amount. Free file 2012 taxes But if you deducted your actual state and local general sales taxes in the earlier year and the deduction reduced your tax, you may have to include the refund in income on Form 1040, line 21. Free file 2012 taxes See Recoveries in Pub. Free file 2012 taxes 525 for details. Free file 2012 taxes Optional Sales Tax Tables Instead of using your actual expenses, you can use the tables on pages 5 through 7 to figure your state and local general sales tax deduction. Free file 2012 taxes You may also be able to add the state and local general sales taxes paid on certain specified items. Free file 2012 taxes To figure your state and local general sales tax deduction using the tables, complete the worksheet below. Free file 2012 taxes If your filing status is married filing separately, both you and your spouse elect to deduct sales taxes, and your spouse elects to use the optional sales tax tables, you also must use the tables to figure your state and local general sales tax deduction. Free file 2012 taxes State and Local General Sales Tax Deduction Worksheet (See the instructions that begin on page 3. Free file 2012 taxes ) Before you begin: See the instructions for line 1 on page 3 if: You lived in more than one state during 2006, or You had any nontaxable income in 2006. Free file 2012 taxes   1. Free file 2012 taxes Enter your state general sales taxes from the applicable table on page 5 or 6 (see page 3 of the instructions) 1. Free file 2012 taxes $     Next. Free file 2012 taxes If, for all of 2006, you lived only in Connecticut, the District of Columbia, Hawaii, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, Mississippi, New Jersey, Rhode Island, Virginia, or West Virginia, skip lines 2 through 5, enter -0- on line 6, and go to line 7. Free file 2012 taxes Otherwise, go to line 2       2. Free file 2012 taxes Did you live in Alaska, Arizona, Arkansas (Texarkana only), California (Los Angeles County only), Colorado, Georgia, Illinois, Louisiana, New York State, or North Carolina in 2006?         No. Free file 2012 taxes Enter -0-                   Yes. Free file 2012 taxes Enter your local general sales taxes from the applicable table on page 7 (see page 3 of the instructions)     2. Free file 2012 taxes $       3. Free file 2012 taxes Did your locality impose a local general sales tax in 2006? Residents of California, Nevada, and Texarkana, Arkansas, see page 3 of the instructions             No. Free file 2012 taxes Skip lines 3 through 5, enter -0- on line 6, and go to line 7             Yes. Free file 2012 taxes Enter your local general sales tax rate, but omit the percentage sign. Free file 2012 taxes For example, if your local general sales tax rate was 2. Free file 2012 taxes 5%, enter 2. Free file 2012 taxes 5. Free file 2012 taxes If your local general sales tax rate changed or you lived in more than one locality in the same state during 2006, see page 3 of the instructions. Free file 2012 taxes (If you do not know your local general sales tax rate, contact your local government. Free file 2012 taxes ) 3. Free file 2012 taxes . Free file 2012 taxes       4. Free file 2012 taxes Did you enter -0- on line 2 above?             No. Free file 2012 taxes Skip lines 4 and 5 and go to line 6             Yes. Free file 2012 taxes Enter your state general sales tax rate (shown in the table heading for your state), but omit the percentage sign. Free file 2012 taxes For example, if your state general sales tax rate is 6%, enter 6. Free file 2012 taxes 0 4. Free file 2012 taxes . Free file 2012 taxes       5. Free file 2012 taxes Divide line 3 by line 4. Free file 2012 taxes Enter the result as a decimal (rounded to at least three places) 5. Free file 2012 taxes . Free file 2012 taxes       6. Free file 2012 taxes Did you enter -0- on line 2 above?             No. Free file 2012 taxes Multiply line 2 by line 3   6. Free file 2012 taxes $     Yes. Free file 2012 taxes Multiply line 1 by line 5. Free file 2012 taxes If you lived in more than one locality in the same state during 2006, see page 4 of the instructions           7. Free file 2012 taxes Enter your state and local general sales taxes paid on specified items, if any (see page 4 of the instructions) 7. Free file 2012 taxes $   8. Free file 2012 taxes Deduction for general sales taxes. Free file 2012 taxes Add lines 1, 6, and 7. Free file 2012 taxes Enter the result here and the total from all your state and local general sales tax deduction worksheets, if you completed more than one, on Schedule A, line 5. Free file 2012 taxes Be sure to enter “ST” on the dotted line to the left of the entry space 8. Free file 2012 taxes $     Instructions for the State and Local General Sales Tax Deduction Worksheet Line 1. Free file 2012 taxes    If you lived in the same state for all of 2006, enter the applicable amount, based on your 2006 income and exemptions, from the optional state sales tax table for your state on page 5 or 6. Free file 2012 taxes Read down the “At least-But less than” columns for your state and find the line that includes your 2006 income. Free file 2012 taxes If married filing separately, do not include your spouse's income. Free file 2012 taxes Your 2006 income is the amount shown on your Form 1040, line 38, plus any nontaxable items, such as the following. Free file 2012 taxes Tax-exempt interest. Free file 2012 taxes Veterans' benefits. Free file 2012 taxes Nontaxable combat pay. Free file 2012 taxes Workers' compensation. Free file 2012 taxes Nontaxable part of social security and railroad retirement benefits. Free file 2012 taxes Nontaxable part of IRA, pension, or annuity distributions. Free file 2012 taxes Do not include rollovers. Free file 2012 taxes Public assistance payments. Free file 2012 taxes The exemptions column refers to the number of exemptions claimed on Form 1040, line 6d. Free file 2012 taxes Do not include any additional exemptions you listed on Form 8914 for individuals displaced by Hurricane Katrina. Free file 2012 taxes What if you lived in more than one state?    If you lived in more than one state during 2006, look up the table amount for each state using the above rules. Free file 2012 taxes If there is no table for your state, the table amount is considered to be zero. Free file 2012 taxes Multiply the table amount for each state you lived in by a fraction. Free file 2012 taxes The numerator of the fraction is the number of days you lived in the state during 2006 and the denominator is the total number of days in the year (365). Free file 2012 taxes Enter the total of the prorated table amounts for each state on line 1. Free file 2012 taxes However, if you also lived in a locality during 2006 that imposed a local general sales tax, do not enter the total on line 1. Free file 2012 taxes Instead, complete a separate worksheet for each state you lived in and enter the prorated amount for that state on line 1. Free file 2012 taxes Example. Free file 2012 taxes You lived in State A from January 1 through August 31, 2006 (243 days), and in State B from September 1 through December 31, 2006 (122 days). Free file 2012 taxes The table amount for State A is $500. Free file 2012 taxes The table amount for State B is $400. Free file 2012 taxes You would figure your state general sales tax as follows. Free file 2012 taxes State A: $500 x 243/365 = $333   State B: $400 x 122/365 = 134   Total = $467   If none of the localities in which you lived during 2006 imposed a local general sales tax, enter $467 on line 1 of your worksheet. Free file 2012 taxes Otherwise, complete a separate worksheet for State A and State B. Free file 2012 taxes Enter $333 on line 1 of the State A worksheet and $134 on line 1 of the State B worksheet. Free file 2012 taxes Line 2. Free file 2012 taxes   If you checked the “No” box, enter -0- on line 2, and go to line 3. Free file 2012 taxes If you checked the “Yes” box and lived in the same locality for all of 2006, enter the applicable amount, based on your 2006 income and exemptions, from the optional local sales tax table for your locality on page 7. Free file 2012 taxes Read down the “At least-But less than” columns for your locality and find the line that includes your 2006 income. Free file 2012 taxes See the line 1 instructions on this page to figure your 2006 income. Free file 2012 taxes The exemptions column refers to the number of exemptions claimed on Form 1040, line 6d. Free file 2012 taxes Do not include any additional exemptions you listed on Form 8914 for individuals displaced by Hurricane Katrina. Free file 2012 taxes What if you lived in more than one locality?   If you lived in more than one locality during 2006, look up the table amount for each locality using the above rules. Free file 2012 taxes If there is no table for your locality, the table amount is considered to be zero. Free file 2012 taxes Multiply the table amount for each locality you lived in by a fraction. Free file 2012 taxes The numerator of the fraction is the number of days you lived in the locality during 2006 and the denominator is the total number of days in the year (365). Free file 2012 taxes If you lived in more than one locality in the same state and the local general sales tax rate was the same for each locality, enter the total of the prorated table amounts for each locality in that state on line 2. Free file 2012 taxes Otherwise, complete a separate worksheet for lines 2 through 6 for each locality and enter each prorated table amount on line 2 of the applicable worksheet. Free file 2012 taxes Example. Free file 2012 taxes You lived in Locality 1 from January 1 through August 31, 2006 (243 days), and in Locality 2 from September 1 through December 31, 2006 (122 days). Free file 2012 taxes The table amount for Locality 1 is $100. Free file 2012 taxes The table amount for Locality 2 is $150. Free file 2012 taxes You would figure the amount to enter on line 2 as follows. Free file 2012 taxes Note that this amount may not equal your local sales tax deduction, which is figured on line 6 of the worksheet. Free file 2012 taxes Locality 1: $100 x 243/365 = $67   Locality 2: $150 x 122/365 = 50   Total = $117   Line 3. Free file 2012 taxes   If you lived in California, check the “No” box if your combined state and local general sales tax rate is 7. Free file 2012 taxes 25%. Free file 2012 taxes Otherwise, check the “Yes” box and include on line 3 only the part of the combined rate that is more than 7. Free file 2012 taxes 25%. Free file 2012 taxes   If you lived in Nevada, check the “No” box if your combined state and local general sales tax rate is 6. Free file 2012 taxes 5%. Free file 2012 taxes Otherwise, check the “Yes” box and include on line 3 only the part of the combined rate that is more than 6. Free file 2012 taxes 5%. Free file 2012 taxes   If you lived in Texarkana, Arkansas, check the “Yes” box and enter “4. Free file 2012 taxes 0” on line 3. Free file 2012 taxes Your local general sales tax rate of 4. Free file 2012 taxes 0% includes the additional 1. Free file 2012 taxes 0% Arkansas state sales tax rate for Texarkana and the 1. Free file 2012 taxes 5% sales tax rate for Miller County. Free file 2012 taxes What if your local general sales tax rate changed during 2006?    If you checked the “Yes” box and your local general sales tax rate changed during 2006, figure the rate to enter on line 3 as follows. Free file 2012 taxes Multiply each tax rate for the period it was in effect by a fraction. Free file 2012 taxes The numerator of the fraction is the number of days the rate was in effect during 2006 and the denominator is the total number of days in the year (365). Free file 2012 taxes Enter the total of the prorated tax rates on line 3. Free file 2012 taxes Example. Free file 2012 taxes Locality 1 imposed a 1% local general sales tax from January 1 through September 30, 2006 (273 days). Free file 2012 taxes The rate increased to 1. Free file 2012 taxes 75% for the period from October 1 through December 31, 2006 (92 days). Free file 2012 taxes You would enter “1. Free file 2012 taxes 189” on line 3, figured as follows. Free file 2012 taxes January 1 - September 30: 1. Free file 2012 taxes 00 x 273/365 = 0. Free file 2012 taxes 748   October 1 - December 31: 1. Free file 2012 taxes 75 x 92/365 = 0. Free file 2012 taxes 441   Total = 1. Free file 2012 taxes 189   What if you lived in more than one locality in the same state during 2006?    Complete a separate worksheet for lines 2 through 6 for each locality in your state if you lived in more than one locality in the same state during 2006 and either of the following applies. Free file 2012 taxes Each locality did not have the same local general sales tax rate. Free file 2012 taxes You lived in Texarkana, AR, or Los Angeles County, CA. Free file 2012 taxes   To figure the amount to enter on line 3 of the worksheet for each locality in which you lived (except a locality for which you used the table on page 7 to figure your local general sales tax deduction), multiply the local general sales tax rate by a fraction. Free file 2012 taxes The numerator of the fraction is the number of days you lived in the locality during 2006 and the denominator is the total number of days in the year (365). Free file 2012 taxes Example. Free file 2012 taxes You lived in Locality 1 from January 1 through August 31, 2006 (243 days), and in Locality 2 from September 1 through December 31, 2006 (122 days). Free file 2012 taxes The local general sales tax rate for Locality 1 is 1%. Free file 2012 taxes The rate for Locality 2 is 1. Free file 2012 taxes 75%. Free file 2012 taxes You would enter “0. Free file 2012 taxes 666” on line 3 for the Locality 1 worksheet and “0. Free file 2012 taxes 585” for the Locality 2 worksheet, figured as follows. Free file 2012 taxes Locality 1: 1. Free file 2012 taxes 00 x 243/365 = 0. Free file 2012 taxes 666   Locality 2: 1. Free file 2012 taxes 75 x 122/365 = 0. Free file 2012 taxes 585   Line 6. Free file 2012 taxes   If you lived in more than one locality in the same state during 2006, you should have completed line 1 only on the first worksheet for that state and separate worksheets for lines 2 through 6 for any other locality within that state in which you lived during 2006. Free file 2012 taxes If you checked the “Yes” box on line 6 of any of those worksheets, multiply line 5 of that worksheet by the amount that you entered on line 1 for that state on the first worksheet. Free file 2012 taxes Line 7. Free file 2012 taxes    Enter on line 7 any state and local general sales taxes paid on the following specified items. Free file 2012 taxes If you are completing more than one worksheet, include the total for line 7 on only one of the worksheets. Free file 2012 taxes A motor vehicle (including a car, motorcycle, motor home, recreational vehicle, sport utility vehicle, truck, van, and off-road vehicle). Free file 2012 taxes Also include any state and local general sales taxes paid for a leased motor vehicle. Free file 2012 taxes If the state sales tax rate on these items is higher than the general sales tax rate, only include the amount of tax you would have paid at the general sales tax rate. Free file 2012 taxes An aircraft or boat, if the tax rate was the same as the general sales tax rate. Free file 2012 taxes A home (including a mobile home or prefabricated home) or substantial addition to or major renovation of a home, but only if the tax rate was the same as the general sales tax rate and any of the following applies. Free file 2012 taxes Your state or locality imposes a general sales tax directly on the sale of a home or on the cost of a substantial addition or major renovation. Free file 2012 taxes You purchased the materials to build a home or substantial addition or to perform a major renovation and paid the sales tax directly. Free file 2012 taxes Under your state law, your contractor is considered your agent in the construction of the home or substantial addition or the performance of a major renovation. Free file 2012 taxes The contract must state that the contractor is authorized to act in your name and must follow your directions on construction decisions. Free file 2012 taxes In this case, you will be considered to have purchased any items subject to a sales tax and to have paid the sales tax directly. Free file 2012 taxes   Do not include sales taxes paid on items used in your trade or business. Free file 2012 taxes If you received a refund of state or local general sales taxes in 2006, see Refund of general sales taxes on page 1. Free file 2012 taxes Prev  Up  Next   Home   More Online Publications
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The Free File 2012 Taxes

Free file 2012 taxes Internal Revenue Bulletin:  2009-36  September 8, 2009  Rev. Free file 2012 taxes Proc. Free file 2012 taxes 2009-37 Table of Contents SECTION 1. Free file 2012 taxes PURPOSE SECTION 2. Free file 2012 taxes BACKGROUND SECTION 3. Free file 2012 taxes SCOPE SECTION 4. Free file 2012 taxes ELECTION PROCEDURES SECTION 5. Free file 2012 taxes REQUIRED INFORMATION STATEMENT SECTION 6. Free file 2012 taxes EFFECTIVE DATE SECTION 7. Free file 2012 taxes TRANSITION RULE SECTION 8. Free file 2012 taxes PAPERWORK REDUCTION ACT DRAFTING INFORMATION SECTION 1. Free file 2012 taxes PURPOSE . Free file 2012 taxes 01 This revenue procedure provides the exclusive procedures for taxpayers to make an election to defer recognizing discharge of indebtedness income (“COD income”) under § 108(i) of the Internal Revenue Code. Free file 2012 taxes . Free file 2012 taxes 02 This revenue procedure also requires taxpayers making the § 108(i) election to provide additional information on returns beginning with the taxable year following the taxable year for which the taxpayer makes the election. Free file 2012 taxes This revenue procedure describes the time and manner of providing this additional information. Free file 2012 taxes . Free file 2012 taxes 03 The Internal Revenue Service and Treasury Department intend to issue additional guidance under § 108(i) that may include regulations addressing matters in this revenue procedure. Free file 2012 taxes Taxpayers should be aware that these regulations may be retroactive. Free file 2012 taxes See § 7805(b)(2). Free file 2012 taxes This revenue procedure may be modified to provide procedures consistent with additional guidance. Free file 2012 taxes SECTION 2. Free file 2012 taxes BACKGROUND . Free file 2012 taxes 01 Section 108(i), Generally. Free file 2012 taxes Section 108(i) was added to the Code by § 1231 of the American Recovery and Reinvestment Tax Act of 2009, Pub. Free file 2012 taxes L. Free file 2012 taxes No. Free file 2012 taxes 111-5, 123 Stat. Free file 2012 taxes 338. Free file 2012 taxes In general, § 108(i) provides that, at the election of a taxpayer, COD income realized in connection with a reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument is includible in gross income ratably over a 5-taxable-year inclusion period, beginning with the taxpayer’s fourth or fifth taxable year following the taxable year of the reacquisition. Free file 2012 taxes Generally, if a taxpayer makes a § 108(i) election and reacquires (or is treated as reacquiring) the applicable debt instrument generating the COD income for a new debt instrument with original issue discount (“OID”), then interest deductions for this OID also are deferred, as provided in § 108(i)(2). Free file 2012 taxes The OID deferral rule, however, does not apply if the amount of OID is less than a de minimis amount, as determined under § 1273(a)(3) and § 1. Free file 2012 taxes 1273-1(d) of the Income Tax Regulations. Free file 2012 taxes The OID deferral rule in § 108(i)(2) applies at the entity level for a pass-through entity. Free file 2012 taxes For example, a partnership (and therefore its partners) may not deduct currently the OID described in § 108(i)(2)(A)(i). Free file 2012 taxes A taxpayer must take into account any item of income or deduction deferred under § 108(i), and not previously taken into account, in the taxable year in which certain events occur (such as the liquidation of the taxpayer and upon other events specified in administrative guidance). Free file 2012 taxes See § 108(i)(5)(D). Free file 2012 taxes The rule regarding acceleration of deferred COD income and OID deductions also applies in the case of certain dispositions by persons holding ownership interests in pass-through entities. Free file 2012 taxes Section 108(i)(5)(D)(ii). Free file 2012 taxes For purposes of § 108(i), regulated investment companies (as defined in § 851(a)) and real estate investment trusts (as defined in § 856(a)) are not pass-through entities. Free file 2012 taxes . Free file 2012 taxes 02 Applicable Debt Instrument. Free file 2012 taxes Section 108(i)(3)(A) defines the term “applicable debt instrument” to mean any debt instrument issued by a C corporation or by any other person in connection with the conduct of a trade or business by that person. Free file 2012 taxes The term “debt instrument” means any bond, debenture, note, certificate, or any other instrument or contractual arrangement constituting indebtedness within the meaning of § 1275(a)(1). Free file 2012 taxes Section 108(i)(3)(B). Free file 2012 taxes For purposes of § 108(i), in the case of an intercompany obligation (as defined in § 1. Free file 2012 taxes 1502-13(g)(2)(ii)), an applicable debt instrument includes only an instrument for which COD income is realized upon the instrument’s deemed satisfaction under § 1. Free file 2012 taxes 1502-13(g)(5). Free file 2012 taxes . Free file 2012 taxes 03 Reacquisition. Free file 2012 taxes Section 108(i)(4)(A) defines the term “reacquisition” to mean, with respect to any applicable debt instrument, any acquisition of the debt instrument by the debtor that issued (or is otherwise the obligor under) the debt instrument, or a person related to the debtor under § 108(e)(4). Free file 2012 taxes The term “acquisition” includes an acquisition of the debt instrument for cash or other property, the exchange of the debt instrument for another debt instrument (including an exchange resulting from a modification of the debt instrument), the exchange of the debt instrument for corporate stock or a partnership interest, the contribution of the debt instrument to capital, and the complete forgiveness of the indebtedness by the holder of the debt instrument. Free file 2012 taxes See § 108(i)(4)(B). Free file 2012 taxes The term “acquisition” also includes an indirect acquisition within the meaning of § 1. Free file 2012 taxes 108-2(c) if a direct acquisition of the debt instrument would qualify for an election under § 108(i). Free file 2012 taxes For example, if a corporation acquires debt of a partnership that the partnership issued in connection with its trade or business, and the partnership and corporation become related within six months of the corporation’s acquisition of the debt, the indirect acquisition is an acquisition for which an election under § 108(i) may be made. Free file 2012 taxes . Free file 2012 taxes 04 General Requirements for the Section 108(i) Election. Free file 2012 taxes Section 108(i)(5)(B) provides, in general, that a taxpayer makes the § 108(i) election by including a statement that clearly identifies the applicable debt instrument with the return of tax imposed for the taxable year in which the reacquisition of the instrument occurs. Free file 2012 taxes (For purposes of this revenue procedure, a return of tax or income tax return includes an information return, and a taxpayer includes a person that files an information return. Free file 2012 taxes ) The statement must include the amount of income to which § 108(i)(1) applies and other information the Service may prescribe. Free file 2012 taxes Once made, a § 108(i) election is irrevocable and, except as provided in section 7 of this revenue procedure, may not be modified. Free file 2012 taxes . Free file 2012 taxes 05 Section 108(i) Elections Made by Pass-through Entities. Free file 2012 taxes In the case of COD income realized by a pass-through entity from the reacquisition of an applicable debt instrument, the pass-through entity makes the § 108(i) election. Free file 2012 taxes Section 108(i)(5)(B)(iii). Free file 2012 taxes . Free file 2012 taxes 06 Additional Information on Subsequent Years’ Returns. Free file 2012 taxes Section 108(i)(7) authorizes the Service to issue guidance necessary or appropriate for applying § 108(i), including requiring reporting the election and other information on returns of tax for subsequent taxable years. Free file 2012 taxes . Free file 2012 taxes 07 Exclusivity. Free file 2012 taxes Section 108(i)(5)(C) provides that if a taxpayer elects to apply § 108(i) to an applicable debt instrument, § 108(a)(1)(A), (B), (C), and (D) do not apply to COD income deferred under § 108(i). Free file 2012 taxes . Free file 2012 taxes 08 Allocation of Deferred COD Income on Partnership Indebtedness. Free file 2012 taxes Section 4. Free file 2012 taxes 04(3) of this revenue procedure describes how a partnership may elect under § 108(i) to defer a portion of the COD income realized from the reacquisition of an applicable debt instrument. Free file 2012 taxes If a partnership elects to defer all or any portion of COD income realized from the reacquisition of an applicable debt instrument, all of the COD income with respect to that debt instrument, without regard to § 108(i), is allocated to the partners in the partnership immediately before the reacquisition in the manner in which the income would be included in the distributive shares of these partners under § 704 and the regulations thereunder, including § 1. Free file 2012 taxes 704-1(b)(2)(iii). Free file 2012 taxes Each partner’s share of this COD income is the partner’s COD income amount (“COD income amount”). Free file 2012 taxes The partner’s COD income amount that is deferred under § 108(i) is the partner’s deferred amount (“deferred amount”). Free file 2012 taxes The partner’s COD income amount that is not deferred and is included in the partner’s distributive share of partnership income for the taxable year of the partnership in which the reacquisition occurs is the partner’s included amount (“included amount”). Free file 2012 taxes . Free file 2012 taxes 09 Partner’s Deferred § 752 Amount. Free file 2012 taxes A decrease in a partner’s share of a partnership liability resulting from the reacquisition of an applicable debt instrument that is not treated as a current distribution of money to the partner under § 752 by reason of § 108(i)(6) is the partner’s deferred § 752 amount (“deferred § 752 amount”). Free file 2012 taxes A partner’s deferred § 752 amount may not exceed the lesser of (i) the partner’s deferred amount or (ii) gain that the partner would recognize in the year of reacquisition under § 731 as a result of the reacquisition absent § 108(i)(6). Free file 2012 taxes To determine the amount of gain the partner would recognize under clause (ii) of the preceding sentence, the amount of any deemed distribution of money under § 752(b) resulting from the decrease in the partner’s share of a reacquired applicable debt instrument that is treated as an advance or draw of money under § 1. Free file 2012 taxes 731-1(a)(1)(ii) is determined as if no COD income resulting from the reacquisition of the applicable debt instrument is deferred under § 108(i). Free file 2012 taxes See Rev. Free file 2012 taxes Rul. Free file 2012 taxes 92-97, 1992-2 C. Free file 2012 taxes B. Free file 2012 taxes 124, and Rev. Free file 2012 taxes Rul. Free file 2012 taxes 94-4, 1994-1 C. Free file 2012 taxes B. Free file 2012 taxes 195. Free file 2012 taxes A partner’s deferred § 752 amount is treated as a distribution of money to the partner under § 752 at the same time, and to the extent remaining in the same amount, as the partner recognizes the COD income deferred under § 108(i). Free file 2012 taxes . Free file 2012 taxes 10 Allocation of Deferred COD Income on S Corporation Indebtedness. Free file 2012 taxes For purposes of § 108(i), an S corporation’s COD income deferred under § 108(i) is shared pro rata only among those shareholders that are shareholders of the S corporation immediately before the reacquisition transaction. Free file 2012 taxes . Free file 2012 taxes 11 Deferred COD Income, Earnings and Profits, and Alternative Minimum Taxable Income. Free file 2012 taxes (1) In general. Free file 2012 taxes The Service and Treasury Department intend to issue regulations regarding the computation of a corporation’s earnings and profits with respect to COD income and OID deductions that are deferred under § 108(i). Free file 2012 taxes These regulations generally will provide that deferred COD income increases earnings and profits in the taxable year that it is realized and not in the taxable year or years that the deferred COD income is includible in gross income. Free file 2012 taxes OID deductions deferred under § 108(i) generally will decrease earnings and profits in the taxable year or years in which the deduction would be allowed without regard to § 108(i). Free file 2012 taxes COD income and OID deductions that are deferred increase or decrease adjusted current earnings under § 56(g)(4) in the taxable year or years that the income or deduction is includible or deductible in determining taxable income. Free file 2012 taxes See § 1. Free file 2012 taxes 56(g)-1(c)(1). Free file 2012 taxes (2) Exceptions for certain special status corporations. Free file 2012 taxes The Service and Treasury Department intend to issue regulations providing that in the case of regulated investment companies and real estate investment trusts, COD income deferred under § 108(i) generally increases earnings and profits in the taxable year or years in which the deferred COD income is includible in gross income and not in the year that the deferred COD income is realized. Free file 2012 taxes OID deductions deferred under § 108(i) generally decrease earnings and profits in the taxable year or years that the deferred OID deductions are deductible. Free file 2012 taxes . Free file 2012 taxes 12 Extension of Time to Make Election. Free file 2012 taxes Under § 301. Free file 2012 taxes 9100-1 of the Procedure and Administration Regulations, the Service may grant an extension of time to make a regulatory election. Free file 2012 taxes An election is a regulatory election if the due date is prescribed by regulation or other published guidance of general applicability. Free file 2012 taxes Section 301. Free file 2012 taxes 9100-2(a) provides an automatic 12-month extension from the due date for making certain regulatory elections. Free file 2012 taxes SECTION 3. Free file 2012 taxes SCOPE This revenue procedure applies to taxpayers that realize COD income from a reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument, as provided in § 108(i). Free file 2012 taxes SECTION 4. Free file 2012 taxes ELECTION PROCEDURES . Free file 2012 taxes 01 In General. Free file 2012 taxes (1) A taxpayer within the scope of this revenue procedure makes the § 108(i) election by— (a) Attaching a statement meeting the requirements of section 4. Free file 2012 taxes 05 of this revenue procedure to the taxpayer’s timely filed (including extensions) original federal income tax return for the taxable year in which the reacquisition of the applicable debt instrument occurs, and (b) If applicable, satisfying the additional requirements of section 4. Free file 2012 taxes 07, 4. Free file 2012 taxes 08, 4. Free file 2012 taxes 09, or 4. Free file 2012 taxes 10 of this revenue procedure. Free file 2012 taxes (2) The Service grants an automatic extension of 12 months from the due date prescribed in section 4. Free file 2012 taxes 01(1)(a) of this revenue procedure for making the § 108(i) election. Free file 2012 taxes The rules that apply to an automatic extension under § 301. Free file 2012 taxes 9100-2(a) apply to this automatic extension. Free file 2012 taxes . Free file 2012 taxes 02 Section 108(i) Elections Made by Members of Consolidated Groups. Free file 2012 taxes The common parent of a consolidated group makes the § 108(i) election on behalf of all members of the group. Free file 2012 taxes See § 1. Free file 2012 taxes 1502-77(a). Free file 2012 taxes . Free file 2012 taxes 03 Aggregation Rule. Free file 2012 taxes A taxpayer within the scope of this revenue procedure may treat two or more applicable debt instruments that are part of the same issue and that are reacquired during the same taxable year as one applicable debt instrument for purposes of this revenue procedure. Free file 2012 taxes A pass-through entity may not treat two or more applicable debt instruments as one applicable debt instrument under this section 4. Free file 2012 taxes 03 if the owners and their ownership interests in the pass-through entity immediately prior to the reacquisition of each applicable debt instrument are not identical. Free file 2012 taxes . Free file 2012 taxes 04 Partial Elections. Free file 2012 taxes (1) A taxpayer within the scope of this revenue procedure may make an election for any portion of COD income realized from the reacquisition of any applicable debt instrument. Free file 2012 taxes Thus, for example, if a taxpayer realizes $100 of COD income from the reacquisition of an applicable debt instrument, the taxpayer may elect under § 108(i)(1) to defer only $40 of the $100 of COD income. Free file 2012 taxes The taxpayer may exclude from income the portion of COD income that the taxpayer does not elect to defer under § 108(i) ($60 in this example) under § 108(a)(1)(A), (B), (C), or (D), if applicable. Free file 2012 taxes (2) A taxpayer is not required to make an election for the same portion of COD income arising from each applicable debt instrument that it reacquires, but may make an election for different portions of COD income arising from different applicable debt instruments (whether or not part of the same issue). Free file 2012 taxes Thus, for example, if a taxpayer realizes $100 of COD income from the reacquisition of an applicable debt instrument (Instrument A) and $100 of COD income from the reacquisition of a different applicable debt instrument (Instrument B), the taxpayer may elect to defer all or a portion of the COD income associated with Instrument A and none or a different portion of the COD income associated with Instrument B. Free file 2012 taxes (3) A partnership that elects to defer less than all of the COD income realized from the reacquisition of an applicable debt instrument may determine, in any manner, the portion, if any, of a partner’s COD income amount that is the partner’s deferred amount and the portion, if any, of a partner’s COD income amount that is the partner’s included amount. Free file 2012 taxes Thus, for example, one partner’s deferred amount may be zero while another partner’s deferred amount may equal that partner’s COD income amount (or any portion thereof). Free file 2012 taxes A partner may exclude from income the partner’s included amount under § 108(a)(1)(A), (B), (C), or (D), if applicable. Free file 2012 taxes The provisions of this section 4. Free file 2012 taxes 04(3) apply for purposes of § 108(i) only and are not intended as an interpretation of or a change to existing law under § 704. Free file 2012 taxes . Free file 2012 taxes 05 Contents of Election Statement. Free file 2012 taxes A statement meets the requirements of this section 4. Free file 2012 taxes 05 if the statement— (1) Label. Free file 2012 taxes States “Section 108(i) Election” across the top. Free file 2012 taxes (2) Required information. Free file 2012 taxes Provides, for each applicable debt instrument the reacquisition of which generates COD income that the taxpayer is electing to defer under § 108(i)— (a) The name and taxpayer identification numbers, if any, of the issuer or issuers of the applicable debt instrument; (b) A general description of the applicable debt instrument (including the issue and maturity dates) and, in the case of any person other than a C corporation, a general description of the person’s trade or business to which the applicable debt instrument is connected; (c) A general description of the reacquisition transaction or transactions generating the COD income (including the date(s) of the transaction(s)); (d) The total amount of COD income for the applicable debt instrument that results from the reacquisition (in the case of a partnership, the aggregate of the partners’ COD income amounts) and a general description of the manner in which this amount is calculated; (e) The amount of COD income for the applicable debt instrument that the taxpayer is electing to defer under § 108(i); (f) In the case of a partnership, a list of partners that have a deferred amount, their identifying information and each partner’s deferred amount; and in the case of an S corporation, a list of shareholders with COD income deferred under § 108(i), their identifying information and each shareholder’s share of the S corporation’s deferred COD income; and (g) In cases in which a new debt instrument is issued or deemed issued in exchange for the applicable debt instrument (including exchanges under § 108(e)(4), § 108(i)(2)(B), and § 1. Free file 2012 taxes 1001-3), the issuer’s name, the issuer’s taxpayer identification number, if any, a general description of the new debt instrument and whether the new debt instrument has OID, and if the new debt instrument has OID, a schedule of the OID that the issuer expects to accrue each taxable year on the instrument and the amount of OID that the issuer expects to defer under § 108(i)(2) each taxable year. Free file 2012 taxes . Free file 2012 taxes 06 Supplemental information. Free file 2012 taxes The statement described in section 4. Free file 2012 taxes 05 of this revenue procedure may specify for each applicable debt instrument an amount greater than the amount identified in section 4. Free file 2012 taxes 05(2)(e) of this revenue procedure that the taxpayer elects to defer under § 108(i) in the event the Service subsequently concludes that the taxpayer understated the amount of COD income described in section 4. Free file 2012 taxes 05(2)(d) of this revenue procedure. Free file 2012 taxes This additional amount of COD income the taxpayer elects to defer may be described as the entire additional COD income, or as a percentage of any additional COD income. Free file 2012 taxes If the taxpayer is a partnership, the partnership must specify each partner’s share of the partnership’s additional COD income that would be deferred (the partner’s additional deferred amount), which the partnership may describe for each partner as the partner’s entire share of the partnership’s additional COD income or as a percentage of the partner’s share of the partnership’s additional COD income. Free file 2012 taxes If the taxpayer is an S corporation, the S corporation must specify each shareholder’s share of the S corporation’s additional COD income that would be deferred, which the S corporation may describe for each shareholder as the shareholder’s entire share of the S corporation’s additional COD income or as a percentage of the shareholder’s share of the S corporation’s additional COD income. Free file 2012 taxes In the case of partnerships and S corporations, the additional COD income and the portion of additional COD income that would be deferred are allocated or determined as provided in sections 2. Free file 2012 taxes 08, 2. Free file 2012 taxes 10 and, if applicable, 4. Free file 2012 taxes 04(3) of this revenue procedure, respectively, as if the additional COD income was realized. Free file 2012 taxes . Free file 2012 taxes 07 Additional Requirements for Certain Partnerships Making a § 108(i) Election. Free file 2012 taxes The rules of this section 4. Free file 2012 taxes 07 apply to partnerships other than partnerships described in section 4. Free file 2012 taxes 10 of this revenue procedure. Free file 2012 taxes (1) Information filing on Schedule K-1 (Form 1065 and Form 1065-B). Free file 2012 taxes For the taxable year in which the § 108(i) election is made, the partnership must report on the Schedule K-1 (Form 1065 or Form 1065-B), Partner’s Share of Income, Deductions, Credits, etc. Free file 2012 taxes , in the manner specified in the instructions to the forms, for each partner § 108(i) information on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made. Free file 2012 taxes Partnerships reporting § 108(i) information on the 2008 Schedule K-1 (Form 1065 or Form 1065-B) must report for each partner on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made: (a) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(1) or § 108(i)(5)(D)(i) or (ii), in box 11 (“other income”) using code F for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (b) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii) or § 108(i)(5)(D)(i) or (ii), in box 13 (“other deductions”) using code W for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (c) The partner’s deferred amount that has not been included in income in the current or prior taxable years, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (d) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (e) The partner’s deferred § 752 amount that is treated as a distribution of money to the partner under § 752 in the current taxable year, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); and (f) The partner’s deferred § 752 amount remaining as of the end of the current taxable year, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B). Free file 2012 taxes (2) Election information statement provided to partners. Free file 2012 taxes The partnership must attach to the Schedule K-1 (Form 1065 or Form 1065-B) provided to each partner for the taxable year in which the § 108(i) election is made a statement satisfying the requirements of this section 4. Free file 2012 taxes 07(2). Free file 2012 taxes The partnership should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each partner must retain that partner’s statement, in their respective books and records. Free file 2012 taxes A statement meets the requirements of this section 4. Free file 2012 taxes 07(2) if the statement— (a) Label. Free file 2012 taxes States “Section 108(i) Election Information Statement for Partners” across the top. Free file 2012 taxes (b) Required information. Free file 2012 taxes Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies— (i) The partner’s COD income amount, the partner’s deferred amount, and the partner’s included amount; (ii) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iii) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (iv) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); (v) The partner’s share of each liability of the partnership described in section 4. Free file 2012 taxes 05(2)(g) of this revenue procedure; (vi) The partner’s share of the decrease in the partnership liability that results from the reacquisition of the applicable debt instrument; (vii) The partner’s share of the decrease in the partnership liability that results from the reacquisition of the applicable debt instrument that is treated as a distribution of money to the partner under § 752 in the current taxable year; (viii) The partner’s deferred § 752 amount as described in section 2. Free file 2012 taxes 09 of this revenue procedure; (ix) The partner’s additional deferred amount as described in section 4. Free file 2012 taxes 06 of this revenue procedure; and (x) The date of the reacquisition transaction generating the COD income. Free file 2012 taxes (c) If a partner fails to provide the written statement required by section 4. Free file 2012 taxes 07(3) of this revenue procedure, the partnership must indicate that the amounts described in section 4. Free file 2012 taxes 07(2)(b)(vii) and (viii) of this revenue procedure cannot be calculated because the partner did not provide the information necessary to report these amounts. Free file 2012 taxes (3) Partner reporting requirements. Free file 2012 taxes The partnership must make reasonable efforts prior to making a § 108(i) election to secure from each partner with a deferred amount for which it does not have the information necessary to compute the partner’s basis in its partnership interest (and its deferred § 752 amount as described in section 2. Free file 2012 taxes 09 of this revenue procedure) a written statement signed under penalties of perjury that includes this information. Free file 2012 taxes Each partner with a deferred amount must provide this written statement to the partnership within 30 days of the date of request by the partnership. Free file 2012 taxes A partner’s failure to comply with this reporting requirement does not invalidate the partnership’s election under § 108(i) for an applicable debt instrument only if the partnership makes reasonable efforts before making the § 108(i) election to obtain the written statement from the partner and otherwise complies with the requirements of section 4 of this revenue procedure. Free file 2012 taxes If a partner provides its written statement under this section 4. Free file 2012 taxes 07(3) after the partnership has provided to the partner the Section 108(i) Election Information Statement for Partners, the partnership must provide to the partner a revised Section 108(i) Election Information Statement for Partners reporting the information required under section 4. Free file 2012 taxes 07(2)(b)(vii) and (viii) of this revenue procedure and report the partner’s deferred § 752 amount on the partner’s Schedule K-1 (Form 1065 or Form 1065-B) in subsequent taxable years. Free file 2012 taxes . Free file 2012 taxes 08 Additional Requirements for an S Corporation Making a § 108(i) Election. Free file 2012 taxes (1) Information filing on Schedule K-1 (Form 1120S). Free file 2012 taxes For the taxable year in which the § 108(i) election is made, the S corporation must report on the Schedule K-1 (Form 1120S), Shareholder’s Share of Income, Deductions, Credits, etc. Free file 2012 taxes , in the manner specified in the instructions to the forms, for each shareholder § 108(i) information on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made. Free file 2012 taxes S corporations reporting § 108(i) information on the 2008 Schedule K-1 (Form 1120S) must report for each shareholder, on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made, the shareholder’s share of the S corporation’s: (a) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(1) or § 108(i)(5)(D)(i) or (ii), in box 10 (“other income”) using code E; (b) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii), or § 108(i)(5)(D)(i) or (ii), in box 12 (“other deductions”) using code S; (c) COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years, in box 17 (“other information”) using code T; and (d) OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years, in box 17 (“other information”) using code T. Free file 2012 taxes (2) Election information statement provided to shareholders. Free file 2012 taxes The S corporation must attach to the Schedule K-1 (Form 1120S) provided to each shareholder for the taxable year in which the § 108(i) election is made, a statement satisfying the requirements of this section 4. Free file 2012 taxes 08(2). Free file 2012 taxes The S corporation should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each shareholder must retain that shareholder’s statement, in their respective books and records. Free file 2012 taxes A statement meets the requirements of this section 4. Free file 2012 taxes 08(2) if the statement— (a) Label. Free file 2012 taxes States “Section 108(i) Election Information Statement for Shareholders” across the top. Free file 2012 taxes (b) Required information. Free file 2012 taxes Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies, the shareholder’s share of the S corporation’s— (i) COD income that the S corporation elects to defer under § 108(i); (ii) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iii) OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (iv) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); and (v) Additional COD income that would be deferred as described in section 4. Free file 2012 taxes 06 of this revenue procedure. Free file 2012 taxes . Free file 2012 taxes 09 Section 108(i) Elections Made on Behalf of Certain Foreign Corporations. Free file 2012 taxes The controlling domestic shareholder(s) (or common parent of the controlling domestic shareholder(s), if applicable) of a controlled foreign corporation or a noncontrolled § 902 corporation not otherwise required to file a return of tax may make the § 108(i) election on behalf of the foreign corporation by satisfying the requirements of § 1. Free file 2012 taxes 964-1(c)(3). Free file 2012 taxes Each controlling domestic shareholder must attach a statement identifying the foreign corporation and satisfying the requirements of section 4. Free file 2012 taxes 05 of this revenue procedure and, if applicable, section 4. Free file 2012 taxes 06 of this revenue procedure, to its federal income tax return for the taxable year ending within or with the taxable year of the foreign corporation for which the § 108(i) election is made. Free file 2012 taxes . Free file 2012 taxes 10 Section 108(i) Elections Made By Certain Foreign Partnerships. Free file 2012 taxes The rules of this section 4. Free file 2012 taxes 10 apply to a foreign partnership making a § 108(i) election that is not otherwise required to file a federal partnership return (“nonfiling foreign partnership”). Free file 2012 taxes See § 1. Free file 2012 taxes 6031(a)-1(b). Free file 2012 taxes (1) A nonfiling foreign partnership making the election must attach a statement satisfying the requirements of section 4. Free file 2012 taxes 05 of this revenue procedure and, if applicable, section 4. Free file 2012 taxes 06 of this revenue procedure, to a partnership return satisfying the requirements of § 1. Free file 2012 taxes 6031(a)-1(b)(5) it files with the Service. Free file 2012 taxes In addition, a nonfiling foreign partnership must include in the information required in section 4. Free file 2012 taxes 05(2)(d) and (e) of this revenue procedure the aggregate amounts for all partners as well as the aggregate amounts for all U. Free file 2012 taxes S. Free file 2012 taxes persons (as defined in § 7701(a)(30)) and controlled foreign corporation(s) that are partners with deferred amounts in the nonfiling foreign partnership (“affected partners”). Free file 2012 taxes (2) The nonfiling foreign partnership must make the election, in accordance with § 1. Free file 2012 taxes 6031(a)-1(b)(5), by the date provided in section 4. Free file 2012 taxes 01(1)(a) of this revenue procedure, as if it had a filing obligation for the taxable year in which the reacquisition of the applicable debt instrument occurs. Free file 2012 taxes (3) For each affected partner, the partnership must file with the Service a Schedule K-1 (Form 1065) and report on the Schedule K-1 (Form 1065) for the affected partner as provided in section 4. Free file 2012 taxes 07(1) of this revenue procedure. Free file 2012 taxes Except for this § 108(i) information, the partnership need not complete Part III of the Schedule K-1 (Form 1065). Free file 2012 taxes The partnership must provide a copy of the respective Schedule K-1 (Form 1065) to each affected partner and must also attach to the Schedule K-1 (Form 1065) provided to each affected partner a statement satisfying the requirements of section 4. Free file 2012 taxes 07(2) of this revenue procedure by the date provided in section 4. Free file 2012 taxes 01(1)(a) of this revenue procedure. Free file 2012 taxes The partnership should not attach any statement described in section 4. Free file 2012 taxes 07(2) of this revenue procedure to the Schedules K-1 that are filed with the Service. Free file 2012 taxes However, the partnership must retain the statements provided to the affected partners, and each affected partner must retain that partner’s statement, in their respective books and records. Free file 2012 taxes (4) The partnership and each affected partner must satisfy the requirements of section 4. Free file 2012 taxes 07(3) of this revenue procedure. Free file 2012 taxes . Free file 2012 taxes 11 Protective § 108(i) Election. Free file 2012 taxes (1) In general. Free file 2012 taxes A taxpayer may make a protective election under § 108(i) for an applicable debt instrument if the taxpayer concludes that a particular transaction does not result in the realization of COD income, reports the transaction on its federal income tax return in a manner consistent with the taxpayer’s conclusion, and would be within the scope of this revenue procedure if the taxpayer’s conclusion were incorrect. Free file 2012 taxes If the Service at any time determines the taxpayer’s conclusion that the particular transaction does not result in the realization of COD income is incorrect, the taxpayer’s protective election is treated as a valid, irrevocable election under § 108(i). Free file 2012 taxes Thus, if a taxpayer makes a protective election, the Service subsequently may require the taxpayer to report COD income deferred pursuant to the valid and irrevocable protective election even if the statute of limitations has expired for the year in which the COD income was realized and the protective election was made. Free file 2012 taxes A taxpayer makes a protective election by attaching a statement satisfying the requirements of this section 4. Free file 2012 taxes 11(1) to the taxpayer’s original federal income tax return within the period described in section 4. Free file 2012 taxes 01(1)(a) of this revenue procedure. Free file 2012 taxes The taxpayer also must attach the election to its federal income tax return in each of the 8 or 9 taxable years, as applicable, following the taxable year of the election. Free file 2012 taxes A statement meets the requirements of this section 4. Free file 2012 taxes 11(1) if the statement— (a) States “Section 108(i) Protective Election” across the top; (b) Provides the information required under section 4. Free file 2012 taxes 05(2)(a), (b), and (c) of this revenue procedure; (c) Provides that the amounts described in sections 4. Free file 2012 taxes 05(2)(d) and (e) of this revenue procedure are zero; and (d) Provides the information described in section 4. Free file 2012 taxes 06 of this revenue procedure. Free file 2012 taxes (2) Statements provided to shareholders and partners. Free file 2012 taxes (a) For each applicable debt instrument, a partnership or S corporation that makes a protective election must attach to the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) it provides each of its partners or shareholders, as the case may be, for the taxable year in which the protective election is made a statement containing the information described in section 4. Free file 2012 taxes 11(1)(b) of this revenue procedure (an S corporation need not provide its shareholders with the date(s) of the transaction(s) that would constitute the reacquisition transaction or transactions) and the partner’s or shareholder’s share of the additional COD income that would be deferred as described in section 4. Free file 2012 taxes 11(1)(d) of this revenue procedure. Free file 2012 taxes (b) The partnership or S corporation should not attach the statements described in this section 4. Free file 2012 taxes 11(2) to the Schedules K-1 that are filed with the Service but must retain these statements, and each partner and shareholder must retain that partner’s or shareholder’s statement, in their respective books and records. Free file 2012 taxes . Free file 2012 taxes 12 Election-Year Reporting by Tiered Pass-Through Entities. Free file 2012 taxes (1) A partnership required to file a U. Free file 2012 taxes S. Free file 2012 taxes partnership return other than under § 1. Free file 2012 taxes 6031(a)-1(b)(5), or an S corporation, that receives a Schedule K-1 (Form 1065 or Form 1065-B) reflecting its share of any items listed in section 4. Free file 2012 taxes 07(1) of this revenue procedure, must report on the Schedules K-1 (Form 1065, Form 1065-B, or Form 1120S) to its partners or shareholders, as the case may be, each partner’s or shareholder’s share of those items (an S corporation only reports to its shareholders the items described in section 4. Free file 2012 taxes 07(1)(a) through (d) of this revenue procedure). Free file 2012 taxes (2) If a partnership described in section 4. Free file 2012 taxes 12(1) of this revenue procedure receives a statement described in sections 4. Free file 2012 taxes 07(2) or 4. Free file 2012 taxes 10(3) of this revenue procedure or this section 4. Free file 2012 taxes 12(2), it must provide each of its partners a statement containing the partner’s share of each of the items listed on each statement received by the partnership, including the information described in section 4. Free file 2012 taxes 07(2)(b)(x) of this revenue procedure. Free file 2012 taxes If an S corporation receives a statement described in sections 4. Free file 2012 taxes 07(2) or 4. Free file 2012 taxes 10(3) of this revenue procedure or this section 4. Free file 2012 taxes 12(2), it must provide each of its shareholders a statement containing the shareholder’s share of each of the items listed on each statement received by the S corporation that are described in section 4. Free file 2012 taxes 07(2)(b)(i), (ii), (iii), (iv) and (ix) of this revenue procedure. Free file 2012 taxes The partnership or S corporation must attach this statement or statements to the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) that it provides to each of its partners or shareholders, as the case may be, for the taxable year of the partnership or S corporation. Free file 2012 taxes The partnership or S corporation should not attach these statements to the Schedules K-1 that are filed with the Service but must retain these statements, and each partner and shareholder must retain that partner’s or shareholder’s statement, in their respective books and records. Free file 2012 taxes (3) A partnership that receives a statement described in this section 4 identifying its COD income amount with respect to an applicable debt instrument must allocate its COD income amount, without regard to § 108(i), to the partners in the partnership immediately before the reacquisition transaction in the manner in which the income would be included in the distributive shares of these partners under § 704 and the regulations thereunder, including § 1. Free file 2012 taxes 704-1(b)(2)(iii). Free file 2012 taxes The partnership may determine in any manner the portion, if any, of a partner’s COD income amount that is the partner’s deferred amount and the portion, if any, of a partner’s COD income amount that is the partner’s included amount. Free file 2012 taxes No partner’s deferred amount with respect to an applicable debt instrument may exceed its COD income amount with respect to the applicable debt instrument, and the aggregate of deferred amounts of its partners with respect to an applicable debt instrument must equal the partnership’s deferred amount with respect to the applicable debt instrument. Free file 2012 taxes The partnership allocates amounts described in section 4. Free file 2012 taxes 06 of this revenue procedure under this section 4. Free file 2012 taxes 12(3) as if the additional COD income was realized. Free file 2012 taxes (4) The deferred § 752 amount for partners in a partnership making a § 108(i) election is calculated only for the partnership’s direct partners. Free file 2012 taxes No further adjustment to the deferred § 752 amount is made to reflect the basis or other attributes of partners that are indirect partners in the partnership. Free file 2012 taxes (5) If an S corporation receives a statement described in this section 4 identifying its COD income amount, deferred amount, included amount or additional COD income that would be deferred with respect to an applicable debt instrument, these amounts are shared pro rata only among those shareholders that are shareholders in the S corporation immediately before the reacquisition transaction. Free file 2012 taxes (6) This paragraph 4. Free file 2012 taxes 12(6) provides the rules for Category 1 and Category 2 filers of Form 8865, Return of U. Free file 2012 taxes S. Free file 2012 taxes Persons With Respect to Certain Foreign Partnerships, as defined in the instructions for Form 8865, if the foreign partnership, for which the Category 1 or Category 2 filer has a filing requirement, receives a Schedule K-1 (Form 1065 or Form 1065-B) reflecting the partnership’s share of any items listed in section 4. Free file 2012 taxes 07(1) of this revenue procedure, or a statement described in sections 4. Free file 2012 taxes 07(2) or 4. Free file 2012 taxes 10(3) of this revenue procedure (because the foreign partnership owns an interest directly or indirectly in another partnership in which an election was made under § 108(i) with respect to that foreign partnership’s distributive share from the other entity). Free file 2012 taxes (a) For each partner for whom the Category 1 filer is required to complete a Schedule K-1 (Form 8865) (which includes the Category 1 filer itself), the Category 1 filer must: (i) Include the information described in section 4. Free file 2012 taxes 07(1) of this revenue procedure in the Schedule K-1 (Form 8865) that the Category 1 filer files with the Service and completes for the partner; (ii) Produce a statement containing the partner’s share of the items listed on each statement received by the partnership; and (iii) Attach the statement described in section 4. Free file 2012 taxes 12(6)(a)(ii) of this revenue procedure to each Schedule K-1 (Form 8865) that it is required to provide to a partner of the foreign partnership. Free file 2012 taxes (b) A Category 2 filer must include its share of the information described in section 4. Free file 2012 taxes 07(1) on the Schedule K-1 (Form 8865) that it is required to complete. Free file 2012 taxes Category 2 filers also must complete a statement containing their share of the items listed on each statement received by the partnership. Free file 2012 taxes (c) The Category 1 and Category 2 filers should not attach the statements described in sections 4. Free file 2012 taxes 12(6)(a)(ii) and 4. Free file 2012 taxes 12(6)(b) of this revenue procedure, respectively, to the Schedules K-1 that are filed with the Service. Free file 2012 taxes However, Category 1 filers must retain the statements they complete and each partner must retain its own statement, in their respective books and records. Free file 2012 taxes (7) If as a result of § 108(i)(5)(D)(ii), a partner of a partnership described in section 4. Free file 2012 taxes 12(1) of this revenue procedure or a shareholder of an S corporation described in section 4. Free file 2012 taxes 12(1) of this revenue procedure must recognize items deferred under § 108(i), the partnership or S corporation must report these items on the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) and statements provided to the partner or shareholder pursuant to section 4. Free file 2012 taxes 12(1) and (2) of this revenue procedure. Free file 2012 taxes Similar rules apply to Category 1 and Category 2 filers (Form 8865) described in section 4. Free file 2012 taxes 12(6) of this revenue procedure. Free file 2012 taxes (8) The provisions of section 4. Free file 2012 taxes 12(2), (3), (5) and (6) of this revenue procedure also apply to a statement received that is described in section 4. Free file 2012 taxes 11(2) of this revenue procedure, except that the information that must be provided are those items described in section 4. Free file 2012 taxes 11(1)(b) of this revenue procedure (an S corporation need not provide its shareholders with the date(s) of the transaction(s) that would constitute the reacquisition transaction or transactions) and the share of the partner or shareholder in the amounts described in section 4. Free file 2012 taxes 11(1)(d) of this revenue procedure. Free file 2012 taxes SECTION 5. Free file 2012 taxes REQUIRED INFORMATION STATEMENT . Free file 2012 taxes 01 Annual Information Statements. Free file 2012 taxes Pursuant to § 108(i)(7)(B), a taxpayer that makes an election under § 108(i) (except for a protective election under section 4. Free file 2012 taxes 11(1) of this revenue procedure) must attach a statement meeting the requirements of section 5. Free file 2012 taxes 02 of this revenue procedure to its federal income tax return for each taxable year beginning with the taxable year following the taxable year for which the taxpayer makes the election and ending with the first taxable year in which all items deferred under § 108(i) have been recognized. Free file 2012 taxes . Free file 2012 taxes 02 Contents of Statement. Free file 2012 taxes A statement meets the requirements of this section 5. Free file 2012 taxes 02 if the statement— (1) Label. Free file 2012 taxes States “Section 108(i) Information Statement” across the top; (2) Required information. Free file 2012 taxes Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies— (a) COD income deferred under § 108(i) that is included in income in the current taxable year under § 108(i)(1); (b) COD income deferred under § 108(i) that is included in income in the current taxable year under § 108(i)(5)(D), including a description and date of the acceleration event described in § 108(i)(5)(D); (c) COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years (in the case of a partnership, the aggregate of the partners’ deferred amounts that have not been included in income in the current or prior taxable years, and in the case of an S corporation, the S corporation’s COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years); (d) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii); (e) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D); and (f) OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years. Free file 2012 taxes (3) Election attached. Free file 2012 taxes Includes a copy of the election statement described in section 4. Free file 2012 taxes 05 of this revenue procedure. Free file 2012 taxes . Free file 2012 taxes 03 Additional Annual Reporting Requirements for Certain Partnerships. Free file 2012 taxes The rules of this section 5. Free file 2012 taxes 03 apply to partnerships other than partnerships described in section 5. Free file 2012 taxes 05 of this revenue procedure. Free file 2012 taxes (1) In general. Free file 2012 taxes A partnership that makes an election under § 108(i) (except for a protective election under section 4. Free file 2012 taxes 11(1) of this revenue procedure) must attach to its federal income tax returns the statements required under section 5. Free file 2012 taxes 01 of this revenue procedure. Free file 2012 taxes In addition, for each taxable year in which a statement is required under section 5. Free file 2012 taxes 01 of this revenue procedure, the partnership must report on the Schedule K-1 (Form 1065 or Form 1065-B) for each partner § 108(i) information in the manner described in section 4. Free file 2012 taxes 07(1) of this revenue procedure. Free file 2012 taxes (2) Annual information statements provided to partners. Free file 2012 taxes The partnership must attach to the Schedule K-1 (Form 1065) provided to each partner for each taxable year in which a statement is required under section 5. Free file 2012 taxes 01 of this revenue procedure, a statement meeting the requirements of this section 5. Free file 2012 taxes 03(2). Free file 2012 taxes The partnership should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each partner must retain that partner’s statement, in their respective books and records. Free file 2012 taxes A statement meets the requirements of this section 5. Free file 2012 taxes 03(2) if the statement— (a) Label. Free file 2012 taxes States “Section 108(i) Annual Information Statement for Partners” across the top of the statement. Free file 2012 taxes (b) Required information. Free file 2012 taxes Clearly identifies for each applicable debt instrument to which a § 108(i) election applies— (i) The partner’s deferred amount that has not been included in income as of the end of the prior taxable year; (ii) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(1); (iii) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iv) The partner’s deferred amount that has not been included in income in the current or prior taxable years; (v) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (vi) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii); (vii) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); (viii) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years; and (ix) The partner’s deferred § 752 amount that is treated as a distribution of money to the partner under § 752 in the current taxable year and any remaining deferred § 752 amount. Free file 2012 taxes If a partner fails to provide the written statement required by section 4. Free file 2012 taxes 07(3) of this revenue procedure, the partnership must indicate that the amounts described in this section 5. Free file 2012 taxes 03(2)(b)(ix) cannot be calculated because the partner did not provide the information necessary to report these amounts. Free file 2012 taxes . Free file 2012 taxes 04 Additional Annual Reporting Requirements for an S Corporation. Free file 2012 taxes (1) In general. Free file 2012 taxes An S corporation that makes an election under § 108(i) (except for a protective election under section 4. Free file 2012 taxes 11(1) of this revenue procedure) must attach to its federal income tax returns the statements required under section 5. Free file 2012 taxes 01 of this revenue procedure. Free file 2012 taxes In addition, for each taxable year in which a statement is required under section 5. Free file 2012 taxes 01 of this revenue procedure, the S corporation must report on the Schedule K-1 (Form 1120S) for each shareholder § 108(i) information in the manner described in section 4. Free file 2012 taxes 08(1) of this revenue procedure. Free file 2012 taxes (2) Annual information statements provided to shareholders. Free file 2012 taxes The S corporation must attach to the Schedule K-1 (Form 1120S) provided to each shareholder for each taxable year in which a statement is required under section 5. Free file 2012 taxes 01 of this revenue procedure a statement meeting the requirements of this section 5. Free file 2012 taxes 04(2). Free file 2012 taxes The S corporation should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each shareholder must retain that shareholder’s statement, in their respective books and records. Free file 2012 taxes A statement meets the requirements of this section 5. Free file 2012 taxes 04(2) if the statement— (a) Label. Free file 2012 taxes States “Section 108(i) Annual Information Statement for Shareholders” across the top; (b) Required information. Free file 2012 taxes Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies, the shareholder’s share of the S corporation’s— (i) COD income deferred under § 108(i) that has not been included in income as of the end of the prior taxable year; (ii) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(1); (iii) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iv) COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years; (v) OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (vi) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii); (vii) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); and (viii) OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years. Free file 2012 taxes . Free file 2012 taxes 05 Additional Annual Reporting Requirements for Certain Foreign Partnerships. Free file 2012 taxes (1) The rules of this section 5. Free file 2012 taxes 05 apply to nonfiling foreign partnerships. Free file 2012 taxes (2) A nonfiling foreign partnership that makes an election under § 108(i) (except for a protective election under section 4. Free file 2012 taxes 11(1) of this revenue procedure) must file federal income tax returns with the Service containing the information under § 1. Free file 2012 taxes 6031(a)-1(b)(5) for each taxable year in which a statement is required by section 5. Free file 2012 taxes 01 of this revenue procedure. Free file 2012 taxes (3) The nonfiling foreign partnership must attach to its federal income tax returns the statements required under section 5. Free file 2012 taxes 01 of this revenue procedure, but only for that portion of the COD income allocated to affected partners. Free file 2012 taxes (4) For each taxable year in which a statement is required under section 5. Free file 2012 taxes 01 of this revenue procedure, the nonfiling foreign partnership must provide each affected partner a Schedule K-1 (Form 1065) reporting § 108(i) information in the manner described in section 4. Free file 2012 taxes 07(1) of this revenue procedure. Free file 2012 taxes Except for this § 108(i) information, the partnership need not complete Part III of the Schedule K-1 (Form 1065). Free file 2012 taxes The partnership must provide each affected partner with a copy of the Schedule K-1 (Form 1065) by the date provided in § 1. Free file 2012 taxes 6031(b)-1T(b). Free file 2012 taxes The partnership must attach the Schedules K-1 (Form 1065) to the federal income tax returns filed with the Service pursuant to section 5. Free file 2012 taxes 05(2) of this revenue procedure. Free file 2012 taxes (5) For each taxable year for which a statement is required under section 5. Free file 2012 taxes 01 of this revenue procedure, the nonfiling foreign partnership must attach to each affected partner’s Schedule K-1 (Form 1065) a statement meeting the requirements of section 5. Free file 2012 taxes 03(2) of this revenue procedure. Free file 2012 taxes The partnership should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain the statements, and each partner must retain that partner’s statement, in their respective books and records. Free file 2012 taxes . Free file 2012 taxes 06 Information Statements Made on Behalf of Certain Foreign Corporations. Free file 2012 taxes Each controlling domestic shareholder must attach a statement identifying the foreign corporation and meeting the requirements of section 5. Free file 2012 taxes 02 of this revenue procedure to the shareholder’s federal income tax return for each taxable year for which a statement is required under section 5. Free file 2012 taxes 01 of this revenue procedure. Free file 2012 taxes . Free file 2012 taxes 07 Additional Annual Reporting Requirements for Tiered Pass-Through Entities. Free file 2012 taxes (1) A partnership required to file a U. Free file 2012 taxes S. Free file 2012 taxes partnership return other than under § 1. Free file 2012 taxes 6031(a)-1(b)(5), or an S corporation, that receives a Schedule K-1 (Form 1065 or Form 1065-B) described in the second sentence of section 5. Free file 2012 taxes 03(1) of this revenue procedure reflecting its share of any § 108(i) information must report on the Schedules K-1 (Form 1065, Form 1065-B, or Form 1120S) to its partners or shareholders, as the case may be, each partner’s or shareholder’s share of those items (an S corporation only reports to its shareholders the items described in section 4. Free file 2012 taxes 07(1)(a) through (d) of this revenue procedure). Free file 2012 taxes (2) If a partnership described in section 5. Free file 2012 taxes 07(1) of this revenue procedure receives a statement described in sections 5. Free file 2012 taxes 03(2) or 5. Free file 2012 taxes 05(5) of this revenue procedure or this section 5. Free file 2012 taxes 07(2), it must provide each of its partners a statement containing the partner’s share of each of the items listed on each statement received by the partnership. Free file 2012 taxes If an S corporation receives a statement described in sections 5. Free file 2012 taxes 03(2) or 5. Free file 2012 taxes 05(5) of this revenue procedure or this section 5. Free file 2012 taxes 07(2), it must provide each of its shareholders a statement containing the shareholder’s share of each of the items listed on each statement received by the S corporation that are described in section 5. Free file 2012 taxes 03(2)(b)(i) through (viii) of this revenue procedure. Free file 2012 taxes The partnership or S corporation must attach the statement or statements to the Schedule K-1 (Form 1065 or Form 1065-B) or Schedule K-1 (Form 1120S) that is provided to each of its partners or shareholders, as the case may be, for the taxable year of the partnership or S corporation. Free file 2012 taxes The partnership or S corporation should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each partner and shareholder must retain that partner’s or shareholder’s statement, in their respective books and records. Free file 2012 taxes (3) This paragraph 5. Free file 2012 taxes 07(3) provides the rules for persons described in section 4. Free file 2012 taxes 12(6) of this revenue procedure if the foreign partnership, for which the Category 1 or 2 filer has a filing requirement, receives a Schedule K-1 (Form 1065 or Form 1065-B) reflecting the partnership’s share of any items described in the second sentence of section 5. Free file 2012 taxes 03(1) of this revenue procedure, or a statement described in sections 5. Free file 2012 taxes 03(2) or 5. Free file 2012 taxes 05(5) of this revenue procedure (because the foreign partnership owns an interest directly or indirectly in another partnership in which an election was made under § 108(i) with respect to that foreign partnership’s distributive share from the other entity). Free file 2012 taxes (a) For each partner for whom the Category 1 filer is required to complete a Schedule K-1 (Form 8865) (which includes the Category 1 filer itself), the Category 1 filer must: (i) Include the information described in section 4. Free file 2012 taxes 07(1) of this revenue procedure in the Schedule K-1 (Form 8865) that the Category 1 filer files with the Service and completes for the partner; (ii) Produce a statement containing the partner’s share of the items listed on each statement received by the partnership; and (iii) Attach the statement described in section 5. Free file 2012 taxes 07(3)(a)(ii) of this revenue procedure to each Schedule K-1 (Form 8865) that it is required to provide to a partner of the foreign partnership. Free file 2012 taxes (b) A Category 2 filer must include its share of the information described in section 4. Free file 2012 taxes 07(1) on the Schedule K-1 (Form 8865) that it is required to complete. Free file 2012 taxes Category 2 filers also must complete a statement containing their share of the items listed on each statement received by the partnership. Free file 2012 taxes (c) The Category 1 and Category 2 filers should not attach the statements described in sections 5. Free file 2012 taxes 07(3)(a)(ii) and 5. Free file 2012 taxes 07(3)(b) of this revenue procedure, respectively, to the Schedules K-1 that are filed with the Service. Free file 2012 taxes However, Category 1 filers must retain the statements they complete and each partner must retain its own statement, in their respective books and records. Free file 2012 taxes (4) If as a result of § 108(i)(5)(D)(ii), a partner of a partnership described in section 5. Free file 2012 taxes 07(1) of this revenue procedure or a shareholder of an S corporation described in section 5. Free file 2012 taxes 07(1) of this revenue procedure must recognize items deferred under § 108(i), the partnership or S corporation must report these items on the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) and statements provided to the partner or shareholder pursuant to section 5. Free file 2012 taxes 07(1) and (2) of this revenue procedure. Free file 2012 taxes Similar rules apply to Category 1 and Category 2 filers (Form 8865) described in section 4. Free file 2012 taxes 12(6) of this revenue procedure. Free file 2012 taxes SECTION 6. Free file 2012 taxes EFFECTIVE DATE This revenue procedure is effective for reacquisitions of applicable debt instruments in taxable years ending after December 31, 2008. Free file 2012 taxes SECTION 7. Free file 2012 taxes TRANSITION RULE . Free file 2012 taxes 01 Noncomplying Election. Free file 2012 taxes Except as otherwise provided in this section 7. Free file 2012 taxes 01, the Service will treat a § 108(i) election as effective if a taxpayer files an election with the taxpayer’s federal income tax return filed on or before September 16, 2009, using any reasonable procedure to make the election. Free file 2012 taxes However, an election that does not comply with section 4 of this revenue procedure will not be effective unless the taxpayer on or before November 16, 2009, files an amended return for the taxable year of the election and complies with the requirements of section 4 of this revenue procedure. Free file 2012 taxes . Free file 2012 taxes 02 Modification of Election. Free file 2012 taxes A taxpayer that files a § 108(i) election on or before September 16, 2009, may modify that election by filing an amended return on or before November 16, 2009 (for example, to modify the amount of COD income the taxpayer elects to defer). Free file 2012 taxes To be effective, a modification of an election described in the preceding sentence must satisfy the requirements for an election described in section 4 of this revenue procedure. Free file 2012 taxes . Free file 2012 taxes 03 Notations. Free file 2012 taxes A taxpayer that files the amended return on paper must write “Section 108(i) Election” on the top of the first page. Free file 2012 taxes A taxpayer that files the amended return electronically should indicate “Section 108(i) Election” on the return. Free file 2012 taxes See Publication 4163, Modernized e-File (MeF) Information for Authorized IRS e-file Providers for Business Returns Tax Year 2008 for more details. Free file 2012 taxes SECTION 8. Free file 2012 taxes PAPERWORK REDUCTION ACT The collection of information contained in this revenue procedure has been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act (44 U. Free file 2012 taxes S. Free file 2012 taxes C. Free file 2012 taxes 3507) under control number 1545-2147. Free file 2012 taxes An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Free file 2012 taxes The collection of information in this revenue procedure is in sections 4, 5 and 7. Free file 2012 taxes This information is required to determine the amount of income and deductions a taxpayer elects to defer and to track those amounts until the taxpayer has reported all deferred income and deductions on the taxpayer’s tax return. Free file 2012 taxes This information will be used during examination to verify that a taxpayer has correctly deferred income and deductions. Free file 2012 taxes The collection of information is required to obtain a benefit. Free file 2012 taxes The likely respondents are C corporations, shareholders of S corporations, partners of partnerships, and other individuals engaged in a trade or business, that reacquire applicable debt instruments in 2009 or 2010. Free file 2012 taxes The estimated total annual reporting burden is 300,000 hours. Free file 2012 taxes The estimated annual burden per respondent varies from 1 to 8 hours, depending on individual circumstances, with an estimated average of 6 hours. Free file 2012 taxes The estimated number of respondents is 50,000. Free file 2012 taxes Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Free file 2012 taxes Generally, tax returns and return information are confidential, as required by § 6103. Free file 2012 taxes DRAFTING INFORMATION The principal authors of this revenue procedure are Megan A. Free file 2012 taxes Stoner of the Office of Associate Chief Counsel (Passthroughs & Special Industries) and Craig Wojay of the Office of Associate Chief Counsel (Income Tax & Accounting). Free file 2012 taxes For further information regarding this revenue procedure, contact Megan A. Free file 2012 taxes Stoner at (202) 622-3070 for questions involving partnerships and S corporations, William E. Free file 2012 taxes Blanchard at (202) 622-3950 for questions involving OID, Ronald M. Free file 2012 taxes Gootzeit at (202) 622-3860 for questions involving foreign entities, Robert Rhyne at (202) 622-7790 for questions involving earnings and profits and consolidated groups, and Craig Wojay at (202) 622-4920 for questions on § 108(i) generally (not toll-free calls). Free file 2012 taxes Prev  Up  Next   Home   More Internal Revenue Bulletins