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Free income tax help 24. Free income tax help   Contributions Table of Contents Introduction Useful Items - You may want to see: Organizations That Qualify To Receive Deductible ContributionsTypes of Qualified Organizations Contributions You Can DeductContributions From Which You Benefit Expenses Paid for Student Living With You Out-of-Pocket Expenses in Giving Services Contributions You Cannot DeductContributions to Individuals Contributions to Nonqualified Organizations Contributions From Which You Benefit Value of Time or Services Personal Expenses Appraisal Fees Contributions of PropertyException. Free income tax help Household items. Free income tax help Deduction more than $500. Free income tax help Form 1098-C. Free income tax help Filing deadline approaching and still no Form 1098-C. Free income tax help Exception 1—vehicle used or improved by organization. Free income tax help Exception 2—vehicle given or sold to needy individual. Free income tax help Deduction $500 or less. Free income tax help Right to use property. Free income tax help Tangible personal property. Free income tax help Future interest. Free income tax help Determining Fair Market Value Giving Property That Has Decreased in Value Giving Property That Has Increased in Value When To DeductChecks. Free income tax help Text message. Free income tax help Credit card. Free income tax help Pay-by-phone account. Free income tax help Stock certificate. Free income tax help Promissory note. Free income tax help Option. Free income tax help Borrowed funds. Free income tax help Limits on DeductionsCarryovers Records To KeepCash Contributions Noncash Contributions Out-of-Pocket Expenses How To Report Introduction This chapter explains how to claim a deduction for your charitable contributions. Free income tax help It discusses the following topics. Free income tax help The types of organizations to which you can make deductible charitable contributions. Free income tax help The types of contributions you can deduct. Free income tax help How much you can deduct. Free income tax help What records you must keep. Free income tax help How to report your charitable contributions. Free income tax help A charitable contribution is a donation or gift to, or for the use of, a qualified organization. Free income tax help It is voluntary and is made without getting, or expecting to get, anything of equal value. Free income tax help Form 1040 required. Free income tax help    To deduct a charitable contribution, you must file Form 1040 and itemize deductions on Schedule A. Free income tax help The amount of your deduction may be limited if certain rules and limits explained in this chapter apply to you. Free income tax help The limits are explained in detail in Publication 526. Free income tax help Useful Items - You may want to see: Publication 526 Charitable Contributions 561 Determining the Value of Donated Property Form (and Instructions) Schedule A (Form 1040) Itemized Deductions 8283 Noncash Charitable Contributions Organizations That Qualify To Receive Deductible Contributions You can deduct your contributions only if you make them to a qualified organization. Free income tax help Most organizations other than churches and governments must apply to the IRS to become a qualified organization. Free income tax help How to check whether an organization can receive deductible charitable contributions. Free income tax help   You can ask any organization whether it is a qualified organization, and most will be able to tell you. Free income tax help Or go to IRS. Free income tax help gov. Free income tax help Click on “Tools” and then on “Exempt Organizations Select Check” (www. Free income tax help irs. Free income tax help gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check). Free income tax help This online tool will enable you to search for qualified organizations. Free income tax help You can also call the IRS to find out if an organization is qualified. Free income tax help Call 1-877-829-5500. Free income tax help People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD equipment can call 1-800-829-4059. Free income tax help Deaf or hard of hearing individuals can also contact the IRS through relay services such as the Federal Relay Service at www. Free income tax help gsa. Free income tax help gov/fedrelay. Free income tax help Types of Qualified Organizations Generally, only the following types of organizations can be qualified organizations. Free income tax help A community chest, corporation, trust, fund, or foundation organized or created in or under the laws of the United States, any state, the District of Columbia, or any possession of the United States (including Puerto Rico). Free income tax help It must, however, be organized and operated only for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. Free income tax help Certain organizations that foster national or international amateur sports competition also qualify. Free income tax help War veterans' organizations, including posts, auxiliaries, trusts, or foundations, organized in the United States or any of its possessions (including Puerto Rico). Free income tax help Domestic fraternal societies, orders, and associations operating under the lodge system. Free income tax help (Your contribution to this type of organization is deductible only if it is to be used solely for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. Free income tax help ) Certain nonprofit cemetery companies or corporations. Free income tax help (Your contribution to this type of organization is not deductible if it can be used for the care of a specific lot or mausoleum crypt. Free income tax help ) The United States or any state, the District of Columbia, a U. Free income tax help S. Free income tax help possession (including Puerto Rico), a political subdivision of a state or U. Free income tax help S. Free income tax help possession, or an Indian tribal government or any of its subdivisions that perform substantial government functions. Free income tax help (Your contribution to this type of organization is only deductible if it is to be used solely for public purposes. Free income tax help ) Examples. Free income tax help    The following list gives some examples of qualified organizations. Free income tax help Churches, a convention or association of churches, temples, synagogues, mosques, and other religious organizations. Free income tax help Most nonprofit charitable organizations such as the American Red Cross and the United Way. Free income tax help Most nonprofit educational organizations, including the Boy Scouts of America, Girl Scouts of America, colleges, and museums. Free income tax help This also includes nonprofit daycare centers that provide childcare to the general public if substantially all the childcare is provided to enable parents and guardians to be gainfully employed. Free income tax help However, if your contribution is a substitute for tuition or other enrollment fee, it is not deductible as a charitable contribution, as explained later under Contributions You Cannot Deduct . Free income tax help Nonprofit hospitals and medical research organizations. Free income tax help Utility company emergency energy programs, if the utility company is an agent for a charitable organization that assists individuals with emergency energy needs. Free income tax help Nonprofit volunteer fire companies. Free income tax help Nonprofit organizations that develop and maintain public parks and recreation facilities. Free income tax help Civil defense organizations. Free income tax help Certain foreign charitable organizations. Free income tax help   Under income tax treaties with Canada, Israel, and Mexico, you may be able to deduct contributions to certain Canadian, Israeli, or Mexican charitable organizations. Free income tax help Generally, you must have income from sources in that country. Free income tax help For additional information on the deduction of contributions to Canadian charities, see Publication 597, Information on the United States–Canada Income Tax Treaty. Free income tax help If you need more information on how to figure your contribution to Mexican and Israeli charities, see Publication 526. Free income tax help Contributions You Can Deduct Generally, you can deduct contributions of money or property you make to, or for the use of, a qualified organization. Free income tax help A contribution is “for the use of” a qualified organization when it is held in a legally enforceable trust for the qualified organization or in a similar legal arrangement. Free income tax help The contributions must be made to a qualified organization and not set aside for use by a specific person. Free income tax help If you give property to a qualified organization, you generally can deduct the fair market value of the property at the time of the contribution. Free income tax help See Contributions of Property , later in this chapter. Free income tax help Your deduction for charitable contributions generally cannot be more than 50% of your adjusted gross income (AGI), but in some cases 20% and 30% limits may apply. Free income tax help See Limits on Deductions , later. Free income tax help In addition, the total of your charitable contribution deduction and certain other itemized deductions may be limited. Free income tax help See chapter 29. Free income tax help Table 24-1 gives examples of contributions you can and cannot deduct. Free income tax help Contributions From Which You Benefit If you receive a benefit as a result of making a contribution to a qualified organization, you can deduct only the amount of your contribution that is more than the value of the benefit you receive. Free income tax help Also see Contributions From Which You Benefit under Contributions You Cannot Deduct, later. Free income tax help If you pay more than fair market value to a qualified organization for goods or services, the excess may be a charitable contribution. Free income tax help For the excess amount to qualify, you must pay it with the intent to make a charitable contribution. Free income tax help Example 1. Free income tax help You pay $65 for a ticket to a dinner-dance at a church. Free income tax help Your entire $65 payment goes to the church. Free income tax help The ticket to the dinner-dance has a fair market value of $25. Free income tax help When you buy your ticket, you know that its value is less than your payment. Free income tax help To figure the amount of your charitable contribution, subtract the value of the benefit you receive ($25) from your total payment ($65). Free income tax help You can deduct $40 as a contribution to the church. Free income tax help Example 2. Free income tax help At a fundraising auction conducted by a charity, you pay $600 for a week's stay at a beach house. Free income tax help The amount you pay is no more than the fair rental value. Free income tax help You have not made a deductible charitable contribution. Free income tax help Athletic events. Free income tax help   If you make a payment to, or for the benefit of, a college or university and, as a result, you receive the right to buy tickets to an athletic event in the athletic stadium of the college or university, you can deduct 80% of the payment as a charitable contribution. Free income tax help   If any part of your payment is for tickets (rather than the right to buy tickets), that part is not deductible. Free income tax help Subtract the price of the tickets from your payment. Free income tax help You can deduct 80% of the remaining amount as a charitable contribution. Free income tax help Example 1. Free income tax help You pay $300 a year for membership in a university's athletic scholarship program. Free income tax help The only benefit of membership is that you have the right to buy one season ticket for a seat in a designated area of the stadium at the university's home football games. Free income tax help You can deduct $240 (80% of $300) as a charitable contribution. Free income tax help Table 24-1. Free income tax help Examples of Charitable Contributions—A Quick Check Use the following lists for a quick check of whether you can deduct a contribution. Free income tax help See the rest of this chapter for more information and additional rules and limits that may apply. Free income tax help Deductible As  Charitable Contributions Not Deductible  As Charitable Contributions Money or property you give to:  Churches, synagogues, temples, mosques, and other religious organizations Federal, state, and local governments, if your contribution is solely for public purposes (for example, a gift to reduce the public debt or maintain a public park) Nonprofit schools and hospitals The Salvation Army, American Red Cross, CARE, Goodwill Industries, United Way, Boy Scouts of America, Girl Scouts of America, Boys and Girls Clubs of America, etc. Free income tax help War veterans groups   Expenses paid for a student living with you, sponsored by a qualified organization  Out-of-pocket expenses when you serve a qualified organization as a volunteer Money or property you give to:  Civic leagues, social and sports clubs, labor unions, and chambers of commerce Foreign organizations (except certain Canadian, Israeli, and Mexican charities) Groups that are run for personal profit Groups whose purpose is to lobby for law changes Homeowners' associations Individuals Political groups or candidates for public office   Cost of raffle, bingo, or lottery tickets  Dues, fees, or bills paid to country clubs, lodges, fraternal orders, or similar groups  Tuition  Value of your time or services  Value of blood given to a blood bank    Example 2. Free income tax help The facts are the same as in Example 1 except your $300 payment includes the purchase of one season ticket for the stated ticket price of $120. Free income tax help You must subtract the usual price of a ticket ($120) from your $300 payment. Free income tax help The result is $180. Free income tax help Your deductible charitable contribution is $144 (80% of $180). Free income tax help Charity benefit events. Free income tax help   If you pay a qualified organization more than fair market value for the right to attend a charity ball, banquet, show, sporting event, or other benefit event, you can deduct only the amount that is more than the value of the privileges or other benefits you receive. Free income tax help   If there is an established charge for the event, that charge is the value of your benefit. Free income tax help If there is no established charge, the reasonable value of the right to attend the event is the value of your benefit. Free income tax help Whether you use the tickets or other privileges has no effect on the amount you can deduct. Free income tax help However, if you return the ticket to the qualified organization for resale, you can deduct the entire amount you paid for the ticket. Free income tax help    Even if the ticket or other evidence of payment indicates that the payment is a “contribution,” this does not mean you can deduct the entire amount. Free income tax help If the ticket shows the price of admission and the amount of the contribution, you can deduct the contribution amount. Free income tax help Example. Free income tax help You pay $40 to see a special showing of a movie for the benefit of a qualified organization. Free income tax help Printed on the ticket is “Contribution—$40. Free income tax help ” If the regular price for the movie is $8, your contribution is $32 ($40 payment − $8 regular price). Free income tax help Membership fees or dues. Free income tax help    You may be able to deduct membership fees or dues you pay to a qualified organization. Free income tax help However, you can deduct only the amount that is more than the value of the benefits you receive. Free income tax help    You cannot deduct dues, fees, or assessments paid to country clubs and other social organizations. Free income tax help They are not qualified organizations. Free income tax help Certain membership benefits can be disregarded. Free income tax help   Both you and the organization can disregard the following membership benefits if you receive them in return for an annual payment of $75 or less. Free income tax help Any rights or privileges, other than those discussed under Athletic events , earlier, that you can use frequently while you are a member, such as: Free or discounted admission to the organization's facilities or events, Free or discounted parking, Preferred access to goods or services, and Discounts on the purchase of goods and services. Free income tax help Admission, while you are a member, to events open only to members of the organization, if the organization reasonably projects that the cost per person (excluding any allocated overhead) is not more than $10. Free income tax help 20. Free income tax help Token items. Free income tax help   You do not have to reduce your contribution by the value of any benefit you receive if both of the following are true. Free income tax help You receive only a small item or other benefit of token value. Free income tax help The qualified organization correctly determines that the value of the item or benefit you received is not substantial and informs you that you can deduct your payment in full. Free income tax help Written statement. Free income tax help   A qualified organization must give you a written statement if you make a payment of more than $75 that is partly a contribution and partly for goods or services. Free income tax help The statement must say that you can deduct only the amount of your payment that is more than the value of the goods or services you received. Free income tax help It must also give you a good faith estimate of the value of those goods or services. Free income tax help   The organization can give you the statement either when it solicits or when it receives the payment from you. Free income tax help Exception. Free income tax help   An organization will not have to give you this statement if one of the following is true. Free income tax help The organization is: A governmental organization described in (5) under Types of Qualified Organizations , earlier, or An organization formed only for religious purposes, and the only benefit you receive is an intangible religious benefit (such as admission to a religious ceremony) that generally is not sold in commercial transactions outside the donative context. Free income tax help You receive only items whose value is not substantial as described under Token items , earlier. Free income tax help You receive only membership benefits that can be disregarded, as described earlier. Free income tax help Expenses Paid for Student Living With You You may be able to deduct some expenses of having a student live with you. Free income tax help You can deduct qualifying expenses for a foreign or American student who: Lives in your home under a written agreement between you and a qualified organization as part of a program of the organization to provide educational opportunities for the student, Is not your relative or dependent, and Is a full-time student in the twelfth or any lower grade at a school in the United States. Free income tax help You can deduct up to $50 a month for each full calendar month the student lives with you. Free income tax help Any month when conditions (1) through (3) are met for 15 days or more counts as a full month. Free income tax help For additional information, see Expenses Paid for Student Living With You in Publication 526. Free income tax help Mutual exchange program. Free income tax help   You cannot deduct the costs of a foreign student living in your home under a mutual exchange program through which your child will live with a family in a foreign country. Free income tax help Table 24-2. Free income tax help Volunteers' Questions and Answers If you volunteer for a qualified organization, the following questions and answers may apply to you. Free income tax help All of the rules explained in this chapter also apply. Free income tax help See, in particular, Out-of-Pocket Expenses in Giving Services . Free income tax help Question Answer I volunteer 6 hours a week in the office of a qualified organization. Free income tax help The receptionist is paid $10 an hour for the same work. Free income tax help Can I deduct $60 a week for my time?    No, you cannot deduct the value of your time or services. Free income tax help The office is 30 miles from my home. Free income tax help Can I deduct any of my car expenses for these trips? Yes, you can deduct the costs of gas and oil that are directly related to getting to and from the place where you volunteer. Free income tax help If you don't want to figure your actual costs, you can deduct 14 cents for each mile. Free income tax help I volunteer as a Red Cross nurse's aide at a hospital. Free income tax help Can I deduct the cost of the uniforms I must wear? Yes, you can deduct the cost of buying and cleaning your uniforms if the hospital is a qualified organization, the uniforms are not suitable for everyday use, and you must wear them when volunteering. Free income tax help I pay a babysitter to watch my children while I volunteer for a qualified organization. Free income tax help Can I deduct these costs? No, you cannot deduct payments for childcare expenses as a charitable contribution, even if you would be unable to volunteer without childcare. Free income tax help (If you have childcare expenses so you can work for pay, see chapter 32. Free income tax help ) Out-of-Pocket Expenses in Giving Services Although you cannot deduct the value of your services given to a qualified organization, you may be able to deduct some amounts you pay in giving services to a qualified organization. Free income tax help The amounts must be: Unreimbursed, Directly connected with the services, Expenses you had only because of the services you gave, and Not personal, living, or family expenses. Free income tax help Table 24-2 contains questions and answers that apply to some individuals who volunteer their services. Free income tax help Conventions. Free income tax help   If a qualified organization selects you to attend a convention as its representative, you can deduct unreimbursed expenses for travel, including reasonable amounts for meals and lodging, while away from home overnight in connection with the convention. Free income tax help However, see Travel , later. Free income tax help   You cannot deduct personal expenses for sightseeing, fishing parties, theater tickets, or nightclubs. Free income tax help You also cannot deduct transportation, meals and lodging, and other expenses for your spouse or children. Free income tax help    You cannot deduct your travel expenses in attending a church convention if you go only as a member of your church rather than as a chosen representative. Free income tax help You can, however, deduct unreimbursed expenses that are directly connected with giving services for your church during the convention. Free income tax help Uniforms. Free income tax help   You can deduct the cost and upkeep of uniforms that are not suitable for everyday use and that you must wear while performing donated services for a charitable organization. Free income tax help Foster parents. Free income tax help   You may be able to deduct as a charitable contribution some of the costs of being a foster parent (foster care provider) if you have no profit motive in providing the foster care and are not, in fact, making a profit. Free income tax help A qualified organization must select the individuals you take into your home for foster care. Free income tax help    You can deduct expenses that meet both of the following requirements. Free income tax help They are unreimbursed out-of-pocket expenses to feed, clothe, and care for the foster child. Free income tax help They are incurred primarily to benefit the qualified organization. Free income tax help   Unreimbursed expenses that you cannot deduct as charitable contributions may be considered support provided by you in determining whether you can claim the foster child as a dependent. Free income tax help For details, see chapter 3. Free income tax help Example. Free income tax help You cared for a foster child because you wanted to adopt her, not to benefit the agency that placed her in your home. Free income tax help Your unreimbursed expenses are not deductible as charitable contributions. Free income tax help Car expenses. Free income tax help   You can deduct as a charitable contribution any unreimbursed out-of-pocket expenses, such as the cost of gas and oil, that are directly related to the use of your car in giving services to a charitable organization. Free income tax help You cannot deduct general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance. Free income tax help    If you do not want to deduct your actual expenses, you can use a standard mileage rate of 14 cents a mile to figure your contribution. Free income tax help   You can deduct parking fees and tolls whether you use your actual expenses or the standard mileage rate. Free income tax help   You must keep reliable written records of your car expenses. Free income tax help For more information, see Car expenses under Records To Keep, later. Free income tax help Travel. Free income tax help   Generally, you can claim a charitable contribution deduction for travel expenses necessarily incurred while you are away from home performing services for a charitable organization only if there is no significant element of personal pleasure, recreation, or vacation in the travel. Free income tax help This applies whether you pay the expenses directly or indirectly. Free income tax help You are paying the expenses indirectly if you make a payment to the charitable organization and the organization pays for your travel expenses. Free income tax help   The deduction for travel expenses will not be denied simply because you enjoy providing services to the charitable organization. Free income tax help Even if you enjoy the trip, you can take a charitable contribution deduction for your travel expenses if you are on duty in a genuine and substantial sense throughout the trip. Free income tax help However, if you have only nominal duties, or if for significant parts of the trip you do not have any duties, you cannot deduct your travel expenses. Free income tax help Example 1. Free income tax help You are a troop leader for a tax-exempt youth group and you take the group on a camping trip. Free income tax help You are responsible for overseeing the setup of the camp and for providing adult supervision for other activities during the entire trip. Free income tax help You participate in the activities of the group and enjoy your time with them. Free income tax help You oversee the breaking of camp and you transport the group home. Free income tax help You can deduct your travel expenses. Free income tax help Example 2. Free income tax help You sail from one island to another and spend 8 hours a day counting whales and other forms of marine life. Free income tax help The project is sponsored by a charitable organization. Free income tax help In most circumstances, you cannot deduct your expenses. Free income tax help Example 3. Free income tax help You work for several hours each morning on an archaeological dig sponsored by a charitable organization. Free income tax help The rest of the day is free for recreation and sightseeing. Free income tax help You cannot take a charitable contribution deduction even though you work very hard during those few hours. Free income tax help Example 4. Free income tax help You spend the entire day attending a charitable organization's regional meeting as a chosen representative. Free income tax help In the evening you go to the theater. Free income tax help You can claim your travel expenses as charitable contributions, but you cannot claim the cost of your evening at the theater. Free income tax help Daily allowance (per diem). Free income tax help   If you provide services for a charitable organization and receive a daily allowance to cover reasonable travel expenses, including meals and lodging while away from home overnight, you must include in income any part of the allowance that is more than your deductible travel expenses. Free income tax help You may be able to deduct any necessary travel expenses that are more than the allowance. Free income tax help Deductible travel expenses. Free income tax help   These include: Air, rail, and bus transportation, Out-of-pocket expenses for your car, Taxi fares or other costs of transportation between the airport or station and your hotel, Lodging costs, and The cost of meals. Free income tax help Because these travel expenses are not business-related, they are not subject to the same limits as business-related expenses. Free income tax help For information on business travel expenses, see Travel Expenses in chapter 26. Free income tax help Contributions You Cannot Deduct There are some contributions you cannot deduct, such as those made to specific individuals and those made to nonqualified organizations. Free income tax help (See Contributions to Individuals and Contributions to Nonqualified Organizations , next. Free income tax help ) There are others you can deduct only part of, as discussed later under Contributions From Which You Benefit . Free income tax help Contributions to Individuals You cannot deduct contributions to specific individuals, including the following. Free income tax help Contributions to fraternal societies made for the purpose of paying medical or burial expenses of deceased members. Free income tax help Contributions to individuals who are needy or worthy. Free income tax help You cannot deduct these contributions even if you make them to a qualified organization for the benefit of a specific person. Free income tax help But you can deduct a contribution to a qualified organization that helps needy or worthy individuals if you do not indicate that your contribution is for a specific person. Free income tax help Example. Free income tax help You can deduct contributions to a qualified organization for flood relief, hurricane relief, or other disaster relief. Free income tax help However, you cannot deduct contributions earmarked for relief of a particular individual or family. Free income tax help Payments to a member of the clergy that can be spent as he or she wishes, such as for personal expenses. Free income tax help Expenses you paid for another person who provided services to a qualified organization. Free income tax help Example. Free income tax help Your son does missionary work. Free income tax help You pay his expenses. Free income tax help You cannot claim a deduction for your son's unreimbursed expenses related to his contribution of services. Free income tax help Payments to a hospital that are for a specific patient's care or for services for a specific patient. Free income tax help You cannot deduct these payments even if the hospital is operated by a city, a state, or other qualified organization. Free income tax help Contributions to Nonqualified Organizations You cannot deduct contributions to organizations that are not qualified to receive tax-deductible contributions, including the following. Free income tax help Certain state bar associations if: The bar is not a political subdivision of a state, The bar has private, as well as public, purposes, such as promoting the professional interests of members, and Your contribution is unrestricted and can be used for private purposes. Free income tax help Chambers of commerce and other business leagues or organizations (but see chapter 28). Free income tax help Civic leagues and associations. Free income tax help Communist organizations. Free income tax help Country clubs and other social clubs. Free income tax help Most foreign organizations (other than certain Canadian, Israeli, or Mexican charitable organizations). Free income tax help For details, see Publication 526. Free income tax help Homeowners' associations. Free income tax help Labor unions (but see chapter 28). Free income tax help Political organizations and candidates. Free income tax help Contributions From Which You Benefit If you receive or expect to receive a financial or economic benefit as a result of making a contribution to a qualified organization, you cannot deduct the part of the contribution that represents the value of the benefit you receive. Free income tax help See Contributions From Which You Benefit under Contributions You Can Deduct, earlier. Free income tax help These contributions include the following. Free income tax help Contributions for lobbying. Free income tax help This includes amounts that you earmark for use in, or in connection with, influencing specific legislation. Free income tax help Contributions to a retirement home for room, board, maintenance, or admittance. Free income tax help Also, if the amount of your contribution depends on the type or size of apartment you will occupy, it is not a charitable contribution. Free income tax help Costs of raffles, bingo, lottery, etc. Free income tax help You cannot deduct as a charitable contribution amounts you pay to buy raffle or lottery tickets or to play bingo or other games of chance. Free income tax help For information on how to report gambling winnings and losses, see Gambling winnings in chapter 12 and Gambling Losses Up to the Amount of Gambling Winnings in chapter 28. Free income tax help Dues to fraternal orders and similar groups. Free income tax help However, see Membership fees or dues , earlier, under Contributions You Can Deduct. Free income tax help Tuition, or amounts you pay instead of tuition. Free income tax help You cannot deduct as a charitable contribution amounts you pay as tuition even if you pay them for children to attend parochial schools or qualifying nonprofit daycare centers. Free income tax help You also cannot deduct any fixed amount you must pay in addition to, or instead of, tuition to enroll in a private school, even if it is designated as a “donation. Free income tax help ” Value of Time or Services You cannot deduct the value of your time or services, including: Blood donations to the American Red Cross or to blood banks, and The value of income lost while you work as an unpaid volunteer for a qualified organization. Free income tax help Personal Expenses You cannot deduct personal, living, or family expenses, such as the following items. Free income tax help The cost of meals you eat while you perform services for a qualified organization unless it is necessary for you to be away from home overnight while performing the services. Free income tax help Adoption expenses, including fees paid to an adoption agency and the costs of keeping a child in your home before adoption is final (but see Adoption Credit in chapter 37, and the instructions for Form 8839, Qualified Adoption Expenses). Free income tax help You also may be able to claim an exemption for the child. Free income tax help See Adopted child in chapter 3. Free income tax help Appraisal Fees You cannot deduct as a charitable contribution any fees you pay to find the fair market value of donated property (but see chapter 28). Free income tax help Contributions of Property If you contribute property to a qualified organization, the amount of your charitable contribution is generally the fair market value of the property at the time of the contribution. Free income tax help However, if the property has increased in value, you may have to make some adjustments to the amount of your deduction. Free income tax help See Giving Property That Has Increased in Value , later. Free income tax help For information about the records you must keep and the information you must furnish with your return if you donate property, see Records To Keep and How To Report , later. Free income tax help Clothing and household items. Free income tax help   You cannot take a deduction for clothing or household items you donate unless the clothing or household items are in good used condition or better. Free income tax help Exception. Free income tax help   You can take a deduction for a contribution of an item of clothing or household item that is not in good used condition or better if you deduct more than $500 for it and include a qualified appraisal of it with your return. Free income tax help Household items. Free income tax help   Household items include: Furniture and furnishings, Electronics, Appliances, Linens, and Other similar items. Free income tax help   Household items do not include: Food, Paintings, antiques, and other objects of art, Jewelry and gems, and Collections. Free income tax help Cars, boats, and airplanes. Free income tax help    The following rules apply to any donation of a qualified vehicle. Free income tax help A qualified vehicle is: A car or any motor vehicle manufactured mainly for use on public streets, roads, and highways, A boat, or An airplane. Free income tax help Deduction more than $500. Free income tax help   If you donate a qualified vehicle with a claimed fair market value of more than $500, you can deduct the smaller of: The gross proceeds from the sale of the vehicle by the organization, or The vehicle's fair market value on the date of the contribution. Free income tax help If the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to figure the deductible amount, as described under Giving Property That Has Increased in Value , later. Free income tax help Form 1098-C. Free income tax help   You must attach to your return Copy B of the Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, (or other statement containing the same information as Form 1098-C) you received from the organization. Free income tax help The Form 1098-C (or other statement) will show the gross proceeds from the sale of the vehicle. Free income tax help   If you e-file your return, you must: Attach Copy B of Form 1098-C to Form 8453 and mail the forms to the IRS, or Include Copy B of Form 1098-C as a pdf attachment if your software program allows it. Free income tax help   If you do not attach Form 1098-C (or other statement), you cannot deduct your contribution. Free income tax help    You must get Form 1098-C (or other statement) within 30 days of the sale of the vehicle. Free income tax help But if exception 1 or 2 (described later) applies, you must get Form 1098-C (or other statement) within 30 days of your donation. Free income tax help Filing deadline approaching and still no Form 1098-C. Free income tax help   If the filing deadline is approaching and you still do not have a Form 1098-C, you have two choices. Free income tax help Request an automatic 6-month extension of time to file your return. Free income tax help You can get this extension by filing Form 4868, Application for Automatic Extension of Time to File U. Free income tax help S. Free income tax help Individual Income Tax Return. Free income tax help  For more information, see Automatic Extension in chapter 1. Free income tax help File the return on time without claiming the deduction for the qualified vehicle. Free income tax help After receiving the Form 1098-C, file an amended return, Form 1040X, claiming the deduction. Free income tax help Attach Copy B of Form 1098-C (or other statement) to the amended return. Free income tax help For more information about amended returns, see Amended Returns and Claims for Refund in chapter 1. Free income tax help Exceptions. Free income tax help   There are two exceptions to the rules just described for deductions of more than $500. Free income tax help Exception 1—vehicle used or improved by organization. Free income tax help   If the qualified organization makes a significant intervening use of or material improvement to the vehicle before transferring it, you generally can deduct the vehicle's fair market value at the time of the contribution. Free income tax help But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. Free income tax help The Form 1098-C (or other statement) will show whether this exception applies. Free income tax help Exception 2—vehicle given or sold to needy individual. Free income tax help   If the qualified organization will give the vehicle, or sell it for a price well below fair market value, to a needy individual to further the organization's charitable purpose, you generally can deduct the vehicle's fair market value at the time of the contribution. Free income tax help But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. Free income tax help The Form 1098-C (or other statement) will show whether this exception applies. Free income tax help   This exception does not apply if the organization sells the vehicle at auction. Free income tax help In that case, you cannot deduct the vehicle's fair market value. Free income tax help Example. Free income tax help Anita donates a used car to a qualified organization. Free income tax help She bought it 3 years ago for $9,000. Free income tax help A used car guide shows the fair market value for this type of car is $6,000. Free income tax help However, Anita gets a Form 1098-C from the organization showing the car was sold for $2,900. Free income tax help Neither exception 1 nor exception 2 applies. Free income tax help If Anita itemizes her deductions, she can deduct $2,900 for her donation. Free income tax help She must attach Form 1098-C and Form 8283 to her return. Free income tax help Deduction $500 or less. Free income tax help   If the qualified organization sells the vehicle for $500 or less and exceptions 1 and 2 do not apply, you can deduct the smaller of: $500, or The vehicle's fair market value on the date of the contribution. Free income tax help But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. Free income tax help   If the vehicle's fair market value is at least $250 but not more than $500, you must have a written statement from the qualified organization acknowledging your donation. Free income tax help The statement must contain the information and meet the tests for an acknowledgment described under Deductions of At Least $250 But Not More Than $500 under Records To Keep, later. Free income tax help Partial interest in property. Free income tax help   Generally, you cannot deduct a charitable contribution of less than your entire interest in property. Free income tax help Right to use property. Free income tax help   A contribution of the right to use property is a contribution of less than your entire interest in that property and is not deductible. Free income tax help For exceptions and more information, see Partial Interest in Property Not in Trust in Publication 561. Free income tax help Future interests in tangible personal property. Free income tax help   You cannot deduct the value of a charitable contribution of a future interest in tangible personal property until all intervening interests in and rights to the actual possession or enjoyment of the property have either expired or been turned over to someone other than yourself, a related person, or a related organization. Free income tax help Tangible personal property. Free income tax help   This is any property, other than land or buildings, that can be seen or touched. Free income tax help It includes furniture, books, jewelry, paintings, and cars. Free income tax help Future interest. Free income tax help   This is any interest that is to begin at some future time, regardless of whether it is designated as a future interest under state law. Free income tax help Determining Fair Market Value This section discusses general guidelines for determining the fair market value of various types of donated property. Free income tax help Publication 561 contains a more complete discussion. Free income tax help Fair market value 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 the relevant facts. Free income tax help Used clothing and household items. Free income tax help   The fair market value of used clothing and household goods is usually far less than what you paid for them when they were new. Free income tax help   For used clothing, you should claim as the value the price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops. Free income tax help See Household Goods in Publication 561 for information on the valuation of household goods, such as furniture, appliances, and linens. Free income tax help Example. Free income tax help Dawn Greene donated a coat to a thrift store operated by her church. Free income tax help She paid $300 for the coat 3 years ago. Free income tax help Similar coats in the thrift store sell for $50. Free income tax help The fair market value of the coat is $50. Free income tax help Dawn's donation is limited to $50. Free income tax help Cars, boats, and airplanes. Free income tax help   If you contribute a car, boat, or airplane to a charitable organization, you must determine its fair market value. Free income tax help Certain commercial firms and trade organizations publish used car pricing guides, commonly called “blue books,” containing complete dealer sale prices or dealer average prices for recent model years. Free income tax help The guides may be published monthly or seasonally and for different regions of the country. Free income tax help These guides also provide estimates for adjusting for unusual equipment, unusual mileage, and physical condition. Free income tax help The prices are not “official” and these publications are not considered an appraisal of any specific donated property. Free income tax help But they do provide clues for making an appraisal and suggest relative prices for comparison with current sales and offerings in your area. Free income tax help   You can also find used car pricing information on the Internet. Free income tax help Example. Free income tax help You donate a used car in poor condition to a local high school for use by students studying car repair. Free income tax help A used car guide shows the dealer retail value for this type of car in poor condition is $1,600. Free income tax help However, the guide shows the price for a private party sale of the car is only $750. Free income tax help The fair market value of the car is considered to be $750. Free income tax help Large quantities. Free income tax help   If you contribute a large number of the same item, fair market value is the price at which comparable numbers of the item are being sold. Free income tax help Giving Property That Has Decreased in Value If you contribute property with a fair market value that is less than your basis in it, your deduction is limited to its fair market value. Free income tax help You cannot claim a deduction for the difference between the property's basis and its fair market value. Free income tax help Giving Property That Has Increased in Value If you contribute property with a fair market value that is more than your basis in it, you may have to reduce the fair market value by the amount of appreciation (increase in value) when you figure your deduction. Free income tax help Your basis in property is generally what you paid for it. Free income tax help See chapter 13 if you need more information about basis. Free income tax help Different rules apply to figuring your deduction, depending on whether the property is: Ordinary income property, or Capital gain property. Free income tax help Ordinary income property. Free income tax help   Property is ordinary income property if you would have recognized ordinary income or short-term capital gain had you sold it at fair market value on the date it was contributed. Free income tax help Examples of ordinary income property are inventory, works of art created by the donor, manuscripts prepared by the donor, and capital assets (defined in chapter 14) held 1 year or less. Free income tax help Amount of deduction. Free income tax help   The amount you can deduct for a contribution of ordinary income property is its fair market value minus the amount that would be ordinary income or short-term capital gain if you sold the property for its fair market value. Free income tax help Generally, this rule limits the deduction to your basis in the property. Free income tax help Example. Free income tax help You donate stock you held for 5 months to your church. Free income tax help The fair market value of the stock on the day you donate it is $1,000, but you paid only $800 (your basis). Free income tax help Because the $200 of appreciation would be short-term capital gain if you sold the stock, your deduction is limited to $800 (fair market value minus the appreciation). Free income tax help Capital gain property. Free income tax help   Property is capital gain property if you would have recognized long-term capital gain had you sold it at fair market value on the date of the contribution. Free income tax help It includes capital assets held more than 1 year, as well as certain real property and depreciable property used in your trade or business and, generally, held more than 1 year. Free income tax help Amount of deduction — general rule. Free income tax help   When figuring your deduction for a contribution of capital gain property, you generally can use the fair market value of the property. Free income tax help Exceptions. Free income tax help   In certain situations, you must reduce the fair market value by any amount that would have been long-term capital gain if you had sold the property for its fair market value. Free income tax help Generally, this means reducing the fair market value to the property's cost or other basis. Free income tax help Bargain sales. Free income tax help   A bargain sale of property is a sale or exchange for less than the property's fair market value. Free income tax help A bargain sale to a qualified organization is partly a charitable contribution and partly a sale or exchange. Free income tax help A bargain sale may result in a taxable gain. Free income tax help More information. Free income tax help   For more information on donating appreciated property, see Giving Property That Has Increased in Value in Publication 526. Free income tax help When To Deduct You can deduct your contributions only in the year you actually make them in cash or other property (or in a later carryover year, as explained later under Carryovers ). Free income tax help This applies whether you use the cash or an accrual method of accounting. Free income tax help Time of making contribution. Free income tax help   Usually, you make a contribution at the time of its unconditional delivery. Free income tax help Checks. Free income tax help   A check you mail to a charity is considered delivered on the date you mail it. Free income tax help Text message. Free income tax help   Contributions made by text message are deductible in the year you send the text message if the contribution is charged to your telephone or wireless account. Free income tax help Credit card. Free income tax help    Contributions charged on your credit card are deductible in the year you make the charge. Free income tax help Pay-by-phone account. Free income tax help    Contributions made through a pay-by-phone account are considered delivered on the date the financial institution pays the amount. Free income tax help Stock certificate. Free income tax help   A properly endorsed stock certificate is considered delivered on the date of mailing or other delivery to the charity or to the charity's agent. Free income tax help However, if you give a stock certificate to your agent or to the issuing corporation for transfer to the name of the charity, your contribution is not delivered until the date the stock is transferred on the books of the corporation. Free income tax help Promissory note. Free income tax help   If you issue and deliver a promissory note to a charity as a contribution, it is not a contribution until you make the note payments. Free income tax help Option. Free income tax help    If you grant a charity an option to buy real property at a bargain price, it is not a contribution until the organization exercises the option. Free income tax help Borrowed funds. Free income tax help   If you contribute borrowed funds, you can deduct the contribution in the year you deliver the funds to the charity, regardless of when you repay the loan. Free income tax help Limits on Deductions The amount you can deduct for charitable contributions cannot be more than 50% of your adjusted gross income (AGI). Free income tax help Your deduction may be further limited to 30% or 20% of your AGI, depending on the type of property you give and the type of organization you give it to. Free income tax help If your total contributions for the year are 20% or less of your AGI, these limits do not apply to you. Free income tax help The limits are discussed in detail under Limits on Deductions in Publication 526. Free income tax help A higher limit applies to certain qualified conservation contributions. Free income tax help See Publication 526 for details. Free income tax help Carryovers You can carry over any contributions you cannot deduct in the current year because they exceed your adjusted-gross-income limits. Free income tax help You can deduct the excess in each of the next 5 years until it is used up, but not beyond that time. Free income tax help For more information, see Carryovers in Publication 526. Free income tax help Records To Keep You must keep records to prove the amount of the contributions you make during the year. Free income tax help The kind of records you must keep depends on the amount of your contributions and whether they are: Cash contributions, Noncash contributions, or Out-of-pocket expenses when donating your services. Free income tax help Note. Free income tax help An organization generally must give you a written statement if it receives a payment from you that is more than $75 and is partly a contribution and partly for goods or services. Free income tax help (See Contributions From Which You Benefit under Contributions You Can Deduct, earlier. Free income tax help ) Keep the statement for your records. Free income tax help It may satisfy all or part of the recordkeeping requirements explained in the following discussions. Free income tax help Cash Contributions Cash contributions include those paid by cash, check, electronic funds transfer, debit card, credit card, or payroll deduction. Free income tax help You cannot deduct a cash contribution, regardless of the amount, unless you keep one of the following. Free income tax help A bank record that shows the name of the qualified organization, the date of the contribution, and the amount of the contribution. Free income tax help Bank records may include: A canceled check, A bank or credit union statement, or A credit card statement. Free income tax help A receipt (or a letter or other written communication) from the qualified organization showing the name of the organization, the date of the contribution, and the amount of the contribution. Free income tax help The payroll deduction records described next. Free income tax help Payroll deductions. Free income tax help   If you make a contribution by payroll deduction, you must keep: A pay stub, Form W-2, or other document furnished by your employer that shows the date and amount of the contribution, and A pledge card or other document prepared by or for the qualified organization that shows the name of the organization. Free income tax help If your employer withheld $250 or more from a single paycheck, see Contributions of $250 or More , next. Free income tax help Contributions of $250 or More You can claim a deduction for a contribution of $250 or more only if you have an acknowledgment of your contribution from the qualified organization or certain payroll deduction records. Free income tax help If you made more than one contribution of $250 or more, you must have either a separate acknowledgment for each or one acknowledgment that lists each contribution and the date of each contribution and shows your total contributions. Free income tax help Amount of contribution. Free income tax help   In figuring whether your contribution is $250 or more, do not combine separate contributions. Free income tax help For example, if you gave your church $25 each week, your weekly payments do not have to be combined. Free income tax help Each payment is a separate contribution. Free income tax help   If contributions are made by payroll deduction, the deduction from each paycheck is treated as a separate contribution. Free income tax help   If you made a payment that is partly for goods and services, as described earlier under Contributions From Which You Benefit , your contribution is the amount of the payment that is more than the value of the goods and services. Free income tax help Acknowledgment. Free income tax help   The acknowledgment must meet these tests. Free income tax help It must be written. Free income tax help It must include: The amount of cash you contributed, Whether the qualified organization gave you any goods or services as a result of your contribution (other than certain token items and membership benefits), A description and good faith estimate of the value of any goods or services described in (b) (other than intangible religious benefits), and A statement that the only benefit you received was an intangible religious benefit, if that was the case. Free income tax help The acknowledgment does not need to describe or estimate the value of an intangible religious benefit. Free income tax help An intangible religious benefit is a benefit that generally is not sold in commercial transactions outside a donative (gift) context. Free income tax help An example is admission to a religious ceremony. Free income tax help You must get it on or before the earlier of: The date you file your return for the year you make the contribution, or The due date, including extensions, for filing the return. Free income tax help   If the acknowledgment does not show the date of the contribution, you must also have a bank record or receipt, as described earlier, that does show the date of the contribution. Free income tax help If the acknowledgment shows the date of the contribution and meets the other tests just described, you do not need any other records. Free income tax help Payroll deductions. Free income tax help   If you make a contribution by payroll deduction and your employer withholds $250 or more from a single paycheck, you must keep: A pay stub, Form W-2, or other document furnished by your employer that shows the amount withheld as a contribution, and A pledge card or other document prepared by or for the qualified organization that shows the name of the organization and states the organization does not provide goods or services in return for any contribution made to it by payroll deduction. Free income tax help A single pledge card may be kept for all contributions made by payroll deduction regardless of amount as long as it contains all the required information. Free income tax help   If the pay stub, Form W-2, pledge card, or other document does not show the date of the contribution, you must have another document that does show the date of the contribution. Free income tax help If the pay stub, Form W-2, pledge card, or other document shows the date of the contribution, you do not need any other records except those just described in (1) and (2). Free income tax help Noncash Contributions For a contribution not made in cash, the records you must keep depend on whether your deduction for the contribution is: Less than $250, At least $250 but not more than $500, Over $500 but not more than $5,000, or Over $5,000. Free income tax help Amount of deduction. Free income tax help   In figuring whether your deduction is $500 or more, combine your claimed deductions for all similar items of property donated to any charitable organization during the year. Free income tax help   If you received goods or services in return, as described earlier in Contributions From Which You Benefit , reduce your contribution by the value of those goods or services. Free income tax help If you figure your deduction by reducing the fair market value of the donated property by its appreciation, as described earlier in Giving Property That Has Increased in Value , your contribution is the reduced amount. Free income tax help Deductions of Less Than $250 If you make any noncash contribution, you must get and keep a receipt from the charitable organization showing: The name of the charitable organization, The date and location of the charitable contribution, and A reasonably detailed description of the property. Free income tax help A letter or other written communication from the charitable organization acknowledging receipt of the contribution and containing the information in (1), (2), and (3) will serve as a receipt. Free income tax help You are not required to have a receipt where it is impractical to get one (for example, if you leave property at a charity's unattended drop site). Free income tax help Additional records. Free income tax help   You must also keep reliable written records for each item of contributed property. Free income tax help Your written records must include the following information. Free income tax help The name and address of the organization to which you contributed. Free income tax help The date and location of the contribution. Free income tax help A description of the property in detail reasonable under the circumstances. Free income tax help For a security, keep the name of the issuer, the type of security, and whether it is regularly traded on a stock exchange or in an over-the-counter market. Free income tax help The fair market value of the property at the time of the contribution and how you figured the fair market value. Free income tax help If it was determined by appraisal, keep a signed copy of the appraisal. Free income tax help The cost or other basis of the property, if you must reduce its fair market value by appreciation. Free income tax help Your records should also include the amount of the reduction and how you figured it. Free income tax help The amount you claim as a deduction for the tax year as a result of the contribution, if you contribute less than your entire interest in the property during the tax year. Free income tax help Your records must include the amount you claimed as a deduction in any earlier years for contributions of other interests in this property. Free income tax help They must also include the name and address of each organization to which you contributed the other interests, the place where any such tangible property is located or kept, and the name of any person in possession of the property, other than the organization to which you contributed it. Free income tax help The terms of any conditions attached to the contribution of property. Free income tax help Deductions of At Least $250 But Not More Than $500 If you claim a deduction of at least $250 but not more than $500 for a noncash charitable contribution, you must get and keep an acknowledgment of your contribution from the qualified organization. Free income tax help If you made more than one contribution of $250 or more, you must have either a separate acknowledgment for each or one acknowledgment that shows your total contributions. Free income tax help The acknowledgment must contain the information in items (1) through (3) under Deductions of Less Than $250 , earlier, and your written records must include the information listed in that discussion under Additional records . Free income tax help The acknowledgment must also meet these tests. Free income tax help It must be written. Free income tax help It must include: A description (but not necessarily the value) of any property you contributed, Whether the qualified organization gave you any goods or services as a result of your contribution (other than certain token items and membership benefits), and A description and good faith estimate of the value of any goods or services described in (b). Free income tax help If the only benefit you received was an intangible religious benefit (such as admission to a religious ceremony) that generally is not sold in a commercial transaction outside the donative context, the acknowledgment must say so and does not need to describe or estimate the value of the benefit. Free income tax help You must get it on or before the earlier of: The date you file your return for the year you make the contribution, or The due date, including extensions, for filing the return. Free income tax help Deductions Over $500 You are required to give additional information if you claim a deduction over $500 for noncash charitable contributions. Free income tax help See Records To Keep in Publication 526 for more information. Free income tax help Out-of-Pocket Expenses If you give services to a qualified organization and have unreimbursed out-of-pocket expenses related to those services, the following two rules apply. Free income tax help You must have adequate records to prove the amount of the expenses. Free income tax help If any of your unreimbursed out-of-pocket expenses, considered separately, are $250 or more (for example, you pay $250 or more for an airline ticket to attend a convention of a qualified organization as a chosen representative), you must get an acknowledgment from the qualified organization that contains: A description of the services you provided, A statement of whether or not the organization provided you any goods or services to reimburse you for the expenses you incurred, A description and a good faith estimate of the value of any goods or services (other than intangible religious benefits) provided to reimburse you, and A statement that the only benefit you received was an intangible religious benefit, if that was the case. Free income tax help The acknowledgment does not need to describe or estimate the value of an intangible religious benefit (defined earlier under Acknowledgment ). Free income tax help You must get the acknowledgment on or before the earlier of: The date you file your return for the year you make the contribution, or The due date, including extensions, for filing the return. Free income tax help Car expenses. Free income tax help   If you claim expenses directly related to use of your car in giving services to a qualified organization, you must keep reliable written records of your expenses. Free income tax help Whether your records are considered reliable depends on all the facts and circumstances. Free income tax help Generally, they may be considered reliable if you made them regularly and at or near the time you had the expenses. Free income tax help   For example, your records might show the name of the organization you were serving and the dates you used your car for a charitable purpose. Free income tax help If you use the standard mileage rate of 14 cents a mile, your records must show the miles you drove your car for the charitable purpose. Free income tax help If you deduct your actual expenses, your records must show the costs of operating the car that are directly related to a charitable purpose. Free income tax help   See Car expenses under Out-of-Pocket Expenses in Giving Services, earlier, for the expenses you can deduct. Free income tax help How To Report Report your charitable contributions on Schedule A (Form 1040). Free income tax help If your total deduction for all noncash contributions for the year is over $500, you must also file Form 8283. Free income tax help See How To Report in Publication 526 for more information. Free income tax help Prev  Up  Next   Home   More Online Publications
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SOI Tax Stats – IRS Tax-Exempt Organization Population Data

 

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Financial Data Extract

These microdata files contain selected financial data extracted annually from all Forms 990, 990-EZ and 990-PF filed by active organizations in a given calendar year:

Annual Extracts of Tax-Exempt Organization Financial Data

 

Other Available Data

Selected organizational data, extracted monthly for all tax-exempt organizations, organized by state and region:

Exempt Organizations Business Master File Extract

Cumulative listing of organizations eligible to receive tax-deductible contributions (formerly known as Publication 78) searchable by Organization Name, Employer Identification Number (EIN), or Address:

Exempt Organizations Select Check

Electronic copies (images) of certain Exempt Organization returns filed with the Internal Revenue Service are available on CD or DVD and in Raw or Alchemy format depending on the type of return, the type of filer, and the year the return was filed.

Exempt Organization Return Electronic Copies


 

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Page Last Reviewed or Updated: 26-Mar-2014

The Free Income Tax Help

Free income tax help 15. Free income tax help   Selling Your Home Table of Contents Reminder Introduction Useful Items - You may want to see: Main Home Figuring Gain or LossSelling Price Amount Realized Adjusted Basis Amount of Gain or Loss Dispositions Other Than Sales Determining Basis Excluding the GainMaximum Exclusion Ownership and Use Tests Reduced Maximum Exclusion Business Use or Rental of Home Reporting the SaleSeller-financed mortgage. Free income tax help More information. Free income tax help Special SituationsException for sales to related persons. Free income tax help Recapturing (Paying Back) a Federal Mortgage Subsidy Reminder Home sold with undeducted points. Free income tax help  If you have not deducted all the points you paid to secure a mortgage on your old home, you may be able to deduct the remaining points in the year of the sale. Free income tax help See Mortgage ending early under Points in chapter 23. Free income tax help Introduction This chapter explains the tax rules that apply when you sell your main home. Free income tax help In most cases, your main home is the one in which you live most of the time. Free income tax help If you sold your main home in 2013, you may be able to exclude from income any gain up to a limit of $250,000 ($500,000 on a joint return in most cases). Free income tax help See Excluding the Gain , later. Free income tax help Generally, if you can exclude all the gain, you do not need to report the sale on your tax return. Free income tax help If you have gain that cannot be excluded, it is taxable. Free income tax help Report it on Form 8949, Sales and Other Dispositions of Capital Assets, and Schedule D (Form 1040). Free income tax help You may also have to complete Form 4797, Sales of Business Property. Free income tax help See Reporting the Sale , later. Free income tax help If you have a loss on the sale, you generally cannot deduct it on your return. Free income tax help However, you may need to report it. Free income tax help See Reporting the Sale , later. Free income tax help The following are main topics in this chapter. Free income tax help Figuring gain or loss. Free income tax help Basis. Free income tax help Excluding the gain. Free income tax help Ownership and use tests. Free income tax help Reporting the sale. Free income tax help Other topics include the following. Free income tax help Business use or rental of home. Free income tax help Recapturing a federal mortgage subsidy. Free income tax help Useful Items - You may want to see: Publication 523 Selling Your Home 530 Tax Information for Homeowners 547 Casualties, Disasters, and Thefts Form (and Instructions) Schedule D (Form 1040) Capital Gains and Losses 982 Reduction of Tax Attributes Due to Discharge of Indebtedness 8828 Recapture of Federal Mortgage Subsidy 8949 Sales and Other Dispositions of Capital Assets Main Home This section explains the term “main home. Free income tax help ” Usually, the home you live in most of the time is your main home and can be a: House, Houseboat, Mobile home, Cooperative apartment, or Condominium. Free income tax help To exclude gain under the rules of this chapter, you in most cases must have owned and lived in the property as your main home for at least 2 years during the 5-year period ending on the date of sale. Free income tax help Land. Free income tax help   If you sell the land on which your main home is located, but not the house itself, you cannot exclude any gain you have from the sale of the land. Free income tax help However, if you sell vacant land used as part of your main home and that is adjacent to it, you may be able to exclude the gain from the sale under certain circumstances. Free income tax help See Vacant land under Main Home in Publication 523 for more information. Free income tax help Example. Free income tax help You buy a piece of land and move your main home to it. Free income tax help Then you sell the land on which your main home was located. Free income tax help This sale is not considered a sale of your main home, and you cannot exclude any gain on the sale of the land. Free income tax help More than one home. Free income tax help   If you have more than one home, you can exclude gain only from the sale of your main home. Free income tax help You must include in income gain from the sale of any other home. Free income tax help If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time during the year. Free income tax help Example 1. Free income tax help You own two homes, one in New York and one in Florida. Free income tax help From 2009 through 2013, you live in the New York home for 7 months and in the Florida residence for 5 months of each year. Free income tax help In the absence of facts and circumstances indicating otherwise, the New York home is your main home. Free income tax help You would be eligible to exclude the gain from the sale of the New York home but not of the Florida home in 2013. Free income tax help Example 2. Free income tax help You own a house, but you live in another house that you rent. Free income tax help The rented house is your main home. Free income tax help Example 3. Free income tax help You own two homes, one in Virginia and one in New Hampshire. Free income tax help In 2009 and 2010, you lived in the Virginia home. Free income tax help In 2011 and 2012, you lived in the New Hampshire home. Free income tax help In 2013, you lived again in the Virginia home. Free income tax help Your main home in 2009, 2010, and 2013 is the Virginia home. Free income tax help Your main home in 2011 and 2012 is the New Hampshire home. Free income tax help You would be eligible to exclude gain from the sale of either home (but not both) in 2013. Free income tax help Property used partly as your main home. Free income tax help   If you use only part of the property as your main home, the rules discussed in this publication apply only to the gain or loss on the sale of that part of the property. Free income tax help For details, see Business Use or Rental of Home , later. Free income tax help Figuring Gain or Loss To figure the gain or loss on the sale of your main home, you must know the selling price, the amount realized, and the adjusted basis. Free income tax help Subtract the adjusted basis from the amount realized to get your gain or loss. Free income tax help     Selling price     − Selling expenses       Amount realized       Amount realized     − Adjusted basis       Gain or loss   Selling Price The selling price is the total amount you receive for your home. Free income tax help It includes money and the fair market value of any other property or any other services you receive and all notes, mortgages or other debts assumed by the buyer as part of the sale. Free income tax help Payment by employer. Free income tax help   You may have to sell your home because of a job transfer. Free income tax help If your employer pays you for a loss on the sale or for your selling expenses, do not include the payment as part of the selling price. Free income tax help Your employer will include it as wages in box 1 of your Form W-2, and you will include it in your income on Form 1040, line 7. Free income tax help Option to buy. Free income tax help   If you grant an option to buy your home and the option is exercised, add the amount you receive for the option to the selling price of your home. Free income tax help If the option is not exercised, you must report the amount as ordinary income in the year the option expires. Free income tax help Report this amount on Form 1040, line 21. Free income tax help Form 1099-S. Free income tax help   If you received Form 1099-S, Proceeds From Real Estate Transactions, box 2 (Gross proceeds) should show the total amount you received for your home. Free income tax help   However, box 2 will not include the fair market value of any services or property other than cash or notes you received or will receive. Free income tax help Instead, box 4 will be checked to indicate your receipt or expected receipt of these items. Free income tax help Amount Realized The amount realized is the selling price minus selling expenses. Free income tax help Selling expenses. Free income tax help   Selling expenses include: Commissions, Advertising fees, Legal fees, and Loan charges paid by the seller, such as loan placement fees or “points. Free income tax help ” Adjusted Basis While you owned your home, you may have made adjustments (increases or decreases) to the basis. Free income tax help This adjusted basis must be determined before you can figure gain or loss on the sale of your home. Free income tax help For information on how to figure your home's adjusted basis, see Determining Basis , later. Free income tax help Amount of Gain or Loss To figure the amount of gain or loss, compare the amount realized to the adjusted basis. Free income tax help Gain on sale. Free income tax help   If the amount realized is more than the adjusted basis, the difference is a gain and, except for any part you can exclude, in most cases is taxable. Free income tax help Loss on sale. Free income tax help   If the amount realized is less than the adjusted basis, the difference is a loss. Free income tax help A loss on the sale of your main home cannot be deducted. Free income tax help Jointly owned home. Free income tax help   If you and your spouse sell your jointly owned home and file a joint return, you figure your gain or loss as one taxpayer. Free income tax help Separate returns. Free income tax help   If you file separate returns, each of you must figure your own gain or loss according to your ownership interest in the home. Free income tax help Your ownership interest is generally determined by state law. Free income tax help Joint owners not married. Free income tax help   If you and a joint owner other than your spouse sell your jointly owned home, each of you must figure your own gain or loss according to your ownership interest in the home. Free income tax help Each of you applies the rules discussed in this chapter on an individual basis. Free income tax help Dispositions Other Than Sales Some special rules apply to other dispositions of your main home. Free income tax help Foreclosure or repossession. Free income tax help   If your home was foreclosed on or repossessed, you have a disposition. Free income tax help See Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments, to determine if you have ordinary income, gain, or loss. Free income tax help Abandonment. Free income tax help   If you abandon your home, see Publication 4681 to determine if you have ordinary income, gain, or loss. Free income tax help Trading (exchanging) homes. Free income tax help   If you trade your old home for another home, treat the trade as a sale and a purchase. Free income tax help Example. Free income tax help You owned and lived in a home with an adjusted basis of $41,000. Free income tax help A real estate dealer accepted your old home as a trade-in and allowed you $50,000 toward a new home priced at $80,000. Free income tax help This is treated as a sale of your old home for $50,000 with a gain of $9,000 ($50,000 – $41,000). Free income tax help If the dealer had allowed you $27,000 and assumed your unpaid mortgage of $23,000 on your old home, your sales price would still be $50,000 (the $27,000 trade-in allowed plus the $23,000 mortgage assumed). Free income tax help Transfer to spouse. Free income tax help   If you transfer your home to your spouse or you transfer it to your former spouse incident to your divorce, you in most cases have no gain or loss. Free income tax help This is true even if you receive cash or other consideration for the home. Free income tax help As a result, the rules in this chapter do not apply. Free income tax help More information. Free income tax help   If you need more information, see Transfer to spouse in Publication 523 and Property Settlements in Publication 504, Divorced or Separated Individuals. Free income tax help Involuntary conversion. Free income tax help   You have a disposition when your home is destroyed or condemned and you receive other property or money in payment, such as insurance or a condemnation award. Free income tax help This is treated as a sale and you may be able to exclude all or part of any gain from the destruction or condemnation of your home, as explained later under Special Situations . Free income tax help Determining Basis You need to know your basis in your home to figure any gain or loss when you sell it. Free income tax help Your basis in your home is determined by how you got the home. Free income tax help Generally, your basis is its cost if you bought it or built it. Free income tax help If you got it in some other way (inheritance, gift, etc. Free income tax help ), your basis is generally either its fair market value when you received it or the adjusted basis of the previous owner. Free income tax help While you owned your home, you may have made adjustments (increases or decreases) to your home's basis. Free income tax help The result of these adjustments is your home's adjusted basis, which is used to figure gain or loss on the sale of your home. Free income tax help See Adjusted Basis , later. Free income tax help You can find more information on basis and adjusted basis in chapter 13 of this publication and in Publication 523. Free income tax help Cost As Basis The cost of property is the amount you paid for it in cash, debt obligations, other property, or services. Free income tax help Purchase. Free income tax help   If you bought your home, your basis is its cost to you. Free income tax help This includes the purchase price and certain settlement or closing costs. Free income tax help In most cases, your purchase price includes your down payment and any debt, such as a first or second mortgage or notes you gave the seller in payment for the home. Free income tax help If you build, or contract to build, a new home, your purchase price can include costs of construction, as discussed in Publication 523. Free income tax help Settlement fees or closing costs. Free income tax help   When you bought your home, you may have paid settlement fees or closing costs in addition to the contract price of the property. Free income tax help You can include in your basis some of the settlement fees and closing costs you paid for buying the home, but not the fees and costs for getting a mortgage loan. Free income tax help A fee paid for buying the home is any fee you would have had to pay even if you paid cash for the home (that is, without the need for financing). Free income tax help    Chapter 13 lists some of the settlement fees and closing costs that you can include in the basis of property, including your home. Free income tax help It also lists some settlement costs that cannot be included in basis. Free income tax help   Also see Publication 523 for additional items and a discussion of basis other than cost. Free income tax help Adjusted Basis Adjusted basis is your cost or other basis increased or decreased by certain amounts. Free income tax help To figure your adjusted basis, you can use Worksheet 1 in Publication 523. Free income tax help Do not use Worksheet 1 if you acquired an interest in your home from a decedent who died in 2010 and whose executor filed Form 8939, Allocation of Increase in Basis for Property Acquired From a Decedent. Free income tax help Increases to basis. Free income tax help   These include the following. Free income tax help Additions and other improvements that have a useful life of more than 1 year. Free income tax help Special assessments for local improvements. Free income tax help Amounts you spent after a casualty to restore damaged property. Free income tax help Improvements. Free income tax help   These add to the value of your home, prolong its useful life, or adapt it to new uses. Free income tax help You add the cost of additions and other improvements to the basis of your property. Free income tax help   For example, putting a recreation room or another bathroom in your unfinished basement, putting up a new fence, putting in new plumbing or wiring, putting on a new roof, or paving your unpaved driveway are improvements. Free income tax help An addition to your house, such as a new deck, a sunroom, or a new garage, is also an improvement. Free income tax help Repairs. Free income tax help   These maintain your home in good condition but do not add to its value or prolong its life. Free income tax help You do not add their cost to the basis of your property. Free income tax help   Examples of repairs include repainting your house inside or outside, fixing your gutters or floors, repairing leaks or plastering, and replacing broken window panes. Free income tax help Decreases to basis. Free income tax help   These include the following. Free income tax help Discharge of qualified principal residence indebtedness that was excluded from income. Free income tax help Some or all of the cancellation of debt income that was excluded due to your bankruptcy or insolvency. Free income tax help For details, see Publication 4681. Free income tax help Gain you postponed from the sale of a previous home before May 7, 1997. Free income tax help Deductible casualty losses. Free income tax help Insurance payments you received or expect to receive for casualty losses. Free income tax help Payments you received for granting an easement or right-of-way. Free income tax help Depreciation allowed or allowable if you used your home for business or rental purposes. Free income tax help Energy-related credits allowed for expenditures made on the residence. Free income tax help (Reduce the increase in basis otherwise allowable for expenditures on the residence by the amount of credit allowed for those expenditures. Free income tax help ) Adoption credit you claimed for improvements added to the basis of your home. Free income tax help Nontaxable payments from an adoption assistance program of your employer you used for improvements you added to the basis of your home. Free income tax help Energy conservation subsidy excluded from your gross income because you received it (directly or indirectly) from a public utility after 1992 to buy or install any energy conservation measure. Free income tax help An energy conservation measure is an installation or modification primarily designed either to reduce consumption of electricity or natural gas or to improve the management of energy demand for a home. Free income tax help District of Columbia first-time homebuyer credit (allowed on the purchase of a principal residence in the District of Columbia beginning on August 5, 1997 and before January 1, 2012). Free income tax help General sales taxes (allowed beginning 2004 and ending before 2014) claimed as an itemized deduction on Schedule A (Form 1040) that were imposed on the purchase of personal property, such as a houseboat used as your home or a mobile home. Free income tax help Discharges of qualified principal residence indebtedness. Free income tax help   You may be able to exclude from gross income a discharge of qualified principal residence indebtedness. Free income tax help This exclusion applies to discharges made after 2006 and before 2014. Free income tax help If you choose to exclude this income, you must reduce (but not below zero) the basis of the principal residence by the amount excluded from your gross income. Free income tax help   File Form 982 with your tax return. Free income tax help See the form's instructions for detailed information. Free income tax help Recordkeeping. Free income tax help You should keep records to prove your home's adjusted basis. Free income tax help Ordinarily, you must keep records for 3 years after the due date for filing your return for the tax year in which you sold your home. Free income tax help But if you sold a home before May 7, 1997, and postponed tax on any gain, the basis of that home affects the basis of the new home you bought. Free income tax help Keep records proving the basis of both homes as long as they are needed for tax purposes. Free income tax help The records you should keep include: Proof of the home's purchase price and purchase expenses, Receipts and other records for all improvements, additions, and other items that affect the home's adjusted basis, Any worksheets or other computations you used to figure the adjusted basis of the home you sold, the gain or loss on the sale, the exclusion, and the taxable gain, Any Form 982 you filed to report any discharge of qualified principal residence indebtedness, Any Form 2119, Sale of Your Home, you filed to postpone gain from the sale of a previous home before May 7, 1997, and Any worksheets you used to prepare Form 2119, such as the Adjusted Basis of Home Sold Worksheet or the Capital Improvements Worksheet from the Form 2119 instructions, or other source of computations. Free income tax help Excluding the Gain You may qualify to exclude from your income all or part of any gain from the sale of your main home. Free income tax help This means that, if you qualify, you will not have to pay tax on the gain up to the limit described under Maximum Exclusion , next. Free income tax help To qualify, you must meet the ownership and use tests described later. Free income tax help You can choose not to take the exclusion by including the gain from the sale in your gross income on your tax return for the year of the sale. Free income tax help You can use Worksheet 2 in Publication 523 to figure the amount of your exclusion and your taxable gain, if any. Free income tax help If you have any taxable gain from the sale of your home, you may have to increase your withholding or make estimated tax payments. Free income tax help See Publication 505, Tax Withholding and Estimated Tax. Free income tax help Maximum Exclusion You can exclude up to $250,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if all of the following are true. Free income tax help You meet the ownership test. Free income tax help You meet the use test. Free income tax help During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home. Free income tax help For details on gain allocated to periods of nonqualified use, see Periods of nonqualified use , later. Free income tax help You may be able to exclude up to $500,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if you are married and file a joint return and meet the requirements listed in the discussion of the special rules for joint returns, later, under Married Persons . Free income tax help Ownership and Use Tests To claim the exclusion, you must meet the ownership and use tests. Free income tax help This means that during the 5-year period ending on the date of the sale, you must have: Owned the home for at least 2 years (the ownership test), and Lived in the home as your main home for at least 2 years (the use test). Free income tax help Exception. Free income tax help   If you owned and lived in the property as your main home for less than 2 years, you can still claim an exclusion in some cases. Free income tax help However, the maximum amount you may be able to exclude will be reduced. Free income tax help See Reduced Maximum Exclusion , later. Free income tax help Example 1—home owned and occupied for at least 2 years. Free income tax help Mya bought and moved into her main home in September 2011. Free income tax help She sold the home at a gain in October 2013. Free income tax help During the 5-year period ending on the date of sale in October 2013, she owned and lived in the home for more than 2 years. Free income tax help She meets the ownership and use tests. Free income tax help Example 2—ownership test met but use test not met. Free income tax help Ayden bought a home, lived in it for 6 months, moved out, and never occupied the home again. Free income tax help He later sold the home for a gain. Free income tax help He owned the home during the entire 5-year period ending on the date of sale. Free income tax help He meets the ownership test but not the use test. Free income tax help He cannot exclude any part of his gain on the sale unless he qualified for a reduced maximum exclusion (explained later). Free income tax help Period of Ownership and Use The required 2 years of ownership and use during the 5-year period ending on the date of the sale do not have to be continuous nor do they both have to occur at the same time. Free income tax help You meet the tests if you can show that you owned and lived in the property as your main home for either 24 full months or 730 days (365 × 2) during the 5-year period ending on the date of sale. Free income tax help Temporary absence. Free income tax help   Short temporary absences for vacations or other seasonal absences, even if you rent out the property during the absences, are counted as periods of use. Free income tax help The following examples assume that the reduced maximum exclusion (discussed later) does not apply to the sales. Free income tax help Example 1. Free income tax help David Johnson, who is single, bought and moved into his home on February 1, 2011. Free income tax help Each year during 2011 and 2012, David left his home for a 2-month summer vacation. Free income tax help David sold the house on March 1, 2013. Free income tax help Although the total time David used his home is less than 2 years (21 months), he meets the requirement and may exclude gain. Free income tax help The 2-month vacations are short temporary absences and are counted as periods of use in determining whether David used the home for the required 2 years. Free income tax help Example 2. Free income tax help Professor Paul Beard, who is single, bought and moved into a house on August 18, 2010. Free income tax help He lived in it as his main home continuously until January 5, 2012, when he went abroad for a 1-year sabbatical leave. Free income tax help On February 6, 2013, 1 month after returning from the leave, Paul sold the house at a gain. Free income tax help Because his leave was not a short temporary absence, he cannot include the period of leave to meet the 2-year use test. Free income tax help He cannot exclude any part of his gain, because he did not use the residence for the required 2 years. Free income tax help Ownership and use tests met at different times. Free income tax help   You can meet the ownership and use tests during different 2-year periods. Free income tax help However, you must meet both tests during the 5-year period ending on the date of the sale. Free income tax help Example. Free income tax help Beginning in 2002, Helen Jones lived in a rented apartment. Free income tax help The apartment building was later converted to condominiums, and she bought her same apartment on December 3, 2010. Free income tax help In 2011, Helen became ill and on April 14 of that year she moved to her daughter's home. Free income tax help On July 12, 2013, while still living in her daughter's home, she sold her condominium. Free income tax help Helen can exclude gain on the sale of her condominium because she met the ownership and use tests during the 5-year period from July 13, 2008, to July 12, 2013, the date she sold the condominium. Free income tax help She owned her condominium from December 3, 2010, to July 12, 2013 (more than 2 years). Free income tax help She lived in the property from July 13, 2008 (the beginning of the 5-year period), to April 14, 2011 (more than 2 years). Free income tax help The time Helen lived in her daughter's home during the 5-year period can be counted toward her period of ownership, and the time she lived in her rented apartment during the 5-year period can be counted toward her period of use. Free income tax help Cooperative apartment. Free income tax help   If you sold stock as a tenant-stockholder in a cooperative housing corporation, the ownership and use tests are met if, during the 5-year period ending on the date of sale, you: Owned the stock for at least 2 years, and Lived in the house or apartment that the stock entitles you to occupy as your main home for at least 2 years. Free income tax help Exceptions to Ownership and Use Tests The following sections contain exceptions to the ownership and use tests for certain taxpayers. Free income tax help Exception for individuals with a disability. Free income tax help   There is an exception to the use test if: You become physically or mentally unable to care for yourself, and You owned and lived in your home as your main home for a total of at least 1 year during the 5-year period before the sale of your home. Free income tax help Under this exception, you are considered to live in your home during any time within the 5-year period that you own the home and live in a facility (including a nursing home) licensed by a state or political subdivision to care for persons in your condition. Free income tax help If you meet this exception to the use test, you still have to meet the 2-out-of-5-year ownership test to claim the exclusion. Free income tax help Previous home destroyed or condemned. Free income tax help   For the ownership and use tests, you add the time you owned and lived in a previous home that was destroyed or condemned to the time you owned and lived in the replacement home on whose sale you wish to exclude gain. Free income tax help This rule applies if any part of the basis of the home you sold depended on the basis of the destroyed or condemned home. Free income tax help Otherwise, you must have owned and lived in the same home for 2 of the 5 years before the sale to qualify for the exclusion. Free income tax help Members of the uniformed services or Foreign Service, employees of the intelligence community, or employees or volunteers of the Peace Corps. Free income tax help   You can choose to have the 5-year test period for ownership and use suspended during any period you or your spouse serve on “qualified official extended duty” as a member of the uniformed services or Foreign Service of the United States, or as an employee of the intelligence community. Free income tax help You can choose to have the 5-year test period for ownership and use suspended during any period you or your spouse serve outside the United States either as an employee of the Peace Corps on "qualified official extended duty" or as an enrolled volunteer or volunteer leader of the Peace Corps. Free income tax help This means that you may be able to meet the 2-year use test even if, because of your service, you did not actually live in your home for at least the required 2 years during the 5-year period ending on the date of sale. Free income tax help   If this helps you qualify to exclude gain, you can choose to have the 5-year test period suspended by filing a return for the year of sale that does not include the gain. Free income tax help For more information about the suspension of the 5-year test period, see Members of the uniformed services or Foreign Service, employees of the intelligence community, or employees or volunteers of the Peace Corps in Publication 523. Free income tax help Married Persons If you and your spouse file a joint return for the year of sale and one spouse meets the ownership and use tests, you can exclude up to $250,000 of the gain. Free income tax help (But see Special rules for joint returns , next. Free income tax help ) Special rules for joint returns. Free income tax help   You can exclude up to $500,000 of the gain on the sale of your main home if all of the following are true. Free income tax help You are married and file a joint return for the year. Free income tax help Either you or your spouse meets the ownership test. Free income tax help Both you and your spouse meet the use test. Free income tax help During the 2-year period ending on the date of the sale, neither you nor your spouse excluded gain from the sale of another home. Free income tax help If either spouse does not satisfy all these requirements, the maximum exclusion that can be claimed by the couple is the total of the maximum exclusions that each spouse would qualify for if not married and the amounts were figured separately. Free income tax help For this purpose, each spouse is treated as owning the property during the period that either spouse owned the property. Free income tax help Example 1—one spouse sells a home. Free income tax help Emily sells her home in June 2013 for a gain of $300,000. Free income tax help She marries Jamie later in the year. Free income tax help She meets the ownership and use tests, but Jamie does not. Free income tax help Emily can exclude up to $250,000 of gain on a separate or joint return for 2013. Free income tax help The $500,000 maximum exclusion for certain joint returns does not apply because Jamie does not meet the use test. Free income tax help Example 2—each spouse sells a home. Free income tax help The facts are the same as in Example 1 except that Jamie also sells a home in 2013 for a gain of $200,000 before he marries Emily. Free income tax help He meets the ownership and use tests on his home, but Emily does not. Free income tax help Emily can exclude $250,000 of gain and Jamie can exclude $200,000 of gain on the respective sales of their individual homes. Free income tax help However, Emily cannot use Jamie's unused exclusion to exclude more than $250,000 of gain. Free income tax help Therefore, Emily and Jamie must recognize $50,000 of gain on the sale of Emily's home. Free income tax help The $500,000 maximum exclusion for certain joint returns does not apply because Emily and Jamie do not both meet the use test for the same home. Free income tax help Sale of main home by surviving spouse. Free income tax help   If your spouse died and you did not remarry before the date of sale, you are considered to have owned and lived in the property as your main home during any period of time when your spouse owned and lived in it as a main home. Free income tax help   If you meet all of the following requirements, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home. Free income tax help The sale or exchange took place after 2008. Free income tax help The sale or exchange took place no more than 2 years after the date of death of your spouse. Free income tax help You have not remarried. Free income tax help You and your spouse met the use test at the time of your spouse's death. Free income tax help You or your spouse met the ownership test at the time of your spouse's death. Free income tax help Neither you nor your spouse excluded gain from the sale of another home during the last 2 years. Free income tax help Example. Free income tax help   Harry owned and used a house as his main home since 2009. Free income tax help Harry and Wilma married on July 1, 2013, and from that date they use Harry's house as their main home. Free income tax help Harry died on August 15, 2013, and Wilma inherited the property. Free income tax help Wilma sold the property on September 3, 2013, at which time she had not remarried. Free income tax help Although Wilma owned and used the house for less than 2 years, Wilma is considered to have satisfied the ownership and use tests because her period of ownership and use includes the period that Harry owned and used the property before death. Free income tax help Home transferred from spouse. Free income tax help   If your home was transferred to you by your spouse (or former spouse if the transfer was incident to divorce), you are considered to have owned it during any period of time when your spouse owned it. Free income tax help Use of home after divorce. Free income tax help   You are considered to have used property as your main home during any period when: You owned it, and Your spouse or former spouse is allowed to live in it under a divorce or separation instrument and uses it as his or her main home. Free income tax help Reduced Maximum Exclusion If you fail to meet the requirements to qualify for the $250,000 or $500,000 exclusion, you may still qualify for a reduced exclusion. Free income tax help This applies to those who: Fail to meet the ownership and use tests, or Have used the exclusion within 2 years of selling their current home. Free income tax help In both cases, to qualify for a reduced exclusion, the sale of your main home must be due to one of the following reasons. Free income tax help A change in place of employment. Free income tax help Health. Free income tax help Unforeseen circumstances. Free income tax help Unforeseen circumstances. Free income tax help   The sale of your main home is because of an unforeseen circumstance if your primary reason for the sale is the occurrence of an event that you could not reasonably have anticipated before buying and occupying your main home. Free income tax help   See Publication 523 for more information and to use Worksheet 3 to figure your reduced maximum exclusion. Free income tax help Business Use or Rental of Home You may be able to exclude gain from the sale of a home you have used for business or to produce rental income. Free income tax help But you must meet the ownership and use tests. Free income tax help Periods of nonqualified use. Free income tax help   In most cases, gain from the sale or exchange of your main home will not qualify for the exclusion to the extent that the gains are allocated to periods of nonqualified use. Free income tax help Nonqualified use is any period after 2008 during which neither you nor your spouse (or your former spouse) used the property as a main home with the following exceptions. Free income tax help Exceptions. Free income tax help   A period of nonqualified use does not include: Any portion of the 5-year period ending on the date of the sale or exchange after the last date you (or your spouse) use the property as a main home; Any period (not to exceed an aggregate period of 10 years) during which you (or your spouse) are serving on qualified official extended duty: As a member of the uniformed services; As a member of the Foreign Service of the United States; or As an employee of the intelligence community; and Any other period of temporary absence (not to exceed an aggregate period of 2 years) due to change of employment, health conditions, or such other unforeseen circumstances as may be specified by the IRS. Free income tax help The gain resulting from the sale of the property is allocated between qualified and nonqualified use periods based on the amount of time the property was held for qualified and nonqualified use. Free income tax help Gain from the sale or exchange of a main home allocable to periods of qualified use will continue to qualify for the exclusion for the sale of your main home. Free income tax help Gain from the sale or exchange of property allocable to nonqualified use will not qualify for the exclusion. Free income tax help Calculation. Free income tax help   To figure the portion of the gain allocated to the period of nonqualified use, multiply the gain by the following fraction:   Total nonqualified use during the period of ownership after 2008      Total period of ownership     This calculation can be found in Worksheet 2, line 10, in Publication 523. Free income tax help Example 1. Free income tax help On May 23, 2007, Amy, who is unmarried for all years in this example, bought a house. Free income tax help She moved in on that date and lived in it until May 31, 2009, when she moved out of the house and put it up for rent. Free income tax help The house was rented from June 1, 2009, to March 31, 2011. Free income tax help Amy claimed depreciation deductions in 2009 through 2011 totaling $10,000. Free income tax help Amy moved back into the house on April 1, 2011, and lived there until she sold it on January 31, 2013, for a gain of $200,000. Free income tax help During the 5-year period ending on the date of the sale (January 31, 2008-January 31, 2013), Amy owned and lived in the house for more than 2 years as shown in the following table. Free income tax help Five Year Period Used as  Home Used as  Rental 1/31/08 – 5/31/09 16 months       6/1/09 – 3/31/11   22 months 4/1/11 – 1/31/13 22 months         38 months 22 months During the period Amy owned the house (2,080 days), her period of nonqualified use was 668 days. Free income tax help Amy divides 668 by 2,080 and obtains a decimal (rounded to at least three decimal places) of 0. Free income tax help 321. Free income tax help To figure her gain attributable to the period of nonqualified use, she multiplies $190,000 (the gain not attributable to the $10,000 depreciation deduction) by 0. Free income tax help 321. Free income tax help Because the gain attributable to periods of nonqualified use is $60,990, Amy can exclude $129,010 of her gain. Free income tax help Example 2. Free income tax help William owned and used a house as his main home from 2007 through 2010. Free income tax help On January 1, 2011, he moved to another state. Free income tax help He rented his house from that date until April 30, 2013, when he sold it. Free income tax help During the 5-year period ending on the date of sale (May 1, 2008-April 30, 2013), William owned and lived in the house for more than 2 years. Free income tax help He must report the sale on Form 4797 because it was rental property at the time of sale. Free income tax help Because the period of nonqualified use does not include any part of the 5-year period after the last date William lived in the house, he has no period of nonqualified use. Free income tax help Because he met the ownership and use tests, he can exclude gain up to $250,000. Free income tax help However, he cannot exclude the part of the gain equal to the depreciation he claimed or could have claimed for renting the house, as explained next. Free income tax help Depreciation after May 6, 1997. Free income tax help   If you were entitled to take depreciation deductions because you used your home for business purposes or as rental property, you cannot exclude the part of your gain equal to any depreciation allowed or allowable as a deduction for periods after May 6, 1997. Free income tax help If you can show by adequate records or other evidence that the depreciation allowed was less than the amount allowable, then you may limit the amount of gain recognized to the depreciation allowed. Free income tax help See Publication 544 for more information. Free income tax help Property used partly for business or rental. Free income tax help   If you used property partly as a home and partly for business or to produce rental income, see Publication 523. Free income tax help Reporting the Sale Do not report the 2013 sale of your main home on your tax return unless: You have a gain and do not qualify to exclude all of it, You have a gain and choose not to exclude it, or You received Form 1099-S. Free income tax help If any of these conditions apply, report the entire gain or loss. Free income tax help For details on how to report the gain or loss, see the Instructions for Schedule D (Form 1040) and the Instructions for Form 8949. Free income tax help If you used the home for business or to produce rental income, you may have to use Form 4797 to report the sale of the business or rental part (or the sale of the entire property if used entirely for business or rental). Free income tax help See Business Use or Rental of Home in Publication 523 and the Instructions for Form 4797. Free income tax help Installment sale. Free income tax help    Some sales are made under arrangements that provide for part or all of the selling price to be paid in a later year. Free income tax help These sales are called “installment sales. Free income tax help ” If you finance the buyer's purchase of your home yourself instead of having the buyer get a loan or mortgage from a bank, you probably have an installment sale. Free income tax help You may be able to report the part of the gain you cannot exclude on the installment basis. Free income tax help    Use Form 6252, Installment Sale Income, to report the sale. Free income tax help Enter your exclusion on line 15 of Form 6252. Free income tax help Seller-financed mortgage. Free income tax help   If you sell your home and hold a note, mortgage, or other financial agreement, the payments you receive in most cases consist of both interest and principal. Free income tax help You must separately report as interest income the interest you receive as part of each payment. Free income tax help If the buyer of your home uses the property as a main or second home, you must also report the name, address, and social security number (SSN) of the buyer on line 1 of Schedule B (Form 1040A or 1040). Free income tax help The buyer must give you his or her SSN, and you must give the buyer your SSN. Free income tax help Failure to meet these requirements may result in a $50 penalty for each failure. Free income tax help If either you or the buyer does not have and is not eligible to get an SSN, see Social Security Number in chapter 1. Free income tax help More information. Free income tax help   For more information on installment sales, see Publication 537, Installment Sales. Free income tax help Special Situations The situations that follow may affect your exclusion. Free income tax help Sale of home acquired in a like-kind exchange. Free income tax help   You cannot claim the exclusion if: You acquired your home in a like-kind exchange (also known as a section 1031 exchange), or your basis in your home is determined by reference to the basis of the home in the hands of the person who acquired the property in a like-kind exchange (for example, you received the home from that person as a gift), and You sold the home during the 5-year period beginning with the date your home was acquired in the like-kind exchange. Free income tax help Gain from a like-kind exchange is not taxable at the time of the exchange. Free income tax help This means that gain will not be taxed until you sell or otherwise dispose of the property you receive. Free income tax help To defer gain from a like-kind exchange, you must have exchanged business or investment property for business or investment property of a like kind. Free income tax help For more information about like-kind exchanges, see Publication 544, Sales and Other Dispositions of Assets. Free income tax help Home relinquished in a like-kind exchange. Free income tax help   If you use your main home partly for business or rental purposes and then exchange the home for another property, see Publication 523. Free income tax help Expatriates. Free income tax help   You cannot claim the exclusion if the expatriation tax applies to you. Free income tax help The expatriation tax applies to certain U. Free income tax help S. Free income tax help citizens who have renounced their citizenship (and to certain long-term residents who have ended their residency). Free income tax help For more information about the expatriation tax, see Expatriation Tax in chapter 4 of Publication 519, U. Free income tax help S. Free income tax help Tax Guide for Aliens. Free income tax help Home destroyed or condemned. Free income tax help   If your home was destroyed or condemned, any gain (for example, because of insurance proceeds you received) qualifies for the exclusion. Free income tax help   Any part of the gain that cannot be excluded (because it is more than the maximum exclusion) can be postponed under the rules explained in: Publication 547, in the case of a home that was destroyed, or Publication 544, chapter 1, in the case of a home that was condemned. Free income tax help Sale of remainder interest. Free income tax help   Subject to the other rules in this chapter, you can choose to exclude gain from the sale of a remainder interest in your home. Free income tax help If you make this choice, you cannot choose to exclude gain from your sale of any other interest in the home that you sell separately. Free income tax help Exception for sales to related persons. Free income tax help   You cannot exclude gain from the sale of a remainder interest in your home to a related person. Free income tax help Related persons include your brothers, sisters, half-brothers, half-sisters, spouse, ancestors (parents, grandparents, etc. Free income tax help ), and lineal descendants (children, grandchildren, etc. Free income tax help ). Free income tax help Related persons also include certain corporations, partnerships, trusts, and exempt organizations. Free income tax help Recapturing (Paying Back) a Federal Mortgage Subsidy If you financed your home under a federally subsidized program (loans from tax-exempt qualified mortgage bonds or loans with mortgage credit certificates), you may have to recapture all or part of the benefit you received from that program when you sell or otherwise dispose of your home. Free income tax help You recapture the benefit by increasing your federal income tax for the year of the sale. Free income tax help You may have to pay this recapture tax even if you can exclude your gain from income under the rules discussed earlier; that exclusion does not affect the recapture tax. Free income tax help Loans subject to recapture rules. Free income tax help   The recapture applies to loans that: Came from the proceeds of qualified mortgage bonds, or Were based on mortgage credit certificates. Free income tax help The recapture also applies to assumptions of these loans. Free income tax help When recapture applies. Free income tax help   Recapture of the federal mortgage subsidy applies only if you meet both of the following conditions. Free income tax help You sell or otherwise dispose of your home at a gain within the first 9 years after the date you close your mortgage loan. Free income tax help Your income for the year of disposition is more than that year's adjusted qualifying income for your family size for that year (related to the income requirements a person must meet to qualify for the federally subsidized program). Free income tax help When recapture does not apply. Free income tax help   Recapture does not apply in any of the following situations. Free income tax help Your mortgage loan was a qualified home improvement loan (QHIL) of not more than $15,000 used for alterations, repairs, and improvements that protect or improve the basic livability or energy efficiency of your home. Free income tax help Your mortgage loan was a QHIL of not more than $150,000 in the case of a QHIL used to repair damage from Hurricane Katrina to homes in the hurricane disaster area; a QHIL funded by a qualified mortgage bond that is a qualified Gulf Opportunity Zone Bond; or a QHIL for an owner-occupied home in the Gulf Opportunity Zone (GO Zone), Rita GO Zone, or Wilma GO Zone. Free income tax help For more information, see Publication 4492, Information for Taxpayers Affected by Hurricanes Katrina, Rita, and Wilma. Free income tax help Also see Publication 4492-B, Information for Affected Taxpayers in the Midwestern Disaster Areas. Free income tax help The home is disposed of as a result of your death. Free income tax help You dispose of the home more than 9 years after the date you closed your mortgage loan. Free income tax help You transfer the home to your spouse, or to your former spouse incident to a divorce, where no gain is included in your income. Free income tax help You dispose of the home at a loss. Free income tax help Your home is destroyed by a casualty, and you replace it on its original site within 2 years after the end of the tax year when the destruction happened. Free income tax help The replacement period is extended for main homes destroyed in a federally declared disaster area, a Midwestern disaster area, the Kansas disaster area, and the Hurricane Katrina disaster area. Free income tax help For more information, see Replacement Period in Publication 547. Free income tax help You refinance your mortgage loan (unless you later meet the conditions listed previously under When recapture applies ). Free income tax help Notice of amounts. Free income tax help   At or near the time of settlement of your mortgage loan, you should receive a notice that provides the federally subsidized amount and other information you will need to figure your recapture tax. Free income tax help How to figure and report the recapture. Free income tax help    The recapture tax is figured on Form 8828. Free income tax help If you sell your home and your mortgage is subject to recapture rules, you must file Form 8828 even if you do not owe a recapture tax. Free income tax help Attach Form 8828 to your Form 1040. Free income tax help For more information, see Form 8828 and its instructions. Free income tax help Prev  Up  Next   Home   More Online Publications