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Free State Tax Filing For Low Income

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Free State Tax Filing For Low Income

Free state tax filing for low income 7. Free state tax filing for low income   Filing Information Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: What, When, and Where To FileResident Aliens Nonresident Aliens Amended Returns and Claims for Refund Other Forms You May Have To File PenaltiesCivil Penalties Criminal Penalties Introduction This chapter provides the basic filing information that you may need. Free state tax filing for low income Topics - This chapter discusses: Forms aliens must file, When and where to file, Penalties, and Amended returns and claims for refund. Free state tax filing for low income Useful Items - You may want to see: Forms (and Instructions) 1040 U. Free state tax filing for low income S. Free state tax filing for low income Individual Income Tax Return 1040A U. Free state tax filing for low income S. Free state tax filing for low income Individual Income Tax Return 1040EZ Income Tax Return for Single and Joint Filers With No Dependents 1040NR U. Free state tax filing for low income S. Free state tax filing for low income Nonresident Alien Income Tax Return 1040NR-EZ U. Free state tax filing for low income S. Free state tax filing for low income Income Tax Return for Certain Nonresident Aliens With No Dependents See chapter 12 for information about getting these forms. Free state tax filing for low income What, When, and Where To File What return you must file as well as when and where you file that return, depends on your status at the end of the tax year as a resident or a nonresident alien. Free state tax filing for low income Resident Aliens Resident aliens should file Form 1040EZ, 1040A, or 1040 at the address shown in the instructions for that form. Free state tax filing for low income The due date for filing the return and paying any tax due is April 15 of the year following the year for which you are filing a return (but see the Tip, later). Free state tax filing for low income Under U. Free state tax filing for low income S. Free state tax filing for low income immigration law, a lawful permanent resident who is required to file a tax return as a resident and fails to do so may be regarded as having abandoned status and may lose permanent resident status. Free state tax filing for low income Extensions of time to file. Free state tax filing for low income   You are allowed an automatic extension to June 15 to file if your main place of business and the home you live in are outside the United States and Puerto Rico on April 15. Free state tax filing for low income You can get an extension of time to October 15 to file your return if you get an extension by April 15 (June 15 if you qualify for the June 15 extension). Free state tax filing for low income Use Form 4868 to get the extension to October 15. Free state tax filing for low income In addition to this 6-month extension, taxpayers who are out of the country (as defined in the Form 4868 instructions) can request a discretionary 2-month additional extension of time to file their returns (to December 15 for calendar year taxpayers). Free state tax filing for low income To request this extension, you must send the IRS a letter explaining the reasons why you need the additional 2 months. Free state tax filing for low income Send the letter by the extended due date (October 15 for calendar year taxpayers) to the following address:  Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215   You will not receive any notification from the IRS unless your request is denied for being untimely. Free state tax filing for low income   The discretionary 2-month additional extension is not available to taxpayers who have an approved extension of time to file on Form 2350 (for U. Free state tax filing for low income S. Free state tax filing for low income citizens and resident aliens abroad who expect to qualify for special tax treatment). Free state tax filing for low income    If the due date for filing falls on a Saturday, Sunday, or legal holiday, the due date is the next day which is not a Saturday, Sunday, or legal holiday. Free state tax filing for low income You may be able to file your return electronically. Free state tax filing for low income See IRS e-file in your form instructions. Free state tax filing for low income Nonresident Aliens Nonresident aliens who are required to file an income tax return should use Form 1040NR or, if qualified, Form 1040NR-EZ. Free state tax filing for low income If you are any of the following, you must file a return. Free state tax filing for low income A nonresident alien individual engaged or considered to be engaged in a trade or business in the United States during 2013. Free state tax filing for low income (But see Exceptions , later. Free state tax filing for low income ) You must file even if: Your income did not come from a trade or business conducted in the United States, You have no income from U. Free state tax filing for low income S. Free state tax filing for low income sources, or Your income is exempt from income tax. Free state tax filing for low income A nonresident alien individual not engaged in a trade or business in the United States with U. Free state tax filing for low income S. Free state tax filing for low income income on which the tax liability was not satisfied by the withholding of tax at the source. Free state tax filing for low income A representative or agent responsible for filing the return of an individual described in (1) or (2). Free state tax filing for low income A fiduciary for a nonresident alien estate or trust. Free state tax filing for low income You must also file if you want to: Claim a refund of overwithheld or overpaid tax, or Claim the benefit of any deductions or credits. Free state tax filing for low income For example, if you have no U. Free state tax filing for low income S. Free state tax filing for low income business activities but have income from real property that you choose to treat as effectively connected income (discussed in chapter 4), you must timely file a true and accurate return to take any allowable deductions against that income. Free state tax filing for low income For information on what is timely, see When to file for deductions and credits under When To File, later. Free state tax filing for low income Exceptions. Free state tax filing for low income   You do not need to file Form 1040NR or Form 1040NR-EZ if you meet either of the following conditions. Free state tax filing for low income Your only U. Free state tax filing for low income S. Free state tax filing for low income trade or business was the performance of personal services, and Your wages were less than $3,900, and You have no other need to file a return to claim a refund of overwithheld taxes, to satisfy additional withholding at source, or to claim income exempt or partly exempt by treaty. Free state tax filing for low income You were a nonresident alien student, teacher, or trainee who was temporarily present in the United States under an “F,” “J,” “M,” or “Q” visa and you have no income that is subject to tax, such as wages, tips, scholarship and fellowship grants, dividends, etc. Free state tax filing for low income Even if you have left the United States and filed a Form 1040-C, U. Free state tax filing for low income S. Free state tax filing for low income Departing Alien Income Tax Return, on departure, you still must file an annual U. Free state tax filing for low income S. Free state tax filing for low income income tax return. Free state tax filing for low income If you are married and both you and your spouse are required to file, you must each file a separate return. Free state tax filing for low income Form 1040NR-EZ You can use Form 1040NR-EZ if all of the following conditions are met. Free state tax filing for low income You do not claim any dependents. Free state tax filing for low income You cannot be claimed as a dependent on someone else's U. Free state tax filing for low income S. Free state tax filing for low income tax return. Free state tax filing for low income If you were married, you do not claim an exemption for your spouse. Free state tax filing for low income Your taxable income is less than $100,000. Free state tax filing for low income The only itemized deduction you can claim is for state and local income taxes. Free state tax filing for low income Note. Free state tax filing for low income Residents of India who were students or business apprentices may be able to take the standard deduction instead of the itemized deduction for state and local income taxes. Free state tax filing for low income See chapter 5. Free state tax filing for low income Your only U. Free state tax filing for low income S. Free state tax filing for low income source income is from wages, salaries, tips, taxable refunds of state and local income taxes, scholarship or fellowship grants, and nontaxable interest or dividends. Free state tax filing for low income (If you had taxable interest or dividend income, you cannot use this form. Free state tax filing for low income ) You are not claiming any adjustments to income other than the student loan interest deduction or scholarship and fellowship grants excluded. Free state tax filing for low income You are not claiming any tax credits. Free state tax filing for low income This is not an “expatriation return. Free state tax filing for low income ” See Expatriation Tax in chapter 4. Free state tax filing for low income The only taxes you owe are: The income tax from the Tax Table. Free state tax filing for low income The social security and Medicare tax from Form 4137 or Form 8919. Free state tax filing for low income You are not claiming a credit for excess social security and tier 1 RRTA tax withheld. Free state tax filing for low income You are not filing Form 8959, to figure the amount of Additional Medicare Tax you owe and/or the amount of Additional Medicare Tax withheld by your employer, if any. Free state tax filing for low income If you do not meet all of the above conditions, you must file Form 1040NR. Free state tax filing for low income When To File If you are an employee and you receive wages subject to U. Free state tax filing for low income S. Free state tax filing for low income income tax withholding, you will generally file by the 15th day of the 4th month after your tax year ends. Free state tax filing for low income For the 2013 calendar year, file your return by April 15, 2014. Free state tax filing for low income If you are not an employee who receives wages subject to U. Free state tax filing for low income S. Free state tax filing for low income income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. Free state tax filing for low income For the 2013 calendar year, file your return by June 16, 2014 (because June 15 is a Sunday. Free state tax filing for low income ) Extensions of time to file. Free state tax filing for low income   If you cannot file your return by the due date, file Form 4868 or use one of the electronic filing options explained in the Form 4868 instructions. Free state tax filing for low income For the 2013 calendar year, this will extend the due date to October 15, 2014 (December 15, 2014, if the regular due date of your return is June 16, 2014). Free state tax filing for low income You must file the extension by the regular due date of your return. Free state tax filing for low income   In addition to the 6-month extension to October 15, taxpayers whose main place of business is outside the United States and Puerto Rico and who live outside those jurisdictions can request a discretionary 2-month extension of time to file their returns (to December 15 for calendar year taxpayers). Free state tax filing for low income To request this extension, you must send the IRS a letter explaining the reasons why you need the additional 2 months. Free state tax filing for low income Send the letter by the extended due date (October 15 for calendar year taxpayers) to the following address: Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215   You will not receive any notification from the IRS unless your request is denied for being untimely. Free state tax filing for low income When to file for deductions and credits. Free state tax filing for low income   To get the benefit of any allowable deductions or credits, you must timely file a true and accurate return. Free state tax filing for low income For this purpose, a return is timely if it is filed within 16 months of the due date just discussed. Free state tax filing for low income However, if you did not file a 2012 tax return and 2013 is not the first year for which you are required to file one, your 2013 return is timely for this purpose if it is filed by the earlier of: The date that is 16 months after the due date for filing your 2013 return, or The date the IRS notifies you that your 2013 return has not been filed and that you cannot claim certain deductions and credits. Free state tax filing for low income The allowance of the following credits is not affected by this time requirement. Free state tax filing for low income Credit for withheld taxes. Free state tax filing for low income Credit for excise tax on certain uses of gasoline and special fuels. Free state tax filing for low income Credit for tax paid by a mutual fund (or other regulated investment company) or a real estate investment trust on undistributed long-term capital gains. Free state tax filing for low income Protective return. Free state tax filing for low income   If your activities in the United States were limited and you do not believe that you had any gross income effectively connected with a U. Free state tax filing for low income S. Free state tax filing for low income trade or business during the year, you can file a protective return (Form 1040NR) by the deadline explained above. Free state tax filing for low income By filing a protective return, you protect your right to receive the benefit of deductions and credits in the event it is later determined that some or all of your income is effectively connected. Free state tax filing for low income You are not required to report any effectively connected income or any deductions on the protective return, but you must give the reason the return is being filed. Free state tax filing for low income   If you believe some of your activities resulted in effectively connected income, file your return reporting that income and related deductions by the regular due date. Free state tax filing for low income To protect your right to claim deductions or credits resulting from other activities, attach a statement to that return explaining that you wish to protect your right to claim deductions and credits if it is later determined that the other activities produced effectively connected income. Free state tax filing for low income   You can follow the same procedure if you believe you have no U. Free state tax filing for low income S. Free state tax filing for low income tax liability because of a U. Free state tax filing for low income S. Free state tax filing for low income tax treaty. Free state tax filing for low income Be sure to also complete item L on page 5 of Form 1040NR. Free state tax filing for low income Waiver of filing deadline. Free state tax filing for low income   The IRS may waive the filing deadline if you establish that, based on the facts and circumstances, you acted reasonably and in good faith in failing to file a U. Free state tax filing for low income S. Free state tax filing for low income income tax return (including a protective return) and you cooperate with the IRS in determining your U. Free state tax filing for low income S. Free state tax filing for low income income tax liability for the tax year for which you did not file a return. Free state tax filing for low income Where To File If you are not enclosing a payment, file Form 1040NR-EZ and Form 1040NR at the following address. Free state tax filing for low income  Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215 If enclosing a payment, mail your return to:  Internal Revenue Service  P. Free state tax filing for low income O. Free state tax filing for low income Box 1303 Charlotte, NC 28201-1303 Aliens from the U. Free state tax filing for low income S. Free state tax filing for low income Virgin Islands. Free state tax filing for low income    If you are a bona fide resident of the U. Free state tax filing for low income S. Free state tax filing for low income Virgin Islands during your entire tax year and work temporarily in the United States, you must pay your income taxes to the U. Free state tax filing for low income S. Free state tax filing for low income Virgin Islands and file your income tax returns at the following address. Free state tax filing for low income Virgin Islands Bureau of Internal Revenue 6115 Estate Smith Bay Suite 225 St. Free state tax filing for low income Thomas, VI 00802   Report all income from U. Free state tax filing for low income S. Free state tax filing for low income sources, as well as income from other sources, on your return. Free state tax filing for low income For information on filing U. Free state tax filing for low income S. Free state tax filing for low income Virgin Islands returns, contact the U. Free state tax filing for low income S. Free state tax filing for low income Virgin Islands Bureau of Internal Revenue. Free state tax filing for low income   Chapter 8 discusses withholding from U. Free state tax filing for low income S. Free state tax filing for low income wages of U. Free state tax filing for low income S. Free state tax filing for low income Virgin Islanders. Free state tax filing for low income Aliens from Guam or the Commonwealth of the Northern Mariana Islands. Free state tax filing for low income   If you are a bona fide resident of Guam or the Commonwealth of the Northern Mariana Islands (CNMI) during your entire tax year, you must file your return with, and pay any tax due to, Guam or the CNMI. Free state tax filing for low income Report all income, including income from U. Free state tax filing for low income S. Free state tax filing for low income sources, on your return. Free state tax filing for low income It is not necessary to file a separate U. Free state tax filing for low income S. Free state tax filing for low income income tax return. Free state tax filing for low income    Bona fide residents of Guam should file their Guam returns at the following address. Free state tax filing for low income   Department of Revenue and Taxation Government of Guam P. Free state tax filing for low income O. Free state tax filing for low income Box 23607 GMF, GU 96921    Bona fide residents of the CNMI should file their CNMI income tax returns at the following address. Free state tax filing for low income   Department of Finance Division of Revenue and Taxation Commonwealth of the Northern Mariana Islands P. Free state tax filing for low income O. Free state tax filing for low income Box 5234 CHRB Saipan, MP 96950   If you are not a bona fide resident of Guam or the CNMI, see Pub. Free state tax filing for low income 570, Tax Guide for Individuals With Income From U. Free state tax filing for low income S. Free state tax filing for low income Possessions, for information on where to file your return. Free state tax filing for low income Amended Returns and Claims for Refund If you find changes in your income, deductions, or credits after you mail your return, file Form 1040X, Amended U. Free state tax filing for low income S. Free state tax filing for low income Individual Income Tax Return. Free state tax filing for low income Also use Form 1040X if you should have filed Form 1040, 1040A, or 1040EZ instead of Form 1040NR or 1040NR-EZ, or vice versa. Free state tax filing for low income If you amend Form 1040NR or Form 1040NR-EZ or file the correct return, attach the corrected return (Form 1040, Form 1040NR, etc. Free state tax filing for low income ) to Form 1040X. Free state tax filing for low income Print “Amended” across the top. Free state tax filing for low income Ordinarily, an amended return claiming a refund must be filed within 3 years from the date your return was filed or within 2 years from the time the tax was paid, whichever is later. Free state tax filing for low income A return filed before the final due date is considered to have been filed on the due date. Free state tax filing for low income Other Forms You May Have To File You may be required to file information returns to report certain foreign income or assets, or monetary transactions. Free state tax filing for low income FinCen Form 105 FinCEN Form 105 (formerly Customs Form 4790), Report of International Transportation of Currency or Monetary Instruments, must be filed by each person who physically transports, mails, or ships, or causes to be physically transported, mailed, or shipped, currency or other monetary instruments in a total amount of more than $10,000 at one time from the United States to any place outside the United States, or into the United States from any place outside the United States. Free state tax filing for low income The filing requirement also applies to each person who receives in the United States currency or monetary instruments totaling more than $10,000 at one time from any place outside of the United States. Free state tax filing for low income The term “monetary instruments” means the following: Coin and currency of the United States or of any other country, Travelers' checks in any form, Investment securities or stock in bearer form or otherwise in such form that title to them passes upon delivery, Negotiable instruments (including checks, promissory notes, and money orders) in bearer form, endorsed without restriction, made out to a fictitious payee, or otherwise in such form that title to them passes upon delivery, and Checks, promissory notes, and money orders which are signed but on which the name of the payee has been omitted. Free state tax filing for low income However, the term does not include: Checks or money orders made payable to the order of a named person which have not been endorsed or which contain restrictive endorsements, Warehouse receipts, or Bills of lading. Free state tax filing for low income A transfer of funds through normal banking procedures (wire transfer) that does not involve the physical transportation of currency or monetary instruments is not required to be reported on FinCEN Form 105. Free state tax filing for low income Filing requirements. Free state tax filing for low income   FinCEN Form 105 filing requirements follow. Free state tax filing for low income Recipients. Free state tax filing for low income   Each person who receives currency or other monetary instruments in the United States must file FinCEN Form 105 within 15 days after receipt, with the Customs officer in charge at any port of entry or departure, or by mail at the following address. Free state tax filing for low income Commissioner of Customs  Attention: Currency Transportation Reports Washington, DC 20229 Shippers or mailers. Free state tax filing for low income   If the currency or other monetary instrument does not accompany the person entering or departing the United States, FinCEN Form 105 can be filed by mail at the above address on or before the date of entry, departure, mailing, or shipping. Free state tax filing for low income Travelers. Free state tax filing for low income   Travelers must file FinCEN Form 105 with the Customs officer in charge at any Customs port of entry or departure, when entering or departing the United States. Free state tax filing for low income Penalties. Free state tax filing for low income   Civil and criminal penalties are provided for failing to file a report, filing a report containing material omissions or misstatements, or filing a false or fraudulent report. Free state tax filing for low income Also, the entire amount of the currency or monetary instrument may be subject to seizure and forfeiture. Free state tax filing for low income More information. Free state tax filing for low income   More information regarding the filing of FinCEN Form 105 can be found in the instructions on the back of the form. Free state tax filing for low income Form 8938 You may have to file Form 8938, Statement of Specified Foreign Financial Assets, to report the ownership of specified foreign financial asset(s) if you are one of the following individuals. Free state tax filing for low income A resident alien of the United States for any part of the tax year. Free state tax filing for low income A resident alien of the United States who elects to be treated as a resident of a foreign country under the provisions of a U. Free state tax filing for low income S. Free state tax filing for low income income tax treaty. Free state tax filing for low income See Effect of Tax Treaties in chapter 1. Free state tax filing for low income A nonresident alien who makes an election to be treated as a resident alien for purposes of filing a joint income tax return. Free state tax filing for low income See chapter 1 for information about this election. Free state tax filing for low income A nonresident alien who is a bona fide resident of American Samoa or Puerto Rico. Free state tax filing for low income See Publication 570, Tax Guide for Individuals With Income From U. Free state tax filing for low income S. Free state tax filing for low income Possessions, for a definition of bona fide resident. Free state tax filing for low income You must file Form 8938 if the total value of those assets exceeds an applicable threshold (the “reporting threshold”). Free state tax filing for low income The reporting threshold varies depending on whether you live in the United States, are married, or file a joint income tax return with your spouse. Free state tax filing for low income Specified foreign financial assets include any financial account maintained by a foreign financial institution and, to the extent held for investment, any stock, securities, or any other interest in a foreign entity and any financial instrument or contract with an issuer or counterparty that is not a U. Free state tax filing for low income S. Free state tax filing for low income person. Free state tax filing for low income You may have to pay penalties if you are required to file Form 8938 and fail to do so, or if you have an understatement of tax due to any transaction involving an undisclosed foreign financial asset. Free state tax filing for low income More information about the filing of Form 8938 can be found in the separate instructions for Form 8938. Free state tax filing for low income Penalties The law provides penalties for failure to file returns or pay taxes as required. Free state tax filing for low income Civil Penalties If you do not file your return and pay your tax by the due date, you may have to pay a penalty. Free state tax filing for low income You may also have to pay a penalty if you substantially understate your tax, file a frivolous tax submission, or fail to supply your taxpayer identification number. Free state tax filing for low income If you provide fraudulent information on your return, you may have to pay a civil fraud penalty. Free state tax filing for low income Filing late. Free state tax filing for low income   If you do not file your return by the due date (including extensions), you may have to pay a failure-to-file penalty. Free state tax filing for low income The penalty is based on the tax not paid by the due date (without regard to extensions). Free state tax filing for low income The penalty is usually 5% for each month or part of a month that a return is late, but not more than 25%. Free state tax filing for low income Fraud. Free state tax filing for low income   If your failure to file is due to fraud, the penalty is 15% for each month or part of a month that your return is late, up to a maximum of 75%. Free state tax filing for low income Return over 60 days late. Free state tax filing for low income   If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax. Free state tax filing for low income Exception. Free state tax filing for low income   You will not have to pay the penalty if you show that you failed to file on time because of reasonable cause and not because of willful neglect. Free state tax filing for low income Paying tax late. Free state tax filing for low income   You will have to pay a failure-to-pay penalty of ½ of 1% (. Free state tax filing for low income 50%) of your unpaid taxes for each month, or part of a month, after the due date that the tax is not paid. Free state tax filing for low income This penalty does not apply during the automatic 6-month extension of time to file period, if you paid at least 90% of your actual tax liability on or before the due date of your return and pay the balance when you file the return. Free state tax filing for low income   The monthly rate of the failure-to-pay penalty is half the usual rate (. Free state tax filing for low income 25% instead of . Free state tax filing for low income 50%) if an installment agreement is in effect for that month. Free state tax filing for low income You must have filed your return by the due date (including extensions) to qualify for this reduced penalty. Free state tax filing for low income   If a notice of intent to levy is issued, the rate will increase to 1% at the start of the first month beginning at least 10 days after the day that the notice is issued. Free state tax filing for low income If a notice and demand for immediate payment is issued, the rate will increase to 1% at the start of the first month beginning after the day that the notice and demand is issued. Free state tax filing for low income   This penalty cannot be more than 25% of your unpaid tax. Free state tax filing for low income You will not have to pay the penalty if you can show that you had a good reason for not paying your tax on time. Free state tax filing for low income Combined penalties. Free state tax filing for low income   If both the failure-to-file penalty and the failure-to-pay penalty (discussed earlier) apply in any month, the 5% (or 15%) failure-to-file penalty is reduced by the failure-to-pay penalty. Free state tax filing for low income However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax. Free state tax filing for low income Accuracy-related penalty. Free state tax filing for low income   You may have to pay an accuracy-related penalty if you underpay your tax because: You show negligence or disregard of rules or regulations, You substantially understate your income tax, You claim tax benefits for a transaction that lacks economic substance, or You fail to disclose a foreign financial asset. Free state tax filing for low income The penalty is equal to 20% of the underpayment. Free state tax filing for low income The penalty is 40% of any portion of the underpayment that is attributable to an undisclosed noneconomic substance transaction or an undisclosed foreign financial asset transaction. Free state tax filing for low income The penalty will not be figured on any part of an underpayment on which the fraud penalty (discussed later) is charged. Free state tax filing for low income Negligence or disregard. Free state tax filing for low income   The term “negligence” includes a failure to make a reasonable attempt to comply with the tax law or to exercise ordinary and reasonable care in preparing a return. Free state tax filing for low income Negligence also includes failure to keep adequate books and records. Free state tax filing for low income You will not have to pay a negligence penalty if you have a reasonable basis for a position you took. Free state tax filing for low income   The term “disregard” includes any careless, reckless, or intentional disregard. Free state tax filing for low income Adequate disclosure. Free state tax filing for low income   You can avoid the penalty for disregard of rules or regulations if you adequately disclose on your return a position that has at least a reasonable basis. Free state tax filing for low income See Disclosure statement , later. Free state tax filing for low income   This exception will not apply to an item that is attributable to a tax shelter. Free state tax filing for low income In addition, it will not apply if you fail to keep adequate books and records, or substantiate items properly. Free state tax filing for low income Substantial understatement of income tax. Free state tax filing for low income   You understate your tax if the tax shown on your return is less than the correct tax. Free state tax filing for low income The understatement is substantial if it is more than the larger of 10% of the correct tax or $5,000. Free state tax filing for low income However, the amount of the understatement is reduced to the extent the understatement is due to: Substantial authority, or Adequate disclosure and a reasonable basis. Free state tax filing for low income   If an item on your return is attributable to a tax shelter, there is no reduction for an adequate disclosure. Free state tax filing for low income However, there is a reduction for a position with substantial authority, but only if you reasonably believed that your tax treatment was more likely than not the proper treatment. Free state tax filing for low income Substantial authority. Free state tax filing for low income   Whether there is or was substantial authority for the tax treatment of an item depends on the facts and circumstances. Free state tax filing for low income Consideration will be given to court opinions, Treasury regulations, revenue rulings, revenue procedures, and notices and announcements issued by the IRS and published in the Internal Revenue Bulletin that involve the same or similar circumstances as yours. Free state tax filing for low income Disclosure statement. Free state tax filing for low income   To adequately disclose the relevant facts about your tax treatment of an item, use Form 8275, Disclosure Statement. Free state tax filing for low income You must also have a reasonable basis for treating the item the way you did. Free state tax filing for low income   In cases of substantial understatement only, items that meet the requirements of Revenue Procedure 2012-51, 2012-51 IRB 719 (or later update) are considered adequately disclosed on your return without filing Form 8275. Free state tax filing for low income   Use Form 8275-R, Regulation Disclosure Statement, to disclose items or positions contrary to regulations. Free state tax filing for low income Transaction lacking economic substance. Free state tax filing for low income   For more information on economic substance, see section 7701(o). Free state tax filing for low income Foreign financial asset. Free state tax filing for low income   For more information on undisclosed foreign financial assets, see section 6662(j) or the Instructions for Form 8938. Free state tax filing for low income Reasonable cause. Free state tax filing for low income   You will not have to pay a penalty if you show a good reason (reasonable cause) for the way you treated an item. Free state tax filing for low income You must also show that you acted in good faith. Free state tax filing for low income This does not apply to a transaction that lacks economic substance. 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About the API

We make the content you see in our directory of federal agencies available in both English and Spanish via a REST API. The API programmatically returns all of the information contained in the directory, or you can query the API to return just a subset of the available information.

If you are using the Federal Agency Directory API and have feedback or want to tell us about your product, please e-mail us.

Changes to the API

On December 28, 2012, we launched version 2.0 of the API and made the following changes:

  • Launched new methods to return directory records in a hierarchical fashion.
  • Results can now be returned using XML and JSONP, as well as straight JSON.
  • The Interface method was removed.

About the Data

The data in the Federal Agency Directory API is based on the English and Spanish federal agency directories. We gather this data from the agency information listed in the U.S. Government Manual, and independent research by our staff.

There is no schedule for data updates; we update data continually, and as needed. Early versions of the API may have incomplete and inconsistent data. We are working to continually develop the data in our directory records.

If you have suggestions about what types of data you would like to see in the Federal Agency Directory API, please e-mail us.

About the Spanish Data

GobiernoUSA.gov and the North American Academy of the Spanish Language (ANLE, per its Spanish acronym) worked together to review federal agencies Spanish translations to ensure language accuracy and consistency throughout the government. ANLE, the highest authority on Spanish language in the United States, and GobiernoUSA.gov have the joined mission of improving and standardizing the use of Spanish language in government communications.

This collaboration, possible through a signed agreement between the two institutions, resulted in a list of official Spanish language translations of federal agencies, available through this API.

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Accessing the API

Our Federal Agency Directory API is accessible via HTTP GET requests and does not require a login or API key to use.

The base URL for the API is http://www.usa.gov/api/USAGovAPI/contacts.{format}/. Append the API call you’d like to make to this URL.

Currently, three output formats are available:

  1. JSON (such as http://www.usa.gov/api/USAGovAPI/contacts.json/contacts)
  2. XML (such as http://www.usa.gov/api/USAGovAPI/contacts.xml/contacts)
  3. JSONP (such as http://www.usa.gov/api/USAGovAPI/contacts.jsonp/contacts?callback=callmemaybe). When requesting JSONP, you should include a callback parameter with the name of the callback function you would like called.

For the purposes of this documentation, only JSON sample calls and results will be shown.

API Result Formats

The Federal Agency Directory API returns results in json, with an optional callback parameter to enable jsonp support.

Interactive Documentation for the API

If you're interested in trying out the Federal Agency Directory API, we have an interactive test page. On this page, you can try different parameters and see the results.

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API Data Model

The following fields are associated with directory records. Please note that not every record has data in every field, and the API will only return completed fields.

  • Id - A unique identifier for each directory record
  • Name – The name of the agency.
  • Description – A brief description of the agency.
  • Language – Whether the record is in English or Spanish.
  • Subdivision – Used for mailing items to the agency.
  • Street1 – A first line of address information (such as the street address) for the agency’s main office.
  • Street2 – A second line of address information for the agency’s main office.
  • City – The city of the agency’s main office.
  • StateTer – The state of the agency’s main office.
  • Zip – The postal zip code of the agency’s main office.
  • Email – The e-mail address for the agency’s main office.
  • Phone – The phone number of the agency’s main office (may contain more than one).
  • TTY – The TTY number of the agency’s main office (may contain more than one).
  • Tollfree – The toll-free number to contact the agency (may contain more than one).
  • SMS – Any services offered via text messaging by the agency.
  • Synonym – Alternative names used commonly to refer to the agency (may contain more than one).
  • URI – The URL to access the agency’s complete directory record via the API.
  • Source_Url – The USA.gov or GobiernoUSA.gov URL that contains the record.

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URLs

The directory API returns several types of URLs that can be used to link to the agency.

  • Web_Url – Main URLs for the agency (may contain more than one).
  • Contact_Url – URLs for the public to contact the agency (may contain more than one).
  • In_Person_Url – URLs for the public to find out how to interact with the agney in person (may contain more than one).
  • Form_Url – URLs for the agency to find forms from the agency (may contain more than one).

For each of these URLs, the following sub-data elements are returned:

  • Url – The URL to the web page.
  • Description – A description of the URL.
  • Language – Whether the web page located at the URL is in English (en) or Spanish (es).

Agency Relationships

Additionally, the directory API returns information on the hierarchical relationship between federal agencies.

  • Parent – The parent of the agency. such as the Department of the Treasury for the Internal Revenue Service.
  • Child – Any children departments or agencies for the agency. such as the Census Bureau for the Department of Commerce (may contain more than one of these).
  • Alt_Language – The record for the agency in Spanish, if the record is in English, and vice versa.

For each of these relationships, the following sub-data elements are returned for the related agency:

  • Id – A unique identifier for each directory record
  • Name – The name of the agency.
  • URI – The URL to access the agency’s complete directory record via the API.
  • For Alt_Language only, Language – Whether the alternate language record is in English (en) or Spanish (es).

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API Methods

As of version 2.0, the methods of the Federal Agency Directory API are broken down into two categories. The first category simply returns a list of agency records. The second category returns a hierarchical structure of the agency records, making it easy to form a tree. The tree can show that the Food and Drug Administration is part of the Department of Health and Human Services. This is just one example.

API Methods That Return A List of Agency Records

Contacts

Contacts is a general purpose call that, by default, will return all of the agency directory records. However, you can pass parameters into contacts that allow you to filter the records returned by the API in powerful ways.

Parameters

query_filter – Return only agency directory records that meet the criteria you enter into this parameter. In general, the filter takes the form of {field_name}::{value}[|{field_name}::{value}]*. Additionally, for names, you can perform substring searches by surrounding {value} with asterixis.

For example, if you want to return all agencies that have the word “commission” in their title, you can use a query_filter of name::*commission*. Likewise, if you want to find all commissions who have their main address in Virginia, you can use a query_filter of: name::*commission*|state::VA

See the data model above for a list of field names that you can query on.

result_filter – Return only the fields listed here (separated by |) as opposed to every field in each directory record. For example, use a result_filter of name|phone to return only names and phone numbers.

See the data model above for a list of field names that you can specify be returned.

sort – Allows you to specify the sort order of the returned agency directory records. For example, use a sort of name to sort the results by the agency’s name. You can also cause the sort to go in descending order by prepending the field name with a -, such as -name.

See the data model above for a list of field names that you can sort the results on.

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/contacts/tree/independent

The independent method will return every agency record that has no parent and no child, such as the National Railroad Passenger Corporation.

/contacts/tree

The tree method returns every agency record, and, optionally, includes sub-agencies as part of their parent agency’s record.

Paramaters

include_descendants - Set to true if you want the API to return the descendents directly as part of their parent agency’s record.

/contacts/tree/dependent

The dependent method returns every agency record that has sub-agencies, and, optionally, includes sub-agencies as part of their parent agency’s record.

Parameters

include_descendants - Set to true if you want the API to return the descendents directly as part of their parent agency’s record.

/contact/{identifier}/tree/sibling

The sibling method will return all of the agency records that are siblings to the agency represented by the id specified in the REST URL. It will also return the record for the id specified as well.  

The only difference between the result format of the sibling method and the more generic contacts method is that the siblings method does not return the child and parent data elements as part of it’s results.

For example, if you request the sibling agencies for the U.S. Botanic Garden (id 49108), the API will return records for both the U.S. Botanic Garden and the U.S. Capitol Visitor Center, as both of these agencies are part of the Architect of the Capitol.

If you desired the results in JSON format, the API call for this query would look like the following:
http://www.usa.gov/api/USAGovAPI/contacts.json/contact/49108/tree/sibling

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Sample Results For These Methods

For API methods that return a list of directory records, the API will return an array of objects, such as:

The API will return an array of objects, such as:

{
   "Contact":[
      {
         "Id":"52663",
         "URI":"http://www.usa.gov/api/USAGovAPI/contacts.json/contact/52663",
         "Language":"en",
         "Name":"U.S. Access Board",
         "Source_Url":"http://www.usa.gov/directory/federal/us-access-board.shtml",
         "Street1":"1331 F Street, NW",
         "Street2":"Suite 1000",
         "City":"Washington",
         "StateTer":"DC",
         "Zip":"20004-1111",
         "Synonym":[
            "Access Board"
         ],
         "Phone":[
            "202-272-0080"
         ],
         "Tollfree":[
            "800-872-2253"
         ],
         "TTY":[
            "202-272-0082",
            "800-993-2822"
         ],
         "Email":"info@access-board.gov",
         "Contact_Url":[
            {
               "Url":"http://www.access-board.gov/contact.htm",
               "Description":"Contact the U.S. Access Board ",
               "Language":"en"
            },
            {
               "Url":"http://www.access-board.gov/contact.htm#email",
               "Description":"E-mail Directory",
               "Language":"en"
            },
            {
               "Url":"http://www.access-board.gov/contact.htm#Phone",
               "Description":"Phone Directory",
               "Language":"en"
            },
            {
               "Url":"http://www.access-board.gov/enforcement/filing.htm",
               "Description":"File an Accessibility Complaint",
               "Language":"en"
            }
         ],
         "Web_Url":[
            {
               "Url":"http://www.access-board.gov/",
               "Description":"U.S. Access Board ",
               "Language":"en"
            }
         ],
         "In_Person_Url":[
            {
               "Url":"http://www.access-board.gov/contact.htm#Location",
               "Description":"Map and Directions",
               "Language":"en"
            }
         ],
         "Description":"The Access Board is an independent federal agency devoted to accessibility for people with disabilities. The Board develops and maintains design criteria for the built environment, transit vehicles, telecommunications equipment, and for electronic and information technology. ",
         "Alt_Language":[
            {
               "Id":"50175",
               "URI":"http://www.usa.gov/api/USAGovAPI/contacts.json/contact/50175",
               "Name":"Consejo de Acceso de Estados Unidos",
               "Language":"es"
            }
         ]
      },
      {
         "Id":"61787",
         "URI":"http://www.usa.gov/api/USAGovAPI/contacts.json/contact/61787",
         "Language":"en",
         "Name":"Medicaid and CHIP Payment and Access Commission",
         "Source_Url":"http://www.usa.gov/directory/federal/medicaid-chip-payment-access-commission.shtml",
         "Street1":"1800 M Street, NW",
         "Street2":"Suite 350N",
         "City":"Washington",
         "StateTer":"DC",
         "Zip":"20036",
         "Phone":[
            "202-273-2460"
         ],
         "Email":"webmaster@macpac.gov",
         "Web_Url":[
            {
               "Url":"http://www.macpac.gov",
               "Description":"Medicaid and CHIP Payment and Access Commission ",
               "Language":"en"
            }
         ]
      }
   ]
}

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If you set include_descendents to true in the tree or descendants methods, parent agencies will include an array called "Contact" with their child agency records, such as in this snippet:

{
   "Contact":[
      {
         "Id":"49015",
         "URI":"http://www.usa.gov/api/USAGovAPI/contacts.json/contact/49015",
         "Language":"en",
         "Name":"U.S. Department of Agriculture (USDA)",
         "Source_Url":"http://www.usa.gov/directory/federal/department-of-agriculture.shtml",
         "Street1":"1400 Independence Ave., S.W.",
         "City":"Washington",
         "StateTer":"DC",
         "Zip":"20250",
         "Synonym":[
            "Agriculture Department",
            "Department of Agriculture"
         ],
         "Phone":[
            "202-720-2791"
         ],
         "Contact_Url":[
            {
               "Url":"http://usda.gov/wps/portal/usda/usdahome?navid=CONTACT_US",
               "Description":"Contact the U.S. Department of Agriculture (USDA) ",
               "Language":"en"
            },
            {
               "Url":"http://www.fns.usda.gov/cnd/Contacts/StateDirectory.htm",
               "Description":"Child Nutrition Programs",
               "Language":"en"
            },
            {
               "Url":"http://www.fns.usda.gov/snap/contact_info/default.htm",
               "Description":"Food Stamps",
               "Language":"en"
            },
            {
               "Url":"http://www.fsis.usda.gov/Food_Safety_Education/USDA_Meat_&_Poultry_Hotline/index.asp",
               "Description":"Meat and Poultry Hotline",
               "Language":"en"
            },
            {
               "Url":"http://offices.sc.egov.usda.gov/employeeDirectory/app",
               "Description":"Employee Directory",
               "Language":"en"
            }
         ],
         "Web_Url":[
            {
               "Url":"http://www.usda.gov/wps/portal/usda/usdahome",
               "Description":"U.S. Department of Agriculture (USDA) ",
               "Language":"en"
            }
         ],
         "In_Person_Url":[
            {
               "Url":"http://www.rurdev.usda.gov/recd_map.html",
               "Description":"Rural Development Office Locator",
               "Language":"en"
            },
            {
               "Url":"http://apps.ams.usda.gov/FarmersMarkets/",
               "Description":"Farmers Markets Near You",
               "Language":"en"
            },
            {
               "Url":"http://offices.sc.egov.usda.gov/locator/app",
               "Description":"Find a Service Center Near You",
               "Language":"en"
            }
         ],
         "Description":"The Department of Agriculture provides leadership on food, agriculture, natural resources, and related issues.",
         "Alt_Language":[
            {
               "Id":"50072",
               "URI":"http://www.usa.gov/api/USAGovAPI/contacts.json/contact/50072",
               "Name":"Departamento de Agricultura",
               "Language":"es"
            }
         ],
         "Contact":[
            {
               "Id":"48012",
               "URI":"http://www.usa.gov/api/USAGovAPI/contacts.json/contact/48012",
               "Language":"en",
               "Name":"Center for Nutrition Policy and Promotion (CNPP)",
               "Source_Url":"http://www.usa.gov/directory/federal/center-for-nutrition-policy-and-promotion.shtml",
               "Street1":"3101 Park Center Dr., 10th Floor",
               "City":"Alexandria",
               "StateTer":"VA",
               "Zip":"22302-1594",
               "Phone":[
                  "703-305-7600"
               ],
               "Contact_Url":[
                  {
                     "Url":"http://www.cnpp.usda.gov/contacts.htm",
                     "Description":"Contact the Center for Nutrition Policy and Promotion (CNPP) ",
                     "Language":"en"
                  }
               ],
               "Web_Url":[
                  {
                     "Url":"http://www.cnpp.usda.gov/",
                     "Description":"Center for Nutrition Policy and Promotion (CNPP) ",
                     "Language":"en"
                  },
                  {
                     "Url":"http://www.choosemyplate.gov/",
                     "Description":"",
                     "Language":"en"
                  }
               ],
               "Description":"The USDA Center for Nutrition Policy and Promotion (CNPP) works to improve the health and well-being of Americans by developing and promoting dietary guidance that links scientific research to the nutrition needs of consumers."
            }
         ]
      }
   ]
}

For a complete list of fields returned in the json, see the data model description above. Please note that any field that contains more than one item in it (such as synonyms), is returned as an array and noted in the data model description.

We encourage you to try out the interactive documentation to learn more.

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API Methods That Return Agency Records in a Tree Form

These methods return agency records in a hierarchical data structure. In this way, you do not have to manually recreate the hierarchy yourself using the contacts method.

/contact/{identifier}/tree/parent

The parent method returns the record of the parent agency specified in the REST URL and will continue up the agency hierarchy until the root agency is returned. Additionally, the record for the id specified will also be returned.

For example, if you request the parent tree for the Administration for Native Americans (agency id 49064) , the API will return a tree structure whose head is the U.S.  Department of Health and Human Services, with a child record for the Administration for Children and Families, which will then have a child record for the Administration of Native Americans.

With JSON-formatted results, this call would be made with this URL:  http://www.usa.gov/api/USAGovAPI/contacts.json/contact/49064/tree/parent

Likewise, if you request the parent tree for the Administration for Children and Families (agency id 47994), the API will return a tree structure whose head is the U.S. Department of Health and Human Services, with a child record for the Administration for Children and Families.  However, the structure will end at that point instead of continuing down the agency hierarchy.

With JSON-formatted results, this call would be made with this URL:  http://www.usa.gov/api/USAGovAPI/contacts.json/contact/47994/tree/parent

/contact/{identifier}/tree/descendant

The descendant method will return a tree with the agency specified in the REST URL at it’s head. It will include all of the agency's sub-agencies as children. The tree will then continue in this fashion until the agencies with no children are returned.

For example, if you request the descendant tree of the Administration for Children and Families (agency id 47994), the API will return a tree structure with the record for the Administration for Children and Families at it’s head. There would then be child record for the Administration of Native Americans, since that agency is a subagency of the Administration for Children and Families.

With JSON-formatted results, this call would be made with this URL: http://www.usa.gov/api/USAGovAPI/contacts.json/contact/47994/tree/descendant

Likewise, if you request the descendant tree of the U.S. Department of Health and Human Services (agency id 49021), the API will return a tree structure with the U.S. Department of Health and Human Services record at it’s head, and have 15 child records for each of the sub-agencies.  The tree will continue in this manner until the entire U.S. Department of Health and Human Services hierarchy of agencies is exposed.

With JSON-formatted results, this call would be made with this URL: http://www.usa.gov/api/USAGovAPI/contacts.json/contact/49021/tree/descendant

/contact/{identifier}/tree/branch

The branch method returns a tree that is the combination of the trees returned by the parent method and the descendant method for the id specified in the REST URL. With this one method, the API will return every parent and every descendant of a particular agency.

/contact/{identifier}

The contact/{identifier} method will return the single directory record represented by the id specified in the REST URL. There are no children records returned when using this method.

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Sample Results For These Methods

For API methods that return a tree of directory records, the API will return an array of objects, such as:

{
  "Id": "49021",
  "URI": "http://www.usa.gov/api/USAGovAPI/contacts.json/contact/49021",
  "Language": "en",
  "Name": "U.S. Department of Health and Human Services (HHS)",
  "Source_Url": "http://www.usa.gov/directory/federal/department-of-health-and-human-services.shtml",
  "Street1": "200 Independence Avenue, S.W.",
  "City": "Washington",
  "StateTer": "DC",
  "Zip": "20201",
  "Synonym": [
    "Health and Human Services Department",
    "Department of Health and Human Services"
  ],
  "Contact_Url": [
    {
      "Url": "http://www.hhs.gov/contactus.html",
      "Description": "Contact the U.S. Department of Health and Human Services (HHS) ",
      "Language": "en"
    },
    {
      "Url": "http://www.acf.hhs.gov/acf_contact_us.html#state",
      "Description": "Child Support",
      "Language": "en"
    },
    {
      "Url": "http://www.acf.hhs.gov/programs/ofa/help",
      "Description": "Temporary Assistance for Needy Families (Welfare)",
      "Language": "en"
    },
    {
      "Url": "http://www.medicare.gov/ContactUs.asp",
      "Description": "Medicare",
      "Language": "en"
    },
    {
      "Url": "http://www.acf.hhs.gov/programs/ocs/liheap/about/contact_us.html",
      "Description": "Low Income Home Energy Assistance Program (LIHEAP)",
      "Language": "en"
    },
    {
      "Url": "https://cfo.gov/cfo-members/",
      "Description": "Employee Directory",
      "Language": "en"
    }
  ],
  "Web_Url": [
    {
      "Url": "http://www.hhs.gov/",
      "Description": "U.S. Department of Health and Human Services (HHS) ",
      "Language": "en"
    }
  ],
  "In_Person_Url": [
    {
      "Url": "http://eclkc.ohs.acf.hhs.gov/hslc/HeadStartOffices",
      "Description": "Head Start Program Locator",
      "Language": "en"
    }
  ],
  "Description": "The Department of Health and Human Services protects the health of all Americans and provides essential human services.",
  "Alt_Language": [
    {
      "Id": "50081",
      "URI": "http://www.usa.gov/api/USAGovAPI/contacts.json/contact/50081",
      "Name": "Departamento de Salud y Servicios Sociales – HHS",
      "Language": "es"
    }
  ],
  "Contact": [
    {
      "Id": "47994",
      "URI": "http://www.usa.gov/api/USAGovAPI/contacts.json/contact/47994",
      "Language": "en",
      "Name": "Administration for Children and Families (ACF)",
      "Source_Url": "http://www.usa.gov/directory/federal/administration-for-children--families.shtml",
      "Street1": "370 L'nfant Promenade, SW",
      "City": "Washington",
      "StateTer": "DC",
      "Zip": "20447",
      "Tollfree": [
        "1-888-289-8442 (Fraud Alert Hotline)"
      ],
      "Contact_Url": [
        {
          "Url": "http://www.acf.hhs.gov/programs/ana/about",
          "Description": "Contact the Administration for Children and Families (ACF) ",
          "Language": "en"
        },
        {
          "Url": "https://cfo.gov/cfo-members/",
          "Description": "Employee Directory",
          "Language": "en"
        },
        {
          "Url": "http://www.acf.hhs.gov/acf_contact_us.html#state",
          "Description": "Child Support",
          "Language": "en"
        },
        {
          "Url": "http://www.acf.hhs.gov/programs/ofa/help",
          "Description": "Temporary Assistance for Needy Families (Welfare)",
          "Language": "en"
        },
        {
          "Url": "http://www.childwelfare.gov/pubs/reslist/rl_dsp.cfm?rs_id=5&rate_chno=11-11172",
          "Description": "Report Child Abuse and Neglect",
          "Language": "en"
        },
        {
          "Url": "http://www.acf.hhs.gov/programs/ocs/liheap/about/contact_us.html",
          "Description": "Low Income Home Energy Assistance Program (LIHEAP)",
          "Language": "en"
        }
      ],
      "Web_Url": [
        {
          "Url": "http://www.acf.hhs.gov/",
          "Description": "Administration for Children and Families (ACF) ",
          "Language": "en"
        }
      ],
      "In_Person_Url": [
        {
          "Url": "http://eclkc.ohs.acf.hhs.gov/hslc/HeadStartOffices",
          "Description": "Head Start Program Locator",
          "Language": "en"
        },
        {
          "Url": "http://www.acf.hhs.gov/programs/cse/extinf.html",
          "Description": "Child Support Enforcement in Your State",
          "Language": "en"
        }
      ],
      "Description": "The ACF funds state, territory, local, and tribal organizations to provide family assistance (welfare), child support, child care, Head Start, child welfare, and other programs relating to children and families.",
      "Alt_Language": [
        {
          "Id": "50101",
          "URI": "http://www.usa.gov/api/USAGovAPI/contacts.json/contact/50101",
          "Name": "Administración de Asuntos de Niños y Familias",
          "Language": "es"
        }
      ],
      "Contact": [
        {
          "Id": "49064",
          "URI": "http://www.usa.gov/api/USAGovAPI/contacts.json/contact/49064",
          "Language": "en",
          "Name": "Administration for Native Americans",
          "Source_Url": "http://www.usa.gov/directory/federal/administration-for-native-americans.shtml",
          "Street1": "2nd Floor, West Aerospace Center",
          "Street2": "370 L'Enfant Promenade, SW",
          "City": "Washington",
          "StateTer": "DC",
          "Zip": "20447-0002",
          "Tollfree": [
            "877-922-9262"
          ],
          "Email": "anacomments@acf.hhs.gov",
          "Contact_Url": [
            {
              "Url": "http://www.acf.hhs.gov/programs/ana/about",
              "Description": "Contact the Administration for Native Americans ",
              "Language": "en"
            }
          ],
          "Web_Url": [
            {
              "Url": "http://www.acf.hhs.gov/programs/ana/",
              "Description": "Administration for Native Americans ",
              "Language": "en"
            }
          ],
          "Description": "The Administration for Native Americans promotes self-sufficiency and cultural preservation for Native Americans by providing social and economic development opportunities through financial assistance, training, and technical assistance.",
          "Alt_Language": [
            {
              "Id": "50125",
              "URI": "http://www.usa.gov/api/USAGovAPI/contacts.json/contact/50125",
              "Name": "Oficina de Asuntos Nativo Americanos",
              "Language": "es"
            }
          ]
        }
      ]
    }
  ]
}

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The Free State Tax Filing For Low Income

Free state tax filing for low income 4. Free state tax filing for low income   Unrelated Business Taxable Income Table of Contents IncomeExclusions Dues of Agricultural Organizations and Business Leagues DeductionsDirectly Connected Exploitation of Exempt Activity—Advertising Sales Modifications Partnership Income or Loss S Corporation Income or Loss Special Rules for Foreign Organizations Special Rules for Social Clubs, VEBAs, SUBs, and GLSOsIncome that is set aside. Free state tax filing for low income Special Rules for Veterans' Organizations Income From Controlled OrganizationsAddition to tax for valuation misstatements. Free state tax filing for low income Net unrelated income. Free state tax filing for low income Net unrelated loss. Free state tax filing for low income Control. Free state tax filing for low income Income from property financed with qualified 501(c)(3) bonds. Free state tax filing for low income Disposition of property received from taxable subsidiary and used in unrelated business. Free state tax filing for low income Income From Debt-Financed Property Debt-Financed PropertyAcquisition Indebtedness Computation of Debt-Financed Income Deductions for Debt-Financed Property Allocation Rules How to Get Tax Help The term “unrelated business taxable income” generally means the gross income derived from any unrelated trade or business regularly conducted by the exempt organization, less the deductions directly connected with carrying on the trade or business. Free state tax filing for low income If an organization regularly carries on two or more unrelated business activities, its unrelated business taxable income is the total of gross income from all such activities less the total allowable deductions attributable to all the activities. Free state tax filing for low income In computing unrelated business taxable income, gross income and deductions are subject to the modifications and special rules explained in this chapter. Free state tax filing for low income Whether a particular item of income or expense falls within any of these modifications or special rules must be determined by all the facts and circumstances in each specific case. Free state tax filing for low income For example, if the organization received a payment termed rent that is in fact a return of profits by a person operating the property for the benefit of the organization, or that is a share of the profits retained by the organization as a partner or joint venturer, the payment is not within the income exclusion for rents, discussed later under Exclusions. Free state tax filing for low income Income Generally, unrelated business income is taxable, but there are exclusions and special rules that must be considered when figuring the income. Free state tax filing for low income Exclusions The following types of income (and deductions directly connected with the income) are generally excluded when figuring unrelated business taxable income. Free state tax filing for low income Dividends, interest, annuities and other investment income. Free state tax filing for low income   All dividends, interest, annuities, payments with respect to securities loans, income from notional principal contracts, and other income from an exempt organization's ordinary and routine investments that the IRS determines are substantially similar to these types of income are excluded in computing unrelated business taxable income. Free state tax filing for low income Exception for insurance activity income of a controlled foreign corporation. Free state tax filing for low income   This exclusion does not apply to income from certain insurance activities of an exempt organization's controlled foreign corporation. Free state tax filing for low income The income is not excludable dividend income, but instead is unrelated business taxable income to the extent it would be so treated if the exempt organization had earned it directly. Free state tax filing for low income Certain exceptions to this rule apply. Free state tax filing for low income For more information, see section 512(b)(17). Free state tax filing for low income Other exceptions. Free state tax filing for low income   This exclusion does not apply to unrelated debt-financed income (discussed under Income From Debt-Financed Property, later), to interest or annuities received from a controlled corporation (discussed under Income From Controlled Organizations, later). Free state tax filing for low income Income from lending securities. Free state tax filing for low income   Payments received with respect to a security loan are excluded in computing unrelated business taxable income only if the loan is made under an agreement that:    Provides for the return to the exempt organization of securities identical to the securities loaned, Requires payments to the organization of amounts equivalent to all interest, dividends, and other distributions that the owner of the securities is entitled to receive during the period of the loan, Does not reduce the organization's risk of loss or opportunity for gain on the securities, Contains reasonable procedures to implement the obligation of the borrower to furnish collateral to the organization with a fair market value each business day during the period of the loan in an amount not less than the fair market value of the securities at the close of the preceding business day, and Permits the organization to terminate the loan upon notice of not more than 5 business days. Free state tax filing for low income   Payments with respect to securities loans include: Amounts in respect of dividends, interest, and other distributions, Fees based on the period of time the loan is in effect and the fair market value of the security during that period, Income from collateral security for the loan, and Income from the investment of collateral security. Free state tax filing for low income The payments are considered to be from the securities loaned and not from collateral security or the investment of collateral security from the loans. Free state tax filing for low income Any deductions that are directly connected with collateral security for the loan, or with the investment of collateral security, are considered deductions that are directly connected with the securities loaned. Free state tax filing for low income Royalties. Free state tax filing for low income   Royalties, including overriding royalties, are excluded in computing unrelated business taxable income. Free state tax filing for low income   To be considered a royalty, a payment must relate to the use of a valuable right. Free state tax filing for low income Payments for trademarks, trade names, or copyrights are ordinarily considered royalties. Free state tax filing for low income Similarly, payments for the use of a professional athlete's name, photograph, likeness, or facsimile signature are ordinarily considered royalties. Free state tax filing for low income However, royalties do not include payments for personal services. Free state tax filing for low income Therefore, payments for personal appearances and interviews are not excluded as royalties and must be included in figuring unrelated business taxable income. Free state tax filing for low income   Unrelated business taxable income does not include royalty income received from licensees by an exempt organization that is the legal and beneficial owner of patents assigned to it by inventors for specified percentages of future royalties. Free state tax filing for low income   Mineral royalties are excluded whether measured by production or by gross or taxable income from the mineral property. Free state tax filing for low income However, the exclusion does not apply to royalties that stem from an arrangement whereby the organization owns a working interest in a mineral property and is liable for its share of the development and operating costs under the terms of its agreement with the operator of the property. Free state tax filing for low income To the extent they are not treated as loans under section 636 (relating to income tax treatment of mineral production payments), payments for mineral production are treated in the same manner as royalty payments for the purpose of computing unrelated business taxable income. Free state tax filing for low income To the extent they are treated as loans, any payments for production that are the equivalent of interest are treated as interest and are excluded. Free state tax filing for low income Exceptions. Free state tax filing for low income   This exclusion does not apply to debt-financed income (discussed under Income From Debt-Financed Property, later) or to royalties received from a controlled corporation (discussed under Income From Controlled Organizations, later). Free state tax filing for low income Rents. Free state tax filing for low income   Rents from real property, including elevators and escalators, are excluded in computing unrelated business taxable income. Free state tax filing for low income Rents from personal property are not excluded. Free state tax filing for low income However, special rules apply to “mixed leases” of both real and personal property. Free state tax filing for low income Mixed leases. Free state tax filing for low income   In a mixed lease, all of the rents are excluded if the rents attributable to the personal property are not more than 10% of the total rents under the lease, as determined when the personal property is first placed in service by the lessee. Free state tax filing for low income If the rents attributable to personal property are more than 10% but not more than 50% of the total rents, only the rents attributable to the real property are excluded. Free state tax filing for low income If the rents attributable to the personal property are more than 50% of the total rents, none of the rents are excludable. Free state tax filing for low income   Property is placed in service when the lessee first may use it under the terms of a lease. Free state tax filing for low income For example, property subject to a lease entered into on November 1, for a term starting on January 1 of the next year, is considered placed in service on January 1, regardless of when the lessee first actually uses it. Free state tax filing for low income   If separate leases are entered into for real and personal property and the properties have an integrated use (for example, one or more leases for real property and another lease or leases for personal property to be used on the real property), all the leases will be considered as one lease. Free state tax filing for low income   The rent attributable to the personal property must be recomputed, and the treatment of the rents must be redetermined, if: The rent attributable to all the leased personal property increases by 100% or more because additional or substitute personal property is placed in service, or The lease is modified to change the rent charged (whether or not the amount of rented personal property changes). Free state tax filing for low income Any change in the treatment of rents resulting from the recomputation is effective only for the period beginning with the event that caused the recomputation. Free state tax filing for low income Exception for rents based on net profit. Free state tax filing for low income   The exclusion for rents does not apply if the amount of the rent depends on the income or profits derived by any person from the leased property, other than an amount based on a fixed percentage of the gross receipts or sales. Free state tax filing for low income Exception for income from personal services. Free state tax filing for low income   Payment for occupying space when personal services are also rendered to the occupant does not constitute rent from real property. Free state tax filing for low income Therefore, the exclusion does not apply to transactions such as renting hotel rooms, rooms in boarding houses or tourist homes, and space in parking lots or warehouses. Free state tax filing for low income Other exceptions. Free state tax filing for low income   This exclusion does not apply to unrelated debt-financed income (discussed under Income From Debt-Financed Property, later), or to interest, annuities, royalties and rents received from a controlled corporation (discussed under Income From Controlled Organizations, later), investment income (dividends, interest, rents, etc. Free state tax filing for low income ) received by organizations described in sections 501(c)(7), 501(c)(9), 501(c)(17), and 501(c)(20). Free state tax filing for low income See Special Rules for Social Clubs, VEBAs, SUBs, and GLSOs, discussed later for more information. Free state tax filing for low income Income from research. Free state tax filing for low income   A tax-exempt organization may exclude income from research grants or contracts from unrelated business taxable income. Free state tax filing for low income However, the extent of the exclusion depends on the nature of the organization and the type of research. Free state tax filing for low income   Income from research for the United States, any of its agencies or instrumentalities, or a state or any of its political subdivisions is excluded when computing unrelated business taxable income. Free state tax filing for low income   For a college, university, or hospital, all income from research, whether fundamental or applied, is excluded in computing unrelated business taxable income. Free state tax filing for low income   When an organization is operated primarily to conduct fundamental research (as distinguished from applied research) and the results are freely available to the general public, all income from research performed for any person is excluded in computing unrelated business taxable income. Free state tax filing for low income   The term research, for this purpose, does not include activities of a type normally conducted as an incident to commercial or industrial operations, such as testing or inspecting materials or products, or designing or constructing equipment, buildings, etc. Free state tax filing for low income In addition, the term fundamental research does not include research conducted for the primary purpose of commercial or industrial application. Free state tax filing for low income Gains and losses from disposition of property. Free state tax filing for low income   Also excluded from unrelated business taxable income are gains or losses from the sale, exchange, or other disposition of property other than: Stock in trade or other property of a kind that would properly be includable in inventory if on hand at the close of the tax year, Property held primarily for sale to customers in the ordinary course of a trade or business, or Cutting of timber that an organization has elected to consider as a sale or exchange of the timber. Free state tax filing for low income   It should be noted that the last exception relates only to cut timber. Free state tax filing for low income The sale, exchange, or other disposition of standing timber is excluded from the computation of unrelated business income, unless it constitutes property held for sale to customers in the ordinary course of business. Free state tax filing for low income Lapse or termination of options. Free state tax filing for low income   Any gain from the lapse or termination of options to buy or sell securities is excluded from unrelated business taxable income. Free state tax filing for low income The exclusion applies only if the option is written in connection with the exempt organization's investment activities. Free state tax filing for low income Therefore, this exclusion is not available if the organization is engaged in the trade or business of writing options or the options are held by the organization as inventory or for sale to customers in the ordinary course of a trade or business. Free state tax filing for low income Exception. Free state tax filing for low income   This exclusion does not apply to unrelated debt-financed income, discussed later under Income From Debt-Financed Property. Free state tax filing for low income Gain or loss on disposition of certain brownfield property. Free state tax filing for low income   Gain or loss from the qualifying sale, exchange, or other disposition of a qualifying brownfield property (as defined in section 512(b)(19)(C)), which was acquired by the organization after December 31, 2005 and before January 1, 2011, is excluded from unrelated business taxable income and is excepted from the debt-financed rules for such property. Free state tax filing for low income See sections 512(b)(19) and 514(b)(1)(E). Free state tax filing for low income Income from services provided under federal license. Free state tax filing for low income   There is a further exclusion from unrelated business taxable income of income from a trade or business conducted by a religious order or by an educational organization maintained by the order. Free state tax filing for low income   This exclusion applies only if the following requirements are met. Free state tax filing for low income The trade or business must have been operated by the order or by the institution before May 27, 1959. Free state tax filing for low income The trade or business must provide services under a license issued by a federal regulatory agency. Free state tax filing for low income More than 90% of the net income from the business for the tax year must be devoted to religious, charitable, or educational purposes that constitute the basis for the religious order's exemption. Free state tax filing for low income The rates or other charges for these services must be fully competitive with the rates or other charges of similar taxable businesses. Free state tax filing for low income Rates or other charges for these services will be considered as fully competitive if they are neither materially higher nor materially lower than the rates charged by similar businesses operating in the same general area. Free state tax filing for low income Exception. Free state tax filing for low income    This exclusion does not apply to unrelated debt-financed income (discussed under Income From Debt-Financed Property, later). Free state tax filing for low income Member income of mutual or cooperative electric companies. Free state tax filing for low income   Income of a mutual or cooperative electric company described in section 501(c)(12) which is treated as member income under subparagraph (H) of that section is excluded from unrelated business taxable income. Free state tax filing for low income Dues of Agricultural Organizations and Business Leagues Dues received from associate members by organizations exempt under section 501(c)(5) or section 501(c)(6) may be treated as gross income from an unrelated trade or business if the associate member category exists for the principal purpose of producing unrelated business income. Free state tax filing for low income For example, if an organization creates an associate member category solely to allow associate members to purchase insurance through the organization, the associate member dues may be unrelated business income. Free state tax filing for low income Exception. Free state tax filing for low income   Associate member dues received by an agricultural or horticultural organization are not treated as gross income from an unrelated trade or business, regardless of their purpose, if they are not more than the annual limit. Free state tax filing for low income The limit on dues paid by an associate member is $148 for 2011. Free state tax filing for low income   If the required annual dues are more than the limit, the entire amount is treated as income from an unrelated business unless the associate member category was formed or availed of for the principal purpose of furthering the organization's exempt purposes. Free state tax filing for low income Deductions To qualify as allowable deductions in computing unrelated business taxable income, the expenses, depreciation, and similar items generally must be allowable income tax deductions that are directly connected with carrying on an unrelated trade or business. Free state tax filing for low income They cannot be directly connected with excluded income. Free state tax filing for low income For an exception to the “directly connected” requirement, see Charitable contributions deduction, under Modifications, later. Free state tax filing for low income Directly Connected To be directly connected with the conduct of an unrelated business, deductions must have a proximate and primary relationship to carrying on that business. Free state tax filing for low income For an exception, see Expenses attributable to exploitation of exempt activities, later. Free state tax filing for low income Expenses attributable solely to unrelated business. Free state tax filing for low income   Expenses, depreciation, and similar items attributable solely to the conduct of an unrelated business are proximately and primarily related to that business and qualify for deduction to the extent that they are otherwise allowable income tax deductions. Free state tax filing for low income   For example, salaries of personnel employed full-time to conduct the unrelated business and depreciation of a building used entirely in the conduct of that business are deductible to the extent otherwise allowable. Free state tax filing for low income Expenses attributable to dual use of facilities or personnel. Free state tax filing for low income   When facilities or personnel are used both to conduct exempt functions and to conduct an unrelated trade or business, expenses, depreciation, and similar items attributable to the facilities or personnel must be allocated between the two uses on a reasonable basis. Free state tax filing for low income The part of an item allocated to the unrelated trade or business is proximately and primarily related to that business and is allowable as a deduction in computing unrelated business taxable income if the expense is otherwise an allowable income tax deduction. Free state tax filing for low income Example 1. Free state tax filing for low income A school recognized as a tax-exempt organization contracts with an individual to conduct a summer tennis camp. Free state tax filing for low income The school provides the tennis courts, housing, and dining facilities. Free state tax filing for low income The contracted individual hires the instructors, recruits campers, and provides supervision. Free state tax filing for low income The income the school receives from this activity is from a dual use of the facilities and personnel. Free state tax filing for low income The school, in computing its unrelated business taxable income, may deduct an allocable part of the expenses attributable to the facilities and personnel. Free state tax filing for low income Example 2. Free state tax filing for low income An exempt organization with gross income from an unrelated trade or business pays its president $90,000 a year. Free state tax filing for low income The president devotes approximately 10% of his time to the unrelated business. Free state tax filing for low income To figure the organization's unrelated business taxable income, a deduction of $9,000 ($90,000 × 10%) is allowed for the salary paid to its president. Free state tax filing for low income Expenses attributable to exploitation of exempt activities. Free state tax filing for low income   Generally, expenses, depreciation, and similar items attributable to the conduct of an exempt activity are not deductible in computing unrelated business taxable income from an unrelated trade or business that exploits the exempt activity. Free state tax filing for low income (See Exploitation of exempt functions under Not substantially related in chapter 3. Free state tax filing for low income ) This is because they do not have a proximate and primary relationship to the unrelated trade or business, and therefore, they do not qualify as directly connected with that business. Free state tax filing for low income Exception. Free state tax filing for low income   Expenses, depreciation, and similar items may be treated as directly connected with the conduct of the unrelated business if all the following statements are true. Free state tax filing for low income The unrelated business exploits the exempt activity. Free state tax filing for low income The unrelated business is a type normally conducted for profit by taxable organizations. Free state tax filing for low income The exempt activity is a type normally conducted by taxable organizations in carrying on that type of business. Free state tax filing for low income The amount treated as directly connected is the smaller of: The excess of these expenses, depreciation, and similar items over the income from, or attributable to, the exempt activity; or The gross unrelated business income reduced by all other expenses, depreciation, and other items that are actually directly connected. Free state tax filing for low income   The application of these rules to an advertising activity that exploits an exempt publishing activity is explained next. Free state tax filing for low income Exploitation of Exempt Activity—Advertising Sales The sale of advertising in a periodical of an exempt organization that contains editorial material related to the accomplishment of the organization's exempt purpose is an unrelated business that exploits an exempt activity, the circulation and readership of the periodical. Free state tax filing for low income Therefore, in addition to direct advertising costs, exempt activity costs (expenses, depreciation, and similar expenses attributable to the production and distribution of the editorial or readership content) can be treated as directly connected with the conduct of the advertising activity. Free state tax filing for low income (See Expenses attributable to exploitation of exempt activities under Directly Connected, earlier. Free state tax filing for low income ) Figuring unrelated business taxable income (UBTI). Free state tax filing for low income   The UBTI of an advertising activity is the amount shown in the following chart. Free state tax filing for low income IF gross advertising income is . Free state tax filing for low income . Free state tax filing for low income . Free state tax filing for low income THEN UBTI is . Free state tax filing for low income . Free state tax filing for low income . Free state tax filing for low income More than direct advertising costs The excess advertising income, reduced (but not below zero) by the excess, if any, of readership costs over circulation income. Free state tax filing for low income Equal to or less than direct advertising costs Zero. Free state tax filing for low income   • Circulation income and readership costs are not taken into account. Free state tax filing for low income   • Any excess advertising costs reduce (but not below zero) UBTI from any other unrelated business activity. Free state tax filing for low income   The terms used in the chart are explained in the following discussions. Free state tax filing for low income Periodical Income Gross advertising income. Free state tax filing for low income   This is all the income from the unrelated advertising activities of an exempt organization periodical. Free state tax filing for low income Circulation income. Free state tax filing for low income   This is all the income from the production, distribution, or circulation of an exempt organization's periodical (other than gross advertising income). Free state tax filing for low income It includes all amounts from the sale or distribution of the readership content of the periodical, such as income from subscriptions. Free state tax filing for low income It also includes allocable membership receipts if the right to receive the periodical is associated with a membership or similar status in the organization. Free state tax filing for low income Allocable membership receipts. Free state tax filing for low income   This is the part of membership receipts (dues, fees, or other charges associated with membership) equal to the amount that would have been charged and paid for the periodical if: The periodical was published by a taxable organization, The periodical was published for profit, and The member was an unrelated party dealing with the taxable organization at arm's length. Free state tax filing for low income   The amount used to allocate membership receipts is the amount shown in the following chart. Free state tax filing for low income   For this purpose, the total periodical costs are the sum of the direct advertising costs and the readership costs, explained under Periodical Costs, later. Free state tax filing for low income The cost of other exempt activities means the total expenses incurred by the organization in connection with its other exempt activities, not offset by any income earned by the organization from those activities. Free state tax filing for low income IF . Free state tax filing for low income . Free state tax filing for low income . Free state tax filing for low income THEN the amount used to allocate membership receipts is . Free state tax filing for low income . Free state tax filing for low income . Free state tax filing for low income 20% or more of the total circulation consists of sales to nonmembers The subscription price charged nonmembers. Free state tax filing for low income The above condition does not apply, and 20% or more of the members pay reduced dues because they do not receive the periodical The reduction in dues for a member not receiving the periodical. Free state tax filing for low income Neither of the above conditions applies The membership receipts multiplied by this fraction:   Total periodical costs Total periodical costs Plus Cost of other exempt activities Example 1. Free state tax filing for low income U is an exempt scientific organization with 10,000 members who pay annual dues of $15. Free state tax filing for low income One of U's activities is publishing a monthly periodical distributed to all of its members. Free state tax filing for low income U also distributes 5,000 additional copies of its periodical to nonmembers, who subscribe for $10 a year. Free state tax filing for low income Since the nonmember circulation of U's periodical represents one-third (more than 20%) of its total circulation, the subscription price charged to nonmembers is used to determine the part of U's membership receipts allocable to the periodical. Free state tax filing for low income Thus, U's allocable membership receipts are $100,000 ($10 times 10,000 members), and U's total circulation income for the periodical is $150,000 ($100,000 from members plus $50,000 from sales to nonmembers). Free state tax filing for low income Example 2. Free state tax filing for low income Assume the same facts except that U sells only 500 copies of its periodical to nonmembers, at a price of $10 a year. Free state tax filing for low income Assume also that U's members may elect not to receive the periodical, in which case their dues are reduced from $15 a year to $6 a year, and that only 3,000 members elect to receive the periodical and pay the full dues of $15 a year. Free state tax filing for low income U's stated subscription price of $9 to members consistently results in an excess of total income (including gross advertising income) attributable to the periodical over total costs of the periodical. Free state tax filing for low income Since the 500 copies of the periodical distributed to nonmembers represent only 14% of the 3,500 copies distributed, the $10 subscription price charged to nonmembers is not used to determine the part of membership receipts allocable to the periodical. Free state tax filing for low income Instead, since 70% of the members elect not to receive the periodical and pay $9 less per year in dues, the $9 price is used to determine the subscription price charged to members. Free state tax filing for low income Thus, the allocable membership receipts will be $9 a member, or $27,000 ($9 times 3,000 copies). Free state tax filing for low income U's total circulation income is $32,000 ($27,000 plus the $5,000 from nonmember subscriptions). Free state tax filing for low income Periodical Costs Direct advertising costs. Free state tax filing for low income   These are expenses, depreciation, and similar items of deduction directly connected with selling and publishing advertising in the periodical. Free state tax filing for low income   Examples of allowable deductions under this classification include agency commissions and other direct selling costs, such as transportation and travel expenses, office salaries, promotion and research expenses, and office overhead directly connected with the sale of advertising lineage in the periodical. Free state tax filing for low income Also included are other deductions commonly classified as advertising costs under standard account classifications, such as artwork and copy preparation, telephone, telegraph, postage, and similar costs directly connected with advertising. Free state tax filing for low income   In addition, direct advertising costs include the part of mechanical and distribution costs attributable to advertising lineage. Free state tax filing for low income For this purpose, the general account classifications of items includable in mechanical and distribution costs ordinarily employed in business-paper and consumer-publication accounting provide a guide for the computation. Free state tax filing for low income Accordingly, the mechanical and distribution costs include the part of the costs and other expenses of composition, press work, binding, mailing (including paper and wrappers used for mailing), and bulk postage attributable to the advertising lineage of the publication. Free state tax filing for low income   In the absence of specific and detailed records, the part of mechanical and distribution costs attributable to the periodical's advertising lineage can be based on the ratio of advertising lineage to total lineage in the periodical, if this allocation is reasonable. Free state tax filing for low income Readership costs. Free state tax filing for low income   These are all expenses, depreciation, and similar items that are directly connected with the production and distribution of the readership content of the periodical. Free state tax filing for low income Costs partly attributable to other activities. Free state tax filing for low income   Deductions properly attributable to exempt activities other than publishing the periodical may not be allocated to the periodical. Free state tax filing for low income When expenses are attributable both to the periodical and to the organization's other activities, an allocation must be made on a reasonable basis. Free state tax filing for low income The method of allocation will vary with the nature of the item, but once adopted, should be used consistently. Free state tax filing for low income Allocations based on dollar receipts from various exempt activities generally are not reasonable since receipts usually do not accurately reflect the costs associated with specific activities that an exempt organization conducts. Free state tax filing for low income Consolidated Periodicals If an exempt organization publishes more than one periodical to produce income, it may treat all of them (but not less than all) as one in determining unrelated business taxable income from selling advertising. Free state tax filing for low income It treats the gross income from all the periodicals, and the deductions directly connected with them, on a consolidated basis. Free state tax filing for low income Consolidated treatment, once adopted, must be followed consistently and is binding. Free state tax filing for low income This treatment can be changed only with the consent of the Internal Revenue Service. Free state tax filing for low income An exempt organization's periodical is published to produce income if: The periodical generates gross advertising income to the organization equal to at least 25% of its readership costs, and Publishing the periodical is an activity engaged in for profit. Free state tax filing for low income Whether the publication of a periodical is an activity engaged in for profit can be determined only by all the facts and circumstances in each case. Free state tax filing for low income The facts and circumstances must show that the organization carries on the activity for economic profit, although there may not be a profit in a particular year. Free state tax filing for low income For example, if an organization begins publishing a new periodical whose total costs exceed total income in the start-up years because of lack of advertising sales, that does not mean that the organization did not have as its objective an economic profit. Free state tax filing for low income The organization may establish that it had this objective by showing it can reasonably expect advertising sales to increase, so that total income will exceed costs within a reasonable time. Free state tax filing for low income Example. Free state tax filing for low income Y, an exempt trade association, publishes three periodicals that it distributes to its members: a weekly newsletter, a monthly magazine, and a quarterly journal. Free state tax filing for low income Both the monthly magazine and the quarterly journal contain advertising that accounts for gross advertising income equal to more than 25% of their respective readership costs. Free state tax filing for low income Similarly, the total income attributable to each periodical has exceeded the total deductions attributable to each periodical for substantially all the years they have been published. Free state tax filing for low income The newsletter carries no advertising and its annual subscription price is not intended to cover the cost of publication. Free state tax filing for low income The newsletter is a service that Y distributes to all of its members in an effort to keep them informed of changes occurring in the business world. Free state tax filing for low income It is not engaged in for profit. Free state tax filing for low income Under these circumstances, Y may consolidate the income and deductions from the monthly and quarterly journals in computing its unrelated business taxable income. Free state tax filing for low income It may not consolidate the income and deductions from the newsletter with the income and deductions of its other periodicals, since the newsletter is not published for the production of income. Free state tax filing for low income Modifications Net operating loss deduction. Free state tax filing for low income   The net operating loss (NOL) deduction (as provided in section 172) is allowed in computing unrelated business taxable income. Free state tax filing for low income However, the NOL for any tax year, the carrybacks and carryovers of NOLs, and the NOL deduction are determined without taking into account any amount of income or deduction that has been specifically excluded in computing unrelated business taxable income. Free state tax filing for low income For example, a loss from an unrelated trade or business is not diminished because dividend income was received. Free state tax filing for low income   If this were not done, organizations would, in effect, be taxed on their exempt income, since unrelated business losses then would be offset by dividends, interest, and other excluded income. Free state tax filing for low income This would reduce the loss that could be applied against unrelated business income of prior or future tax years. Free state tax filing for low income Therefore, to preserve the immunity of exempt income, all NOL computations are limited to those items of income and deductions that affect the unrelated business taxable income. Free state tax filing for low income   In line with this concept, an NOL carryback or carryover is allowed only from a tax year for which the organization is subject to tax on unrelated business income. Free state tax filing for low income   For example, if an organization just became subject to the tax last year, its NOL for that year is not a carryback to a prior year when it had no unrelated business taxable income, nor is its NOL carryover to succeeding years reduced by the related income of those prior years. Free state tax filing for low income   However, in determining the span of years for which an NOL may be carried back or forward, the tax years for which the organization is not subject to the tax on unrelated business income are counted. Free state tax filing for low income For example, if an organization was subject to the tax for 2009 and had an NOL for that year, the last tax year to which any part of that loss may be carried over is 2029, regardless of whether the organization was subject to the unrelated business income tax in any of the intervening years. Free state tax filing for low income   For more details on the NOL deduction, including property eligible for an extended carryback period, see sections 172 and 1400N, Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts, and Publication 4492-B, Information for Affected Taxpayers in the Midwestern Disaster Areas. Free state tax filing for low income Charitable contributions deduction. Free state tax filing for low income   An exempt organization is allowed to deduct its charitable contributions in computing its unrelated business taxable income whether or not the contributions are directly connected with the unrelated business. Free state tax filing for low income   To be deductible, the contribution must be paid to another qualified organization. Free state tax filing for low income For example, an exempt university that operates an unrelated business may deduct a contribution made to another university for educational work, but may not claim a deduction for contributions of amounts spent for carrying out its own educational program. Free state tax filing for low income   For purposes of the deduction, a distribution by a trust made under the trust instrument to a beneficiary, which itself is a qualified organization, is treated the same as a contribution. Free state tax filing for low income Deduction limits. Free state tax filing for low income   An exempt organization that is subject to the unrelated business income tax at corporate rates is allowed a deduction for charitable contributions up to 10% of its unrelated business taxable income computed without regard to the deduction for contributions. Free state tax filing for low income See the Instructions for Form 990-T for more information. Free state tax filing for low income    An exempt trust that is subject to the unrelated business income tax at trust rates generally is allowed a deduction for charitable contributions in the same amounts as allowed for individuals. Free state tax filing for low income However, the limit on the deduction is determined in relation to the trust's unrelated business taxable income computed without regard to the deduction, rather than in relation to adjusted gross income. Free state tax filing for low income   Contributions in excess of the limits just described may be carried over to the next 5 tax years. Free state tax filing for low income A contribution carryover is not allowed, however, to the extent that it increases an NOL carryover. Free state tax filing for low income Suspension of deduction limits for farmers and ranchers. Free state tax filing for low income   The limitations discussed above are temporarily suspended for certain qualified conservation contributions of property used in agriculture or livestock production. Free state tax filing for low income See the Instructions for Form 990-T for details. Free state tax filing for low income Specific deduction. Free state tax filing for low income   In computing unrelated business taxable income, a specific deduction of $1,000 is allowed. Free state tax filing for low income However, the specific deduction is not allowed in computing an NOL or the NOL deduction. Free state tax filing for low income   Generally, the deduction is limited to $1,000 regardless of the number of unrelated businesses in which the organization is engaged. Free state tax filing for low income Exception. Free state tax filing for low income   An exception is provided in the case of a diocese, province of a religious order, or a convention or association of churches that may claim a specific deduction for each parish, individual church, district, or other local unit. Free state tax filing for low income In these cases, the specific deduction for each local unit is limited to the lower of: $1,000, or Gross income derived from an unrelated trade or business regularly conducted by the local unit. Free state tax filing for low income   This exception applies only to parishes, districts, or other local units that are not separate legal entities, but are components of a larger entity (diocese, province, convention, or association) filing Form 990-T. Free state tax filing for low income The parent organization must file a return reporting the unrelated business gross income and related deductions of all units that are not separate legal entities. Free state tax filing for low income The local units cannot file separate returns. Free state tax filing for low income However, each local unit that is separately incorporated must file its own return and cannot include, or be included with, any other entity. Free state tax filing for low income See Title-holding corporations in chapter 1 for a discussion of the only situation in which more than one legal entity may be included on the same Form 990-T. Free state tax filing for low income Example. Free state tax filing for low income X is an association of churches and is divided into local units A, B, C, and D. Free state tax filing for low income Last year, A, B, C, and D derived gross income of, respectively, $1,200, $800, $1,500, and $700 from unrelated businesses that they regularly conduct. Free state tax filing for low income X may claim a specific deduction of $1,000 with respect to A, $800 with respect to B, $1,000 with respect to C, and $700 with respect to D. Free state tax filing for low income Partnership Income or Loss An organization may have unrelated business income or loss as a member of a partnership, rather than through direct business dealings with the public. Free state tax filing for low income If so, it must treat its share of the partnership income or loss as if it had conducted the business activity in its own capacity as a corporation or trust. Free state tax filing for low income No distinction is made between limited and general partners. Free state tax filing for low income The organization is required to notify the partnership of its tax-exempt status. Free state tax filing for low income Thus, if an organization is a member of a partnership regularly engaged in a trade or business that is an unrelated trade or business with respect to the organization, the organization must include in its unrelated business taxable income its share of the partnership's gross income from the unrelated trade or business (whether or not distributed), and the deductions attributable to it. Free state tax filing for low income The partnership income and deductions to be included in the organization's unrelated business taxable income are figured the same way as any income and deductions from an unrelated trade or business conducted directly by the organization. Free state tax filing for low income The partnership is required to provide the organization this information on Schedule K-1. Free state tax filing for low income Example. Free state tax filing for low income An exempt educational organization is a partner in a partnership that operates a factory. Free state tax filing for low income The partnership also holds stock in a corporation. Free state tax filing for low income The exempt organization must include its share of the gross income from operating the factory in its unrelated business taxable income but may exclude its share of any dividends the partnership received from the corporation. Free state tax filing for low income Different tax years. Free state tax filing for low income   If the exempt organization and the partnership of which it is a member have different tax years, the partnership items that enter into the computation of the organization's unrelated business taxable income must be based on the income and deductions of the partnership for the partnership's tax year that ends within or with the organization's tax year. Free state tax filing for low income S Corporation Income or Loss An organization that owns S corporation stock must take into account its share of the S corporation's income, deductions, or losses in figuring unrelated business taxable income, regardless of the actual source or nature of the income, deductions, and losses. Free state tax filing for low income For example, the organization's share of the S corporation's interest and dividend income will be taxable, even though interest and dividends are normally excluded from unrelated business taxable income. Free state tax filing for low income The organization must also take into account its gain or loss on the sale or other disposition of the S corporation stock in figuring unrelated business taxable income. Free state tax filing for low income Special Rules for Foreign Organizations The unrelated business taxable income of a foreign organization exempt from tax under section 501(a) consists of the organization's: Unrelated business taxable income derived from sources within the United States but not effectively connected with the conduct of a trade or business within the United States, and Unrelated business taxable income effectively connected with the conduct of a trade or business within the United States, whether or not this income is derived from sources within the United States. Free state tax filing for low income To determine whether income realized by a foreign organization is derived from sources within the United States or is effectively connected with the conduct of a trade or business within the United States, see sections 861 through 865 and the related regulations. Free state tax filing for low income Special Rules for Social Clubs, VEBAs, SUBs, and GLSOs The following discussion applies to: Social clubs described in section 501(c)(7), Voluntary employees' beneficiary associations (VEBAs) described in section 501(c)(9), Supplemental unemployment compensation benefit trusts (SUBs) described in section 501(c)(17), and Group legal services organizations (GLSOs) described in section 501(c)(20). Free state tax filing for low income These organizations must figure unrelated business taxable income under special rules. Free state tax filing for low income Unlike other exempt organizations, they cannot exclude their investment income (dividends, interest, rents, etc. Free state tax filing for low income ). Free state tax filing for low income (See Exclusions under Income, earlier. Free state tax filing for low income ) Therefore, they are generally subject to unrelated business income tax on this income. Free state tax filing for low income The unrelated business taxable income of these organizations includes all gross income, less deductions directly connected with the production of that income, except that gross income for this purpose does not include exempt function income. Free state tax filing for low income The dividends received by a corporation are not allowed in computing unrelated business taxable income because it is not an expense incurred in the production of income. Free state tax filing for low income Losses from nonexempt activities. Free state tax filing for low income   Losses from nonexempt activities of these organizations cannot be used to offset investment income unless the activities were undertaken with the intent to make a profit. Free state tax filing for low income Example. Free state tax filing for low income A private golf and country club that is a qualified tax-exempt social club has nonexempt function income from interest and from the sale of food and beverages to nonmembers. Free state tax filing for low income The club sells food and beverages as a service to members and their guests rather than for the purpose of making a profit. Free state tax filing for low income Therefore, any loss resulting from sales to nonmembers cannot be used to offset the club's interest income. Free state tax filing for low income Modifications. Free state tax filing for low income   The unrelated business taxable income is modified by any NOL or charitable contributions deduction and by the specific deduction (described earlier under Deductions). Free state tax filing for low income Exempt function income. Free state tax filing for low income   This is gross income from dues, fees, charges or similar items paid by members for goods, facilities, or services to the members or their dependents or guests, to further the organization's exempt purposes. Free state tax filing for low income Exempt function income also includes income set aside for qualified purposes. Free state tax filing for low income Income that is set aside. Free state tax filing for low income   This is income set aside to be used for religious, charitable, scientific, literary, or educational purposes or for the prevention of cruelty to children or animals. Free state tax filing for low income In addition, for a VEBA, SUB, or GLSO, it is income set aside to provide for the payment of life, sick, accident, or other benefits. Free state tax filing for low income   However, any amounts set aside by a VEBA or SUB that exceed the organization's qualified asset account limit (determined under section 419A) are unrelated business income. Free state tax filing for low income Special rules apply to the treatment of existing reserves for post-retirement medical or life insurance benefits. Free state tax filing for low income These rules are explained in section 512(a)(3)(E)(ii). Free state tax filing for low income   Income derived from an unrelated trade or business may not be set aside and therefore cannot be exempt function income. Free state tax filing for low income In addition, any income set aside and later spent for other purposes must be included in unrelated business taxable income. Free state tax filing for low income   Set-aside income is generally excluded from gross income only if it is set aside in the tax year in which it is otherwise includible in gross income. Free state tax filing for low income However, income set aside on or before the date for filing Form 990-T, including extensions of time, may, at the election of the organization, be treated as having been set aside in the tax year for which the return was filed. Free state tax filing for low income The income set aside must have been includible in gross income for that earlier year. Free state tax filing for low income Nonrecognition of gain. Free state tax filing for low income   If the organization sells property used directly in performing an exempt function and purchases other property used directly in performing an exempt function, any gain on the sale is recognized only to the extent that the sales price of the old property exceeds the cost of the new property. Free state tax filing for low income The purchase of the new property must be made within 1 year before the date of sale of the old property or within 3 years after the date of sale. Free state tax filing for low income   This rule also applies to gain from an involuntary conversion of the property resulting from its destruction in whole or in part, theft, seizure, requisition, or condemnation. Free state tax filing for low income Special Rules for Veterans' Organizations Unrelated business taxable income of a veterans' organization that is exempt under section 501(c)(19) does not include the net income from insurance business that is properly set aside. Free state tax filing for low income The organization may set aside income from payments received for life, sick, accident, or health insurance for the organization's members or their dependents for the payment of insurance benefits or reasonable costs of insurance administration, or for use exclusively for religious, charitable, scientific, literary, or educational purposes, or the prevention of cruelty to children or animals. Free state tax filing for low income For details, see section 512(a)(4) and the regulations under that section. Free state tax filing for low income Income From Controlled Organizations The exclusions for interest, annuities, royalties, and rents, explained earlier in this chapter under Income, may not apply to a payment of these items received by a controlling organization from its controlled organization. Free state tax filing for low income The payment is included in the controlling organization's unrelated business taxable income to the extent it reduced the net unrelated income (or increased the net unrelated loss) of the controlled organization. Free state tax filing for low income All deductions of the controlling organization directly connected with the amount included in its unrelated business taxable income are allowed. Free state tax filing for low income Excess qualifying specified payments. Free state tax filing for low income   Excess qualifying specified payments received or accrued from a controlled entity are included in a controlling exempt organization's unrelated business taxable income only on the amount that exceeds that which would have been paid or accrued if the payments had been determined under section 482. Free state tax filing for low income Qualifying specified payments means any payments of interest, annuities, royalties, or rents received or accrued from the controlled organization pursuant to a binding written contract in effect on August 17, 2006, or to a contract which is a renewal, under substantially similar terms of a binding written contract in effect on August 17, 2006, and the payments are received or accrued before January 1, 2012. Free state tax filing for low income   If a controlled participant is not required to file a U. Free state tax filing for low income S. Free state tax filing for low income income tax return, the participant must ensure that the copy or copies of the Regulations section 1. Free state tax filing for low income 482-7 Cost Sharing Arrangement Statement and any updates are attached to Schedule M of any Form 5471, Information Return of U. Free state tax filing for low income S. Free state tax filing for low income Persons With Respect To Certain Foreign Corporations, any Form 5472, Information Return of a 25% Foreign-Owned U. Free state tax filing for low income S. Free state tax filing for low income Corporation or a Foreign Corporation Engaged in a U. Free state tax filing for low income S. Free state tax filing for low income Trade or Business, or any Form 8865, Return of U. Free state tax filing for low income S. Free state tax filing for low income Persons With Respect to Certain Foreign Partnerships, filed for that participant. Free state tax filing for low income Addition to tax for valuation misstatements. Free state tax filing for low income   Under section 512(b)(13)(E)(ii), the tax imposed on a controlling organization will be increased by 20 percent of the excess qualifying specified payments that are determined with or without any amendments or supplements, whichever is larger. Free state tax filing for low income See section 512(b)(13)(E)(ii) for more information. Free state tax filing for low income Net unrelated income. Free state tax filing for low income   This is: For an exempt organization, its unrelated business taxable income, or For a nonexempt organization, the part of its taxable income that would be unrelated business taxable income if it were exempt and had the same exempt purposes as the controlling organization. Free state tax filing for low income Net unrelated loss. Free state tax filing for low income   This is: For an exempt organization, its NOL, or For a nonexempt organization, the part of its NOL that would be its NOL if it were exempt and had the same exempt purposes as the controlling organization. Free state tax filing for low income Control. Free state tax filing for low income   An organization is controlled if: For a corporation, the controlling organization owns (by vote or value) more than 50% of the stock, For a partnership, the controlling organization owns more than 50% of the profits or capital interests, or For any other organization, the controlling organization owns more than 50% of the beneficial interest. Free state tax filing for low income For this purpose, constructive ownership of stock (determined under section 318) or other interests is taken into account. Free state tax filing for low income   As a result, an exempt parent organization is treated as controlling any subsidiary in which it holds more than 50% of the voting power or value, whether directly (as in the case of a first-tier subsidiary) or indirectly (as in the case of a second-tier subsidiary). Free state tax filing for low income Income from property financed with qualified 501(c)(3) bonds. Free state tax filing for low income If any part of a 501(c)(3) organization's property financed with qualified 501(c)(3) bonds is used in a trade or business of any person other than a section 501(c)(3) organization or a governmental unit, and such use is not consistent with the requirements for qualified 501(c)(3) bonds under section 145, the section 501(c)(3) organization is considered to have received unrelated business income in the amount of the greater of the actual rental income or the fair rental value of the property for the period it is used. Free state tax filing for low income No deduction is allowed for interest on the private activity bond. Free state tax filing for low income See sections 150(b)(3) and (c) for more information. Free state tax filing for low income Disposition of property received from taxable subsidiary and used in unrelated business. Free state tax filing for low income A taxable 80%-owned subsidiary corporation of one or more tax-exempt entities is generally subject to tax on a distribution in liquidation of its assets to its exempt parent (or parents). Free state tax filing for low income The assets are treated as if sold at fair market value. Free state tax filing for low income Tax-exempt entities include organizations described in sections 501(a), 529, and 115, charitable remainder trusts, U. Free state tax filing for low income S. Free state tax filing for low income and foreign governments, Indian tribal governments, international organizations, and similar non-taxable organizations. Free state tax filing for low income A taxable corporation that transfers substantially all of its assets to a tax-exempt entity in a transaction that otherwise qualifies for nonrecognition treatment must recognize gain on the transaction as if it sold the assets at fair market value. Free state tax filing for low income However, such a transfer is not taxable if it qualifies as a like-kind exchange under section 1031 or an involuntary conversion under section 1033. Free state tax filing for low income In such a case the built-in appreciation is preserved in the replacement property received in the transaction. Free state tax filing for low income A corporation that changes status from taxable to tax-exempt is treated generally as if it transferred all of its assets to a tax-exempt entity immediately before the change in status (thus subjecting it to the tax on a deemed sale for fair market value). Free state tax filing for low income This rule does not apply where the taxable corporation becomes exempt within 3 years of formation, or had previously been exempt and within several years (generally a period of 3 years) regains exemption, unless the principal purpose of the transactions is to avoid the tax on the change in status. Free state tax filing for low income In the transactions described above, the taxable event is deferred for property that the tax-exempt entity immediately uses in an unrelated business. Free state tax filing for low income If the parent later disposes of the property, then any gain (not in excess of the amount not recognized) is included in the parent's unrelated business taxable income. Free state tax filing for low income If there is partial use of the assets in unrelated business, then there is partial recognition of gain or loss. Free state tax filing for low income Property is treated as disposed if the tax-exempt entity no longer uses it in an unrelated business. Free state tax filing for low income Losses on the transfer of assets to a tax-exempt entity are disallowed if part of a plan with a principal purpose of recognizing losses. Free state tax filing for low income Income From Debt-Financed Property Investment income that would otherwise be excluded from an exempt organization's unrelated business taxable income (see Exclusions under Income earlier) must be included to the extent it is derived from debt-financed property. Free state tax filing for low income The amount of income included is proportionate to the debt on the property. Free state tax filing for low income Debt-Financed Property In general, the term “debt-financed property” means any property held to produce income (including gain from its disposition) for which there is an acquisition indebtedness at any time during the tax year (or during the 12-month period before the date of the property's disposal, if it was disposed of during the tax year). Free state tax filing for low income It includes rental real estate, tangible personal property, and corporate stock. Free state tax filing for low income Acquisition Indebtedness For any debt-financed property, acquisition indebtedness is the unpaid amount of debt incurred by an organization: When acquiring or improving the property, Before acquiring or improving the property if the debt would not have been incurred except for the acquisition or improvement, and After acquiring or improving the property if: The debt would not have been incurred except for the acquisition or improvement, and Incurring the debt was reasonably foreseeable when the property was acquired or improved. Free state tax filing for low income The facts and circumstances of each situation determine whether incurring a debt was reasonably foreseeable. Free state tax filing for low income That an organization may not have foreseen the need to incur a debt before acquiring or improving the property does not necessarily mean that incurring the debt later was not reasonably foreseeable. Free state tax filing for low income Example 1. Free state tax filing for low income Y, an exempt scientific organization, mortgages its laboratory to replace working capital used in remodeling an office building that Y rents to an insurance company for nonexempt purposes. Free state tax filing for low income The debt is acquisition indebtedness since the debt, though incurred after the improvement of the office building, would not have been incurred without the improvement, and the debt was reasonably foreseeable when, to make the improvement, Y reduced its working capital below the amount necessary to continue current operations. Free state tax filing for low income Example 2. Free state tax filing for low income X, an exempt organization, forms a partnership with A and B. Free state tax filing for low income The partnership agreement provides that all three partners will share equally in the profits of the partnership, each will invest $3 million, and X will be a limited partner. Free state tax filing for low income X invests $1 million of its own funds in the partnership and $2 million of borrowed funds. Free state tax filing for low income The partnership buys as its sole asset an office building that it leases to the public for nonexempt purposes. Free state tax filing for low income The office building costs the partnership $24 million, of which $15 million is borrowed from Y bank. Free state tax filing for low income The loan is secured by a mortgage on the entire office building. Free state tax filing for low income By agreement with Y bank, X is not personally liable for payment of the mortgage. Free state tax filing for low income X has acquisition indebtedness of $7 million. Free state tax filing for low income This amount is the $2 million debt X incurred in acquiring the partnership interest, plus the $5 million that is X's allocable part of the partnership's debt incurred to buy the office building (one-third of $15 million). Free state tax filing for low income Example 3. Free state tax filing for low income A labor union advanced funds, from existing resources and without any borrowing, to its tax-exempt subsidiary title-holding company. Free state tax filing for low income The subsidiary used the funds to pay a debt owed to a third party that was previously incurred in acquiring two income-producing office buildings. Free state tax filing for low income Neither the union nor the subsidiary has incurred any further debt in acquiring or improving the property. Free state tax filing for low income The union has no outstanding debt on the property. Free state tax filing for low income The subsidiary's debt to the union is represented by a demand note on which the subsidiary makes payments whenever it has the available cash. Free state tax filing for low income The books of the union and the subsidiary list the outstanding debt as interorganizational indebtedness. Free state tax filing for low income Although the subsidiary's books show a debt to the union, it is not the type subject to the debt-financed property rules. Free state tax filing for low income In this situation, the very nature of the title-holding company and the parent-subsidiary relationship shows this debt to be merely a matter of accounting between the two organizations. Free state tax filing for low income Accordingly, the debt is not acquisition indebtedness. Free state tax filing for low income Change in use of property. Free state tax filing for low income   If an organization converts property that is not debt-financed property to a use that results in its treatment as debt-financed property, the outstanding principal debt on the property is thereafter treated as acquisition indebtedness. Free state tax filing for low income Example. Free state tax filing for low income Four years ago a university borrowed funds to acquire an apartment building as housing for married students. Free state tax filing for low income Last year, the university rented the apartment building to the public for nonexempt purposes. Free state tax filing for low income The outstanding principal debt becomes acquisition indebtedness as of the time the building was first rented to the public. Free state tax filing for low income Continued debt. Free state tax filing for low income   If an organization sells property and, without paying off debt that would be acquisition indebtedness if the property were debt-financed property, buys property that is otherwise debt-financed property, the unpaid debt is acquisition indebtedness for the new property. Free state tax filing for low income This is true even if the original property was not debt-financed property. Free state tax filing for low income Example. Free state tax filing for low income To house its administration offices, an exempt organization bought a building using $600,000 of its own funds and $400,000 of borrowed funds secured by a pledge of its securities. Free state tax filing for low income The office building was not debt-financed property. Free state tax filing for low income The organization later sold the building for $1 million without repaying the $400,000 loan. Free state tax filing for low income It used the sale proceeds to buy an apartment building it rents to the general public. Free state tax filing for low income The unpaid debt of $400,000 is acquisition indebtedness with respect to the apartment building. Free state tax filing for low income Property acquired subject to mortgage or lien. Free state tax filing for low income   If property (other than certain gifts, bequests, and devises) is acquired subject to a mortgage, the outstanding principal debt secured by that mortgage is treated as acquisition indebtedness even if the organization did not assume or agree to pay the debt. Free state tax filing for low income Example. Free state tax filing for low income An exempt organization paid $50,000 for real property valued at $150,000 and subject to a $100,000 mortgage. Free state tax filing for low income The $100,000 of outstanding principal debt is acquisition indebtedness, as though the organization had borrowed $100,000 to buy the property. Free state tax filing for low income Liens similar to a mortgage. Free state tax filing for low income   In determining acquisition indebtedness, a lien similar to a mortgage is treated as a mortgage. Free state tax filing for low income A lien is similar to a mortgage if title to property is encumbered by the lien for a creditor's benefit. Free state tax filing for low income However, when state law provides that a lien for taxes or assessments attaches to property before the taxes or assessments become due and payable, the lien is not treated as a mortgage until after the taxes or assessments have become due and payable and the organization has had an opportunity to pay the lien in accordance with state law. Free state tax filing for low income Liens similar to mortgages include (but are not limited to): Deeds of trust, Conditional sales contracts, Chattel mortgages, Security interests under the Uniform Commercial Code, Pledges, Agreements to hold title in escrow, and Liens for taxes or assessments (other than those discussed earlier in this paragraph). Free state tax filing for low income Exception for property acquired by gift, bequest, or devise. Free state tax filing for low income   If property subject to a mortgage is acquired by gift, bequest, or devise, the outstanding principal debt secured by the mortgage is not treated as acquisition indebtedness during the 10-year period following the date the organization receives the property. Free state tax filing for low income However, this applies to a gift of property only if:    The mortgage was placed on the property more than 5 years before the date the organization received it, and The donor held the property for more than 5 years before the date the organization received it. Free state tax filing for low income   This exception does not apply if an organization assumes and agrees to pay all or part of the debt secured by the mortgage or makes any payment for the equity in the property owned by the donor or decedent (other than a payment under an annuity obligation excluded from the definition of acquisition indebtedness, discussed under Debt That Is Not Acquisition Indebtedness, later). Free state tax filing for low income   Whether an organization has assumed and agreed to pay all or part of a debt in order to acquire the property is determined by the facts and circumstances of each situation. Free state tax filing for low income Modifying existing debt. Free state tax filing for low income   Extending, renewing, or refinancing an existing debt is considered a continuation of that debt to the extent its outstanding principal does not increase. Free state tax filing for low income When the principal of the modified debt is more than the outstanding principal of the old debt, the excess is treated as a separate debt. Free state tax filing for low income Extension or renewal. Free state tax filing for low income   In general, any modification or substitution of the terms of a debt by an organization is considered an extension or renewal of the original debt, rather than the start of a new one, to the extent that the outstanding principal of the debt does not increase. Free state tax filing for low income   The following are examples of acts resulting in the extension or renewal of a debt: Substituting liens to secure the debt, Substituting obligees whether or not with the organization's consent, Renewing, extending, or accelerating the payment terms of the debt, and Adding, deleting, or substituting sureties or other primary or secondary obligors. Free state tax filing for low income Debt increase. Free state tax filing for low income   If the outstanding principal of a modified debt is more than that of the unmodified debt, and only part of the refinanced debt is acquisition indebtedness, the payments on the refinanced debt must be allocated between the old debt and the excess. Free state tax filing for low income Example. Free state tax filing for low income An organization has an outstanding principal debt of $500,000 that is treated as acquisition indebtedness. Free state tax filing for low income The organization borrows another $100,000, which is not acquisition indebtedness, from the same lender, resulting in a $600,000 note for the total obligation. Free state tax filing for low income A payment of $60,000 on the total obligation would reduce the acquisition indebtedness by $50,000 ($60,000 x $500,000/$600,000) and the excess debt by $10,000. Free state tax filing for low income Debt That Is Not Acquisition Indebtedness Certain debt and obligations are not acquisition indebtedness. Free state tax filing for low income These include the following. Free state tax filing for low income Debts incurred in performing an exempt purpose. Free state tax filing for low income Annuity obligations. Free state tax filing for low income Securities loans. Free state tax filing for low income Real property debts of qualified organizations. Free state tax filing for low income Certain Federal financing. Free state tax filing for low income Debt incurred in performing exempt purpose. Free state tax filing for low income   A debt incurred in performing an exempt purpose is not acquisition indebtedness. Free state tax filing for low income For example, acquisition indebtedness does not include the debt an exempt credit union incurs in accepting deposits from its members or the debt an exempt organization incurs in accepting payments from its members to provide them with insurance, retirement, or other benefits. Free state tax filing for low income Annuity obligation. Free state tax filing for low income   The organization's obligation to pay an annuity is not acquisition indebtedness if the annuity meets all the following requirements. Free state tax filing for low income It must be the sole consideration (other than a mortgage on property acquired by gift, bequest, or devise that meets the exception discussed under Property acquired subject to mortgage or lien, earlier in this chapter) issued in exchange for the property received. Free state tax filing for low income Its present value, at the time of exchange, must be less than 90% of the value of the prior owner's equity in the property received. Free state tax filing for low income It must be payable over the lives of either one or two individuals living when issued. Free state tax filing for low income It must be payable under a contract that: Does not guarantee a minimum nor specify a maximum number of payments, and Does not provide for any adjustment of the amount of the annuity payments based on the income received from the transferred property or any other property. Free state tax filing for low income Example. Free state tax filing for low income X, an exempt organization, receives property valued at $100,000 from donor A, a male age 60. Free state tax filing for low income In return X promises to pay A $6,000 a year for the rest of A's life, with neither a minimum nor maximum number of payments specified. Free state tax filing for low income The amounts paid under the annuity are not dependent on the income derived from the property transferred to X. Free state tax filing for low income The present value of this annuity is $81,156, determined from IRS valuation tables. Free state tax filing for low income Since the value of the annuity is less than 90 percent of A's $100,000 equity in the property transferred and the annuity meets all the other requirements just discussed, the obligation to make annuity payments is not acquisition indebtedness. Free state tax filing for low income Securities loans. Free state tax filing for low income   Acquisition indebtedness does not include an obligation of the exempt organization to return collateral security provided by the borrower of the exempt organization's securities under a securities loan agreement (discussed under Exclusions earlier in this chapter). Free state tax filing for low income This transaction is not treated as the borrowing by the exempt organization of the collateral furnished by the borrower (usually a broker) of the securities. Free state tax filing for low income   However, if the exempt organization incurred debt to buy the loaned securities, any income from the securities (including income from