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Georgia State Income Tax Forms 2012

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Georgia State Income Tax Forms 2012

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

Georgia state income tax forms 2012 Publication 547 - Main Content Table of Contents CasualtyFamily pet. Georgia state income tax forms 2012 Progressive deterioration. Georgia state income tax forms 2012 Special Procedure for Damage From Corrosive Drywall Theft Loss on Deposits Proof of Loss Figuring a LossGain from reimbursement. Georgia state income tax forms 2012 Business or income-producing property. Georgia state income tax forms 2012 Loss of inventory. Georgia state income tax forms 2012 Leased property. Georgia state income tax forms 2012 Exception for personal-use real property. Georgia state income tax forms 2012 Decrease in Fair Market Value Adjusted Basis Insurance and Other Reimbursements Deduction Limits2% Rule $100 Rule 10% Rule Figuring the Deduction Figuring a GainPostponement of Gain When To Report Gains and LossesLoss on deposits. Georgia state income tax forms 2012 Lessee's loss. Georgia state income tax forms 2012 Disaster Area LossesDisaster loss to inventory. Georgia state income tax forms 2012 Main home in disaster area. Georgia state income tax forms 2012 Unsafe home. Georgia state income tax forms 2012 Time limit for making choice. Georgia state income tax forms 2012 Revoking your choice. Georgia state income tax forms 2012 Figuring the loss deduction. Georgia state income tax forms 2012 How to report the loss on Form 1040X. Georgia state income tax forms 2012 Records. Georgia state income tax forms 2012 Need a copy of your tax return for the preceding year? Postponed Tax Deadlines Contacting the Federal Emergency Management Agency (FEMA) How To Report Gains and LossesProperty held 1 year or less. Georgia state income tax forms 2012 Property held more than 1 year. Georgia state income tax forms 2012 Depreciable property. Georgia state income tax forms 2012 Adjustments to Basis If Deductions Are More Than Income How To Get Tax HelpLow Income Taxpayer Clinics Casualty A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. Georgia state income tax forms 2012 A sudden event is one that is swift, not gradual or progressive. Georgia state income tax forms 2012 An unexpected event is one that is ordinarily unanticipated and unintended. Georgia state income tax forms 2012 An unusual event is one that is not a day-to-day occurrence and that is not typical of the activity in which you were engaged. Georgia state income tax forms 2012 Generally, casualty losses are deductible during the taxable year that the loss occurred. Georgia state income tax forms 2012 See Table 3, later. Georgia state income tax forms 2012 Deductible losses. Georgia state income tax forms 2012   Deductible casualty losses can result from a number of different causes, including the following. Georgia state income tax forms 2012 Car accidents (but see Nondeductible losses , next, for exceptions). Georgia state income tax forms 2012 Earthquakes. Georgia state income tax forms 2012 Fires (but see Nondeductible losses , next, for exceptions). Georgia state income tax forms 2012 Floods. Georgia state income tax forms 2012 Government-ordered demolition or relocation of a home that is unsafe to use because of a disaster as discussed under Disaster Area Losses , later. Georgia state income tax forms 2012 Mine cave-ins. Georgia state income tax forms 2012 Shipwrecks. Georgia state income tax forms 2012 Sonic booms. Georgia state income tax forms 2012 Storms, including hurricanes and tornadoes. Georgia state income tax forms 2012 Terrorist attacks. Georgia state income tax forms 2012 Vandalism. Georgia state income tax forms 2012 Volcanic eruptions. Georgia state income tax forms 2012 Nondeductible losses. Georgia state income tax forms 2012   A casualty loss is not deductible if the damage or destruction is caused by the following. Georgia state income tax forms 2012 Accidentally breaking articles such as glassware or china under normal conditions. Georgia state income tax forms 2012 A family pet (explained below). Georgia state income tax forms 2012 A fire if you willfully set it, or pay someone else to set it. Georgia state income tax forms 2012 A car accident if your willful negligence or willful act caused it. Georgia state income tax forms 2012 The same is true if the willful act or willful negligence of someone acting for you caused the accident. Georgia state income tax forms 2012 Progressive deterioration (explained below). Georgia state income tax forms 2012 However, see Special Procedure for Damage From Corrosive Drywall , later. Georgia state income tax forms 2012 Family pet. Georgia state income tax forms 2012   Loss of property due to damage by a family pet is not deductible as a casualty loss unless the requirements discussed earlier under Casualty are met. Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 Your antique oriental rug was damaged by your new puppy before it was housebroken. Georgia state income tax forms 2012 Because the damage was not unexpected and unusual, the loss is not deductible as a casualty loss. Georgia state income tax forms 2012 Progressive deterioration. Georgia state income tax forms 2012   Loss of property due to progressive deterioration is not deductible as a casualty loss. Georgia state income tax forms 2012 This is because the damage results from a steadily operating cause or a normal process, rather than from a sudden event. Georgia state income tax forms 2012 The following are examples of damage due to progressive deterioration. Georgia state income tax forms 2012 The steady weakening of a building due to normal wind and weather conditions. Georgia state income tax forms 2012 The deterioration and damage to a water heater that bursts. Georgia state income tax forms 2012 However, the rust and water damage to rugs and drapes caused by the bursting of a water heater does qualify as a casualty. Georgia state income tax forms 2012 Most losses of property caused by droughts. Georgia state income tax forms 2012 To be deductible, a drought-related loss generally must be incurred in a trade or business or in a transaction entered into for profit. Georgia state income tax forms 2012 Termite or moth damage. Georgia state income tax forms 2012 The damage or destruction of trees, shrubs, or other plants by a fungus, disease, insects, worms, or similar pests. Georgia state income tax forms 2012 However, a sudden destruction due to an unexpected or unusual infestation of beetles or other insects may result in a casualty loss. Georgia state income tax forms 2012 Special Procedure for Damage From Corrosive Drywall Under a special procedure, you can deduct the amounts you paid to repair damage to your home and household appliances due to corrosive drywall. Georgia state income tax forms 2012 Under this procedure, you treat the amounts paid for repairs as a casualty loss in the year of payment. Georgia state income tax forms 2012 For example, amounts you paid for repairs in 2013 are deductible on your 2013 tax return and amounts you paid for repairs in 2012 are deductible on your 2012 tax return. Georgia state income tax forms 2012 Note. Georgia state income tax forms 2012 If you paid for any repairs before 2013 and you choose to follow this special procedure, you can amend your return for the earlier year by filing Form 1040X, Amended U. Georgia state income tax forms 2012 S. Georgia state income tax forms 2012 Individual Income Tax Return, and attaching a completed Form 4684 for the appropriate year. Georgia state income tax forms 2012 Form 4684 for the appropriate year can be found at IRS. Georgia state income tax forms 2012 gov. Georgia state income tax forms 2012 Generally, Form 1040X must be filed within 3 years after the date the original return was filed or within 2 years after the date the tax was paid, whichever is later. Georgia state income tax forms 2012 Corrosive drywall. Georgia state income tax forms 2012   For purposes of this special procedure, “corrosive drywall” means drywall that is identified as problem drywall under the two-step identification method published by the Consumer Product Safety Commission (CPSC) and the Department of Housing and Urban Development (HUD) in their interim guidance dated January 28, 2010, as revised by the CPSC and HUD. Georgia state income tax forms 2012 The revised identification guidance and remediation guidelines are available at www. Georgia state income tax forms 2012 cpsc. Georgia state income tax forms 2012 gov/Safety-Education/Safety-Education-Centers/Drywall. Georgia state income tax forms 2012 Special instructions for completing Form 4684. Georgia state income tax forms 2012   If you choose to follow this special procedure, complete Form 4684, Section A, according to the instructions below. Georgia state income tax forms 2012 The IRS will not challenge your treatment of damage resulting from corrosive drywall as a casualty loss if you determine and report the loss as explained below. Georgia state income tax forms 2012 Top margin of Form 4684. Georgia state income tax forms 2012   Enter “Revenue Procedure 2010-36”. Georgia state income tax forms 2012 Line 1. Georgia state income tax forms 2012   Enter the information required by the line 1 instructions. Georgia state income tax forms 2012 Line 2. Georgia state income tax forms 2012   Skip this line. Georgia state income tax forms 2012 Line 3. Georgia state income tax forms 2012   Enter the amount of insurance or other reimbursements you received (including through litigation). Georgia state income tax forms 2012 If none, enter -0-. Georgia state income tax forms 2012 Lines 4–7. Georgia state income tax forms 2012   Skip these lines. Georgia state income tax forms 2012 Line 8. Georgia state income tax forms 2012   Enter the amount you paid to repair the damage to your home and household appliances due to corrosive drywall. Georgia state income tax forms 2012 Enter only the amounts you paid to restore your home to the condition existing immediately before the damage. Georgia state income tax forms 2012 Do not enter any amounts you paid for improvements or additions that increased the value of your home above its pre-loss value. Georgia state income tax forms 2012 If you replaced a household appliance instead of repairing it, enter the lesser of: The current cost to replace the original appliance, or The basis of the original appliance (generally its cost). Georgia state income tax forms 2012 Line 9. Georgia state income tax forms 2012   If line 8 is more than line 3, do one of the following. Georgia state income tax forms 2012 If you have a pending claim for reimbursement (or you intend to pursue reimbursement), enter 75% of the difference between lines 3 and 8. Georgia state income tax forms 2012 If item (1) does not apply to you, enter the full amount of the difference between lines 3 and 8. Georgia state income tax forms 2012 If line 8 is less than or equal to line 3, you cannot claim a casualty loss deduction using this special procedure. Georgia state income tax forms 2012    If you have a pending claim for reimbursement (or you intend to pursue reimbursement), you may have income or an additional deduction in a later tax year depending on the actual amount of reimbursement received. Georgia state income tax forms 2012 See Reimbursement Received After Deducting Loss, later. Georgia state income tax forms 2012 Lines 10–18. Georgia state income tax forms 2012   Complete these lines according to the Instructions for Form 4684. Georgia state income tax forms 2012 Choosing not to follow this special procedure. Georgia state income tax forms 2012   If you choose not to follow this special procedure, you are subject to all of the provisions that apply to the deductibility of casualty losses, and you must complete lines 1–9 according to the Instructions for Form 4684. Georgia state income tax forms 2012 This means, for example, that you must establish that the damage, destruction, or loss of property resulted from an identifiable event as defined earlier under Casualty . Georgia state income tax forms 2012 Furthermore, you must have proof that shows the following. Georgia state income tax forms 2012 The loss is properly deductible in the tax year you claimed it and not in some other year. Georgia state income tax forms 2012 See When To Report Gains and Losses , later. Georgia state income tax forms 2012 The amount of the claimed loss. Georgia state income tax forms 2012 See Proof of Loss , later. Georgia state income tax forms 2012 No claim for reimbursement of any portion of the loss exists for which there is a reasonable prospect of recovery. Georgia state income tax forms 2012 See When To Report Gains and Losses , later. Georgia state income tax forms 2012 Theft A theft is the taking and removing of money or property with the intent to deprive the owner of it. Georgia state income tax forms 2012 The taking of property must be illegal under the law of the state where it occurred and it must have been done with criminal intent. Georgia state income tax forms 2012 You do not need to show a conviction for theft. Georgia state income tax forms 2012 Theft includes the taking of money or property by the following means. Georgia state income tax forms 2012 Blackmail. Georgia state income tax forms 2012 Burglary. Georgia state income tax forms 2012 Embezzlement. Georgia state income tax forms 2012 Extortion. Georgia state income tax forms 2012 Kidnapping for ransom. Georgia state income tax forms 2012 Larceny. Georgia state income tax forms 2012 Robbery. Georgia state income tax forms 2012 The taking of money or property through fraud or misrepresentation is theft if it is illegal under state or local law. Georgia state income tax forms 2012 Decline in market value of stock. Georgia state income tax forms 2012   You cannot deduct as a theft loss the decline in market value of stock acquired on the open market for investment if the decline is caused by disclosure of accounting fraud or other illegal misconduct by the officers or directors of the corporation that issued the stock. Georgia state income tax forms 2012 However, you can deduct as a capital loss the loss you sustain when you sell or exchange the stock or the stock becomes completely worthless. Georgia state income tax forms 2012 You report a capital loss on Schedule D (Form 1040). Georgia state income tax forms 2012 For more information about stock sales, worthless stock, and capital losses, see chapter 4 of Publication 550. Georgia state income tax forms 2012 Mislaid or lost property. Georgia state income tax forms 2012    The simple disappearance of money or property is not a theft. Georgia state income tax forms 2012 However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. Georgia state income tax forms 2012 Sudden, unexpected, and unusual events were defined earlier under Casualty . Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. Georgia state income tax forms 2012 The diamond falls from the ring and is never found. Georgia state income tax forms 2012 The loss of the diamond is a casualty. Georgia state income tax forms 2012 Losses from Ponzi-type investment schemes. Georgia state income tax forms 2012   The IRS has issued the following guidance to assist taxpayers who are victims of losses from Ponzi-type investment schemes: Revenue Ruling 2009-9, 2009-14 I. Georgia state income tax forms 2012 R. Georgia state income tax forms 2012 B. Georgia state income tax forms 2012 735 (available at www. Georgia state income tax forms 2012 irs. Georgia state income tax forms 2012 gov/irb/2009-14_IRB/ar07. Georgia state income tax forms 2012 html). Georgia state income tax forms 2012 Revenue Procedure 2009-20, 2009-14 I. Georgia state income tax forms 2012 R. Georgia state income tax forms 2012 B. Georgia state income tax forms 2012 749 (available at www. Georgia state income tax forms 2012 irs. Georgia state income tax forms 2012 gov/irb/2009-14_IRB/ar11. Georgia state income tax forms 2012 html). Georgia state income tax forms 2012 Revenue Procedure 2011-58, 2011-50 I. Georgia state income tax forms 2012 R. Georgia state income tax forms 2012 B. Georgia state income tax forms 2012 847 (available at www. Georgia state income tax forms 2012 irs. Georgia state income tax forms 2012 gov/irb/2011-50_IRB/ar11. Georgia state income tax forms 2012 html). Georgia state income tax forms 2012 If you qualify to use Revenue Procedure 2009-20, as modified by Revenue Procedure 2011-58, and you choose to follow the procedures in the guidance, first fill out Section C of Form 4684 to determine the amount to enter on Section B, line 28. Georgia state income tax forms 2012 Skip lines 19 to 27, but you must fill out Section B, lines 29 to 39, as appropriate. Georgia state income tax forms 2012 Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. Georgia state income tax forms 2012 You do not need to complete Appendix A. Georgia state income tax forms 2012 For more information, see the above revenue ruling and revenue procedures, and the Instructions for Form 4684. Georgia state income tax forms 2012   If you choose not to use the procedures in Revenue Procedure 2009-20, as modified by Revenue Procedure 2011-58, you may claim your theft loss by filling out Section B, lines 19 to 39, as appropriate. Georgia state income tax forms 2012 Loss on Deposits A loss on deposits can occur when a bank, credit union, or other financial institution becomes insolvent or bankrupt. Georgia state income tax forms 2012 If you incurred this type of loss, you can choose one of the following ways to deduct the loss. Georgia state income tax forms 2012 As a casualty loss. Georgia state income tax forms 2012 As an ordinary loss. Georgia state income tax forms 2012 As a nonbusiness bad debt. Georgia state income tax forms 2012 Casualty loss or ordinary loss. Georgia state income tax forms 2012   You can choose to deduct a loss on deposits as a casualty loss or as an ordinary loss for any year in which you can reasonably estimate how much of your deposits you have lost in an insolvent or bankrupt financial institution. Georgia state income tax forms 2012 The choice generally is made on the return you file for that year and applies to all your losses on deposits for the year in that particular financial institution. Georgia state income tax forms 2012 If you treat the loss as a casualty or ordinary loss, you cannot treat the same amount of the loss as a nonbusiness bad debt when it actually becomes worthless. Georgia state income tax forms 2012 However, you can take a nonbusiness bad debt deduction for any amount of loss that is more than the estimated amount you deducted as a casualty or ordinary loss. Georgia state income tax forms 2012 Once you make the choice, you cannot change it without permission from the Internal Revenue Service. Georgia state income tax forms 2012   If you claim an ordinary loss, report it as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. Georgia state income tax forms 2012 The maximum amount you can claim is $20,000 ($10,000 if you are married filing separately) reduced by any expected state insurance proceeds. Georgia state income tax forms 2012 Your loss is subject to the 2%-of-adjusted-gross-income limit. Georgia state income tax forms 2012 You cannot choose to claim an ordinary loss if any part of the deposit is federally insured. Georgia state income tax forms 2012 Nonbusiness bad debt. Georgia state income tax forms 2012   If you do not choose to deduct the loss as a casualty loss or as an ordinary loss, you must wait until the year the actual loss is determined and deduct the loss as a nonbusiness bad debt in that year. Georgia state income tax forms 2012 How to report. Georgia state income tax forms 2012   The kind of deduction you choose for your loss on deposits determines how you report your loss. Georgia state income tax forms 2012 See Table 1. Georgia state income tax forms 2012 More information. Georgia state income tax forms 2012   For more information, see Special Treatment for Losses on Deposits in Insolvent or Bankrupt Financial Institutions in the Instructions for Form 4684. Georgia state income tax forms 2012 Deducted loss recovered. Georgia state income tax forms 2012   If you recover an amount you deducted as a loss in an earlier year, you may have to include the amount recovered in your income for the year of recovery. Georgia state income tax forms 2012 If any part of the original deduction did not reduce your tax in the earlier year, you do not have to include that part of the recovery in your income. Georgia state income tax forms 2012 For more information, see Recoveries in Publication 525. Georgia state income tax forms 2012 Proof of Loss To deduct a casualty or theft loss, you must be able to show that there was a casualty or theft. Georgia state income tax forms 2012 You also must be able to support the amount you take as a deduction. Georgia state income tax forms 2012 Casualty loss proof. Georgia state income tax forms 2012   For a casualty loss, you should be able to show all of the following. Georgia state income tax forms 2012 The type of casualty (car accident, fire, storm, etc. Georgia state income tax forms 2012 ) and when it occurred. Georgia state income tax forms 2012 That the loss was a direct result of the casualty. Georgia state income tax forms 2012 That you were the owner of the property, or if you leased the property from someone else, that you were contractually liable to the owner for the damage. Georgia state income tax forms 2012 Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. Georgia state income tax forms 2012 Theft loss proof. Georgia state income tax forms 2012   For a theft loss, you should be able to show all of the following. Georgia state income tax forms 2012 When you discovered that your property was missing. Georgia state income tax forms 2012 That your property was stolen. Georgia state income tax forms 2012 That you were the owner of the property. Georgia state income tax forms 2012 Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. Georgia state income tax forms 2012    It is important that you have records that will prove your deduction. Georgia state income tax forms 2012 If you do not have the actual records to support your deduction, you can use other satisfactory evidence to support it. Georgia state income tax forms 2012 Figuring a Loss To determine your deduction for a casualty or theft loss, you must first figure your loss. Georgia state income tax forms 2012 Table 1. Georgia state income tax forms 2012 Reporting Loss on Deposits IF you choose to report the loss as a(n). Georgia state income tax forms 2012 . Georgia state income tax forms 2012 . Georgia state income tax forms 2012   THEN report it on. Georgia state income tax forms 2012 . Georgia state income tax forms 2012 . Georgia state income tax forms 2012 casualty loss   Form 4684 and Schedule A  (Form 1040). Georgia state income tax forms 2012 ordinary loss   Schedule A (Form 1040). Georgia state income tax forms 2012 nonbusiness bad debt   Form 8949 and Schedule D (Form 1040). Georgia state income tax forms 2012 Amount of loss. Georgia state income tax forms 2012   Figure the amount of your loss using the following steps. Georgia state income tax forms 2012 Determine your adjusted basis in the property before the casualty or theft. Georgia state income tax forms 2012 Determine the decrease in fair market value (FMV) of the property as a result of the casualty or theft. Georgia state income tax forms 2012 From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you received or expect to receive. Georgia state income tax forms 2012 For personal-use property and property used in performing services as an employee, apply the deduction limits, discussed later, to determine the amount of your deductible loss. Georgia state income tax forms 2012 Gain from reimbursement. Georgia state income tax forms 2012   If your reimbursement is more than your adjusted basis in the property, you have a gain. Georgia state income tax forms 2012 This is true even if the decrease in the FMV of the property is smaller than your adjusted basis. Georgia state income tax forms 2012 If you have a gain, you may have to pay tax on it, or you may be able to postpone reporting the gain. Georgia state income tax forms 2012 See Figuring a Gain , later. Georgia state income tax forms 2012 Business or income-producing property. Georgia state income tax forms 2012   If you have business or income-producing property, such as rental property, and it is stolen or completely destroyed, the decrease in FMV is not considered. Georgia state income tax forms 2012 Your loss is figured as follows:   Your adjusted basis in the property     MINUS     Any salvage value     MINUS     Any insurance or other reimbursement you  receive or expect to receive   Loss of inventory. Georgia state income tax forms 2012   There are two ways you can deduct a casualty or theft loss of inventory, including items you hold for sale to customers. Georgia state income tax forms 2012   One way is to deduct the loss through the increase in the cost of goods sold by properly reporting your opening and closing inventories. Georgia state income tax forms 2012 Do not claim this loss again as a casualty or theft loss. Georgia state income tax forms 2012 If you take the loss through the increase in the cost of goods sold, include any insurance or other reimbursement you receive for the loss in gross income. Georgia state income tax forms 2012   The other way is to deduct the loss separately. Georgia state income tax forms 2012 If you deduct it separately, eliminate the affected inventory items from the cost of goods sold by making a downward adjustment to opening inventory or purchases. Georgia state income tax forms 2012 Reduce the loss by the reimbursement you received. Georgia state income tax forms 2012 Do not include the reimbursement in gross income. Georgia state income tax forms 2012 If you do not receive the reimbursement by the end of the year, you may not claim a loss to the extent you have a reasonable prospect of recovery. Georgia state income tax forms 2012 Leased property. Georgia state income tax forms 2012   If you are liable for casualty damage to property you lease, your loss is the amount you must pay to repair the property minus any insurance or other reimbursement you receive or expect to receive. Georgia state income tax forms 2012 Separate computations. Georgia state income tax forms 2012   Generally, if a single casualty or theft involves more than one item of property, you must figure the loss on each item separately. Georgia state income tax forms 2012 Then combine the losses to determine the total loss from that casualty or theft. Georgia state income tax forms 2012 Exception for personal-use real property. Georgia state income tax forms 2012   In figuring a casualty loss on personal-use real property, the entire property (including any improvements, such as buildings, trees, and shrubs) is treated as one item. Georgia state income tax forms 2012 Figure the loss using the smaller of the following. Georgia state income tax forms 2012 The decrease in FMV of the entire property. Georgia state income tax forms 2012 The adjusted basis of the entire property. Georgia state income tax forms 2012   See Real property under Figuring the Deduction, later. Georgia state income tax forms 2012 Decrease in Fair Market Value Fair market value (FMV) is the price for which you could sell your property to a willing buyer when neither of you has to sell or buy and both of you know all the relevant facts. Georgia state income tax forms 2012 The decrease in FMV used to figure the amount of a casualty or theft loss is the difference between the property's fair market value immediately before and immediately after the casualty or theft. Georgia state income tax forms 2012 FMV of stolen property. Georgia state income tax forms 2012   The FMV of property immediately after a theft is considered to be zero because you no longer have the property. Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 Several years ago, you purchased silver dollars at face value for $150. Georgia state income tax forms 2012 This is your adjusted basis in the property. Georgia state income tax forms 2012 Your silver dollars were stolen this year. Georgia state income tax forms 2012 The FMV of the coins was $1,000 just before they were stolen, and insurance did not cover them. Georgia state income tax forms 2012 Your theft loss is $150. Georgia state income tax forms 2012 Recovered stolen property. Georgia state income tax forms 2012   Recovered stolen property is your property that was stolen and later returned to you. Georgia state income tax forms 2012 If you recovered property after you had already taken a theft loss deduction, you must refigure your loss using the smaller of the property's adjusted basis (explained later) or the decrease in FMV from the time just before it was stolen until the time it was recovered. Georgia state income tax forms 2012 Use this amount to refigure your total loss for the year in which the loss was deducted. Georgia state income tax forms 2012   If your refigured loss is less than the loss you deducted, you generally have to report the difference as income in the recovery year. Georgia state income tax forms 2012 But report the difference only up to the amount of the loss that reduced your tax. Georgia state income tax forms 2012 For more information on the amount to report, see Recoveries in Publication 525. Georgia state income tax forms 2012 Figuring Decrease in FMV — Items To Consider To figure the decrease in FMV because of a casualty or theft, you generally need a competent appraisal. Georgia state income tax forms 2012 However, other measures also can be used to establish certain decreases. Georgia state income tax forms 2012 See Appraisal and Cost of cleaning up or making repairs , next. Georgia state income tax forms 2012 Appraisal. Georgia state income tax forms 2012   An appraisal to determine the difference between the FMV of the property immediately before a casualty or theft and immediately afterwards should be made by a competent appraiser. Georgia state income tax forms 2012 The appraiser must recognize the effects of any general market decline that may occur along with the casualty. Georgia state income tax forms 2012 This information is needed to limit any deduction to the actual loss resulting from damage to the property. Georgia state income tax forms 2012   Several factors are important in evaluating the accuracy of an appraisal, including the following. Georgia state income tax forms 2012 The appraiser's familiarity with your property before and after the casualty or theft. Georgia state income tax forms 2012 The appraiser's knowledge of sales of comparable property in the area. Georgia state income tax forms 2012 The appraiser's knowledge of conditions in the area of the casualty. Georgia state income tax forms 2012 The appraiser's method of appraisal. Georgia state income tax forms 2012 You may be able to use an appraisal that you used to get a federal loan (or a federal loan guarantee) as the result of a federally declared disaster to establish the amount of your disaster loss. Georgia state income tax forms 2012 For more information on disasters, see Disaster Area Losses, later. Georgia state income tax forms 2012 Cost of cleaning up or making repairs. Georgia state income tax forms 2012   The cost of repairing damaged property is not part of a casualty loss. Georgia state income tax forms 2012 Neither is the cost of cleaning up after a casualty. Georgia state income tax forms 2012 But you can use the cost of cleaning up or of making repairs after a casualty as a measure of the decrease in FMV if you meet all the following conditions. Georgia state income tax forms 2012 The repairs are actually made. Georgia state income tax forms 2012 The repairs are necessary to bring the property back to its condition before the casualty. Georgia state income tax forms 2012 The amount spent for repairs is not excessive. Georgia state income tax forms 2012 The repairs take care of the damage only. Georgia state income tax forms 2012 The value of the property after the repairs is not, due to the repairs, more than the value of the property before the casualty. Georgia state income tax forms 2012 Landscaping. Georgia state income tax forms 2012   The cost of restoring landscaping to its original condition after a casualty may indicate the decrease in FMV. Georgia state income tax forms 2012 You may be able to measure your loss by what you spend on the following. Georgia state income tax forms 2012 Removing destroyed or damaged trees and shrubs, minus any salvage you receive. Georgia state income tax forms 2012 Pruning and other measures taken to preserve damaged trees and shrubs. Georgia state income tax forms 2012 Replanting necessary to restore the property to its approximate value before the casualty. Georgia state income tax forms 2012 Car value. Georgia state income tax forms 2012   Books issued by various automobile organizations that list your car may be useful in figuring the value of your car. Georgia state income tax forms 2012 You can use the books' retail values and modify them by factors such as the mileage and condition of your car to figure its value. Georgia state income tax forms 2012 The prices are not official, but they may be useful in determining value and suggesting relative prices for comparison with current sales and offerings in your area. Georgia state income tax forms 2012 If your car is not listed in the books, determine its value from other sources. Georgia state income tax forms 2012 A dealer's offer for your car as a trade-in on a new car is not usually a measure of its true value. Georgia state income tax forms 2012 Figuring Decrease in FMV — Items Not To Consider You generally should not consider the following items when attempting to establish the decrease in FMV of your property. Georgia state income tax forms 2012 Cost of protection. Georgia state income tax forms 2012   The cost of protecting your property against a casualty or theft is not part of a casualty or theft loss. Georgia state income tax forms 2012 The amount you spend on insurance or to board up your house against a storm is not part of your loss. Georgia state income tax forms 2012 If the property is business property, these expenses are deductible as business expenses. Georgia state income tax forms 2012   If you make permanent improvements to your property to protect it against a casualty or theft, add the cost of these improvements to your basis in the property. Georgia state income tax forms 2012 An example would be the cost of a dike to prevent flooding. Georgia state income tax forms 2012 Exception. Georgia state income tax forms 2012   You cannot increase your basis in the property by, or deduct as a business expense, any expenditures you made with respect to qualified disaster mitigation payments (discussed later under Disaster Area Losses ). Georgia state income tax forms 2012 Related expenses. Georgia state income tax forms 2012   The incidental expenses due to a casualty or theft, such as expenses for the treatment of personal injuries, for temporary housing, or for a rental car, are not part of your casualty or theft loss. Georgia state income tax forms 2012 However, they may be deductible as business expenses if the damaged or stolen property is business property. Georgia state income tax forms 2012 Replacement cost. Georgia state income tax forms 2012   The cost of replacing stolen or destroyed property is not part of a casualty or theft loss. Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 You bought a new chair 4 years ago for $300. Georgia state income tax forms 2012 In April, a fire destroyed the chair. Georgia state income tax forms 2012 You estimate that it would cost $500 to replace it. Georgia state income tax forms 2012 If you had sold the chair before the fire, you estimate that you could have received only $100 for it because it was 4 years old. Georgia state income tax forms 2012 The chair was not insured. Georgia state income tax forms 2012 Your loss is $100, the FMV of the chair before the fire. Georgia state income tax forms 2012 It is not $500, the replacement cost. Georgia state income tax forms 2012 Sentimental value. Georgia state income tax forms 2012   Do not consider sentimental value when determining your loss. Georgia state income tax forms 2012 If a family portrait, heirloom, or keepsake is damaged, destroyed, or stolen, you must base your loss on its FMV, as limited by your adjusted basis in the property. Georgia state income tax forms 2012 Decline in market value of property in or near casualty area. Georgia state income tax forms 2012   A decrease in the value of your property because it is in or near an area that suffered a casualty, or that might again suffer a casualty, is not to be taken into consideration. Georgia state income tax forms 2012 You have a loss only for actual casualty damage to your property. Georgia state income tax forms 2012 However, if your home is in a federally declared disaster area, see Disaster Area Losses , later. Georgia state income tax forms 2012 Costs of photographs and appraisals. Georgia state income tax forms 2012   Photographs taken after a casualty will be helpful in establishing the condition and value of the property after it was damaged. Georgia state income tax forms 2012 Photographs showing the condition of the property after it was repaired, restored, or replaced may also be helpful. Georgia state income tax forms 2012   Appraisals are used to figure the decrease in FMV because of a casualty or theft. Georgia state income tax forms 2012 See Appraisal , earlier, under Figuring Decrease in FMV — Items To Consider, for information about appraisals. Georgia state income tax forms 2012   The costs of photographs and appraisals used as evidence of the value and condition of property damaged as a result of a casualty are not a part of the loss. Georgia state income tax forms 2012 They are expenses in determining your tax liability. Georgia state income tax forms 2012 You can claim these costs as a miscellaneous itemized deduction subject to the 2%-of-adjusted-gross-income limit on Schedule A (Form 1040). Georgia state income tax forms 2012 Adjusted Basis The measure of your investment in the property you own is its basis. Georgia state income tax forms 2012 For property you buy, your basis is usually its cost to you. Georgia state income tax forms 2012 For property you acquire in some other way, such as inheriting it, receiving it as a gift, or getting it in a nontaxable exchange, you must figure your basis in another way, as explained in Publication 551. Georgia state income tax forms 2012 If you inherited the property from someone who died in 2010 and the executor of the decedent's estate made the election to file Form 8939, refer to the information provided by the executor or see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010. Georgia state income tax forms 2012 Adjustments to basis. Georgia state income tax forms 2012    While you own the property, various events may take place that change your basis. Georgia state income tax forms 2012 Some events, such as additions or permanent improvements to the property, increase basis. Georgia state income tax forms 2012 Others, such as earlier casualty losses and depreciation deductions, decrease basis. Georgia state income tax forms 2012 When you add the increases to the basis and subtract the decreases from the basis, the result is your adjusted basis. Georgia state income tax forms 2012 See Publication 551 for more information on figuring the basis of your property. Georgia state income tax forms 2012 Insurance and Other Reimbursements If you receive an insurance or other type of reimbursement, you must subtract the reimbursement when you figure your loss. Georgia state income tax forms 2012 You do not have a casualty or theft loss to the extent you are reimbursed. Georgia state income tax forms 2012 If you expect to be reimbursed for part or all of your loss, you must subtract the expected reimbursement when you figure your loss. Georgia state income tax forms 2012 You must reduce your loss even if you do not receive payment until a later tax year. Georgia state income tax forms 2012 See Reimbursement Received After Deducting Loss , later. Georgia state income tax forms 2012 Failure to file a claim for reimbursement. Georgia state income tax forms 2012   If your property is covered by insurance, you must file a timely insurance claim for reimbursement of your loss. Georgia state income tax forms 2012 Otherwise, you cannot deduct this loss as a casualty or theft. Georgia state income tax forms 2012 The portion of the loss usually not covered by insurance (for example, a deductible) is not subject to this rule. Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 You have a car insurance policy with a $1,000 deductible. Georgia state income tax forms 2012 Because your insurance did not cover the first $1,000 of an auto collision, the $1,000 would be deductible (subject to the $100 and 10% rules, discussed later). Georgia state income tax forms 2012 This is true, even if you do not file an insurance claim, because your insurance policy would never have reimbursed you for the deductible. Georgia state income tax forms 2012 Types of Reimbursements The most common type of reimbursement is an insurance payment for your stolen or damaged property. Georgia state income tax forms 2012 Other types of reimbursements are discussed next. Georgia state income tax forms 2012 Also see the Instructions for Form 4684. Georgia state income tax forms 2012 Employer's emergency disaster fund. Georgia state income tax forms 2012   If you receive money from your employer's emergency disaster fund and you must use that money to rehabilitate or replace property on which you are claiming a casualty loss deduction, you must take that money into consideration in computing the casualty loss deduction. Georgia state income tax forms 2012 Take into consideration only the amount you used to replace your destroyed or damaged property. Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 Your home was extensively damaged by a tornado. Georgia state income tax forms 2012 Your loss after reimbursement from your insurance company was $10,000. Georgia state income tax forms 2012 Your employer set up a disaster relief fund for its employees. Georgia state income tax forms 2012 Employees receiving money from the fund had to use it to rehabilitate or replace their damaged or destroyed property. Georgia state income tax forms 2012 You received $4,000 from the fund and spent the entire amount on repairs to your home. Georgia state income tax forms 2012 In figuring your casualty loss, you must reduce your unreimbursed loss ($10,000) by the $4,000 you received from your employer's fund. Georgia state income tax forms 2012 Your casualty loss before applying the deduction limits (discussed later) is $6,000. Georgia state income tax forms 2012 Cash gifts. Georgia state income tax forms 2012   If you receive excludable cash gifts as a disaster victim and there are no limits on how you can use the money, you do not reduce your casualty loss by these excludable cash gifts. Georgia state income tax forms 2012 This applies even if you use the money to pay for repairs to property damaged in the disaster. Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 Your home was damaged by a hurricane. Georgia state income tax forms 2012 Relatives and neighbors made cash gifts to you that were excludable from your income. Georgia state income tax forms 2012 You used part of the cash gifts to pay for repairs to your home. Georgia state income tax forms 2012 There were no limits or restrictions on how you could use the cash gifts. Georgia state income tax forms 2012 It was an excludable gift, so the money you received and used to pay for repairs to your home does not reduce your casualty loss on the damaged home. Georgia state income tax forms 2012 Insurance payments for living expenses. Georgia state income tax forms 2012   You do not reduce your casualty loss by insurance payments you receive to cover living expenses in either of the following situations. Georgia state income tax forms 2012 You lose the use of your main home because of a casualty. Georgia state income tax forms 2012 Government authorities do not allow you access to your main home because of a casualty or threat of one. Georgia state income tax forms 2012 Inclusion in income. Georgia state income tax forms 2012   If these insurance payments are more than the temporary increase in your living expenses, you must include the excess in your income. Georgia state income tax forms 2012 Report this amount on Form 1040, line 21. Georgia state income tax forms 2012 However, if the casualty occurs in a federally declared disaster area, none of the insurance payments are taxable. Georgia state income tax forms 2012 See Qualified disaster relief payments , later, under Disaster Area Losses. Georgia state income tax forms 2012   A temporary increase in your living expenses is the difference between the actual living expenses you and your family incurred during the period you could not use your home and your normal living expenses for that period. Georgia state income tax forms 2012 Actual living expenses are the reasonable and necessary expenses incurred because of the loss of your main home. Georgia state income tax forms 2012 Generally, these expenses include the amounts you pay for the following. Georgia state income tax forms 2012 Renting suitable housing. Georgia state income tax forms 2012 Transportation. Georgia state income tax forms 2012 Food. Georgia state income tax forms 2012 Utilities. Georgia state income tax forms 2012 Miscellaneous services. Georgia state income tax forms 2012 Normal living expenses consist of these same expenses that you would have incurred but did not because of the casualty or the threat of one. Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 As a result of a fire, you vacated your apartment for a month and moved to a motel. Georgia state income tax forms 2012 You normally pay $525 a month for rent. Georgia state income tax forms 2012 None was charged for the month the apartment was vacated. Georgia state income tax forms 2012 Your motel rent for this month was $1,200. Georgia state income tax forms 2012 You normally pay $200 a month for food. Georgia state income tax forms 2012 Your food expenses for the month you lived in the motel were $400. Georgia state income tax forms 2012 You received $1,100 from your insurance company to cover your living expenses. Georgia state income tax forms 2012 You determine the payment you must include in income as follows. Georgia state income tax forms 2012 1. Georgia state income tax forms 2012 Insurance payment for living expenses $1,100 2. Georgia state income tax forms 2012 Actual expenses during the month you are unable to use your home because of the fire $1,600   3. Georgia state income tax forms 2012 Normal living expenses 725   4. Georgia state income tax forms 2012 Temporary increase in living expenses: Subtract line 3  from line 2 875 5. Georgia state income tax forms 2012 Amount of payment includible in income: Subtract line 4 from line 1 $ 225 Tax year of inclusion. Georgia state income tax forms 2012   You include the taxable part of the insurance payment in income for the year you regain the use of your main home or, if later, for the year you receive the taxable part of the insurance payment. Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 Your main home was destroyed by a tornado in August 2011. Georgia state income tax forms 2012 You regained use of your home in November 2012. Georgia state income tax forms 2012 The insurance payments you received in 2011 and 2012 were $1,500 more than the temporary increase in your living expenses during those years. Georgia state income tax forms 2012 You include this amount in income on your 2012 Form 1040. Georgia state income tax forms 2012 If, in 2013, you receive further payments to cover the living expenses you had in 2011 and 2012, you must include those payments in income on your 2013 Form 1040. Georgia state income tax forms 2012 Disaster relief. Georgia state income tax forms 2012   Food, medical supplies, and other forms of assistance you receive do not reduce your casualty loss, unless they are replacements for lost or destroyed property. Georgia state income tax forms 2012 Table 2. Georgia state income tax forms 2012 Deduction Limit Rules for Personal-Use and Employee Property       $100 Rule 10% Rule 2% Rule General Application You must reduce each casualty or theft loss by $100 when figuring your deduction. Georgia state income tax forms 2012 Apply this rule to personal-use property after you have figured the amount of your loss. Georgia state income tax forms 2012 You must reduce your total casualty or theft loss by 10% of your adjusted gross income. Georgia state income tax forms 2012 Apply this rule to personal-use property after you reduce each loss by $100 (the $100 rule). Georgia state income tax forms 2012 You must reduce your total casualty or theft loss by 2% of your adjusted gross income. Georgia state income tax forms 2012 Apply this rule to property you used in performing services as an employee after you have figured the amount of your loss and added it to your job expenses and most other miscellaneous itemized deductions. Georgia state income tax forms 2012 Single Event Apply this rule only once, even if many pieces of property are affected. Georgia state income tax forms 2012 Apply this rule only once, even if many pieces of property are affected. Georgia state income tax forms 2012 Apply this rule only once, even if many pieces of property are affected. Georgia state income tax forms 2012 More Than One Event Apply to the loss from each event. Georgia state income tax forms 2012 Apply to the total of all your losses from all events. Georgia state income tax forms 2012 Apply to the total of all your losses from all events. Georgia state income tax forms 2012 More Than One Person— With Loss From the   Same Event  (other than a married couple  filing jointly) Apply separately to each person. Georgia state income tax forms 2012 Apply separately to each person. Georgia state income tax forms 2012 Apply separately to each person. Georgia state income tax forms 2012 Married Couple—  With Loss From the  Same Event Filing Joint Return Apply as if you were one person. Georgia state income tax forms 2012 Apply as if you were one person. Georgia state income tax forms 2012 Apply as if you were one person. Georgia state income tax forms 2012 Filing Separate Return Apply separately to each spouse. Georgia state income tax forms 2012 Apply separately to each spouse. Georgia state income tax forms 2012 Apply separately to each spouse. Georgia state income tax forms 2012 More Than One Owner (other than a married couple filing jointly) Apply separately to each owner of jointly owned property. Georgia state income tax forms 2012 Apply separately to each owner of jointly owned property. Georgia state income tax forms 2012 Apply separately to each owner of jointly owned property. Georgia state income tax forms 2012    Qualified disaster relief payments you receive for expenses you incurred as a result of a federally declared disaster, are not taxable income to you. Georgia state income tax forms 2012 For more information, see Qualified disaster relief payments under Disaster Area Losses, later. Georgia state income tax forms 2012   Disaster unemployment assistance payments are unemployment benefits that are taxable. Georgia state income tax forms 2012   Generally, disaster relief grants received under the Robert T. Georgia state income tax forms 2012 Stafford Disaster Relief and Emergency Assistance Act are not included in your income. Georgia state income tax forms 2012 See Federal disaster relief grants , later, under Disaster Area Losses. Georgia state income tax forms 2012 Loan proceeds. Georgia state income tax forms 2012   Do not reduce your casualty loss by loan proceeds you use to rehabilitate or replace property on which you are claiming a casualty loss deduction. Georgia state income tax forms 2012 If you have a federal loan that is canceled (forgiven), see Federal loan canceled , later, under Disaster Area Losses. Georgia state income tax forms 2012 Reimbursement Received After Deducting Loss If you figured your casualty or theft loss using the amount of your expected reimbursement, you may have to adjust your tax return for the tax year in which you get your actual reimbursement. Georgia state income tax forms 2012 This section explains the adjustment you may have to make. Georgia state income tax forms 2012 Actual reimbursement less than expected. Georgia state income tax forms 2012   If you later receive less reimbursement than you expected, include that difference as a loss with your other losses (if any) on your return for the year in which you can reasonably expect no more reimbursement. Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 Your personal car had a FMV of $2,000 when it was destroyed in a collision with another car in 2012. Georgia state income tax forms 2012 The accident was due to the negligence of the other driver. Georgia state income tax forms 2012 At the end of 2012, there was a reasonable prospect that the owner of the other car would reimburse you in full. Georgia state income tax forms 2012 You did not have a deductible loss in 2012. Georgia state income tax forms 2012 In January 2013, the court awards you a judgment of $2,000. Georgia state income tax forms 2012 However, in July it becomes apparent that you will be unable to collect any amount from the other driver. Georgia state income tax forms 2012 Since this is your only casualty or theft loss, you can deduct the loss in 2013 that is figured by applying the Deduction Limits (discussed later). Georgia state income tax forms 2012 Actual reimbursement more than expected. Georgia state income tax forms 2012   If you later receive more reimbursement than you expected, after you have claimed a deduction for the loss, you may have to include the extra reimbursement in your income for the year you receive it. Georgia state income tax forms 2012 However, if any part of the original deduction did not reduce your tax for the earlier year, do not include that part of the reimbursement in your income. Georgia state income tax forms 2012 You do not refigure your tax for the year you claimed the deduction. Georgia state income tax forms 2012 See Recoveries in Publication 525 to find out how much extra reimbursement to include in income. Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 In 2012, a hurricane destroyed your motorboat. Georgia state income tax forms 2012 Your loss was $3,000, and you estimated that your insurance would cover $2,500 of it. Georgia state income tax forms 2012 You did not itemize deductions on your 2012 return, so you could not deduct the loss. Georgia state income tax forms 2012 When the insurance company reimburses you for the loss, you do not report any of the reimbursement as income. Georgia state income tax forms 2012 This is true even if it is for the full $3,000 because you did not deduct the loss on your 2012 return. Georgia state income tax forms 2012 The loss did not reduce your tax. Georgia state income tax forms 2012    If the total of all the reimbursements you receive is more than your adjusted basis in the destroyed or stolen property, you will have a gain on the casualty or theft. Georgia state income tax forms 2012 If you have already taken a deduction for a loss and you receive the reimbursement in a later year, you may have to include the gain in your income for the later year. Georgia state income tax forms 2012 Include the gain as ordinary income up to the amount of your deduction that reduced your tax for the earlier year. Georgia state income tax forms 2012 You may be able to postpone reporting any remaining gain as explained under Postponement of Gain, later. Georgia state income tax forms 2012 Actual reimbursement same as expected. Georgia state income tax forms 2012   If you receive exactly the reimbursement you expected to receive, you do not have to include any of the reimbursement in your income and you cannot deduct any additional loss. Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 In December 2013, you had a collision while driving your personal car. Georgia state income tax forms 2012 Repairs to the car cost $950. Georgia state income tax forms 2012 You had $100 deductible collision insurance. Georgia state income tax forms 2012 Your insurance company agreed to reimburse you for the rest of the damage. Georgia state income tax forms 2012 Because you expected a reimbursement from the insurance company, you did not have a casualty loss deduction in 2013. Georgia state income tax forms 2012 Due to the $100 rule, you cannot deduct the $100 you paid as the deductible. Georgia state income tax forms 2012 When you receive the $850 from the insurance company in 2014, do not report it as income. Georgia state income tax forms 2012 Deduction Limits After you have figured your casualty or theft loss, you must figure how much of the loss you can deduct. Georgia state income tax forms 2012 The deduction for casualty and theft losses of employee property and personal-use property is limited. Georgia state income tax forms 2012 A loss on employee property is subject to the 2% rule, discussed next. Georgia state income tax forms 2012 With certain exceptions, a loss on property you own for your personal use is subject to the $100 and 10% rules, discussed later. Georgia state income tax forms 2012 The 2%, $100, and 10% rules are also summarized in Table 2 . Georgia state income tax forms 2012 Losses on business property (other than employee property) and income-producing property are not subject to these rules. Georgia state income tax forms 2012 However, if your casualty or theft loss involved a home you used for business or rented out, your deductible loss may be limited. Georgia state income tax forms 2012 See the Instructions for Form 4684, Section B. Georgia state income tax forms 2012 If the casualty or theft loss involved property used in a passive activity, see Form 8582, Passive Activity Loss Limitations, and its instructions. Georgia state income tax forms 2012 2% Rule The casualty and theft loss deduction for employee property, when added to your job expenses and most other miscellaneous itemized deductions on Schedule A (Form 1040) or Form 1040NR, Schedule A, must be reduced by 2% of your adjusted gross income. Georgia state income tax forms 2012 Employee property is property used in performing services as an employee. Georgia state income tax forms 2012 $100 Rule After you have figured your casualty or theft loss on personal-use property, as discussed earlier, you must reduce that loss by $100. Georgia state income tax forms 2012 This reduction applies to each total casualty or theft loss. Georgia state income tax forms 2012 It does not matter how many pieces of property are involved in an event. Georgia state income tax forms 2012 Only a single $100 reduction applies. Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 You have $750 deductible collision insurance on your car. Georgia state income tax forms 2012 The car is damaged in a collision. Georgia state income tax forms 2012 The insurance company pays you for the damage minus the $750 deductible. Georgia state income tax forms 2012 The amount of the casualty loss is based solely on the deductible. Georgia state income tax forms 2012 The casualty loss is $650 ($750 − $100) because the first $100 of a casualty loss on personal-use property is not deductible. Georgia state income tax forms 2012 Single event. Georgia state income tax forms 2012   Generally, events closely related in origin cause a single casualty. Georgia state income tax forms 2012 It is a single casualty when the damage is from two or more closely related causes, such as wind and flood damage caused by the same storm. Georgia state income tax forms 2012 A single casualty may also damage two or more pieces of property, such as a hailstorm that damages both your home and your car parked in your driveway. Georgia state income tax forms 2012 Example 1. Georgia state income tax forms 2012 A thunderstorm destroyed your pleasure boat. Georgia state income tax forms 2012 You also lost some boating equipment in the storm. Georgia state income tax forms 2012 Your loss was $5,000 on the boat and $1,200 on the equipment. Georgia state income tax forms 2012 Your insurance company reimbursed you $4,500 for the damage to your boat. Georgia state income tax forms 2012 You had no insurance coverage on the equipment. Georgia state income tax forms 2012 Your casualty loss is from a single event and the $100 rule applies once. Georgia state income tax forms 2012 Figure your loss before applying the 10% rule (discussed later) as follows. Georgia state income tax forms 2012     Boat Equipment 1. Georgia state income tax forms 2012 Loss $5,000 $1,200 2. Georgia state income tax forms 2012 Subtract insurance 4,500 -0- 3. Georgia state income tax forms 2012 Loss after reimbursement $ 500 $1,200 4. Georgia state income tax forms 2012 Total loss $1,700 5. Georgia state income tax forms 2012 Subtract $100 100 6. Georgia state income tax forms 2012 Loss before 10% rule $1,600 Example 2. Georgia state income tax forms 2012 Thieves broke into your home in January and stole a ring and a fur coat. Georgia state income tax forms 2012 You had a loss of $200 on the ring and $700 on the coat. Georgia state income tax forms 2012 This is a single theft. Georgia state income tax forms 2012 The $100 rule applies to the total $900 loss. Georgia state income tax forms 2012 Example 3. Georgia state income tax forms 2012 In September, hurricane winds blew the roof off your home. Georgia state income tax forms 2012 Flood waters caused by the hurricane further damaged your home and destroyed your furniture and personal car. Georgia state income tax forms 2012 This is considered a single casualty. Georgia state income tax forms 2012 The $100 rule is applied to your total loss from the flood waters and the wind. Georgia state income tax forms 2012 More than one loss. Georgia state income tax forms 2012   If you have more than one casualty or theft loss during your tax year, you must reduce each loss by $100. Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 Your family car was damaged in an accident in January. Georgia state income tax forms 2012 Your loss after the insurance reimbursement was $75. Georgia state income tax forms 2012 In February, your car was damaged in another accident. Georgia state income tax forms 2012 This time your loss after the insurance reimbursement was $90. Georgia state income tax forms 2012 Apply the $100 rule to each separate casualty loss. Georgia state income tax forms 2012 Since neither accident resulted in a loss of over $100, you are not entitled to any deduction for these accidents. Georgia state income tax forms 2012 More than one person. Georgia state income tax forms 2012   If two or more individuals (other than a husband and wife filing a joint return) have losses from the same casualty or theft, the $100 rule applies separately to each individual. Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 A fire damaged your house and also damaged the personal property of your house guest. Georgia state income tax forms 2012 You must reduce your loss by $100. Georgia state income tax forms 2012 Your house guest must reduce his or her loss by $100. Georgia state income tax forms 2012 Married taxpayers. Georgia state income tax forms 2012   If you and your spouse file a joint return, you are treated as one individual in applying the $100 rule. Georgia state income tax forms 2012 It does not matter whether you own the property jointly or separately. Georgia state income tax forms 2012   If you and your spouse have a casualty or theft loss and you file separate returns, each of you must reduce your loss by $100. Georgia state income tax forms 2012 This is true even if you own the property jointly. Georgia state income tax forms 2012 If one spouse owns the property, only that spouse can figure a loss deduction on a separate return. Georgia state income tax forms 2012   If the casualty or theft loss is on property you own as tenants by the entirety, each of you can figure your deduction on only one-half of the loss on separate returns. Georgia state income tax forms 2012 Neither of you can figure your deduction on the entire loss on a separate return. Georgia state income tax forms 2012 Each of you must reduce the loss by $100. Georgia state income tax forms 2012 More than one owner. Georgia state income tax forms 2012   If two or more individuals (other than a husband and wife filing a joint return) have a loss on property jointly owned, the $100 rule applies separately to each. Georgia state income tax forms 2012 For example, if two sisters live together in a home they own jointly and they have a casualty loss on the home, the $100 rule applies separately to each sister. Georgia state income tax forms 2012 10% Rule You must reduce the total of all your casualty or theft losses on personal-use property by 10% of your adjusted gross income. Georgia state income tax forms 2012 Apply this rule after you reduce each loss by $100. Georgia state income tax forms 2012 For more information, see the Form 4684 instructions. Georgia state income tax forms 2012 If you have both gains and losses from casualties or thefts, see Gains and losses , later in this discussion. Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 In June, you discovered that your house had been burglarized. Georgia state income tax forms 2012 Your loss after insurance reimbursement was $2,000. Georgia state income tax forms 2012 Your adjusted gross income for the year you discovered the theft is $29,500. Georgia state income tax forms 2012 Figure your theft loss as follows. Georgia state income tax forms 2012 1. Georgia state income tax forms 2012 Loss after insurance $2,000 2. Georgia state income tax forms 2012 Subtract $100 100 3. Georgia state income tax forms 2012 Loss after $100 rule $1,900 4. Georgia state income tax forms 2012 Subtract 10% of $29,500 AGI $2,950 5. Georgia state income tax forms 2012 Theft loss deduction $-0- You do not have a theft loss deduction because your loss ($1,900) is less than 10% of your adjusted gross income ($2,950). Georgia state income tax forms 2012 More than one loss. Georgia state income tax forms 2012   If you have more than one casualty or theft loss during your tax year, reduce each loss by any reimbursement and by $100. Georgia state income tax forms 2012 Then you must reduce the total of all your losses by 10% of your adjusted gross income. Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 In March, you had a car accident that totally destroyed your car. Georgia state income tax forms 2012 You did not have collision insurance on your car, so you did not receive any insurance reimbursement. Georgia state income tax forms 2012 Your loss on the car was $1,800. Georgia state income tax forms 2012 In November, a fire damaged your basement and totally destroyed the furniture, washer, dryer, and other items you had stored there. Georgia state income tax forms 2012 Your loss on the basement items after reimbursement was $2,100. Georgia state income tax forms 2012 Your adjusted gross income for the year that the accident and fire occurred is $25,000. Georgia state income tax forms 2012 You figure your casualty loss deduction as follows. Georgia state income tax forms 2012     Car Basement 1. Georgia state income tax forms 2012 Loss $1,800 $2,100 2. Georgia state income tax forms 2012 Subtract $100 per incident 100 100 3. Georgia state income tax forms 2012 Loss after $100 rule $1,700 $2,000 4. Georgia state income tax forms 2012 Total loss $3,700 5. Georgia state income tax forms 2012 Subtract 10% of $25,000 AGI 2,500 6. Georgia state income tax forms 2012 Casualty loss deduction $1,200 Married taxpayers. Georgia state income tax forms 2012   If you and your spouse file a joint return, you are treated as one individual in applying the 10% rule. Georgia state income tax forms 2012 It does not matter if you own the property jointly or separately. Georgia state income tax forms 2012   If you file separate returns, the 10% rule applies to each return on which a loss is claimed. Georgia state income tax forms 2012 More than one owner. Georgia state income tax forms 2012   If two or more individuals (other than husband and wife filing a joint return) have a loss on property that is owned jointly, the 10% rule applies separately to each. Georgia state income tax forms 2012 Gains and losses. Georgia state income tax forms 2012   If you have casualty or theft gains as well as losses to personal-use property, you must compare your total gains to your total losses. Georgia state income tax forms 2012 Do this after you have reduced each loss by any reimbursements and by $100 but before you have reduced the losses by 10% of your adjusted gross income. Georgia state income tax forms 2012 Casualty or theft gains do not include gains you choose to postpone. Georgia state income tax forms 2012 See Postponement of Gain, later. Georgia state income tax forms 2012 Losses more than gains. Georgia state income tax forms 2012   If your losses are more than your recognized gains, subtract your gains from your losses and reduce the result by 10% of your adjusted gross income. Georgia state income tax forms 2012 The rest, if any, is your deductible loss from personal-use property. Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 Your theft loss after reducing it by reimbursements and by $100 is $2,700. Georgia state income tax forms 2012 Your casualty gain is $700. Georgia state income tax forms 2012 Your loss is more than your gain, so you must reduce your $2,000 net loss ($2,700 − $700) by 10% of your adjusted gross income. Georgia state income tax forms 2012 Gains more than losses. Georgia state income tax forms 2012   If your recognized gains are more than your losses, subtract your losses from your gains. Georgia state income tax forms 2012 The difference is treated as a capital gain and must be reported on Schedule D (Form 1040). Georgia state income tax forms 2012 The 10% rule does not apply to your gains. Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 Your theft loss is $600 after reducing it by reimbursements and by $100. Georgia state income tax forms 2012 Your casualty gain is $1,600. Georgia state income tax forms 2012 Because your gain is more than your loss, you must report the $1,000 net gain ($1,600 − $600) on Schedule D (Form 1040). Georgia state income tax forms 2012 More information. Georgia state income tax forms 2012   For information on how to figure recognized gains, see Figuring a Gain , later. Georgia state income tax forms 2012 Figuring the Deduction Generally, you must figure your loss separately for each item stolen, damaged, or destroyed. Georgia state income tax forms 2012 However, a special rule applies to real property you own for personal use. Georgia state income tax forms 2012 Real property. Georgia state income tax forms 2012   In figuring a loss to real estate you own for personal use, all improvements (such as buildings and ornamental trees and the land containing the improvements) are considered together. Georgia state income tax forms 2012 Example 1. Georgia state income tax forms 2012 In June, a fire destroyed your lakeside cottage, which cost $144,800 (including $14,500 for the land) several years ago. Georgia state income tax forms 2012 (Your land was not damaged. Georgia state income tax forms 2012 ) This was your only casualty or theft loss for the year. Georgia state income tax forms 2012 The FMV of the property immediately before the fire was $180,000 ($145,000 for the cottage and $35,000 for the land). Georgia state income tax forms 2012 The FMV immediately after the fire was $35,000 (value of the land). Georgia state income tax forms 2012 You collected $130,000 from the insurance company. Georgia state income tax forms 2012 Your adjusted gross income for the year the fire occurred is $80,000. Georgia state income tax forms 2012 Your deduction for the casualty loss is $6,700, figured in the following manner. Georgia state income tax forms 2012 1. Georgia state income tax forms 2012 Adjusted basis of the entire property (cost in this example) $144,800 2. Georgia state income tax forms 2012 FMV of entire property  before fire $180,000 3. Georgia state income tax forms 2012 FMV of entire property after fire 35,000 4. Georgia state income tax forms 2012 Decrease in FMV of entire property (line 2 − line 3) $145,000 5. Georgia state income tax forms 2012 Loss (smaller of line 1 or line 4) $144,800 6. Georgia state income tax forms 2012 Subtract insurance 130,000 7. Georgia state income tax forms 2012 Loss after reimbursement $14,800 8. Georgia state income tax forms 2012 Subtract $100 100 9. Georgia state income tax forms 2012 Loss after $100 rule $14,700 10. Georgia state income tax forms 2012 Subtract 10% of $80,000 AGI 8,000 11. Georgia state income tax forms 2012 Casualty loss deduction $ 6,700 Example 2. Georgia state income tax forms 2012 You bought your home a few years ago. Georgia state income tax forms 2012 You paid $150,000 ($10,000 for the land and $140,000 for the house). Georgia state income tax forms 2012 You also spent an additional $2,000 for landscaping. Georgia state income tax forms 2012 This year a fire destroyed your home. Georgia state income tax forms 2012 The fire also damaged the shrubbery and trees in your yard. Georgia state income tax forms 2012 The fire was your only casualty or theft loss this year. Georgia state income tax forms 2012 Competent appraisers valued the property as a whole at $175,000 before the fire, but only $50,000 after the fire. Georgia state income tax forms 2012 Shortly after the fire, the insurance company paid you $95,000 for the loss. Georgia state income tax forms 2012 Your adjusted gross income for this year is $70,000. Georgia state income tax forms 2012 You figure your casualty loss deduction as follows. Georgia state income tax forms 2012 1. Georgia state income tax forms 2012 Adjusted basis of the entire property (cost of land, building, and landscaping) $152,000 2. Georgia state income tax forms 2012 FMV of entire property  before fire $175,000 3. Georgia state income tax forms 2012 FMV of entire property after fire 50,000 4. Georgia state income tax forms 2012 Decrease in FMV of entire property (line 2 − line 3) $125,000 5. Georgia state income tax forms 2012 Loss (smaller of line 1 or line 4) $125,000 6. Georgia state income tax forms 2012 Subtract insurance 95,000 7. Georgia state income tax forms 2012 Loss after reimbursement $30,000 8. Georgia state income tax forms 2012 Subtract $100 100 9. Georgia state income tax forms 2012 Loss after $100 rule $29,900 10. Georgia state income tax forms 2012 Subtract 10% of $70,000 AGI 7,000 11. Georgia state income tax forms 2012 Casualty loss deduction $ 22,900 Personal property. Georgia state income tax forms 2012   Personal property is any property that is not real property. Georgia state income tax forms 2012 If your personal property is stolen or is damaged or destroyed by a casualty, you must figure your loss separately for each item of property. Georgia state income tax forms 2012 Then combine these separate losses to figure the total loss. Georgia state income tax forms 2012 Reduce the total loss by $100 and 10% of your adjusted gross income to figure the loss deduction. Georgia state income tax forms 2012 Example 1. Georgia state income tax forms 2012 In August, a storm destroyed your pleasure boat, which cost $18,500. Georgia state income tax forms 2012 This was your only casualty or theft loss for the year. Georgia state income tax forms 2012 Its FMV immediately before the storm was $17,000. Georgia state income tax forms 2012 You had no insurance, but were able to salvage the motor of the boat and sell it for $200. Georgia state income tax forms 2012 Your adjusted gross income for the year the casualty occurred is $70,000. Georgia state income tax forms 2012 Although the motor was sold separately, it is part of the boat and not a separate item of property. Georgia state income tax forms 2012 You figure your casualty loss deduction as follows. Georgia state income tax forms 2012 1. Georgia state income tax forms 2012 Adjusted basis (cost in this example) $18,500 2. Georgia state income tax forms 2012 FMV before storm $17,000 3. Georgia state income tax forms 2012 FMV after storm 200 4. Georgia state income tax forms 2012 Decrease in FMV  (line 2 − line 3) $16,800 5. Georgia state income tax forms 2012 Loss (smaller of line 1 or line 4) $16,800 6. Georgia state income tax forms 2012 Subtract insurance -0- 7. Georgia state income tax forms 2012 Loss after reimbursement $16,800 8. Georgia state income tax forms 2012 Subtract $100 100 9. Georgia state income tax forms 2012 Loss after $100 rule $16,700 10. Georgia state income tax forms 2012 Subtract 10% of $70,000 AGI 7,000 11. Georgia state income tax forms 2012 Casualty loss deduction $ 9,700 Example 2. Georgia state income tax forms 2012 In June, you were involved in an auto accident that totally destroyed your personal car and your antique pocket watch. Georgia state income tax forms 2012 You had bought the car for $30,000. Georgia state income tax forms 2012 The FMV of the car just before the accident was $17,500. Georgia state income tax forms 2012 Its FMV just after the accident was $180 (scrap value). Georgia state income tax forms 2012 Your insurance company reimbursed you $16,000. Georgia state income tax forms 2012 Your watch was not insured. Georgia state income tax forms 2012 You had purchased it for $250. Georgia state income tax forms 2012 Its FMV just before the accident was $500. Georgia state income tax forms 2012 Your adjusted gross income for the year the accident occurred is $97,000. Georgia state income tax forms 2012 Your casualty loss deduction is zero, figured as follows. Georgia state income tax forms 2012     Car Watch 1. Georgia state income tax forms 2012 Adjusted basis (cost) $30,000 $250 2. Georgia state income tax forms 2012 FMV before accident $17,500 $500 3. Georgia state income tax forms 2012 FMV after accident 180 -0- 4. Georgia state income tax forms 2012 Decrease in FMV (line 2 − line 3) $17,320 $500 5. Georgia state income tax forms 2012 Loss (smaller of line 1 or line 4) $17,320 $250 6. Georgia state income tax forms 2012 Subtract insurance 16,000 -0- 7. Georgia state income tax forms 2012 Loss after reimbursement $1,320 $250 8. Georgia state income tax forms 2012 Total loss $1,570 9. Georgia state income tax forms 2012 Subtract $100 100 10. Georgia state income tax forms 2012 Loss after $100 rule $1,470 11. Georgia state income tax forms 2012 Subtract 10% of $97,000 AGI 9,700 12. Georgia state income tax forms 2012 Casualty loss deduction $ -0- Both real and personal properties. Georgia state income tax forms 2012   When a casualty involves both real and personal properties, you must figure the loss separately for each type of property. Georgia state income tax forms 2012 However, you apply a single $100 reduction to the total loss. Georgia state income tax forms 2012 Then, you apply the 10% rule to figure the casualty loss deduction. Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 In July, a hurricane damaged your home, which cost you $164,000 including land. Georgia state income tax forms 2012 The FMV of the property (both building and land) immediately before the storm was $170,000 and its FMV immediately after the storm was $100,000. Georgia state income tax forms 2012 Your household furnishings were also damaged. Georgia state income tax forms 2012 You separately figured the loss on each damaged household item and arrived at a total loss of $600. Georgia state income tax forms 2012 You collected $50,000 from the insurance company for the damage to your home, but your household furnishings were not insured. Georgia state income tax forms 2012 Your adjusted gross income for the year the hurricane occurred is $65,000. Georgia state income tax forms 2012 You figure your casualty loss deduction from the hurricane in the following manner. Georgia state income tax forms 2012 1. Georgia state income tax forms 2012 Adjusted basis of real property (cost in this example) $164,000 2. Georgia state income tax forms 2012 FMV of real property before hurricane $170,000 3. Georgia state income tax forms 2012 FMV of real property after hurricane 100,000 4. Georgia state income tax forms 2012 Decrease in FMV of real property (line 2 − line 3) $70,000 5. Georgia state income tax forms 2012 Loss on real property (smaller of line 1 or line 4) $70,000 6. Georgia state income tax forms 2012 Subtract insurance 50,000 7. Georgia state income tax forms 2012 Loss on real property after reimbursement $20,000 8. Georgia state income tax forms 2012 Loss on furnishings $600 9. Georgia state income tax forms 2012 Subtract insurance -0- 10. Georgia state income tax forms 2012 Loss on furnishings after reimbursement $600 11. Georgia state income tax forms 2012 Total loss (line 7 plus line 10) $20,600 12. Georgia state income tax forms 2012 Subtract $100 100 13. Georgia state income tax forms 2012 Loss after $100 rule $20,500 14. Georgia state income tax forms 2012 Subtract 10% of $65,000 AGI 6,500 15. Georgia state income tax forms 2012 Casualty loss deduction $14,000 Property used partly for business and partly for personal purposes. Georgia state income tax forms 2012   When property is used partly for personal purposes and partly for business or income-producing purposes, the casualty or theft loss deduction must be figured separately for the personal-use portion and for the business or income-producing portion. Georgia state income tax forms 2012 You must figure each loss separately because the losses attributed to these two uses are figured in two different ways. Georgia state income tax forms 2012 When figuring each loss, allocate the total cost or basis, the FMV before and after the casualty or theft loss, and the insurance or other reimbursement between the business and personal use of the property. Georgia state income tax forms 2012 The $100 rule and the 10% rule apply only to the casualty or theft loss on the personal-use portion of the property. Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 You own a building that you constructed on leased land. Georgia state income tax forms 2012 You use half of the building for your business and you live in the other half. Georgia state income tax forms 2012 The cost of the building was $400,000. Georgia state income tax forms 2012 You made no further improvements or additions to it. Georgia state income tax forms 2012 A flood in March damaged the entire building. Georgia state income tax forms 2012 The FMV of the building was $380,000 immediately before the flood and $320,000 afterwards. Georgia state income tax forms 2012 Your insurance company reimbursed you $40,000 for the flood damage. Georgia state income tax forms 2012 Depreciation on the business part of the building before the flood totaled $24,000. Georgia state income tax forms 2012 Your adjusted gross income for the year the flood occurred is $125,000. Georgia state income tax forms 2012 You have a deductible business casualty loss of $10,000. Georgia state income tax forms 2012 You do not have a deductible personal casualty loss because of the 10% rule. Georgia state income tax forms 2012 You figure your loss as follows. Georgia state income tax forms 2012     Business   Personal     Part   Part 1. Georgia state income tax forms 2012 Cost (total $400,000) $200,000   $200,000 2. Georgia state income tax forms 2012 Subtract depreciation 24,000   -0- 3. Georgia state income tax forms 2012 Adjusted basis $176,000   $200,000 4. Georgia state income tax forms 2012 FMV before flood (total $380,000) $190,000   $190,000 5. Georgia state income tax forms 2012 FMV after flood (total $320,000) 160,000   160,000 6. Georgia state income tax forms 2012 Decrease in FMV  (line 4 − line 5) $30,000   $30,000 7. Georgia state income tax forms 2012 Loss (smaller of line 3 or line 6) $30,000   $30,000 8. Georgia state income tax forms 2012 Subtract insurance 20,000   20,000 9. Georgia state income tax forms 2012 Loss after reimbursement $10,000   $10,000 10. Georgia state income tax forms 2012 Subtract $100 on personal-use property -0-   100 11. Georgia state income tax forms 2012 Loss after $100 rule $10,000   $9,900 12. Georgia state income tax forms 2012 Subtract 10% of $125,000 AGI on personal-use property -0-   12,500 13. Georgia state income tax forms 2012 Deductible business loss $10,000     14. Georgia state income tax forms 2012 Deductible personal loss $-0- Figuring a Gain If you receive an insurance payment or other reimbursement that is more than your adjusted basis in the destroyed, damaged, or stolen property, you have a gain from the casualty or theft. Georgia state income tax forms 2012 Your gain is figured as follows. Georgia state income tax forms 2012 The amount you receive (discussed next), minus Your adjusted basis in the property at the time of the casualty or theft. Georgia state income tax forms 2012 See Adjusted Basis , earlier, for information on adjusted basis. Georgia state income tax forms 2012 Even if the decrease in FMV of your property is smaller than the adjusted basis of your property, use your adjusted basis to figure the gain. Georgia state income tax forms 2012 Amount you receive. Georgia state income tax forms 2012   The amount you receive includes any money plus the value of any property you receive minus any expenses you have in obtaining reimbursement. Georgia state income tax forms 2012 It also includes any reimbursement used to pay off a mortgage or other lien on the damaged, destroyed, or stolen property. Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 A hurricane destroyed your personal residence and the insurance company awarded you $145,000. Georgia state income tax forms 2012 You received $140,000 in cash. Georgia state income tax forms 2012 The remaining $5,000 was paid directly to the holder of a mortgage on the property. Georgia state income tax forms 2012 The amount you received includes the $5,000 reimbursement paid on the mortgage. Georgia state income tax forms 2012 Main home destroyed. Georgia state income tax forms 2012   If you have a gain because your main home was destroyed, you generally can exclude the gain from your income as if you had sold or exchanged your home. Georgia state income tax forms 2012 You may be able to exclude up to $250,000 of the gain (up to $500,000 if married filing jointly). Georgia state income tax forms 2012 To exclude a gain, you generally must have owned and lived in the property as your main home for at least 2 years during the 5-year period ending on the date it was destroyed. Georgia state income tax forms 2012 For information on this exclusion, see Publication 523. Georgia state income tax forms 2012 If your gain is more than the amount you can exclude, but you buy replacement property, you may be able to postpone reporting the excess gain. Georgia state income tax forms 2012 See Postponement of Gain , later. Georgia state income tax forms 2012 Reporting a gain. Georgia state income tax forms 2012   You generally must report your gain as income in the year you receive the reimbursement. Georgia state income tax forms 2012 However, you do not have to report your gain if you meet certain requirements and choose to postpone reporting the gain according to the rules explained under Postponement of Gain, next. Georgia state income tax forms 2012   For information on how to report a gain, see How To Report Gains and Losses , later. Georgia state income tax forms 2012    If you have a casualty or theft gain on personal-use property that you choose to postpone reporting (as explained next) and you also have another casualty or theft loss on personal-use property, do not consider the gain you are postponing when figuring your casualty or theft loss deduction. Georgia state income tax forms 2012 See 10% Rule under Deduction Limits, earlier. Georgia state income tax forms 2012 Postponement of Gain Do not report a gain if you receive reimbursement in the form of property similar or related in service or use to the destroyed or stolen property. Georgia state income tax forms 2012 Your basis in the new property is generally the same as your adjusted basis in the property it replaces. Georgia state income tax forms 2012 You must ordinarily report the gain on your stolen or destroyed property if you receive money or unlike property as reimbursement. Georgia state income tax forms 2012 However, you can choose to postpone reporting the gain if you purchase property that is similar or related in service or use to the stolen or destroyed property within a specified replacement period, discussed later. Georgia state income tax forms 2012 You also can choose to postpone reporting the gain if you purchase a controlling interest (at least 80%) in a corporation owning property that is similar or related in service or use to the property. Georgia state income tax forms 2012 See Controlling interest in a corporation , later. Georgia state income tax forms 2012 If you have a gain on damaged property, you can postpone reporting the gain if you spend the reimbursement to restore the property. Georgia state income tax forms 2012 To postpone reporting all the gain, the cost of your replacement property must be at least as much as the reimbursement you receive. Georgia state income tax forms 2012 If the cost of the replacement property is less than the reimbursement, you must include the gain in your income up to the amount of the unspent reimbursement. Georgia state income tax forms 2012 Example. Georgia state income tax forms 2012 In 1970, you bought an oceanfront cottage for your personal use at a cost of $18,000. Georgia state income tax forms 2012 You made no further improvements or additions to it. Georgia state income tax forms 2012 When a storm destroyed the cottage this January, the cottage was worth $250,000. Georgia state income tax forms 2012 You received $146,000 from the insurance company in March. Georgia state income tax forms 2012 You had a gain of $128,000 ($146,000 − $18,000). Georgia state income tax forms 2012 You spent $144,000 to rebuild the cottage. Georgia state income tax forms 2012 Since this is less than the insurance proceeds received, you must include $2,000 ($146,000 − $144,000) in your income. Georgia state income tax forms 2012 Buying replacement property from a related person. Georgia state income tax forms 2012   You cannot postpone reporting a gain from a casualty or theft if you buy the replacement property from a related person (discussed later). Georgia state income tax forms 2012 This rule applies to the following taxpayers. Georgia state income tax forms 2012 C corporations. Georgia state income tax forms 2012 Partnerships in which more than 50% of the capital or profits interests is owned by C corporations. Georgia state income tax forms 2012 All others (including individuals, partnerships — other than those in (2) — and S corporations) if the total realized gain for the tax year on all destroyed or stolen properties on which there are realized gains is more than $100,000. Georgia state income tax forms 2012 For casualties and thefts described in (3) above, gains cannot be offset by any losses when determining whether the total gain is more than $100,000. Georgia state income tax forms 2012 If the property is owned by a partnership, the $100,000 limit applies to the partnership and each partner. Georgia state income tax forms 2012 If the property is owned by an S corporation, the $100,000 limit applies to the S corporation and each shareholder. Georgia state income tax forms 2012 Exception. Georgia state income tax forms 2012   This rule does not apply if the related person acquired the property from an unrelated person within the period of time allowed for replacing the destroyed or stolen property. Georgia state income tax forms 2012 Related persons. Georgia state income tax forms 2012   Under this rule, related persons include, for example, a parent and child, a brother and sister, a corporation and an individual who owns more than 50% of its outstanding stock, and two partnerships in which the same C corporations own more than 50% of the capital or profits interests. Georgia state income tax forms 2012 For more information on related persons, see Nondeductible Loss under Sales and Exchanges Between Related Persons in chapter 2 of Publication 544. Georgia state income tax forms 2012 Death of a taxpayer. Georgia state income tax forms 2012   If a taxpayer dies after having a gain but before buying replacement property, the gain must be reported for the year in which the decedent realized the gain. Georgia state income tax forms 2012 The executor of the estate or the person succeeding to the funds from the casualty or theft cannot postpone reporting the gain by buying replacement property. Georgia state income tax forms 2012 Replacement Property You must buy replacement property for the specific purpose of replacing your destroyed or stolen property. Georgia state income tax forms 2012 Property you acquire as a gift or inheritance does not qualify. Georgia state income tax forms 2012 You do not have to use the same funds you receive as