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H&r Block Advantage E File

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H&r Block Advantage E File

H&r block advantage e file 10. H&r block advantage e file   Retirement Savings Contributions Credit (Saver's Credit) Table of Contents Full-time student. H&r block advantage e file Adjusted gross income. H&r block advantage e file Distributions received by spouse. H&r block advantage e file Testing period. H&r block advantage e file If you or your employer make eligible contributions (defined later) to a retirement plan, you may be able to take a credit of up to $1,000 (up to $2,000 if filing jointly). H&r block advantage e file This credit could reduce the federal income tax you pay dollar for dollar. H&r block advantage e file Can you claim the credit?   If you or your employer make eligible contributions to a retirement plan, you can claim the credit if all of the following apply. H&r block advantage e file You are not under age 18. H&r block advantage e file You are not a full-time student (explained next). H&r block advantage e file No one else, such as your parent(s), claims an exemption for you on their tax return. H&r block advantage e file Your adjusted gross income (defined later) is not more than: $59,000 for 2013 ($60,000 for 2014) if your filing status is married filing jointly, $44,250 for 2013 ($45,000 for 2014) if your filing status is head of household (with qualifying person), or $29,500 for 2013 ($30,000 for 2014) if your filing status is single, married filing separately, or qualifying widow(er) with dependent child. H&r block advantage e file Full-time student. H&r block advantage e file   You are a full-time student if, during some part of each of 5 calendar months (not necessarily consecutive) during the calendar year, you are either: A full-time student at a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or A student taking a full-time, on-farm training course given by either a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or a state, county, or local government. H&r block advantage e file You are a full-time student if you are enrolled for the number of hours or courses the school considers to be full-time. H&r block advantage e file Adjusted gross income. H&r block advantage e file   This is generally the amount on line 38 of your 2013 Form 1040 or line 22 of your 2013 Form 1040A. H&r block advantage e file However, you must add to that amount any exclusion or deduction claimed for the year for: Foreign earned income, Foreign housing costs, Income for bona fide residents of American Samoa, and Income from Puerto Rico. H&r block advantage e file Eligible contributions. H&r block advantage e file   These include: Contributions to a traditional or Roth IRA, Elective deferrals, including amounts designated as after-tax Roth contributions, to: A 401(k) plan (including a SIMPLE 401(k)), A section 403(b) annuity, An eligible deferred compensation plan of a state or local government (a governmental 457 plan), A SIMPLE IRA plan, or A salary reduction SEP, and Contributions to a section 501(c)(18) plan. H&r block advantage e file They also include voluntary after-tax employee contributions to a tax-qualified retirement plan or a section 403(b) annuity. H&r block advantage e file For purposes of the credit, an employee contribution will be voluntary as long as it is not required as a condition of employment. H&r block advantage e file Reducing eligible contributions. H&r block advantage e file   Reduce your eligible contributions (but not below zero) by the total distributions you received during the testing period (defined later) from any IRA, plan, or annuity included earlier under Eligible contributions. H&r block advantage e file Also reduce your eligible contributions by any distribution from a Roth IRA that is not rolled over, even if the distribution is not taxable. H&r block advantage e file      Do not reduce your eligible contributions by any of the following: The portion of any distribution which is not includible in income because it is a trustee-to-trustee transfer or a rollover distribution. H&r block advantage e file Any distribution that is a return of a contribution to an IRA (including a Roth IRA) made during the year for which you claim the credit if: The distribution is made before the due date (including extensions) of your tax return for that year, You do not take a deduction for the contribution, and The distribution includes any income attributable to the contribution. H&r block advantage e file Loans from a qualified employer plan treated as a distribution. H&r block advantage e file Distributions of excess contributions or deferrals (and income attributable to excess contributions and deferrals). H&r block advantage e file Distributions of dividends paid on stock held by an employee stock ownership plan under section 404(k). H&r block advantage e file Distributions from an eligible retirement plan that are converted or rolled over to a Roth IRA. H&r block advantage e file Distributions from a military retirement plan. H&r block advantage e file Distributions received by spouse. H&r block advantage e file   Any distributions your spouse receives are treated as received by you if you file a joint return with your spouse both for the year of the distribution and for the year for which you claim the credit. H&r block advantage e file Testing period. H&r block advantage e file   The testing period consists of: The year in which you claim the credit, The 2 years before the year in which you claim the credit, and The period after the end of the year in which you claim the credit and before the due date of the return (including extensions) for filing your return for the year in which you claimed the credit. H&r block advantage e file Example. H&r block advantage e file You and your spouse filed joint returns in 2011 and 2012, and plan to do so in 2013 and 2014. H&r block advantage e file You received a taxable distribution from a qualified plan in 2011 and a taxable distribution from an eligible section 457(b) deferred compensation plan in 2012. H&r block advantage e file Your spouse received taxable distributions from a Roth IRA in 2013 and tax-free distributions from a Roth IRA in 2014 before April 15. H&r block advantage e file You made eligible contributions to an IRA in 2013 and you otherwise qualify for this credit. H&r block advantage e file You must reduce the amount of your qualifying contributions in 2013 by the total of the distributions you and your spouse received in 2011, 2012, 2013, and 2014. H&r block advantage e file Maximum eligible contributions. H&r block advantage e file   After your contributions are reduced, the maximum annual contribution on which you can base the credit is $2,000 per person. H&r block advantage e file Effect on other credits. H&r block advantage e file   The amount of this credit will not change the amount of your refundable tax credits. H&r block advantage e file A refundable tax credit, such as the earned income credit or the additional child tax credit, is an amount that you would receive as a refund even if you did not otherwise owe any taxes. H&r block advantage e file Maximum credit. H&r block advantage e file   This is a nonrefundable credit. H&r block advantage e file The amount of the credit in any year cannot be more than the amount of tax that you would otherwise pay (not counting any refundable credits or the adoption credit) in any year. H&r block advantage e file If your tax liability is reduced to zero because of other nonrefundable credits, such as the education credits, then you will not be entitled to this credit. H&r block advantage e file How to figure and report the credit. H&r block advantage e file   The amount of the credit you can get is based on the contributions you make and your credit rate. H&r block advantage e file The credit rate can be as low as 10% or as high as 50%. H&r block advantage e file Your credit rate depends on your income and your filing status. H&r block advantage e file See Form 8880, Credit for Qualified Retirement Savings Contributions, to determine your credit rate. H&r block advantage e file   The maximum contribution taken into account is $2,000 per person. H&r block advantage e file On a joint return, up to $2,000 is taken into account for each spouse. H&r block advantage e file   Figure the credit on Form 8880. H&r block advantage e file Report the credit on line 50 of your Form 1040 or line 32 of your Form 1040A, and attach Form 8880 to your return. H&r block advantage e file Prev  Up  Next   Home   More Online Publications
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Understanding Your CP237 Notice

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What you need to do

  • If you have the expired check, please destroy it.
  • When you receive the new check, remember to cash it.

You may want to...

  • Call 1-800-829-3676 (1-800-TAX-FORM) to order forms and publications.

Answers to Common Questions

 

When will I receive my replacement check?
You should receive the replacement check within 30 days.

Can I request that you mail my refund check to an alternate address?
Refund checks are mailed only to the address of record, which is the address provided on the tax return or the result of a permanent address change request submitted after the return is filed.


Tips for next year

Consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions that you may qualify for. In many cases you can file for free. Learn more about e-file.


Understanding your notice

Your notice may look different from the sample because the information contained in your notice is tailored to your situation.

Notice CP237, Page 1

Page Last Reviewed or Updated: 07-Aug-2013

Printable samples of this notice (PDF)

 

 

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The H&r Block Advantage E File

H&r block advantage e file 2. H&r block advantage e file   Source of Income Table of Contents Introduction Topics - This chapter discusses: Resident Aliens Nonresident AliensInterest Income Dividends Guarantee of Indebtedness Personal Services Transportation Income Scholarships, Grants, Prizes, and Awards Pensions and Annuities Rents or Royalties Real Property Personal Property Community Income Introduction After you have determined your alien status, you must determine the source of your income. H&r block advantage e file This chapter will help you determine the source of different types of income you may receive during the tax year. H&r block advantage e file This chapter also discusses special rules for married individuals who are domiciled in a country with community property laws. H&r block advantage e file Topics - This chapter discusses: Income source rules, and Community income. H&r block advantage e file Resident Aliens A resident alien's income is generally subject to tax in the same manner as a U. H&r block advantage e file S. H&r block advantage e file citizen. H&r block advantage e file If you are a resident alien, you must report all interest, dividends, wages, or other compensation for services, income from rental property or royalties, and other types of income on your U. H&r block advantage e file S. H&r block advantage e file tax return. H&r block advantage e file You must report these amounts from sources within and outside the United States. H&r block advantage e file Nonresident Aliens A nonresident alien usually is subject to U. H&r block advantage e file S. H&r block advantage e file income tax only on U. H&r block advantage e file S. H&r block advantage e file source income. H&r block advantage e file Under limited circumstances, certain foreign source income is subject to U. H&r block advantage e file S. H&r block advantage e file tax. H&r block advantage e file See Foreign Income in chapter 4. H&r block advantage e file The general rules for determining U. H&r block advantage e file S. H&r block advantage e file source income that apply to most nonresident aliens are shown in Table 2-1. H&r block advantage e file The following discussions cover the general rules as well as the exceptions to these rules. H&r block advantage e file Not all items of U. H&r block advantage e file S. H&r block advantage e file source income are taxable. H&r block advantage e file See chapter 3. H&r block advantage e file Interest Income Generally, U. H&r block advantage e file S. H&r block advantage e file source interest income includes the following items. H&r block advantage e file Interest on bonds, notes, or other interest-bearing obligations of U. H&r block advantage e file S. H&r block advantage e file residents or domestic corporations. H&r block advantage e file Interest paid by a domestic or foreign partnership or foreign corporation engaged in a U. H&r block advantage e file S. H&r block advantage e file trade or business at any time during the tax year. H&r block advantage e file Original issue discount. H&r block advantage e file Interest from a state, the District of Columbia, or the U. H&r block advantage e file S. H&r block advantage e file Government. H&r block advantage e file The place or manner of payment is immaterial in determining the source of the income. H&r block advantage e file A substitute interest payment made to the transferor of a security in a securities lending transaction or a sale-repurchase transaction is sourced in the same manner as the interest on the transferred security. H&r block advantage e file Exceptions. H&r block advantage e file   U. H&r block advantage e file S. H&r block advantage e file source interest income does not include the following items. H&r block advantage e file Interest paid by a resident alien or a domestic corporation on obligations issued before August 10, 2010, if for the 3-year period ending with the close of the payer's tax year preceding the interest payment, at least 80% of the payer's total gross income: Is from sources outside the United States, and Is attributable to the active conduct of a trade or business by the individual or corporation in a foreign country or a U. H&r block advantage e file S. H&r block advantage e file possession. H&r block advantage e file However, the interest will be considered U. H&r block advantage e file S. H&r block advantage e file source interest income if either of the following apply. H&r block advantage e file The recipient of the interest is related to the resident alien or domestic corporation. H&r block advantage e file See section 954(d)(3) for the definition of related person. H&r block advantage e file The terms of the obligation are significantly modified after August 9, 2010. H&r block advantage e file Any extension of the term of the obligation is considered a significant modification. H&r block advantage e file Interest paid by a foreign branch of a domestic corporation or a domestic partnership on deposits or withdrawable accounts with mutual savings banks, cooperative banks, credit unions, domestic building and loan associations, and other savings institutions chartered and supervised as savings and loan or similar associations under federal or state law if the interest paid or credited can be deducted by the association. H&r block advantage e file Interest on deposits with a foreign branch of a domestic corporation or domestic partnership, but only if the branch is in the commercial banking business. H&r block advantage e file Dividends In most cases, dividend income received from domestic corporations is U. H&r block advantage e file S. H&r block advantage e file source income. H&r block advantage e file Dividend income from foreign corporations is usually foreign source income. H&r block advantage e file Exceptions to both of these rules are discussed below. H&r block advantage e file A substitute dividend payment made to the transferor of a security in a securities lending transaction or a sale-repurchase transaction is sourced in the same manner as a distribution on the transferred security. H&r block advantage e file Dividend equivalent payments. H&r block advantage e file   U. H&r block advantage e file S. H&r block advantage e file source dividends also include all dividend equivalent payments. H&r block advantage e file Dividend equivalent payments include substitute dividends, payments made pursuant to a specified notional principal contract, and all similar payments that, directly or indirectly, are contingent on or determined by reference to, the payment of a dividend from U. H&r block advantage e file S. H&r block advantage e file sources. H&r block advantage e file    The Internal Revenue Service has issued final regulations that would affect the treatment of dividend equivalent payments and specified notional principal contracts. H&r block advantage e file You can view this regulation at www. H&r block advantage e file irs. H&r block advantage e file gov/irb/2013-52_IRB/ar08. H&r block advantage e file html. H&r block advantage e file First exception. H&r block advantage e file   Dividends received from a domestic corporation are not U. H&r block advantage e file S. H&r block advantage e file source income if the corporation elects to take the American Samoa economic development credit. H&r block advantage e file Second exception. H&r block advantage e file   Part of the dividends received from a foreign corporation is U. H&r block advantage e file S. H&r block advantage e file source income if 25% or more of its total gross income for the 3-year period ending with the close of its tax year preceding the declaration of dividends was effectively connected with a trade or business in the United States. H&r block advantage e file If the corporation was formed less than 3 years before the declaration, use its total gross income from the time it was formed. H&r block advantage e file Determine the part that is U. H&r block advantage e file S. H&r block advantage e file source income by multiplying the dividend by the following fraction. H&r block advantage e file   Foreign corporation's gross income connected with a U. H&r block advantage e file S. H&r block advantage e file trade or business for the 3-year period     Foreign corporation's gross income from all sources for that period   Guarantee of Indebtedness Certain amounts received directly or indirectly, for the provision of a guarantee of indebtedness issued after September 27, 2010, are U. H&r block advantage e file S. H&r block advantage e file source income. H&r block advantage e file They must be paid by a noncorporate resident or U. H&r block advantage e file S. H&r block advantage e file corporation or by any foreign person if the amounts are effectively connected with the conduct of a U. H&r block advantage e file S. H&r block advantage e file trade or business. H&r block advantage e file For more information, see Internal Revenue Code sections 861(a)(9) and 862(a)(9). H&r block advantage e file Personal Services All wages and any other compensation for services performed in the United States are considered to be from sources in the United States. H&r block advantage e file The only exceptions to this rule are discussed in chapter 3 under Employees of foreign persons, organizations, or offices, and under Crew members. H&r block advantage e file If you are an employee and receive compensation for labor or personal services performed both inside and outside the United States, special rules apply in determining the source of the compensation. H&r block advantage e file Compensation (other than certain fringe benefits) is sourced on a time basis. H&r block advantage e file Certain fringe benefits (such as housing and education) are sourced on a geographical basis. H&r block advantage e file Or, you may be permitted to use an alternative basis to determine the source of compensation. H&r block advantage e file See Alternative Basis , later. H&r block advantage e file Multi-level marketing. H&r block advantage e file   Certain companies sell products through a multi-level marketing arrangement, such that an upper-tier distributor, who has sponsored a lower-tier distributor, is entitled to a payment from the company based on certain activities of that lower-tier distributor. H&r block advantage e file Generally, depending on the facts, payments from such multi-level marketing companies to independent (non-employee) distributors (upper-tier distributors) that are based on the sales or purchases of persons whom they have sponsored (lower-tier distributors) constitute income for the performance of personal services in recruiting, training, and supporting the lower-tier distributors. H&r block advantage e file The source of such income is generally based on where the services of the upper-tier distributor are performed, and may, depending on the facts, be considered multi-year compensation, with the source of income determined over the period to which such compensation is attributable. H&r block advantage e file Self-employed individuals. H&r block advantage e file   If you are self-employed, you determine the source of compensation for labor or personal services from self-employment on the basis that most correctly reflects the proper source of that income under the facts and circumstances of your particular case. H&r block advantage e file In many cases, the facts and circumstances will call for an apportionment on a time basis as explained next. H&r block advantage e file Time Basis Use a time basis to figure your U. H&r block advantage e file S. H&r block advantage e file source compensation (other than the fringe benefits discussed later). H&r block advantage e file Do this by multiplying your total compensation (other than the fringe benefits discussed later) by the following fraction:   Number of days you performed services in the United States during the year     Total number of days you performed services during the year   You can use a unit of time less than a day in the above fraction, if appropriate. H&r block advantage e file The time period for which the compensation is made does not have to be a year. H&r block advantage e file Instead, you can use another distinct, separate, and continuous time period if you can establish to the satisfaction of the IRS that this other period is more appropriate. H&r block advantage e file Example 1. H&r block advantage e file Christina Brooks, a resident of the Netherlands, worked 240 days for a U. H&r block advantage e file S. H&r block advantage e file company during the tax year. H&r block advantage e file She received $80,000 in compensation. H&r block advantage e file None of it was for fringe benefits. H&r block advantage e file Christina performed services in the United States for 60 days and performed services in the Netherlands for 180 days. H&r block advantage e file Using the time basis for determining the source of compensation, $20,000 ($80,000 × 60/240) is her U. H&r block advantage e file S. H&r block advantage e file source income. H&r block advantage e file Example 2. H&r block advantage e file Rob Waters, a resident of South Africa, is employed by a corporation. H&r block advantage e file His annual salary is $100,000. H&r block advantage e file None of it is for fringe benefits. H&r block advantage e file During the first quarter of the year he worked entirely within the United States. H&r block advantage e file On April 1, Rob was transferred to Singapore for the remainder of the year. H&r block advantage e file Rob is able to establish that the first quarter of the year and the last 3 quarters of the year are two separate, distinct, and continuous periods of time. H&r block advantage e file Accordingly, $25,000 of Rob's annual salary is attributable to the first quarter of the year (. H&r block advantage e file 25 × $100,000). H&r block advantage e file All of it is U. H&r block advantage e file S. H&r block advantage e file source income because he worked entirely within the United States during that quarter. H&r block advantage e file The remaining $75,000 is attributable to the last three quarters of the year. H&r block advantage e file During those quarters, he worked 150 days in Singapore and 30 days in the United States. H&r block advantage e file His periodic performance of services in the United States did not result in distinct, separate, and continuous periods of time. H&r block advantage e file Of this $75,000, $12,500 ($75,000 × 30/180) is U. H&r block advantage e file S. H&r block advantage e file source income. H&r block advantage e file Multi-year compensation. H&r block advantage e file   The source of multi-year compensation is generally determined on a time basis over the period to which the compensation is attributable. H&r block advantage e file Multi-year compensation is compensation that is included in your income in one tax year but that is attributable to a period that includes two or more tax years. H&r block advantage e file   You determine the period to which the compensation is attributable based on the facts and circumstances of your case. H&r block advantage e file For example, an amount of compensation that specifically relates to a period of time that includes several calendar years is attributable to the entire multi-year period. H&r block advantage e file   The amount of compensation treated as from U. H&r block advantage e file S. H&r block advantage e file sources is figured by multiplying the total multi-year compensation by a fraction. H&r block advantage e file The numerator of the fraction is the number of days (or unit of time less than a day, if appropriate) that you performed labor or personal services in the United States in connection with the project. H&r block advantage e file The denominator of the fraction is the total number of days (or unit of time less than a day, if appropriate) that you performed labor or personal services in connection with the project. H&r block advantage e file Geographical Basis Compensation you receive as an employee in the form of the following fringe benefits is sourced on a geographical basis. H&r block advantage e file Housing. H&r block advantage e file Education. H&r block advantage e file Local transportation. H&r block advantage e file Tax reimbursement. H&r block advantage e file Hazardous or hardship duty pay as defined in Regulations section 1. H&r block advantage e file 861-4(b)(2)(ii)(D)(5). H&r block advantage e file Moving expense reimbursement. H&r block advantage e file The amount of fringe benefits must be reasonable and you must substantiate them by adequate records or by sufficient evidence. H&r block advantage e file Principal place of work. H&r block advantage e file   The above fringe benefits, except for tax reimbursement and hazardous or hardship duty pay, are sourced based on your principal place of work. H&r block advantage e file Your principal place of work is usually the place where you spend most of your working time. H&r block advantage e file This could be your office, plant, store, shop, or other location. H&r block advantage e file If there is no one place where you spend most of your working time, your main job location is the place where your work is centered, such as where you report for work or are otherwise required to “base” your work. H&r block advantage e file   If you have more than one job at any time, your main job location depends on the facts in each case. H&r block advantage e file The more important factors to be considered are: The total time you spend at each place, The amount of work you do at each place, and How much money you earn at each place. H&r block advantage e file Housing. H&r block advantage e file   The source of a housing fringe benefit is determined based on the location of your principal place of work. H&r block advantage e file A housing fringe benefit includes payments to you or on your behalf (and your family's if your family resides with you) only for the following. H&r block advantage e file Rent. H&r block advantage e file Utilities (except telephone charges). H&r block advantage e file Real and personal property insurance. H&r block advantage e file Occupancy taxes not deductible under section 164 or 216(a). H&r block advantage e file Nonrefundable fees for securing a leasehold. H&r block advantage e file Rental of furniture and accessories. H&r block advantage e file Household repairs. H&r block advantage e file Residential parking. H&r block advantage e file Fair rental value of housing provided in kind by your employer. H&r block advantage e file   A housing fringe benefit does not include: Deductible interest and taxes (including deductible interest and taxes of a tenant-stockholder in a cooperative housing corporation), The cost of buying property, including principal payments on a mortgage, The cost of domestic labor (maids, gardeners, etc. H&r block advantage e file ), Pay television subscriptions, Improvements and other expenses that increase the value or appreciably prolong the life of property, Purchased furniture or accessories, Depreciation or amortization of property or improvements, The value of meals or lodging that you exclude from gross income, or The value of meals or lodging that you deduct as moving expenses. H&r block advantage e file Education. H&r block advantage e file   The source of an education fringe benefit for the education expenses of your dependents is determined based on the location of your principal place of work. H&r block advantage e file An education fringe benefit includes payments only for the following expenses for education at an elementary or secondary school. H&r block advantage e file Tuition, fees, academic tutoring, special needs services for a special needs student, books, supplies, and other equipment. H&r block advantage e file Room and board and uniforms that are required or provided by the school in connection with enrollment or attendance. H&r block advantage e file Local transportation. H&r block advantage e file   The source of a local transportation fringe benefit is determined based on the location of your principal place of work. H&r block advantage e file Your local transportation fringe benefit is the amount that you receive as compensation for local transportation for you or your spouse or dependents at the location of your principal place of work. H&r block advantage e file The amount treated as a local transportation fringe benefit is limited to actual expenses incurred for local transportation and the fair rental value of any employer-provided vehicle used predominantly by you, your spouse, or your dependents for local transportation. H&r block advantage e file Actual expenses do not include the cost (including interest) of any vehicle purchased by you or on your behalf. H&r block advantage e file Tax reimbursement. H&r block advantage e file   The source of a tax reimbursement fringe benefit is determined based on the location of the jurisdiction that imposed the tax for which you are reimbursed. H&r block advantage e file Moving expense reimbursement. H&r block advantage e file   The source of a moving expense reimbursement is generally based on the location of your new principal place of work. H&r block advantage e file However, the source is determined based on the location of your former principal place of work if you provide sufficient evidence that such determination of source is more appropriate under the facts and circumstances of your case. H&r block advantage e file Sufficient evidence generally requires an agreement between you and your employer, or a written statement of company policy, which is reduced to writing before the move and which is entered into or established to induce you or other employees to move to another country. H&r block advantage e file The written statement or agreement must state that your employer will reimburse you for moving expenses that you incur to return to your former principal place of work regardless of whether you continue to work for your employer after returning to that location. H&r block advantage e file It may contain certain conditions upon which the right to reimbursement is determined as long as those conditions set forth standards that are definitely ascertainable and can only be fulfilled prior to, or through completion of, your return move to your former principal place of work. H&r block advantage e file Alternative Basis If you are an employee, you can determine the source of your compensation under an alternative basis if you establish to the satisfaction of the IRS that, under the facts and circumstances of your case, the alternative basis more properly determines the source of your compensation than the time or geographical basis. H&r block advantage e file If you use an alternative basis, you must keep (and have available for inspection) records to document why the alternative basis more properly determines the source of your compensation. H&r block advantage e file Also, if your total compensation from all sources is $250,000 or more, check “Yes” to both questions on line K on page 5 of Form 1040NR, and attach a written statement to your tax return that sets forth all of the following. H&r block advantage e file Your name and social security number (written across the top of the statement). H&r block advantage e file The specific compensation income, or the specific fringe benefit, for which you are using the alternative basis. H&r block advantage e file For each item in (2), the alternative basis of allocation of source used. H&r block advantage e file For each item in (2), a computation showing how the alternative allocation was computed. H&r block advantage e file A comparison of the dollar amount of the U. H&r block advantage e file S. H&r block advantage e file compensation and foreign compensation sourced under both the alternative basis and the time or geographical basis discussed earlier. H&r block advantage e file Transportation Income Transportation income is income from the use of a vessel or aircraft or for the performance of services directly related to the use of any vessel or aircraft. H&r block advantage e file This is true whether the vessel or aircraft is owned, hired, or leased. H&r block advantage e file The term “vessel or aircraft” includes any container used in connection with a vessel or aircraft. H&r block advantage e file All income from transportation that begins and ends in the United States is treated as derived from sources in the United States. H&r block advantage e file If the transportation begins or ends in the United States, 50% of the transportation income is treated as derived from sources in the United States. H&r block advantage e file For transportation income from personal services, 50% of the income is U. H&r block advantage e file S. H&r block advantage e file source income if the transportation is between the United States and a U. H&r block advantage e file S. H&r block advantage e file possession. H&r block advantage e file For nonresident aliens, this only applies to income derived from, or in connection with, an aircraft. H&r block advantage e file For information on how U. H&r block advantage e file S. H&r block advantage e file source transportation income is taxed, see chapter 4. H&r block advantage e file Scholarships, Grants, Prizes, and Awards Generally, the source of scholarships, fellowship grants, grants, prizes, and awards is the residence of the payer regardless of who actually disburses the funds. H&r block advantage e file However, see Activities to be performed outside the United States , later. H&r block advantage e file For example, payments for research or study in the United States made by the United States, a noncorporate U. H&r block advantage e file S. H&r block advantage e file resident, or a domestic corporation, are from U. H&r block advantage e file S. H&r block advantage e file sources. H&r block advantage e file Similar payments from a foreign government or foreign corporation are foreign source payments even though the funds may be disbursed through a U. H&r block advantage e file S. H&r block advantage e file agent. H&r block advantage e file Payments made by an entity designated as a public international organization under the International Organizations Immunities Act are from foreign sources. H&r block advantage e file Activities to be performed outside the United States. H&r block advantage e file   Scholarships, fellowship grants, targeted grants, and achievement awards received by nonresident aliens for activities performed, or to be performed, outside the United States are not U. H&r block advantage e file S. H&r block advantage e file source income. H&r block advantage e file    These rules do not apply to amounts paid as salary or other compensation for services. H&r block advantage e file See Personal Services, earlier, for the source rules that apply. H&r block advantage e file Pensions and Annuities If you receive a pension from a domestic trust for services performed both in and outside the United States, part of the pension payment is from U. H&r block advantage e file S. H&r block advantage e file sources. H&r block advantage e file That part is the amount attributable to earnings of the pension plan and the employer contributions made for services performed in the United States. H&r block advantage e file This applies whether the distribution is made under a qualified or nonqualified stock bonus, pension, profit-sharing, or annuity plan (whether or not funded). H&r block advantage e file If you performed services as an employee of the United States, you may receive a distribution from the U. H&r block advantage e file S. H&r block advantage e file Government under a plan, such as the Civil Service Retirement System, that is treated as a qualified pension plan. H&r block advantage e file Your U. H&r block advantage e file S. H&r block advantage e file source income is the otherwise taxable amount of the distribution that is attributable to your total U. H&r block advantage e file S. H&r block advantage e file Government basic pay other than tax-exempt pay for services performed outside the United States. H&r block advantage e file Rents or Royalties Your U. H&r block advantage e file S. H&r block advantage e file source income includes rent and royalty income received during the tax year from property located in the United States or from any interest in that property. H&r block advantage e file U. H&r block advantage e file S. H&r block advantage e file source income also includes rents or royalties for the use of, or for the privilege of using, in the United States, intangible property such as patents, copyrights, secret processes and formulas, goodwill, trademarks, franchises, and similar property. H&r block advantage e file Real Property Real property is land and buildings and generally anything built on, growing on, or attached to land. H&r block advantage e file Gross income from sources in the United States includes gains, profits, and income from the sale or other disposition of real property located in the United States. H&r block advantage e file Natural resources. H&r block advantage e file   The income from the sale of products of any farm, mine, oil or gas well, other natural deposit, or timber located in the United States and sold in a foreign country, or located in a foreign country and sold in the United States, is partly from sources in the United States. H&r block advantage e file For information on determining that part, see section 1. H&r block advantage e file 863-1(b) of the regulations. H&r block advantage e file Table 2-1. H&r block advantage e file Summary of Source Rules for Income of Nonresident Aliens Item of income Factor determining source Salaries, wages, other compensation Where services performed Business income:   Personal services Where services performed Sale of inventory—purchased Where sold Sale of inventory—produced Allocation Interest Residence of payer Dividends Whether a U. H&r block advantage e file S. H&r block advantage e file or foreign corporation* Rents Location of property Royalties:   Natural resources Location of property Patents, copyrights, etc. H&r block advantage e file Where property is used Sale of real property Location of property Sale of personal property Seller's tax home (but see Personal Property , later, for exceptions) Pension distributions attributable to contributions Where services were performed that earned the pension Investment earnings on pension contributions Location of pension trust Sale of natural resources Allocation based on fair market value of product at export terminal. H&r block advantage e file For more information, see section 1. H&r block advantage e file 863-1(b) of the regulations. H&r block advantage e file *Exceptions include: a) Dividends paid by a U. H&r block advantage e file S. H&r block advantage e file corporation are foreign source if the corporation elects the  American Samoa economic development credit. H&r block advantage e file  b) Part of a dividend paid by a foreign corporation is U. H&r block advantage e file S. H&r block advantage e file source if at least 25% of the  corporation's gross income is effectively connected with a U. H&r block advantage e file S. H&r block advantage e file trade or business for the  3 tax years before the year in which the dividends are declared. H&r block advantage e file Personal Property Personal property is property, such as machinery, equipment, or furniture, that is not real property. H&r block advantage e file Gain or loss from the sale or exchange of personal property generally has its source in the United States if you have a tax home in the United States. H&r block advantage e file If you do not have a tax home in the United States, the gain or loss generally is considered to be from sources outside the United States. H&r block advantage e file Tax home. H&r block advantage e file   Your tax home is the general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home. H&r block advantage e file Your tax home is the place where you permanently or indefinitely work as an employee or a self-employed individual. H&r block advantage e file If you do not have a regular or main place of business because of the nature of your work, then your tax home is the place where you regularly live. H&r block advantage e file If you do not fit either of these categories, you are considered an itinerant and your tax home is wherever you work. H&r block advantage e file Inventory property. H&r block advantage e file   Inventory property is personal property that is stock in trade or that is held primarily for sale to customers in the ordinary course of your trade or business. H&r block advantage e file Income from the sale of inventory that you purchased is sourced where the property is sold. H&r block advantage e file Generally, this is where title to the property passes to the buyer. H&r block advantage e file For example, income from the sale of inventory in the United States is U. H&r block advantage e file S. H&r block advantage e file source income, whether you purchased it in the United States or in a foreign country. H&r block advantage e file   Income from the sale of inventory property that you produced in the United States and sold outside the United States (or vice versa) is partly from sources in the United States and partly from sources outside the United States. H&r block advantage e file For information on making this allocation, see section 1. H&r block advantage e file 863-3 of the regulations. H&r block advantage e file   These rules apply even if your tax home is not in the United States. H&r block advantage e file Depreciable property. H&r block advantage e file   To determine the source of any gain from the sale of depreciable personal property, you must first figure the part of the gain that is not more than the total depreciation adjustments on the property. H&r block advantage e file You allocate this part of the gain to sources in the United States based on the ratio of U. H&r block advantage e file S. H&r block advantage e file depreciation adjustments to total depreciation adjustments. H&r block advantage e file The rest of this part of the gain is considered to be from sources outside the United States. H&r block advantage e file   For this purpose, “U. H&r block advantage e file S. H&r block advantage e file depreciation adjustments” are the depreciation adjustments to the basis of the property that are allowable in figuring taxable income from U. H&r block advantage e file S. H&r block advantage e file sources. H&r block advantage e file However, if the property is used predominantly in the United States during a tax year, all depreciation deductions allowable for that year are treated as U. H&r block advantage e file S. H&r block advantage e file depreciation adjustments. H&r block advantage e file But there are some exceptions for certain transportation, communications, and other property used internationally. H&r block advantage e file   Gain from the sale of depreciable property that is more than the total depreciation adjustments on the property is sourced as if the property were inventory property, as discussed above. H&r block advantage e file   A loss is sourced in the same way as the depreciation deductions were sourced. H&r block advantage e file However, if the property was used predominantly in the United States, the entire loss reduces U. H&r block advantage e file S. H&r block advantage e file source income. H&r block advantage e file   The basis of property usually means the cost (money plus the fair market value of other property or services) of property you acquire. H&r block advantage e file Depreciation is an amount deducted to recover the cost or other basis of a trade or business asset. H&r block advantage e file The amount you can deduct depends on the property's cost, when you began using the property, how long it will take to recover your cost, and which depreciation method you use. H&r block advantage e file A depreciation deduction is any deduction for depreciation or amortization or any other allowable deduction that treats a capital expenditure as a deductible expense. H&r block advantage e file Intangible property. H&r block advantage e file   Intangible property includes patents, copyrights, secret processes or formulas, goodwill, trademarks, trade names, or other like property. H&r block advantage e file The gain from the sale of amortizable or depreciable intangible property, up to the previously allowable amortization or depreciation deductions, is sourced in the same way as the original deductions were sourced. H&r block advantage e file This is the same as the source rule for gain from the sale of depreciable property. H&r block advantage e file See Depreciable property , earlier, for details on how to apply this rule. H&r block advantage e file   Gain in excess of the amortization or depreciation deductions is sourced in the country where the property is used if the income from the sale is contingent on the productivity, use, or disposition of that property. H&r block advantage e file If the income is not contingent on the productivity, use, or disposition of the property, the income is sourced according to your tax home as discussed earlier. H&r block advantage e file If payments for goodwill do not depend on its productivity, use, or disposition, their source is the country in which the goodwill was generated. H&r block advantage e file Sales through offices or fixed places of business. H&r block advantage e file   Despite any of the earlier rules, if you do not have a tax home in the United States, but you maintain an office or other fixed place of business in the United States, treat the income from any sale of personal property (including inventory property) that is attributable to that office or place of business as U. H&r block advantage e file S. H&r block advantage e file source income. H&r block advantage e file However, this rule does not apply to sales of inventory property for use, disposition, or consumption outside the United States if your office or other fixed place of business outside the United States materially participated in the sale. H&r block advantage e file   If you have a tax home in the United States but maintain an office or other fixed place of business outside the United States, income from sales of personal property, other than inventory, depreciable property, or intangibles, that is attributable to that foreign office or place of business may be treated as U. H&r block advantage e file S. H&r block advantage e file source income. H&r block advantage e file The income is treated as U. H&r block advantage e file S. H&r block advantage e file source income if an income tax of less than 10% of the income from the sale is paid to a foreign country. H&r block advantage e file This rule also applies to losses if the foreign country would have imposed an income tax of less than 10% had the sale resulted in a gain. H&r block advantage e file Community Income If you are married and you or your spouse is subject to the community property laws of a foreign country, a U. H&r block advantage e file S. H&r block advantage e file state, or a U. H&r block advantage e file S. H&r block advantage e file possession, you generally must follow those laws to determine the income of yourself and your spouse for U. H&r block advantage e file S. H&r block advantage e file tax purposes. H&r block advantage e file But you must disregard certain community property laws if: Both you and your spouse are nonresident aliens, or One of you is a nonresident alien and the other is a U. H&r block advantage e file S. H&r block advantage e file citizen or resident and you do not both choose to be treated as U. H&r block advantage e file S. H&r block advantage e file residents as explained in chapter 1. H&r block advantage e file In these cases, you and your spouse must report community income as explained later. H&r block advantage e file Earned income. H&r block advantage e file   Earned income of a spouse, other than trade or business income and a partner's distributive share of partnership income, is treated as the income of the spouse whose services produced the income. H&r block advantage e file That spouse must report all of it on his or her separate return. H&r block advantage e file Trade or business income. H&r block advantage e file   Trade or business income, other than a partner's distributive share of partnership income, is treated as the income of the spouse carrying on the trade or business. H&r block advantage e file That spouse must report all of it on his or her separate return. H&r block advantage e file Partnership income (or loss). H&r block advantage e file   A partner's distributive share of partnership income (or loss) is treated as the income (or loss) of the partner. H&r block advantage e file The partner must report all of it on his or her separate return. H&r block advantage e file Separate property income. H&r block advantage e file   Income derived from the separate property of one spouse (and which is not earned income, trade or business income, or partnership distributive share income) is treated as the income of that spouse. H&r block advantage e file That spouse must report all of it on his or her separate return. H&r block advantage e file Use the appropriate community property law to determine what is separate property. H&r block advantage e file Other community income. H&r block advantage e file   All other community income is treated as provided by the applicable community property laws. H&r block advantage e file Prev  Up  Next   Home   More Online Publications