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H&r Block Tax Estimator

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H&r Block Tax Estimator

H&r block tax estimator 5. H&r block tax estimator   Manufacturers Taxes Table of Contents Importer. H&r block tax estimator Use considered sale. H&r block tax estimator Lease considered sale. H&r block tax estimator Bonus goods. H&r block tax estimator Taxable Event ExemptionsRequirements for Exempt Sales Credits or Refunds Sport Fishing EquipmentRelated person. H&r block tax estimator Bows, Quivers, Broadheads, and Points Arrow ShaftsExemption for certain wooden arrows. H&r block tax estimator CoalExported. H&r block tax estimator Taxable TiresQualifying intercity or local bus. H&r block tax estimator Qualifying school bus. H&r block tax estimator Gas Guzzler TaxVehicles not subject to tax. H&r block tax estimator Imported automobiles. H&r block tax estimator VaccinesConditions to allowance. H&r block tax estimator Taxable Medical Devices The following discussion of manufacturers taxes applies to the tax on: Sport fishing equipment; Fishing rods and fishing poles; Electric outboard motors; Fishing tackle boxes; Bows, quivers, broadheads, and points; Arrow shafts; Coal; Taxable tires; Gas guzzler automobiles; and Vaccines. H&r block tax estimator Manufacturer. H&r block tax estimator   The term “manufacturer” includes a producer or importer. H&r block tax estimator A manufacturer is any person who produces a taxable article from new or raw material, or from scrap, salvage, or junk material, by processing or changing the form of an article or by combining or assembling two or more articles. H&r block tax estimator If you furnish the materials and keep title to those materials and to the finished article, you are considered the manufacturer even though another person actually manufactures the taxable article. H&r block tax estimator   A manufacturer who sells a taxable article in knockdown (unassembled) condition is liable for the tax. H&r block tax estimator The person who buys these component parts and assembles a taxable article may also be liable for tax as a further manufacturer depending on the labor, material, and overhead required to assemble the completed article if the article is assembled for business use. H&r block tax estimator Importer. H&r block tax estimator   An importer is a person who brings a taxable article into the United States, or withdraws a taxable article from a customs bonded warehouse for sale or use in the United States. H&r block tax estimator Sale. H&r block tax estimator   A sale is the transfer of the title to, or the substantial incidents of ownership in, an article to a buyer for consideration that may consist of money, services, or other things. H&r block tax estimator Use considered sale. H&r block tax estimator   A manufacturer who uses a taxable article is liable for the tax in the same manner as if it were sold. H&r block tax estimator Lease considered sale. H&r block tax estimator   The lease of an article (including any renewal or extension of the lease) by the manufacturer is generally considered a taxable sale. H&r block tax estimator However, for the gas guzzler tax, only the first lease (excluding any renewal or extension) of the automobile by the manufacturer is considered a sale. H&r block tax estimator Manufacturers taxes based on sale price. H&r block tax estimator   The manufacturers taxes imposed on the sale of sport fishing equipment, electric outboard motors, and bows are based on the sale price of the article. H&r block tax estimator The taxes imposed on coal are based either on the sale price or the weight. H&r block tax estimator   The price for which an article is sold includes the total consideration paid for the article, whether that consideration is in the form of money, services, or other things. H&r block tax estimator However, you include certain charges made when a taxable article is sold and you exclude others. H&r block tax estimator To figure the price on which you base the tax, use the following rules. H&r block tax estimator Include both the following charges in the price. H&r block tax estimator Any charge for coverings or containers (regardless of their nature). H&r block tax estimator Any charge incident to placing the article in a condition packed ready for shipment. H&r block tax estimator Exclude all the following amounts from the price. H&r block tax estimator The manufacturers excise tax, whether or not it is stated as a separate charge. H&r block tax estimator The transportation charges pursuant to the sale. H&r block tax estimator The cost of transportation of goods to a warehouse before their bona fide sale is not excludable. H&r block tax estimator Delivery, insurance, installation, retail dealer preparation charges, and other charges you incur in placing the article in the hands of the purchaser under a bona fide sale. H&r block tax estimator Discounts, rebates, and similar allowances actually granted to the purchaser. H&r block tax estimator Local advertising charges. H&r block tax estimator A charge made separately when the article is sold and that qualifies as a charge for “local advertising” may, within certain limits, be excluded from the sale price. H&r block tax estimator Charges for warranty paid at the purchaser's option. H&r block tax estimator However, a charge for a warranty of an article that the manufacturer requires the purchaser to pay to obtain the article is included in the sale price on which the tax is figured. H&r block tax estimator Bonus goods. H&r block tax estimator   Allocate the sale price if you give free nontaxable goods with the purchase of taxable merchandise. H&r block tax estimator Figure the tax only on the sale price attributable to the taxable articles. H&r block tax estimator Example. H&r block tax estimator A manufacturer sells a quantity of taxable articles and gives the purchaser certain nontaxable articles as a bonus. H&r block tax estimator The sale price of the shipment is $1,500. H&r block tax estimator The normal sale price is $2,000: $1,500 for the taxable articles and $500 for the nontaxable articles. H&r block tax estimator Since the taxable items represent 75% of the normal sale price, the tax is based on 75% of the actual sale price, or $1,125 (75% of $1,500). H&r block tax estimator The remaining $375 is allocated to the nontaxable articles. H&r block tax estimator Taxable Event Tax attaches when the title to the article sold passes from the manufacturer to the buyer. H&r block tax estimator When the title passes depends on the intention of the parties as gathered from the contract of sale. H&r block tax estimator In the absence of expressed intention, the legal rules of presumption followed in the jurisdiction where the sale occurs determine when title passes. H&r block tax estimator If the taxable article is used by the manufacturer, the tax attaches at the time use begins. H&r block tax estimator The manufacturer is liable for the tax. H&r block tax estimator Partial payments. H&r block tax estimator   The tax applies to each partial payment received when taxable articles are: Leased, Sold conditionally, Sold on installment with chattel mortgage, or Sold on installment with title to pass in the future. H&r block tax estimator To figure the tax, multiply the partial payment by the tax rate in effect at the time of the payment. H&r block tax estimator Exemptions The following sales by the manufacturer are exempt from the manufacturers tax. H&r block tax estimator Sale of an article to a state or local government for the exclusive use of the state or local government. H&r block tax estimator This exemption does not apply to the taxes on coal, gas guzzlers, and vaccines. H&r block tax estimator State is defined in Definitions in chapter 1. H&r block tax estimator Sale of an article to a nonprofit educational organization for its exclusive use. H&r block tax estimator This exemption does not apply to the taxes on coal, gas guzzlers, and vaccines. H&r block tax estimator Nonprofit educational organization is defined under Communications Tax in chapter 4. H&r block tax estimator Sale of an article to a qualified blood collector organization. H&r block tax estimator This exemption does not apply to gas guzzlers, recreational equipment, and vaccines. H&r block tax estimator Qualified blood collector organizations are defined under Communications Tax in chapter 4. H&r block tax estimator Sale of an article for use by the purchaser as supplies for vessels. H&r block tax estimator This exemption does not apply to the taxes on coal and vaccines. H&r block tax estimator Supplies for vessels means ships' stores, sea stores, or legitimate equipment on vessels of war of the United States or any foreign nation, vessels employed in the fisheries or whaling business, or vessels actually engaged in foreign trade. H&r block tax estimator Sale of an article for use by the purchaser for further manufacture, or for resale by the purchaser to a second purchaser for use by the second purchaser for further manufacture. H&r block tax estimator This exemption does not apply to the tax on coal and tires. H&r block tax estimator Use for further manufacture means use in the manufacture or production of an article subject to the manufacturers excise taxes. H&r block tax estimator If you buy articles tax free and resell or use them other than in the manufacture of another article, you are liable for the tax on their resale or use just as if you had manufactured and sold them. H&r block tax estimator Sale of an article for export or for resale by the purchaser to a second purchaser for export. H&r block tax estimator The article may be exported to a foreign country or to a possession of the United States. H&r block tax estimator A vaccine shipped to a possession of the United States is not considered to be exported. H&r block tax estimator If an article is sold tax free for export and the manufacturer does not receive proof of export, described later, the manufacturer is liable for the tax. H&r block tax estimator Sales of articles of native Indian handicraft, such as bows and arrow shafts, manufactured by Indians on reservations, in Indian schools, or under U. H&r block tax estimator S. H&r block tax estimator jurisdiction in Alaska. H&r block tax estimator For tire exemptions, see section 4221(e)(2). H&r block tax estimator Requirements for Exempt Sales The following requirements must be met for a sale to be exempt from the manufacturers tax. H&r block tax estimator Registration requirements. H&r block tax estimator   The manufacturer, first purchaser, and second purchaser in the case of resales must be registered. H&r block tax estimator See the Form 637 instructions for more information. H&r block tax estimator Exceptions to registration requirements. H&r block tax estimator   Registration is not required for: State or local governments, Foreign purchasers of articles sold or resold for export, The United States, or Parties to a sale of supplies for vessels and aircraft. H&r block tax estimator Certification requirement. H&r block tax estimator   If the purchaser is required to be registered, the purchaser must give the manufacturer its registration number and certify the exempt purpose for which the article will be used. H&r block tax estimator The information must be in writing and may be noted on the purchase order or other document furnished by the purchaser to the seller in connection with the sale. H&r block tax estimator   For a sale to a state or local government, an exemption certificate must be signed by an officer or employee authorized by the state or local government. H&r block tax estimator See Regulations section 48. H&r block tax estimator 4221-5(c) for the certificate requirements. H&r block tax estimator   For sales for use as supplies for vessels and aircraft, if the manufacturer and purchaser are not registered, the owner or agent of the vessel must provide an exemption certificate to the manufacturer before or at the time of sale. H&r block tax estimator See Regulations section 48. H&r block tax estimator 4221-4(d) for the certificate requirements. H&r block tax estimator Proof of export requirement. H&r block tax estimator   Within 6 months of the date of sale or shipment by the manufacturer, whichever is earlier, the manufacturer must receive proof of exportation. H&r block tax estimator See Regulations section 48. H&r block tax estimator 4221-3(d) for evidence that qualifies as proof of exportation. H&r block tax estimator Proof of resale for further manufacture requirement. H&r block tax estimator   Within 6 months of the date of sale or shipment by the manufacturer, whichever is earlier, the manufacturer must receive proof that the article has been resold for use in further manufacture. H&r block tax estimator See Regulations section 48. H&r block tax estimator 4221-2(c) for evidence that qualifies as proof of resale. H&r block tax estimator Information to be furnished to purchaser. H&r block tax estimator   The manufacturer must indicate to the purchaser that the articles normally would be subject to tax and are being sold tax free for an exempt purpose because the purchaser has provided the required certificate. H&r block tax estimator Credits or Refunds The manufacturer may be eligible to obtain a credit or refund of the manufacturers tax for certain uses, sales, exports, and price readjustments. H&r block tax estimator The claim must set forth in detail the facts upon which the claim is based. H&r block tax estimator Uses, sales, and exports. H&r block tax estimator   A credit or refund (without interest) of the manufacturers taxes may be allowable if a tax-paid article is, by any person: Exported, Used or sold for use as supplies for vessels (except for coal and vaccines), Sold to a state or local government for its exclusive use (except for coal, gas guzzlers, and vaccines), Sold to a nonprofit educational organization for its exclusive use (except for coal, gas guzzlers, and vaccines), Sold to a qualified blood collector organization for its exclusive use (except for gas guzzlers, recreational equipment, and vaccines), or Used for further manufacture of another article subject to the manufacturers taxes (except for coal). H&r block tax estimator Export. H&r block tax estimator   If a tax-paid article is exported, the exporter or shipper may claim a credit or refund if the manufacturer waives its right to claim the credit or refund. H&r block tax estimator In the case of a tax-paid article used to make another taxable article, the subsequent manufacturer may claim the credit or refund. H&r block tax estimator Price readjustments. H&r block tax estimator   In addition, a credit or refund (without interest) may be allowable for a tax-paid article for which the price is readjusted by reason of return or repossession of the article or a bona fide discount, rebate, or allowance for taxes based on price. H&r block tax estimator Conditions to allowance. H&r block tax estimator   To claim a credit or refund in the case of export; supplies for vessels; or sales to a state or local government, nonprofit educational organization, or qualified blood collector organization; the person who paid the tax must certify on the claim that one of the following applies and that the claimant has the required supporting information. H&r block tax estimator The claimant sold the article at a tax-excluded price. H&r block tax estimator The person has repaid, or agreed to repay, the tax to the ultimate vendor of the article. H&r block tax estimator The person has obtained the written consent of the ultimate vendor to make the claim. H&r block tax estimator The ultimate vendor generally is the seller making the sale that gives rise to the overpayment of tax. H&r block tax estimator Claim for further manufacture. H&r block tax estimator   To claim a credit or refund for further manufacture, the claimant must include a statement that contains the following. H&r block tax estimator The name and address of the manufacturer and the date of payment. H&r block tax estimator An identification of the article for which the credit or refund is claimed. H&r block tax estimator The amount of tax paid on the article and the date on which it was paid. H&r block tax estimator Information indicating that the article was used as material in the manufacture or production of, or as a component part of, a second article manufactured or produced by the manufacturer, or was sold on or in connection with, or with the sale of a second article manufactured or produced by the manufacturer. H&r block tax estimator An identification of the second article. H&r block tax estimator   For claims by the exporter or shipper, the claim must contain the proof of export and a statement signed by the person that paid the tax waiving the right to claim a credit or refund. H&r block tax estimator The statement must include the amount of tax paid, the date of payment, and the office to which it was paid. H&r block tax estimator Claim for price readjustment. H&r block tax estimator   To claim a credit or refund for a price readjustment, the person who paid the tax must include with the claim, a statement that contains the following. H&r block tax estimator A description of the circumstances that gave rise to the price readjustment. H&r block tax estimator An identification of the article whose price was readjusted. H&r block tax estimator The price at which the article was sold. H&r block tax estimator The amount of tax paid on the article and the date on which it was paid. H&r block tax estimator The name and address of the purchaser. H&r block tax estimator The amount repaid to the purchaser or credited to the purchaser's account. H&r block tax estimator Sport Fishing Equipment A tax of 10% of the sale price is imposed on many articles of sport fishing equipment sold by the manufacturer. H&r block tax estimator This includes any parts or accessories sold on or in connection with the sale of those articles. H&r block tax estimator Pay this tax with Form 720. H&r block tax estimator No tax deposits are required. H&r block tax estimator Sport fishing equipment includes all the following items. H&r block tax estimator Fishing rods and poles (and component parts), fishing reels, fly fishing lines, and other fishing lines not over 130 pounds test, fishing spears, spear guns, and spear tips. H&r block tax estimator Items of terminal tackle, including leaders, artificial lures, artificial baits, artificial flies, fishing hooks, bobbers, sinkers, snaps, drayles, and swivels (but not including natural bait or any item of terminal tackle designed for use and ordinarily used on fishing lines not described in (1)). H&r block tax estimator The following items of fishing supplies and accessories: fish stringers, creels, bags, baskets, and other containers designed to hold fish, portable bait containers, fishing vests, landing nets, gaff hooks, fishing hook disgorgers, and dressing for fishing lines and artificial flies. H&r block tax estimator Fishing tip-ups and tilts. H&r block tax estimator Fishing rod belts, fishing rodholders, fishing harnesses, fish fighting chairs, fishing outriggers, and fishing downriggers. H&r block tax estimator See Revenue Ruling 88-52 in Cumulative Bulletin 1988-1 for a more complete description of the items of taxable equipment. H&r block tax estimator Fishing rods and fishing poles. H&r block tax estimator   The tax on fishing rods and fishing poles (and component parts) is 10% of the sales price not to exceed $10 per article. H&r block tax estimator The tax is paid by the manufacturer, producer, or importer. H&r block tax estimator Fishing tackle boxes. H&r block tax estimator   The tax on fishing tackle boxes is 3% of the sales price. H&r block tax estimator The tax is paid by the manufacturer, producer, or importer. H&r block tax estimator Electric outboard boat motors. H&r block tax estimator   A tax of 3% of the sale price is imposed on the sale by the manufacturer of electric outboard motors. H&r block tax estimator This includes any parts or accessories sold on or in connection with the sale of those articles. H&r block tax estimator Certain equipment resale. H&r block tax estimator   The tax on the sale of sport fishing equipment is imposed a second time under the following circumstances. H&r block tax estimator If the manufacturer sells a taxable article to any person, the manufacturer is liable for the tax. H&r block tax estimator If the purchaser or any other person then sells it to a person who is related (discussed next) to the manufacturer, that related person is liable for a second tax on any subsequent sale of the article. H&r block tax estimator The second tax, however, is not imposed if the constructive sale price rules under section 4216(b) apply to the sale by the manufacturer. H&r block tax estimator   If the second tax is imposed, a credit for tax previously paid by the manufacturer is available provided the related person can document the tax paid. H&r block tax estimator The documentation requirement is generally satisfied only through submission of copies of actual records of the person that previously paid the tax. H&r block tax estimator Related person. H&r block tax estimator   For the tax on sport fishing equipment, a person is a related person of the manufacturer if that person and the manufacturer have a relationship described in section 465(b)(3)(C). H&r block tax estimator Bows, Quivers, Broadheads, and Points The tax on bows is 11% (. H&r block tax estimator 11) of the sales price. H&r block tax estimator The tax is paid by the manufacturer, producer, or importer. H&r block tax estimator It applies to bows having a peak draw weight of 30 pounds or more. H&r block tax estimator The tax is also imposed on the sale of any part or accessory suitable for inclusion in or attachment to a taxable bow and any quiver, broadhead, or point suitable for use with arrows described below. H&r block tax estimator Pay this tax with Form 720. H&r block tax estimator No tax deposits are required. H&r block tax estimator Arrow Shafts The tax on arrow shafts is listed on Form 720. H&r block tax estimator The tax is paid by the manufacturer, producer, or importer of any arrow shaft (whether sold separately or incorporated as part of a finished or unfinished product) of a type used in the manufacture of any arrow that after its assembly meets either of the following conditions. H&r block tax estimator It measures 18 inches or more in overall length. H&r block tax estimator It measures less than 18 inches in overall length but is suitable for use with a taxable bow, described earlier. H&r block tax estimator Exemption for certain wooden arrows. H&r block tax estimator   After October 3, 2008, the tax does not apply to any shaft made of all natural wood with no laminations or artificial means of enhancing the spine of such shaft (whether sold separately or incorporated as part of a finished or unfinished product) and used in the manufacture of any arrow that after its assembly meets both of the following conditions. H&r block tax estimator It measures 5/16 of an inch or less in diameter. H&r block tax estimator It is not suitable for use with a taxable bow, described earlier. H&r block tax estimator Pay this tax with Form 720. H&r block tax estimator No tax deposits are required. H&r block tax estimator Coal A tax is imposed on the first sale of coal mined in the United States. H&r block tax estimator The producer of the coal is liable for the tax. H&r block tax estimator The producer is the person who has vested ownership of the coal under state law immediately after the coal is severed from the ground. H&r block tax estimator Determine vested ownership without regard to any contractual arrangement for the sale or other disposition of the coal or the payment of any royalties between the producer and third parties. H&r block tax estimator A producer includes any person who extracts coal from coal waste refuse piles (or from the silt waste product that results from the wet washing of coal). H&r block tax estimator The tax is not imposed on coal extracted from a riverbed by dredging if it can be shown that the coal has been taxed previously. H&r block tax estimator Tax rates. H&r block tax estimator   The tax on underground-mined coal is the lower of: $1. H&r block tax estimator 10 a ton, or 4. H&r block tax estimator 4% of the sale price. H&r block tax estimator   The tax on surface-mined coal is the lower of: 55 cents a ton, or 4. H&r block tax estimator 4% of the sale price. H&r block tax estimator   Coal will be taxed at the 4. H&r block tax estimator 4% rate if the selling price is less than $25 a ton for underground-mined coal and less than $12. H&r block tax estimator 50 a ton for surface-mined coal. H&r block tax estimator Apply the tax proportionately if a sale or use includes a portion of a ton. H&r block tax estimator Example. H&r block tax estimator If you sell 21,000 pounds (10. H&r block tax estimator 5 tons) of coal from an underground mine for $525, the price per ton is $50. H&r block tax estimator The tax is $1. H&r block tax estimator 10 × 10. H&r block tax estimator 5 tons ($11. H&r block tax estimator 55). H&r block tax estimator Coal production. H&r block tax estimator   Coal is produced from surface mines if all geological matter (trees, earth, rock) above the coal is removed before the coal is mined. H&r block tax estimator Treat coal removed by auger and coal reclaimed from coal waste refuse piles as produced from a surface mine. H&r block tax estimator   Treat coal as produced from an underground mine when the coal is not produced from a surface mine. H&r block tax estimator In some cases, a single mine may yield coal from both surface mining and underground mining. H&r block tax estimator Determine if the coal is from a surface mine or an underground mine for each ton of coal produced and not on a mine-by-mine basis. H&r block tax estimator Determining tonnage or selling price. H&r block tax estimator   The producer pays the tax on coal at the time of sale or use. H&r block tax estimator In figuring the selling price for applying the tax, the point of sale is f. H&r block tax estimator o. H&r block tax estimator b. H&r block tax estimator (free on board) mine or f. H&r block tax estimator o. H&r block tax estimator b. H&r block tax estimator cleaning plant if you clean the coal before selling it. H&r block tax estimator This applies even if you sell the coal for a delivered price. H&r block tax estimator The f. H&r block tax estimator o. H&r block tax estimator b. H&r block tax estimator mine or f. H&r block tax estimator o. H&r block tax estimator b. H&r block tax estimator cleaning plant is the point at which you figure the number of tons sold for applying the applicable tonnage rate, and the point at which you figure the sale price for applying the 4. H&r block tax estimator 4% rate. H&r block tax estimator   The tax applies to the full amount of coal sold. H&r block tax estimator However, the IRS allows a calculated reduction of the taxable weight of the coal for the weight of the moisture in excess of the coal's inherent moisture content. H&r block tax estimator Include in the sale price any additional charge for a freeze-conditioning additive in figuring the tax. H&r block tax estimator   Do not include in the sales price the excise tax imposed on coal. H&r block tax estimator Coal used by the producer. H&r block tax estimator   The tax on coal applies if the coal is used by the producer in other than a mining process. H&r block tax estimator A mining process means the same for this purpose as for percentage depletion. H&r block tax estimator For example, the tax does not apply if, before selling the coal, you break it, clean it, size it, or apply any other process considered mining under the rules for depletion. H&r block tax estimator In this case, the tax applies only when you sell the coal. H&r block tax estimator The tax does not apply to coal used as fuel in the coal drying process since it is considered to be used in a mining process. H&r block tax estimator However, the tax does apply when you use the coal as fuel or as an ingredient in making coke since the coal is not used in a mining process. H&r block tax estimator   You must use a constructive sale price to figure the tax under the 4. H&r block tax estimator 4% rate if you use the coal in other than a mining process. H&r block tax estimator Base your constructive sale price on sales of a like kind and grade of coal by you or other producers made f. H&r block tax estimator o. H&r block tax estimator b. H&r block tax estimator mine or cleaning plant. H&r block tax estimator Normally, you use the same constructive price used to figure your percentage depletion deduction. H&r block tax estimator Blending. H&r block tax estimator   If you blend surface-mined coal with underground-mined coal during the cleaning process, you must figure the excise tax on the sale of the blended, cleaned coal. H&r block tax estimator Figure the tax separately for each type of coal in the blend. H&r block tax estimator Base the tax on the amount of each type in the blend if you can determine the proportion of each type of coal contained in the final blend. H&r block tax estimator Base the tax on the ratio of each type originally put into the cleaning process if you cannot determine the proportion of each type of coal in the blend. H&r block tax estimator However, the tax is limited to 4. H&r block tax estimator 4% of the sale price per ton of the blended coal. H&r block tax estimator Exemption from tax. H&r block tax estimator   The tax does not apply to sales of lignite and imported coal. H&r block tax estimator The only other exemption from the tax on the sale of coal is for coal exported as discussed next. H&r block tax estimator Exported. H&r block tax estimator   The tax does not apply to the sale of coal if the coal is in the stream of export when sold by the producer and the coal is actually exported. H&r block tax estimator   Coal is in the stream of export when sold by the producer if the sale is a step in the exportation of the coal to its ultimate destination in a foreign country. H&r block tax estimator For example, coal is in the stream of export when: The coal is loaded on an export vessel and title is transferred from the producer to a foreign purchaser, or The producer sells the coal to an export broker in the United States under terms of a contract showing that the coal is to be shipped to a foreign country. H&r block tax estimator   Proof of export includes any of the following items. H&r block tax estimator A copy of the export bill of lading issued by the delivering carrier. H&r block tax estimator A certificate signed by the export carrier's agent or representative showing actual exportation of the coal. H&r block tax estimator A certificate of landing signed by a customs officer of the foreign country to which the coal is exported. H&r block tax estimator If the foreign country does not have a customs administrator, a statement of the foreign consignee showing receipt of the coal. H&r block tax estimator Taxable Tires Taxable tires are divided into three categories for reporting and figuring the tax as described below. H&r block tax estimator A tax is imposed on taxable tires sold by the manufacturer, producer, or importer at the rate of $. H&r block tax estimator 0945 ($. H&r block tax estimator 04725 in the case of a biasply tire or super single tire) for each 10 pounds of the maximum rated load capacity over 3,500 pounds. H&r block tax estimator The three categories for reporting the tax and the tax rate are listed below. H&r block tax estimator Taxable tires other than biasply or super single tires at $. H&r block tax estimator 0945. H&r block tax estimator Taxable tires, biasply or super single tires (other than super single tires designed for steering) at $. H&r block tax estimator 04725. H&r block tax estimator Taxable tires, super single tires designed for steering at $. H&r block tax estimator 0945. H&r block tax estimator A taxable tire is any tire of the type used on highway vehicles if wholly or partially made of rubber and if marked according to federal regulations for highway use. H&r block tax estimator A biasply tire is a pneumatic tire on which the ply cords that extend to the beads are laid at alternate angles substantially less than 90 degrees to the centerline of the tread. H&r block tax estimator A super single tire is a tire greater than 13 inches in cross section width designed to replace 2 tires in a dual fitment. H&r block tax estimator Special rule, manufacturer's retail stores. H&r block tax estimator   The excise tax on taxable tires is imposed at the time the taxable tires are delivered to the manufacturer-owned retail stores, not at the time of sale. H&r block tax estimator Tires on imported articles. H&r block tax estimator   The importer of an article equipped with taxable tires is treated as the manufacturer of the tires and is liable for the taxable tire excise tax when the article is sold (except in the case of an automobile bus chassis or body with tires). H&r block tax estimator Tires exempt from tax. H&r block tax estimator   The tax on taxable tires does not apply to the following items. H&r block tax estimator Domestically recapped or retreaded tires if the tires have been sold previously in the United States and were taxable tires at the time of sale. H&r block tax estimator Tire carcasses not suitable for commercial use. H&r block tax estimator Tires for use on qualifying intercity, local, and school buses. H&r block tax estimator For tax-free treatment, the registration requirements discussed earlier under Requirements for Exempt Sales apply. H&r block tax estimator Tires sold for the exclusive use of the Department of Defense or the Coast Guard. H&r block tax estimator Tires of a type used exclusively on mobile machinery. H&r block tax estimator A taxable tire used on mobile machinery is not exempt from tax. H&r block tax estimator Qualifying intercity or local bus. H&r block tax estimator   This is any bus used mainly (more than 50%) to transport the general public for a fee and that either operates on a schedule along regular routes or seats at least 20 adults (excluding the driver). H&r block tax estimator Qualifying school bus. H&r block tax estimator   This is any bus substantially all the use (85% or more) of which is to transport students and employees of schools. H&r block tax estimator Credit or refund. H&r block tax estimator   A credit or refund (without interest) is allowable on tax-paid tires if the tires have been: Exported; Sold to a state or local government for its exclusive use; Sold to a nonprofit educational organization for its exclusive use (as defined under Communications Tax in chapter 4); Sold to a qualified blood collector organization (as defined under Communications Tax in chapter 4) for its exclusive use in connection with a vehicle the organization certifies will be primarily used in the collection, storage, or transportation of blood; Used or sold for use as supplies for vessels; or Sold in connection with qualified intercity, local, or school buses. H&r block tax estimator   Also, a credit or refund (without interest) is allowable on tax-paid tires sold by any person on, or in connection with, any other article that is sold or used in an activity listed above. H&r block tax estimator   The person who paid the tax is eligible to make the claim. H&r block tax estimator Gas Guzzler Tax Tax is imposed on the sale by the manufacturer of automobiles of a model type that has a fuel economy standard as measured by the Environmental Protection Agency (EPA) of less than 22. H&r block tax estimator 5 miles per gallon. H&r block tax estimator If you import an automobile for personal use, you may be liable for this tax. H&r block tax estimator Figure the tax on Form 6197, as discussed later. H&r block tax estimator The tax rate is based on fuel economy rating. H&r block tax estimator The tax rates for the gas guzzler tax are shown on Form 6197. H&r block tax estimator A person that lengthens an existing automobile is the manufacturer of an automobile. H&r block tax estimator Automobiles. H&r block tax estimator   An automobile (including limousines) means any four-wheeled vehicle that is: Rated at an unloaded gross vehicle weight of 6,000 pounds or less, Propelled by an engine powered by gasoline or diesel fuel, and Intended for use mainly on public streets, roads, and highways. H&r block tax estimator Vehicles not subject to tax. H&r block tax estimator   For the gas guzzler tax, the following vehicles are not considered automobiles. H&r block tax estimator Limousines with a gross unloaded vehicle weight of more than 6,000 pounds. H&r block tax estimator Vehicles operated exclusively on a rail or rails. H&r block tax estimator Vehicles sold for use and used primarily: As ambulances or combination ambulance-hearses, For police or other law enforcement purposes by federal, state, or local governments, or For firefighting purposes. H&r block tax estimator Vehicles treated under 49 U. H&r block tax estimator S. H&r block tax estimator C. H&r block tax estimator 32901 (1978) as non-passenger automobiles. H&r block tax estimator This includes limousines manufactured primarily to transport more than 10 persons. H&r block tax estimator   The manufacturer can sell a vehicle described in item (3) tax free only when the sale is made directly to a purchaser for the described emergency use and the manufacturer and purchaser (other than a state or local government) are registered. H&r block tax estimator   Treat an Indian tribal government as a state only if the police or other law enforcement purposes are an essential tribal government function. H&r block tax estimator Model type. H&r block tax estimator   Model type is a particular class of automobile as determined by EPA regulations. H&r block tax estimator Fuel economy. H&r block tax estimator   Fuel economy is the average number of miles an automobile travels on a gallon of gasoline (or diesel fuel) rounded to the nearest 0. H&r block tax estimator 1 mile as figured by the EPA. H&r block tax estimator Imported automobiles. H&r block tax estimator   The tax also applies to automobiles that do not have a prototype-based fuel economy rating assigned by the EPA. H&r block tax estimator An automobile imported into the United States without a certificate of conformity to United States emission standards and that has no assigned fuel economy rating must be either: Converted by installation of emission controls to conform in all material respects to an automobile already certified for sale in the United States, or Modified by installation of emission control components and individually tested to demonstrate emission compliance. H&r block tax estimator   An imported automobile that has been converted to conform to an automobile already certified for sale in the United States may use the fuel economy rating assigned to that certified automobile. H&r block tax estimator   A fuel economy rating is not generally available for modified imported automobiles because the EPA does not require a highway fuel economy test on them. H&r block tax estimator A separate highway fuel economy test would be required to devise a fuel economy rating (otherwise the automobile is presumed to fall within the lowest fuel economy rating category). H&r block tax estimator   For more information about fuel economy ratings for imported automobiles, see Revenue Ruling 86-20 and Revenue Procedure 86-9 in Cumulative Bulletin 1986-1, and Revenue Procedure 87-10 in Cumulative Bulletin 1987-1. H&r block tax estimator Exemptions. H&r block tax estimator   No one is exempt from the gas guzzler tax, including the federal government, state and local governments, qualified blood collector organizations, and nonprofit educational organizations. H&r block tax estimator However, see Vehicles not subject to tax, earlier. H&r block tax estimator Form 6197. H&r block tax estimator   Use Form 6197 to figure your tax liability for each quarter. H&r block tax estimator Attach Form 6197 to your Form 720 for the quarter. H&r block tax estimator See the Form 6197 instructions for more information and the one-time filing rules. H&r block tax estimator Credit or refund. H&r block tax estimator   If the manufacturer paid the tax on a vehicle that is used or resold for an emergency use (see item (3) under Vehicles not subject to tax), the manufacturer can claim a credit or refund. H&r block tax estimator For information about how to file for credits or refunds, see the Instructions for Form 720 or Form 8849. H&r block tax estimator Vaccines Tax is imposed on certain vaccines sold by the manufacturer in the United States. H&r block tax estimator A taxable vaccine means any of the following vaccines. H&r block tax estimator Any vaccine containing diphtheria toxoid. H&r block tax estimator Any vaccine containing tetanus toxoid. H&r block tax estimator Any vaccine containing pertussis bacteria, extracted or partial cell bacteria, or specific pertussis antigens. H&r block tax estimator Any vaccine containing polio virus. H&r block tax estimator Any vaccine against measles. H&r block tax estimator Any vaccine against mumps. H&r block tax estimator Any vaccine against rubella. H&r block tax estimator Any vaccine against hepatitis A. H&r block tax estimator Any vaccine against hepatitis B. H&r block tax estimator Any vaccine against chicken pox. H&r block tax estimator Any vaccine against rotavirus gastroenteritis. H&r block tax estimator Any HIB vaccine. H&r block tax estimator Any conjugate vaccine against streptococcus pneumoniae. H&r block tax estimator Any trivalent vaccine against influenza or any other vaccine against influenza. H&r block tax estimator Any meningococcal vaccine. H&r block tax estimator Any vaccine against the human papillomavirus. H&r block tax estimator The effective date for the tax on any vaccine against influenza, other than trivalent influenza vaccines, is the later of August 1, 2013, or the date the Secretary of Health and Human Services lists a vaccine against seasonal influenza for purposes of compensation for any vaccine-related injury or death through the Vaccine Injury Compensation Trust Fund. H&r block tax estimator The tax is $. H&r block tax estimator 75 per dose of each taxable vaccine. H&r block tax estimator The tax per dose on a vaccine that contains more than one taxable vaccine is $. H&r block tax estimator 75 times the number of taxable vaccines. H&r block tax estimator Taxable use. H&r block tax estimator   Any manufacturer (including a governmental entity) that uses a taxable vaccine before it is sold will be liable for the tax in the same manner as if the vaccine was sold by the manufacturer. H&r block tax estimator Credit or refund. H&r block tax estimator   A credit or refund (without interest) is available if the vaccine is: Returned to the person who paid the tax (other than for resale), or Destroyed. H&r block tax estimator The claim for a credit or refund must be filed within 6 months after the vaccine is returned or destroyed. H&r block tax estimator Conditions to allowance. H&r block tax estimator   To claim a credit or refund, the person who paid the tax must have repaid or agreed to repay the tax to the ultimate purchaser of the vaccine or obtained the written consent of such purchaser to allowance of the credit or refund. H&r block tax estimator Taxable Medical Devices Taxable medical devices. H&r block tax estimator   The tax on the sale of certain medical devices by the manufacturer, producer, or importer of the device is 2. H&r block tax estimator 3% (. H&r block tax estimator 023) of the sales price. H&r block tax estimator A taxable medical device is a device that is listed as a device with the Food and Drug Administration (FDA) under section 510(j) of the Federal Food, Drug, and Cosmetic Act and 21 CFR part 807, pursuant to FDA requirements. H&r block tax estimator There are specific exemptions for eyeglasses, contact lenses, and hearing aids. H&r block tax estimator There is also an exemption for devices that are determined by the Secretary to be of a type that are generally purchased by the general public at retail for individual use (this exemption is known as the retail exemption). H&r block tax estimator See T. H&r block tax estimator D. H&r block tax estimator 9604 for information on how to determine whether a device falls within the retail exemption, and examples of how a taxpayer might evaluate a given device. H&r block tax estimator More information. H&r block tax estimator   For more information on the medical device tax, see section 4191, T. H&r block tax estimator D. H&r block tax estimator 9604, and Notice 2012-77. H&r block tax estimator You can find T. H&r block tax estimator D. H&r block tax estimator 9604 and Notice 2012-77 on pages 730 and 781, respectively, of I. H&r block tax estimator R. H&r block tax estimator B. H&r block tax estimator 2012-52 at www. H&r block tax estimator irs. H&r block tax estimator gov/pub/irs-irbs/irb12-52. H&r block tax estimator pdf. H&r block tax estimator Prev  Up  Next   Home   More Online Publications
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The H&r Block Tax Estimator

H&r block tax estimator 2. H&r block tax estimator   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 tax estimator This chapter will help you determine the source of different types of income you may receive during the tax year. H&r block tax estimator This chapter also discusses special rules for married individuals who are domiciled in a country with community property laws. H&r block tax estimator Topics - This chapter discusses: Income source rules, and Community income. H&r block tax estimator Resident Aliens A resident alien's income is generally subject to tax in the same manner as a U. H&r block tax estimator S. H&r block tax estimator citizen. H&r block tax estimator 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 tax estimator S. H&r block tax estimator tax return. H&r block tax estimator You must report these amounts from sources within and outside the United States. H&r block tax estimator Nonresident Aliens A nonresident alien usually is subject to U. H&r block tax estimator S. H&r block tax estimator income tax only on U. H&r block tax estimator S. H&r block tax estimator source income. H&r block tax estimator Under limited circumstances, certain foreign source income is subject to U. H&r block tax estimator S. H&r block tax estimator tax. H&r block tax estimator See Foreign Income in chapter 4. H&r block tax estimator The general rules for determining U. H&r block tax estimator S. H&r block tax estimator source income that apply to most nonresident aliens are shown in Table 2-1. H&r block tax estimator The following discussions cover the general rules as well as the exceptions to these rules. H&r block tax estimator Not all items of U. H&r block tax estimator S. H&r block tax estimator source income are taxable. H&r block tax estimator See chapter 3. H&r block tax estimator Interest Income Generally, U. H&r block tax estimator S. H&r block tax estimator source interest income includes the following items. H&r block tax estimator Interest on bonds, notes, or other interest-bearing obligations of U. H&r block tax estimator S. H&r block tax estimator residents or domestic corporations. H&r block tax estimator Interest paid by a domestic or foreign partnership or foreign corporation engaged in a U. H&r block tax estimator S. H&r block tax estimator trade or business at any time during the tax year. H&r block tax estimator Original issue discount. H&r block tax estimator Interest from a state, the District of Columbia, or the U. H&r block tax estimator S. H&r block tax estimator Government. H&r block tax estimator The place or manner of payment is immaterial in determining the source of the income. H&r block tax estimator 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 tax estimator Exceptions. H&r block tax estimator   U. H&r block tax estimator S. H&r block tax estimator source interest income does not include the following items. H&r block tax estimator 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 tax estimator S. H&r block tax estimator possession. H&r block tax estimator However, the interest will be considered U. H&r block tax estimator S. H&r block tax estimator source interest income if either of the following apply. H&r block tax estimator The recipient of the interest is related to the resident alien or domestic corporation. H&r block tax estimator See section 954(d)(3) for the definition of related person. H&r block tax estimator The terms of the obligation are significantly modified after August 9, 2010. H&r block tax estimator Any extension of the term of the obligation is considered a significant modification. H&r block tax estimator 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 tax estimator 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 tax estimator Dividends In most cases, dividend income received from domestic corporations is U. H&r block tax estimator S. H&r block tax estimator source income. H&r block tax estimator Dividend income from foreign corporations is usually foreign source income. H&r block tax estimator Exceptions to both of these rules are discussed below. H&r block tax estimator 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 tax estimator Dividend equivalent payments. H&r block tax estimator   U. H&r block tax estimator S. H&r block tax estimator source dividends also include all dividend equivalent payments. H&r block tax estimator 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 tax estimator S. H&r block tax estimator sources. H&r block tax estimator    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 tax estimator You can view this regulation at www. H&r block tax estimator irs. H&r block tax estimator gov/irb/2013-52_IRB/ar08. H&r block tax estimator html. H&r block tax estimator First exception. H&r block tax estimator   Dividends received from a domestic corporation are not U. H&r block tax estimator S. H&r block tax estimator source income if the corporation elects to take the American Samoa economic development credit. H&r block tax estimator Second exception. H&r block tax estimator   Part of the dividends received from a foreign corporation is U. H&r block tax estimator S. H&r block tax estimator 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 tax estimator 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 tax estimator Determine the part that is U. H&r block tax estimator S. H&r block tax estimator source income by multiplying the dividend by the following fraction. H&r block tax estimator   Foreign corporation's gross income connected with a U. H&r block tax estimator S. H&r block tax estimator 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 tax estimator S. H&r block tax estimator source income. H&r block tax estimator They must be paid by a noncorporate resident or U. H&r block tax estimator S. H&r block tax estimator corporation or by any foreign person if the amounts are effectively connected with the conduct of a U. H&r block tax estimator S. H&r block tax estimator trade or business. H&r block tax estimator For more information, see Internal Revenue Code sections 861(a)(9) and 862(a)(9). H&r block tax estimator 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 tax estimator 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 tax estimator 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 tax estimator Compensation (other than certain fringe benefits) is sourced on a time basis. H&r block tax estimator Certain fringe benefits (such as housing and education) are sourced on a geographical basis. H&r block tax estimator Or, you may be permitted to use an alternative basis to determine the source of compensation. H&r block tax estimator See Alternative Basis , later. H&r block tax estimator Multi-level marketing. H&r block tax estimator   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 tax estimator 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 tax estimator 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 tax estimator Self-employed individuals. H&r block tax estimator   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 tax estimator In many cases, the facts and circumstances will call for an apportionment on a time basis as explained next. H&r block tax estimator Time Basis Use a time basis to figure your U. H&r block tax estimator S. H&r block tax estimator source compensation (other than the fringe benefits discussed later). H&r block tax estimator 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 tax estimator The time period for which the compensation is made does not have to be a year. H&r block tax estimator 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 tax estimator Example 1. H&r block tax estimator Christina Brooks, a resident of the Netherlands, worked 240 days for a U. H&r block tax estimator S. H&r block tax estimator company during the tax year. H&r block tax estimator She received $80,000 in compensation. H&r block tax estimator None of it was for fringe benefits. H&r block tax estimator Christina performed services in the United States for 60 days and performed services in the Netherlands for 180 days. H&r block tax estimator Using the time basis for determining the source of compensation, $20,000 ($80,000 × 60/240) is her U. H&r block tax estimator S. H&r block tax estimator source income. H&r block tax estimator Example 2. H&r block tax estimator Rob Waters, a resident of South Africa, is employed by a corporation. H&r block tax estimator His annual salary is $100,000. H&r block tax estimator None of it is for fringe benefits. H&r block tax estimator During the first quarter of the year he worked entirely within the United States. H&r block tax estimator On April 1, Rob was transferred to Singapore for the remainder of the year. H&r block tax estimator 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 tax estimator Accordingly, $25,000 of Rob's annual salary is attributable to the first quarter of the year (. H&r block tax estimator 25 × $100,000). H&r block tax estimator All of it is U. H&r block tax estimator S. H&r block tax estimator source income because he worked entirely within the United States during that quarter. H&r block tax estimator The remaining $75,000 is attributable to the last three quarters of the year. H&r block tax estimator During those quarters, he worked 150 days in Singapore and 30 days in the United States. H&r block tax estimator His periodic performance of services in the United States did not result in distinct, separate, and continuous periods of time. H&r block tax estimator Of this $75,000, $12,500 ($75,000 × 30/180) is U. H&r block tax estimator S. H&r block tax estimator source income. H&r block tax estimator Multi-year compensation. H&r block tax estimator   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 tax estimator 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 tax estimator   You determine the period to which the compensation is attributable based on the facts and circumstances of your case. H&r block tax estimator 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 tax estimator   The amount of compensation treated as from U. H&r block tax estimator S. H&r block tax estimator sources is figured by multiplying the total multi-year compensation by a fraction. H&r block tax estimator 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 tax estimator 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 tax estimator 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 tax estimator Housing. H&r block tax estimator Education. H&r block tax estimator Local transportation. H&r block tax estimator Tax reimbursement. H&r block tax estimator Hazardous or hardship duty pay as defined in Regulations section 1. H&r block tax estimator 861-4(b)(2)(ii)(D)(5). H&r block tax estimator Moving expense reimbursement. H&r block tax estimator The amount of fringe benefits must be reasonable and you must substantiate them by adequate records or by sufficient evidence. H&r block tax estimator Principal place of work. H&r block tax estimator   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 tax estimator Your principal place of work is usually the place where you spend most of your working time. H&r block tax estimator This could be your office, plant, store, shop, or other location. H&r block tax estimator 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 tax estimator   If you have more than one job at any time, your main job location depends on the facts in each case. H&r block tax estimator 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 tax estimator Housing. H&r block tax estimator   The source of a housing fringe benefit is determined based on the location of your principal place of work. H&r block tax estimator 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 tax estimator Rent. H&r block tax estimator Utilities (except telephone charges). H&r block tax estimator Real and personal property insurance. H&r block tax estimator Occupancy taxes not deductible under section 164 or 216(a). H&r block tax estimator Nonrefundable fees for securing a leasehold. H&r block tax estimator Rental of furniture and accessories. H&r block tax estimator Household repairs. H&r block tax estimator Residential parking. H&r block tax estimator Fair rental value of housing provided in kind by your employer. H&r block tax estimator   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 tax estimator ), 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 tax estimator Education. H&r block tax estimator   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 tax estimator An education fringe benefit includes payments only for the following expenses for education at an elementary or secondary school. H&r block tax estimator Tuition, fees, academic tutoring, special needs services for a special needs student, books, supplies, and other equipment. H&r block tax estimator Room and board and uniforms that are required or provided by the school in connection with enrollment or attendance. H&r block tax estimator Local transportation. H&r block tax estimator   The source of a local transportation fringe benefit is determined based on the location of your principal place of work. H&r block tax estimator 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 tax estimator 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 tax estimator Actual expenses do not include the cost (including interest) of any vehicle purchased by you or on your behalf. H&r block tax estimator Tax reimbursement. H&r block tax estimator   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 tax estimator Moving expense reimbursement. H&r block tax estimator   The source of a moving expense reimbursement is generally based on the location of your new principal place of work. H&r block tax estimator 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 tax estimator 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 tax estimator 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 tax estimator 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 tax estimator 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 tax estimator 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 tax estimator 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 tax estimator Your name and social security number (written across the top of the statement). H&r block tax estimator The specific compensation income, or the specific fringe benefit, for which you are using the alternative basis. H&r block tax estimator For each item in (2), the alternative basis of allocation of source used. H&r block tax estimator For each item in (2), a computation showing how the alternative allocation was computed. H&r block tax estimator A comparison of the dollar amount of the U. H&r block tax estimator S. H&r block tax estimator compensation and foreign compensation sourced under both the alternative basis and the time or geographical basis discussed earlier. H&r block tax estimator 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 tax estimator This is true whether the vessel or aircraft is owned, hired, or leased. H&r block tax estimator The term “vessel or aircraft” includes any container used in connection with a vessel or aircraft. H&r block tax estimator 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 tax estimator 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 tax estimator For transportation income from personal services, 50% of the income is U. H&r block tax estimator S. H&r block tax estimator source income if the transportation is between the United States and a U. H&r block tax estimator S. H&r block tax estimator possession. H&r block tax estimator For nonresident aliens, this only applies to income derived from, or in connection with, an aircraft. H&r block tax estimator For information on how U. H&r block tax estimator S. H&r block tax estimator source transportation income is taxed, see chapter 4. H&r block tax estimator 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 tax estimator However, see Activities to be performed outside the United States , later. H&r block tax estimator For example, payments for research or study in the United States made by the United States, a noncorporate U. H&r block tax estimator S. H&r block tax estimator resident, or a domestic corporation, are from U. H&r block tax estimator S. H&r block tax estimator sources. H&r block tax estimator 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 tax estimator S. H&r block tax estimator agent. H&r block tax estimator Payments made by an entity designated as a public international organization under the International Organizations Immunities Act are from foreign sources. H&r block tax estimator Activities to be performed outside the United States. H&r block tax estimator   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 tax estimator S. H&r block tax estimator source income. H&r block tax estimator    These rules do not apply to amounts paid as salary or other compensation for services. H&r block tax estimator See Personal Services, earlier, for the source rules that apply. H&r block tax estimator 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 tax estimator S. H&r block tax estimator sources. H&r block tax estimator 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 tax estimator 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 tax estimator If you performed services as an employee of the United States, you may receive a distribution from the U. H&r block tax estimator S. H&r block tax estimator Government under a plan, such as the Civil Service Retirement System, that is treated as a qualified pension plan. H&r block tax estimator Your U. H&r block tax estimator S. H&r block tax estimator source income is the otherwise taxable amount of the distribution that is attributable to your total U. H&r block tax estimator S. H&r block tax estimator Government basic pay other than tax-exempt pay for services performed outside the United States. H&r block tax estimator Rents or Royalties Your U. H&r block tax estimator S. H&r block tax estimator 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 tax estimator U. H&r block tax estimator S. H&r block tax estimator 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 tax estimator Real Property Real property is land and buildings and generally anything built on, growing on, or attached to land. H&r block tax estimator 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 tax estimator Natural resources. H&r block tax estimator   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 tax estimator For information on determining that part, see section 1. H&r block tax estimator 863-1(b) of the regulations. H&r block tax estimator Table 2-1. H&r block tax estimator 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 tax estimator S. H&r block tax estimator or foreign corporation* Rents Location of property Royalties:   Natural resources Location of property Patents, copyrights, etc. H&r block tax estimator 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 tax estimator For more information, see section 1. H&r block tax estimator 863-1(b) of the regulations. H&r block tax estimator *Exceptions include: a) Dividends paid by a U. H&r block tax estimator S. H&r block tax estimator corporation are foreign source if the corporation elects the  American Samoa economic development credit. H&r block tax estimator  b) Part of a dividend paid by a foreign corporation is U. H&r block tax estimator S. H&r block tax estimator source if at least 25% of the  corporation's gross income is effectively connected with a U. H&r block tax estimator S. H&r block tax estimator trade or business for the  3 tax years before the year in which the dividends are declared. H&r block tax estimator Personal Property Personal property is property, such as machinery, equipment, or furniture, that is not real property. H&r block tax estimator 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 tax estimator 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 tax estimator Tax home. H&r block tax estimator   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 tax estimator Your tax home is the place where you permanently or indefinitely work as an employee or a self-employed individual. H&r block tax estimator 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 tax estimator 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 tax estimator Inventory property. H&r block tax estimator   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 tax estimator Income from the sale of inventory that you purchased is sourced where the property is sold. H&r block tax estimator Generally, this is where title to the property passes to the buyer. H&r block tax estimator For example, income from the sale of inventory in the United States is U. H&r block tax estimator S. H&r block tax estimator source income, whether you purchased it in the United States or in a foreign country. H&r block tax estimator   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 tax estimator For information on making this allocation, see section 1. H&r block tax estimator 863-3 of the regulations. H&r block tax estimator   These rules apply even if your tax home is not in the United States. H&r block tax estimator Depreciable property. H&r block tax estimator   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 tax estimator You allocate this part of the gain to sources in the United States based on the ratio of U. H&r block tax estimator S. H&r block tax estimator depreciation adjustments to total depreciation adjustments. H&r block tax estimator The rest of this part of the gain is considered to be from sources outside the United States. H&r block tax estimator   For this purpose, “U. H&r block tax estimator S. H&r block tax estimator depreciation adjustments” are the depreciation adjustments to the basis of the property that are allowable in figuring taxable income from U. H&r block tax estimator S. H&r block tax estimator sources. H&r block tax estimator 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 tax estimator S. H&r block tax estimator depreciation adjustments. H&r block tax estimator But there are some exceptions for certain transportation, communications, and other property used internationally. H&r block tax estimator   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 tax estimator   A loss is sourced in the same way as the depreciation deductions were sourced. H&r block tax estimator However, if the property was used predominantly in the United States, the entire loss reduces U. H&r block tax estimator S. H&r block tax estimator source income. H&r block tax estimator   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 tax estimator Depreciation is an amount deducted to recover the cost or other basis of a trade or business asset. H&r block tax estimator 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 tax estimator 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 tax estimator Intangible property. H&r block tax estimator   Intangible property includes patents, copyrights, secret processes or formulas, goodwill, trademarks, trade names, or other like property. H&r block tax estimator 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 tax estimator This is the same as the source rule for gain from the sale of depreciable property. H&r block tax estimator See Depreciable property , earlier, for details on how to apply this rule. H&r block tax estimator   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 tax estimator 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 tax estimator 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 tax estimator Sales through offices or fixed places of business. H&r block tax estimator   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 tax estimator S. H&r block tax estimator source income. H&r block tax estimator 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 tax estimator   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 tax estimator S. H&r block tax estimator source income. H&r block tax estimator The income is treated as U. H&r block tax estimator S. H&r block tax estimator 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 tax estimator 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 tax estimator 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 tax estimator S. H&r block tax estimator state, or a U. H&r block tax estimator S. H&r block tax estimator possession, you generally must follow those laws to determine the income of yourself and your spouse for U. H&r block tax estimator S. H&r block tax estimator tax purposes. H&r block tax estimator 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 tax estimator S. H&r block tax estimator citizen or resident and you do not both choose to be treated as U. H&r block tax estimator S. H&r block tax estimator residents as explained in chapter 1. H&r block tax estimator In these cases, you and your spouse must report community income as explained later. H&r block tax estimator Earned income. H&r block tax estimator   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 tax estimator That spouse must report all of it on his or her separate return. H&r block tax estimator Trade or business income. H&r block tax estimator   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 tax estimator That spouse must report all of it on his or her separate return. H&r block tax estimator Partnership income (or loss). H&r block tax estimator   A partner's distributive share of partnership income (or loss) is treated as the income (or loss) of the partner. H&r block tax estimator The partner must report all of it on his or her separate return. H&r block tax estimator Separate property income. H&r block tax estimator   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 tax estimator That spouse must report all of it on his or her separate return. H&r block tax estimator Use the appropriate community property law to determine what is separate property. H&r block tax estimator Other community income. H&r block tax estimator   All other community income is treated as provided by the applicable community property laws. H&r block tax estimator Prev  Up  Next   Home   More Online Publications