Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

How Can I Do My 2012 Federal Tax Return With H&r Block

Free Tax Filing 2013Turbotax Login OnlineH&r Block CouponsFree Tax Filing For 2012Amend Tax ReturnAmend A Tax Return OnlineHow Do I Amend My 2012 Tax ReturnFree Federal & State E-fileTax ReturnTax For Self EmployedH&rblock OnlineState Taxes FreeFile State Taxes OnlineH&r Block Free Tax Software1040x Processing TimeFile 2012 Taxes H&r Block1040ez Forms 20142010 TaxesFiling 2009 Taxes Late Online For Free2011 Tax Forms 1040aStudent TaxesWhere Do I File My State Taxes For FreeFiling 2010 Tax ReturnState Tax Return Free E FileStudent TaxFile Tax Extension Free1040x FilingDo I File Back Taxes FreeFile Tax Return For 20122011 Form 1040Irs Tax ReturnIrs Free Tax FilingFree Ez FormIrs Free FileFree Tax Return H&r Block2011 1040 Ez Tax FormsEz Worksheet Line FMy Free Taxes ComNeed To File 2011 TaxesState Tax Return Only

How Can I Do My 2012 Federal Tax Return With H&r Block

How can i do my 2012 federal tax return with h&r block Publication 584-B - Introductory Material Table of Contents What's New Introduction What's New The IRS has created a page on IRS. How can i do my 2012 federal tax return with h&r block gov for information about Publication 584-B, at www. How can i do my 2012 federal tax return with h&r block irs. How can i do my 2012 federal tax return with h&r block gov/pub584b. How can i do my 2012 federal tax return with h&r block Information about any future developments affecting Publication 584-B (such as legislation enacted after we released it) will be posted on that page. How can i do my 2012 federal tax return with h&r block Introduction This workbook is designed to help you figure your loss on business and income-producing property in the event of a disaster, casualty, or theft. How can i do my 2012 federal tax return with h&r block It contains schedules to help you figure the loss to your office furniture and fixtures, information systems, motor vehicles, office supplies, buildings, and equipment. How can i do my 2012 federal tax return with h&r block These schedules, however, are for your information only. How can i do my 2012 federal tax return with h&r block You must complete Form 4684, Casualties and Thefts, to report your loss. How can i do my 2012 federal tax return with h&r block Prev  Up  Next   Home   More Online Publications
Español

James Madison Memorial Fellowship Foundation

The James Madison Memorial Fellowship Foundation offers fellowship opportunities to individuals who are seeking a Master's degree in order to teach secondary students about the U.S. constitution.

Contact the Agency or Department

Website: James Madison Memorial Fellowship Foundation

Address: 613 Duke St
Alexandria, VA 22314

Toll-free: (800) 525-6928

The How Can I Do My 2012 Federal Tax Return With H&r Block

How can i do my 2012 federal tax return with h&r block 13. How can i do my 2012 federal tax return with h&r block   Basis of Property Table of Contents Introduction Useful Items - You may want to see: Cost BasisReal Property Adjusted BasisIncreases to Basis Decreases to Basis Basis Other Than CostProperty Received for Services Taxable Exchanges Involuntary Conversions Nontaxable Exchanges Property Transferred From a Spouse Property Received as a Gift Inherited Property Property Changed From Personal to Business or Rental Use Stocks and Bonds Introduction This chapter discusses how to figure your basis in property. How can i do my 2012 federal tax return with h&r block It is divided into the following sections. How can i do my 2012 federal tax return with h&r block Cost basis. How can i do my 2012 federal tax return with h&r block Adjusted basis. How can i do my 2012 federal tax return with h&r block Basis other than cost. How can i do my 2012 federal tax return with h&r block Your basis is the amount of your investment in property for tax purposes. How can i do my 2012 federal tax return with h&r block Use the basis to figure gain or loss on the sale, exchange, or other disposition of property. How can i do my 2012 federal tax return with h&r block Also use it to figure deductions for depreciation, amortization, depletion, and casualty losses. How can i do my 2012 federal tax return with h&r block If you use property for both business or investment purposes and for personal purposes, you must allocate the basis based on the use. How can i do my 2012 federal tax return with h&r block Only the basis allocated to the business or investment use of the property can be depreciated. How can i do my 2012 federal tax return with h&r block Your original basis in property is adjusted (increased or decreased) by certain events. How can i do my 2012 federal tax return with h&r block For example, if you make improvements to the property, increase your basis. How can i do my 2012 federal tax return with h&r block If you take deductions for depreciation or casualty losses, or claim certain credits, reduce your basis. How can i do my 2012 federal tax return with h&r block Keep accurate records of all items that affect the basis of your property. How can i do my 2012 federal tax return with h&r block For more information on keeping records, see chapter 1. How can i do my 2012 federal tax return with h&r block Useful Items - You may want to see: Publication 15-B Employer's Tax Guide to Fringe Benefits 525 Taxable and Nontaxable Income 535 Business Expenses 537 Installment Sales 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 551 Basis of Assets 946 How To Depreciate Property Cost Basis The basis of property you buy is usually its cost. How can i do my 2012 federal tax return with h&r block The cost is the amount you pay in cash, debt obligations, other property, or services. How can i do my 2012 federal tax return with h&r block Your cost also includes amounts you pay for the following items: Sales tax, Freight, Installation and testing, Excise taxes, Legal and accounting fees (when they must be capitalized), Revenue stamps, Recording fees, and Real estate taxes (if you assume liability for the seller). How can i do my 2012 federal tax return with h&r block In addition, the basis of real estate and business assets may include other items. How can i do my 2012 federal tax return with h&r block Loans with low or no interest. How can i do my 2012 federal tax return with h&r block    If you buy property on a time-payment plan that charges little or no interest, the basis of your property is your stated purchase price minus any amount considered to be unstated interest. How can i do my 2012 federal tax return with h&r block You generally have unstated interest if your interest rate is less than the applicable federal rate. How can i do my 2012 federal tax return with h&r block   For more information, see Unstated Interest and Original Issue Discount (OID) in Publication 537. How can i do my 2012 federal tax return with h&r block Real Property Real property, also called real estate, is land and generally anything built on, growing on, or attached to land. How can i do my 2012 federal tax return with h&r block If you buy real property, certain fees and other expenses you pay are part of your cost basis in the property. How can i do my 2012 federal tax return with h&r block Lump sum purchase. How can i do my 2012 federal tax return with h&r block   If you buy buildings and the land on which they stand for a lump sum, allocate the cost basis among the land and the buildings. How can i do my 2012 federal tax return with h&r block Allocate the cost basis according to the respective fair market values (FMVs) of the land and buildings at the time of purchase. How can i do my 2012 federal tax return with h&r block Figure the basis of each asset by multiplying the lump sum by a fraction. How can i do my 2012 federal tax return with h&r block The numerator is the FMV of that asset and the denominator is the FMV of the whole property at the time of purchase. How can i do my 2012 federal tax return with h&r block    If you are not certain of the FMVs of the land and buildings, you can allocate the basis according to their assessed values for real estate tax purposes. How can i do my 2012 federal tax return with h&r block Fair market value (FMV). How can i do my 2012 federal tax return with h&r block   FMV is the price at which the property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the necessary facts. How can i do my 2012 federal tax return with h&r block Sales of similar property on or about the same date may be helpful in figuring the FMV of the property. How can i do my 2012 federal tax return with h&r block Assumption of mortgage. How can i do my 2012 federal tax return with h&r block   If you buy property and assume (or buy the property subject to) an existing mortgage on the property, your basis includes the amount you pay for the property plus the amount to be paid on the mortgage. How can i do my 2012 federal tax return with h&r block Settlement costs. How can i do my 2012 federal tax return with h&r block   Your basis includes the settlement fees and closing costs you paid for buying the property. How can i do my 2012 federal tax return with h&r block (A fee for buying property is a cost that must be paid even if you buy the property for cash. How can i do my 2012 federal tax return with h&r block ) Do not include fees and costs for getting a loan on the property in your basis. How can i do my 2012 federal tax return with h&r block   The following are some of the settlement fees or closing costs you can include in the basis of your property. How can i do my 2012 federal tax return with h&r block Abstract fees (abstract of title fees). How can i do my 2012 federal tax return with h&r block Charges for installing utility services. How can i do my 2012 federal tax return with h&r block Legal fees (including fees for the title search and preparation of the sales contract and deed). How can i do my 2012 federal tax return with h&r block Recording fees. How can i do my 2012 federal tax return with h&r block Survey fees. How can i do my 2012 federal tax return with h&r block Transfer taxes. How can i do my 2012 federal tax return with h&r block Owner's title insurance. How can i do my 2012 federal tax return with h&r block Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions. How can i do my 2012 federal tax return with h&r block   Settlement costs do not include amounts placed in escrow for the future payment of items such as taxes and insurance. How can i do my 2012 federal tax return with h&r block   The following are some of the settlement fees and closing costs you cannot include in the basis of property. How can i do my 2012 federal tax return with h&r block Casualty insurance premiums. How can i do my 2012 federal tax return with h&r block Rent for occupancy of the property before closing. How can i do my 2012 federal tax return with h&r block Charges for utilities or other services related to occupancy of the property before closing. How can i do my 2012 federal tax return with h&r block Charges connected with getting a loan, such as points (discount points, loan origination fees), mortgage insurance premiums, loan assumption fees, cost of a credit report, and fees for an appraisal required by a lender. How can i do my 2012 federal tax return with h&r block Fees for refinancing a mortgage. How can i do my 2012 federal tax return with h&r block Real estate taxes. How can i do my 2012 federal tax return with h&r block   If you pay real estate taxes the seller owed on real property you bought, and the seller did not reimburse you, treat those taxes as part of your basis. How can i do my 2012 federal tax return with h&r block You cannot deduct them as an expense. How can i do my 2012 federal tax return with h&r block    If you reimburse the seller for taxes the seller paid for you, you can usually deduct that amount as an expense in the year of purchase. How can i do my 2012 federal tax return with h&r block Do not include that amount in the basis of your property. How can i do my 2012 federal tax return with h&r block If you did not reimburse the seller, you must reduce your basis by the amount of those taxes. How can i do my 2012 federal tax return with h&r block Points. How can i do my 2012 federal tax return with h&r block   If you pay points to get a loan (including a mortgage, second mortgage, line of credit, or a home equity loan), do not add the points to the basis of the related property. How can i do my 2012 federal tax return with h&r block Generally, you deduct the points over the term of the loan. How can i do my 2012 federal tax return with h&r block For more information on how to deduct points, see chapter 23. How can i do my 2012 federal tax return with h&r block Points on home mortgage. How can i do my 2012 federal tax return with h&r block   Special rules may apply to points you and the seller pay when you get a mortgage to buy your main home. How can i do my 2012 federal tax return with h&r block If certain requirements are met, you can deduct the points in full for the year in which they are paid. How can i do my 2012 federal tax return with h&r block Reduce the basis of your home by any seller-paid points. How can i do my 2012 federal tax return with h&r block Adjusted Basis Before figuring gain or loss on a sale, exchange, or other disposition of property or figuring allowable depreciation, depletion, or amortization, you must usually make certain adjustments (increases and decreases) to the cost basis or basis other than cost (discussed later) of the property. How can i do my 2012 federal tax return with h&r block The result is the adjusted basis. How can i do my 2012 federal tax return with h&r block Increases to Basis Increase the basis of any property by all items properly added to a capital account. How can i do my 2012 federal tax return with h&r block Examples of items that increase basis are shown in Table 13-1. How can i do my 2012 federal tax return with h&r block These include the items discussed below. How can i do my 2012 federal tax return with h&r block Improvements. How can i do my 2012 federal tax return with h&r block   Add to your basis in property the cost of improvements having a useful life of more than 1 year, that increase the value of the property, lengthen its life, or adapt it to a different use. How can i do my 2012 federal tax return with h&r block For example, improvements include putting a recreation room in your unfinished basement, adding another bathroom or bedroom, putting up a fence, putting in new plumbing or wiring, installing a new roof, or paving your driveway. How can i do my 2012 federal tax return with h&r block Assessments for local improvements. How can i do my 2012 federal tax return with h&r block   Add to the basis of property assessments for improvements such as streets and sidewalks if they increase the value of the property assessed. How can i do my 2012 federal tax return with h&r block Do not deduct them as taxes. How can i do my 2012 federal tax return with h&r block However, you can deduct as taxes assessments for maintenance or repairs, or for meeting interest charges related to the improvements. How can i do my 2012 federal tax return with h&r block Example. How can i do my 2012 federal tax return with h&r block Your city changes the street in front of your store into an enclosed pedestrian mall and assesses you and other affected property owners for the cost of the conversion. How can i do my 2012 federal tax return with h&r block Add the assessment to your property's basis. How can i do my 2012 federal tax return with h&r block In this example, the assessment is a depreciable asset. How can i do my 2012 federal tax return with h&r block Decreases to Basis Decrease the basis of any property by all items that represent a return of capital for the period during which you held the property. How can i do my 2012 federal tax return with h&r block Examples of items that decrease basis are shown in Table 13-1. How can i do my 2012 federal tax return with h&r block These include the items discussed below. How can i do my 2012 federal tax return with h&r block Table 13-1. How can i do my 2012 federal tax return with h&r block Examples of Adjustments to Basis Increases to Basis Decreases to Basis • Capital improvements: • Exclusion from income of   Putting an addition on your home subsidies for energy conservation   Replacing an entire roof measures   Paving your driveway     Installing central air conditioning • Casualty or theft loss deductions   Rewiring your home and insurance reimbursements       • Assessments for local improvements:     Water connections     Extending utility service lines to the property • Postponed gain from the sale of a home   Sidewalks • Alternative motor vehicle credit  (Form 8910)   Roads       • Alternative fuel vehicle refueling     property credit (Form 8911)           • Residential energy credits (Form 5695)       • Casualty losses: • Depreciation and section 179 deduction   Restoring damaged property     • Nontaxable corporate distributions • Legal fees:     Cost of defending and perfecting a title • Certain canceled debt excluded from   Fees for getting a reduction of an assessment income     • Zoning costs • Easements           • Adoption tax benefits Casualty and theft losses. How can i do my 2012 federal tax return with h&r block   If you have a casualty or theft loss, decrease the basis in your property by any insurance proceeds or other reimbursement and by any deductible loss not covered by insurance. How can i do my 2012 federal tax return with h&r block    You must increase your basis in the property by the amount you spend on repairs that restore the property to its pre-casualty condition. How can i do my 2012 federal tax return with h&r block   For more information on casualty and theft losses, see chapter 25. How can i do my 2012 federal tax return with h&r block Depreciation and section 179 deduction. How can i do my 2012 federal tax return with h&r block   Decrease the basis of your qualifying business property by any section 179 deduction you take and the depreciation you deducted, or could have deducted (including any special depreciation allowance), on your tax returns under the method of depreciation you selected. How can i do my 2012 federal tax return with h&r block   For more information about depreciation and the section 179 deduction, see Publication 946 and the Instructions for Form 4562. How can i do my 2012 federal tax return with h&r block Example. How can i do my 2012 federal tax return with h&r block You owned a duplex used as rental property that cost you $40,000, of which $35,000 was allocated to the building and $5,000 to the land. How can i do my 2012 federal tax return with h&r block You added an improvement to the duplex that cost $10,000. How can i do my 2012 federal tax return with h&r block In February last year, the duplex was damaged by fire. How can i do my 2012 federal tax return with h&r block Up to that time, you had been allowed depreciation of $23,000. How can i do my 2012 federal tax return with h&r block You sold some salvaged material for $1,300 and collected $19,700 from your insurance company. How can i do my 2012 federal tax return with h&r block You deducted a casualty loss of $1,000 on your income tax return for last year. How can i do my 2012 federal tax return with h&r block You spent $19,000 of the insurance proceeds for restoration of the duplex, which was completed this year. How can i do my 2012 federal tax return with h&r block You must use the duplex's adjusted basis after the restoration to determine depreciation for the rest of the property's recovery period. How can i do my 2012 federal tax return with h&r block Figure the adjusted basis of the duplex as follows: Original cost of duplex $35,000 Addition to duplex 10,000 Total cost of duplex $45,000 Minus: Depreciation 23,000 Adjusted basis before casualty $22,000 Minus: Insurance proceeds $19,700     Deducted casualty loss 1,000     Salvage proceeds 1,300 22,000 Adjusted basis after casualty $-0- Add: Cost of restoring duplex 19,000 Adjusted basis after restoration $19,000 Note. How can i do my 2012 federal tax return with h&r block Your basis in the land is its original cost of $5,000. How can i do my 2012 federal tax return with h&r block Easements. How can i do my 2012 federal tax return with h&r block   The amount you receive for granting an easement is generally considered to be proceeds from the sale of an interest in real property. How can i do my 2012 federal tax return with h&r block It reduces the basis of the affected part of the property. How can i do my 2012 federal tax return with h&r block If the amount received is more than the basis of the part of the property affected by the easement, reduce your basis in that part to zero and treat the excess as a recognized gain. How can i do my 2012 federal tax return with h&r block   If the gain is on a capital asset, see chapter 16 for information about how to report it. How can i do my 2012 federal tax return with h&r block If the gain is on property used in a trade or business, see Publication 544 for information about how to report it. How can i do my 2012 federal tax return with h&r block Exclusion of subsidies for energy conservation measures. How can i do my 2012 federal tax return with h&r block   You can exclude from gross income any subsidy you received from a public utility company for the purchase or installation of an energy conservation measure for a dwelling unit. How can i do my 2012 federal tax return with h&r block Reduce the basis of the property for which you received the subsidy by the excluded amount. How can i do my 2012 federal tax return with h&r block For more information about this subsidy, see chapter 12. How can i do my 2012 federal tax return with h&r block Postponed gain from sale of home. How can i do my 2012 federal tax return with h&r block    If you postponed gain from the sale of your main home under rules in effect before May 7, 1997, you must reduce the basis of the home you acquired as a replacement by the amount of the postponed gain. How can i do my 2012 federal tax return with h&r block For more information on the rules for the sale of a home, see chapter 15. How can i do my 2012 federal tax return with h&r block Basis Other Than Cost There are many times when you cannot use cost as basis. How can i do my 2012 federal tax return with h&r block In these cases, the fair market value or the adjusted basis of the property can be used. How can i do my 2012 federal tax return with h&r block Fair market value (FMV) and adjusted basis were discussed earlier. How can i do my 2012 federal tax return with h&r block Property Received for Services If you receive property for your services, include the FMV of the property in income. How can i do my 2012 federal tax return with h&r block The amount you include in income becomes your basis. How can i do my 2012 federal tax return with h&r block If the services were performed for a price agreed on beforehand, it will be accepted as the FMV of the property if there is no evidence to the contrary. How can i do my 2012 federal tax return with h&r block Restricted property. How can i do my 2012 federal tax return with h&r block   If you receive property for your services and the property is subject to certain restrictions, your basis in the property is its FMV when it becomes substantially vested. How can i do my 2012 federal tax return with h&r block However, this rule does not apply if you make an election to include in income the FMV of the property at the time it is transferred to you, less any amount you paid for it. How can i do my 2012 federal tax return with h&r block Property is substantially vested when it is transferable or when it is not subject to a substantial risk of forfeiture (you do not have a good chance of losing it). How can i do my 2012 federal tax return with h&r block For more information, see Restricted Property in Publication 525. How can i do my 2012 federal tax return with h&r block Bargain purchases. How can i do my 2012 federal tax return with h&r block   A bargain purchase is a purchase of an item for less than its FMV. How can i do my 2012 federal tax return with h&r block If, as compensation for services, you buy goods or other property at less than FMV, include the difference between the purchase price and the property's FMV in your income. How can i do my 2012 federal tax return with h&r block Your basis in the property is its FMV (your purchase price plus the amount you include in income). How can i do my 2012 federal tax return with h&r block   If the difference between your purchase price and the FMV is a qualified employee discount, do not include the difference in income. How can i do my 2012 federal tax return with h&r block However, your basis in the property is still its FMV. How can i do my 2012 federal tax return with h&r block See Employee Discounts in Publication 15-B. How can i do my 2012 federal tax return with h&r block Taxable Exchanges A taxable exchange is one in which the gain is taxable or the loss is deductible. How can i do my 2012 federal tax return with h&r block A taxable gain or deductible loss also is known as a recognized gain or loss. How can i do my 2012 federal tax return with h&r block If you receive property in exchange for other property in a taxable exchange, the basis of the property you receive is usually its FMV at the time of the exchange. How can i do my 2012 federal tax return with h&r block Involuntary Conversions If you receive replacement property as a result of an involuntary conversion, such as a casualty, theft, or condemnation, figure the basis of the replacement property using the basis of the converted property. How can i do my 2012 federal tax return with h&r block Similar or related property. How can i do my 2012 federal tax return with h&r block   If you receive replacement property similar or related in service or use to the converted property, the replacement property's basis is the same as the converted property's basis on the date of the conversion, with the following adjustments. How can i do my 2012 federal tax return with h&r block Decrease the basis by the following. How can i do my 2012 federal tax return with h&r block Any loss you recognize on the involuntary conversion. How can i do my 2012 federal tax return with h&r block Any money you receive that you do not spend on similar property. How can i do my 2012 federal tax return with h&r block Increase the basis by the following. How can i do my 2012 federal tax return with h&r block Any gain you recognize on the involuntary conversion. How can i do my 2012 federal tax return with h&r block Any cost of acquiring the replacement property. How can i do my 2012 federal tax return with h&r block Money or property not similar or related. How can i do my 2012 federal tax return with h&r block    If you receive money or property not similar or related in service or use to the converted property, and you buy replacement property similar or related in service or use to the converted property, the basis of the replacement property is its cost decreased by the gain not recognized on the conversion. How can i do my 2012 federal tax return with h&r block Example. How can i do my 2012 federal tax return with h&r block The state condemned your property. How can i do my 2012 federal tax return with h&r block The adjusted basis of the property was $26,000 and the state paid you $31,000 for it. How can i do my 2012 federal tax return with h&r block You realized a gain of $5,000 ($31,000 − $26,000). How can i do my 2012 federal tax return with h&r block You bought replacement property similar in use to the converted property for $29,000. How can i do my 2012 federal tax return with h&r block You recognize a gain of $2,000 ($31,000 − $29,000), the unspent part of the payment from the state. How can i do my 2012 federal tax return with h&r block Your unrecognized gain is $3,000, the difference between the $5,000 realized gain and the $2,000 recognized gain. How can i do my 2012 federal tax return with h&r block The basis of the replacement property is figured as follows: Cost of replacement property $29,000 Minus: Gain not recognized 3,000 Basis of replacement property $26,000 Allocating the basis. How can i do my 2012 federal tax return with h&r block   If you buy more than one piece of replacement property, allocate your basis among the properties based on their respective costs. How can i do my 2012 federal tax return with h&r block Basis for depreciation. How can i do my 2012 federal tax return with h&r block   Special rules apply in determining and depreciating the basis of MACRS property acquired in an involuntary conversion. How can i do my 2012 federal tax return with h&r block For information, see What Is the Basis of Your Depreciable Property? in chapter 1 of Publication 946. How can i do my 2012 federal tax return with h&r block Nontaxable Exchanges A nontaxable exchange is an exchange in which you are not taxed on any gain and you cannot deduct any loss. How can i do my 2012 federal tax return with h&r block If you receive property in a nontaxable exchange, its basis is generally the same as the basis of the property you transferred. How can i do my 2012 federal tax return with h&r block See Nontaxable Trades in chapter 14. How can i do my 2012 federal tax return with h&r block Like-Kind Exchanges The exchange of property for the same kind of property is the most common type of nontaxable exchange. How can i do my 2012 federal tax return with h&r block To qualify as a like-kind exchange, the property traded and the property received must be both of the following. How can i do my 2012 federal tax return with h&r block Qualifying property. How can i do my 2012 federal tax return with h&r block Like-kind property. How can i do my 2012 federal tax return with h&r block The basis of the property you receive is generally the same as the adjusted basis of the property you gave up. How can i do my 2012 federal tax return with h&r block If you trade property in a like-kind exchange and also pay money, the basis of the property received is the adjusted basis of the property you gave up increased by the money you paid. How can i do my 2012 federal tax return with h&r block Qualifying property. How can i do my 2012 federal tax return with h&r block   In a like-kind exchange, you must hold for investment or for productive use in your trade or business both the property you give up and the property you receive. How can i do my 2012 federal tax return with h&r block Like-kind property. How can i do my 2012 federal tax return with h&r block   There must be an exchange of like-kind property. How can i do my 2012 federal tax return with h&r block Like-kind properties are properties of the same nature or character, even if they differ in grade or quality. How can i do my 2012 federal tax return with h&r block The exchange of real estate for real estate and personal property for similar personal property are exchanges of like-kind property. How can i do my 2012 federal tax return with h&r block Example. How can i do my 2012 federal tax return with h&r block You trade in an old truck used in your business with an adjusted basis of $1,700 for a new one costing $6,800. How can i do my 2012 federal tax return with h&r block The dealer allows you $2,000 on the old truck, and you pay $4,800. How can i do my 2012 federal tax return with h&r block This is a like-kind exchange. How can i do my 2012 federal tax return with h&r block The basis of the new truck is $6,500 (the adjusted basis of the old one, $1,700, plus the amount you paid, $4,800). How can i do my 2012 federal tax return with h&r block If you sell your old truck to a third party for $2,000 instead of trading it in and then buy a new one from the dealer, you have a taxable gain of $300 on the sale (the $2,000 sale price minus the $1,700 adjusted basis). How can i do my 2012 federal tax return with h&r block The basis of the new truck is the price you pay the dealer. How can i do my 2012 federal tax return with h&r block Partially nontaxable exchanges. How can i do my 2012 federal tax return with h&r block   A partially nontaxable exchange is an exchange in which you receive unlike property or money in addition to like-kind property. How can i do my 2012 federal tax return with h&r block The basis of the property you receive is the same as the adjusted basis of the property you gave up, with the following adjustments. How can i do my 2012 federal tax return with h&r block Decrease the basis by the following amounts. How can i do my 2012 federal tax return with h&r block Any money you receive. How can i do my 2012 federal tax return with h&r block Any loss you recognize on the exchange. How can i do my 2012 federal tax return with h&r block Increase the basis by the following amounts. How can i do my 2012 federal tax return with h&r block Any additional costs you incur. How can i do my 2012 federal tax return with h&r block Any gain you recognize on the exchange. How can i do my 2012 federal tax return with h&r block If the other party to the exchange assumes your liabilities, treat the debt assumption as money you received in the exchange. How can i do my 2012 federal tax return with h&r block Allocation of basis. How can i do my 2012 federal tax return with h&r block   If you receive like-kind and unlike properties in the exchange, allocate the basis first to the unlike property, other than money, up to its FMV on the date of the exchange. How can i do my 2012 federal tax return with h&r block The rest is the basis of the like-kind property. How can i do my 2012 federal tax return with h&r block More information. How can i do my 2012 federal tax return with h&r block   See Like-Kind Exchanges in chapter 1 of Publication 544 for more information. How can i do my 2012 federal tax return with h&r block Basis for depreciation. How can i do my 2012 federal tax return with h&r block   Special rules apply in determining and depreciating the basis of MACRS property acquired in a like-kind exchange. How can i do my 2012 federal tax return with h&r block For information, see What Is the Basis of Your Depreciable Property? in chapter 1 of Publication 946. How can i do my 2012 federal tax return with h&r block Property Transferred From a Spouse The basis of property transferred to you or transferred in trust for your benefit by your spouse is the same as your spouse's adjusted basis. How can i do my 2012 federal tax return with h&r block The same rule applies to a transfer by your former spouse that is incident to divorce. How can i do my 2012 federal tax return with h&r block However, for property transferred in trust, adjust your basis for any gain recognized by your spouse or former spouse if the liabilities assumed, plus the liabilities to which the property is subject, are more than the adjusted basis of the property transferred. How can i do my 2012 federal tax return with h&r block If the property transferred to you is a series E, series EE, or series I U. How can i do my 2012 federal tax return with h&r block S. How can i do my 2012 federal tax return with h&r block savings bond, the transferor must include in income the interest accrued to the date of transfer. How can i do my 2012 federal tax return with h&r block Your basis in the bond immediately after the transfer is equal to the transferor's basis increased by the interest income includible in the transferor's income. How can i do my 2012 federal tax return with h&r block For more information on these bonds, see chapter 7. How can i do my 2012 federal tax return with h&r block At the time of the transfer, the transferor must give you the records needed to determine the adjusted basis and holding period of the property as of the date of the transfer. How can i do my 2012 federal tax return with h&r block For more information about the transfer of property from a spouse, see chapter 14. How can i do my 2012 federal tax return with h&r block Property Received as a Gift To figure the basis of property you receive as a gift, you must know its adjusted basis to the donor just before it was given to you, its FMV at the time it was given to you, and any gift tax paid on it. How can i do my 2012 federal tax return with h&r block FMV less than donor's adjusted basis. How can i do my 2012 federal tax return with h&r block   If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property. How can i do my 2012 federal tax return with h&r block Your basis for figuring gain is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you held the property. How can i do my 2012 federal tax return with h&r block Your basis for figuring loss is its FMV when you received the gift plus or minus any required adjustments to basis while you held the property. How can i do my 2012 federal tax return with h&r block See Adjusted Basis , earlier. How can i do my 2012 federal tax return with h&r block Example. How can i do my 2012 federal tax return with h&r block You received an acre of land as a gift. How can i do my 2012 federal tax return with h&r block At the time of the gift, the land had an FMV of $8,000. How can i do my 2012 federal tax return with h&r block The donor's adjusted basis was $10,000. How can i do my 2012 federal tax return with h&r block After you received the property, no events occurred to increase or decrease your basis. How can i do my 2012 federal tax return with h&r block If you later sell the property for $12,000, you will have a $2,000 gain because you must use the donor's adjusted basis at the time of the gift ($10,000) as your basis to figure gain. How can i do my 2012 federal tax return with h&r block If you sell the property for $7,000, you will have a $1,000 loss because you must use the FMV at the time of the gift ($8,000) as your basis to figure loss. How can i do my 2012 federal tax return with h&r block If the sales price is between $8,000 and $10,000, you have neither gain nor loss. How can i do my 2012 federal tax return with h&r block Business property. How can i do my 2012 federal tax return with h&r block   If you hold the gift as business property, your basis for figuring any depreciation, depletion, or amortization deductions is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you hold the property. How can i do my 2012 federal tax return with h&r block FMV equal to or greater than donor's adjusted basis. How can i do my 2012 federal tax return with h&r block   If the FMV of the property is equal to or greater than the donor's adjusted basis, your basis is the donor's adjusted basis at the time you received the gift. How can i do my 2012 federal tax return with h&r block Increase your basis by all or part of any gift tax paid, depending on the date of the gift, explained later. How can i do my 2012 federal tax return with h&r block   Also, for figuring gain or loss from a sale or other disposition or for figuring depreciation, depletion, or amortization deductions on business property, you must increase or decrease your basis (the donor's adjusted basis) by any required adjustments to basis while you held the property. How can i do my 2012 federal tax return with h&r block See Adjusted Basis , earlier. How can i do my 2012 federal tax return with h&r block   If you received a gift during the tax year, increase your basis in the gift (the donor's adjusted basis) by the part of the gift tax paid on it due to the net increase in value of the gift. How can i do my 2012 federal tax return with h&r block Figure the increase by multiplying the gift tax paid by a fraction. How can i do my 2012 federal tax return with h&r block The numerator of the fraction is the net increase in value of the gift and the denominator is the amount of the gift. How can i do my 2012 federal tax return with h&r block   The net increase in value of the gift is the FMV of the gift minus the donor's adjusted basis. How can i do my 2012 federal tax return with h&r block The amount of the gift is its value for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. How can i do my 2012 federal tax return with h&r block Example. How can i do my 2012 federal tax return with h&r block In 2013, you received a gift of property from your mother that had an FMV of $50,000. How can i do my 2012 federal tax return with h&r block Her adjusted basis was $20,000. How can i do my 2012 federal tax return with h&r block The amount of the gift for gift tax purposes was $36,000 ($50,000 minus the $14,000 annual exclusion). How can i do my 2012 federal tax return with h&r block She paid a gift tax of $7,320 on the property. How can i do my 2012 federal tax return with h&r block Your basis is $26,076, figured as follows: Fair market value $50,000 Minus: Adjusted basis −20,000 Net increase in value $30,000     Gift tax paid $7,320 Multiplied by ($30,000 ÷ $36,000) × . How can i do my 2012 federal tax return with h&r block 83 Gift tax due to net increase in value $6,076 Adjusted basis of property to your mother +20,000 Your basis in the property $26,076 Note. How can i do my 2012 federal tax return with h&r block If you received a gift before 1977, your basis in the gift (the donor's adjusted basis) includes any gift tax paid on it. How can i do my 2012 federal tax return with h&r block However, your basis cannot exceed the FMV of the gift at the time it was given to you. How can i do my 2012 federal tax return with h&r block Inherited Property Your basis in property you inherited from a decedent, who died before January 1, 2010, or after December 31, 2010, is generally one of the following: The FMV of the property at the date of the decedent's death. How can i do my 2012 federal tax return with h&r block The FMV on the alternate valuation date if the personal representative for the estate elects to use alternate valuation. How can i do my 2012 federal tax return with h&r block The value under the special-use valuation method for real property used in farming or a closely held business if elected for estate tax purposes. How can i do my 2012 federal tax return with h&r block The decedent's adjusted basis in land to the extent of the value excluded from the decedent's taxable estate as a qualified conservation easement. How can i do my 2012 federal tax return with h&r block If a federal estate tax return does not have to be filed, your basis in the inherited property is its appraised value at the date of death for state inheritance or transmission taxes. How can i do my 2012 federal tax return with h&r block For more information, see the instructions to Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return. How can i do my 2012 federal tax return with h&r block Property inherited from a decedent who died in 2010. How can i do my 2012 federal tax return with h&r block   If you inherited property from a decedent who died in 2010, special rules may apply. How can i do my 2012 federal tax return with h&r block For more information, see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010. How can i do my 2012 federal tax return with h&r block Community property. How can i do my 2012 federal tax return with h&r block   In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), husband and wife are each usually considered to own half the community property. How can i do my 2012 federal tax return with h&r block When either spouse dies, the total value of the community property, even the part belonging to the surviving spouse, generally becomes the basis of the entire property. How can i do my 2012 federal tax return with h&r block For this rule to apply, at least half the value of the community property interest must be includible in the decedent's gross estate, whether or not the estate must file a return. How can i do my 2012 federal tax return with h&r block Example. How can i do my 2012 federal tax return with h&r block You and your spouse owned community property that had a basis of $80,000. How can i do my 2012 federal tax return with h&r block When your spouse died, half the FMV of the community interest was includible in your spouse's estate. How can i do my 2012 federal tax return with h&r block The FMV of the community interest was $100,000. How can i do my 2012 federal tax return with h&r block The basis of your half of the property after the death of your spouse is $50,000 (half of the $100,000 FMV). How can i do my 2012 federal tax return with h&r block The basis of the other half to your spouse's heirs is also $50,000. How can i do my 2012 federal tax return with h&r block For more information about community property, see Publication 555, Community Property. How can i do my 2012 federal tax return with h&r block Property Changed From Personal to Business or Rental Use If you hold property for personal use and then change it to business use or use it to produce rent, you can begin to depreciate the property at the time of the change. How can i do my 2012 federal tax return with h&r block To do so, you must figure its basis for depreciation at the time of the change. How can i do my 2012 federal tax return with h&r block An example of changing property held for personal use to business or rental use would be renting out your former personal residence. How can i do my 2012 federal tax return with h&r block Basis for depreciation. How can i do my 2012 federal tax return with h&r block   The basis for depreciation is the lesser of the following amounts. How can i do my 2012 federal tax return with h&r block The FMV of the property on the date of the change. How can i do my 2012 federal tax return with h&r block Your adjusted basis on the date of the change. How can i do my 2012 federal tax return with h&r block Example. How can i do my 2012 federal tax return with h&r block Several years ago, you paid $160,000 to have your house built on a lot that cost $25,000. How can i do my 2012 federal tax return with h&r block You paid $20,000 for permanent improvements to the house and claimed a $2,000 casualty loss deduction for damage to the house before changing the property to rental use last year. How can i do my 2012 federal tax return with h&r block Because land is not depreciable, you include only the cost of the house when figuring the basis for depreciation. How can i do my 2012 federal tax return with h&r block Your adjusted basis in the house when you changed its use was $178,000 ($160,000 + $20,000 − $2,000). How can i do my 2012 federal tax return with h&r block On the same date, your property had an FMV of $180,000, of which $15,000 was for the land and $165,000 was for the house. How can i do my 2012 federal tax return with h&r block The basis for figuring depreciation on the house is its FMV on the date of the change ($165,000) because it is less than your adjusted basis ($178,000). How can i do my 2012 federal tax return with h&r block Sale of property. How can i do my 2012 federal tax return with h&r block   If you later sell or dispose of property changed to business or rental use, the basis you use will depend on whether you are figuring gain or loss. How can i do my 2012 federal tax return with h&r block Gain. How can i do my 2012 federal tax return with h&r block   The basis for figuring a gain is your adjusted basis in the property when you sell the property. How can i do my 2012 federal tax return with h&r block Example. How can i do my 2012 federal tax return with h&r block Assume the same facts as in the previous example except that you sell the property at a gain after being allowed depreciation deductions of $37,500. How can i do my 2012 federal tax return with h&r block Your adjusted basis for figuring gain is $165,500 ($178,000 + $25,000 (land) − $37,500). How can i do my 2012 federal tax return with h&r block Loss. How can i do my 2012 federal tax return with h&r block   Figure the basis for a loss starting with the smaller of your adjusted basis or the FMV of the property at the time of the change to business or rental use. How can i do my 2012 federal tax return with h&r block Then make adjustments (increases and decreases) for the period after the change in the property's use, as discussed earlier under Adjusted Basis . How can i do my 2012 federal tax return with h&r block Example. How can i do my 2012 federal tax return with h&r block Assume the same facts as in the previous example, except that you sell the property at a loss after being allowed depreciation deductions of $37,500. How can i do my 2012 federal tax return with h&r block In this case, you would start with the FMV on the date of the change to rental use ($180,000), because it is less than the adjusted basis of $203,000 ($178,000 + $25,000 (land)) on that date. How can i do my 2012 federal tax return with h&r block Reduce that amount ($180,000) by the depreciation deductions ($37,500). How can i do my 2012 federal tax return with h&r block The basis for loss is $142,500 ($180,000 − $37,500). How can i do my 2012 federal tax return with h&r block Stocks and Bonds The basis of stocks or bonds you buy generally is the purchase price plus any costs of purchase, such as commissions and recording or transfer fees. How can i do my 2012 federal tax return with h&r block If you get stocks or bonds other than by purchase, your basis is usually determined by the FMV or the previous owner's adjusted basis, as discussed earlier. How can i do my 2012 federal tax return with h&r block You must adjust the basis of stocks for certain events that occur after purchase. How can i do my 2012 federal tax return with h&r block For example, if you receive additional stock from nontaxable stock dividends or stock splits, reduce your basis for each share of stock by dividing the adjusted basis of the old stock by the number of shares of old and new stock. How can i do my 2012 federal tax return with h&r block This rule applies only when the additional stock received is identical to the stock held. How can i do my 2012 federal tax return with h&r block Also reduce your basis when you receive nontaxable distributions. How can i do my 2012 federal tax return with h&r block They are a return of capital. How can i do my 2012 federal tax return with h&r block Example. How can i do my 2012 federal tax return with h&r block In 2011 you bought 100 shares of XYZ stock for $1,000 or $10 a share. How can i do my 2012 federal tax return with h&r block In 2012 you bought 100 shares of XYZ stock for $1,600 or $16 a share. How can i do my 2012 federal tax return with h&r block In 2013 XYZ declared a 2-for-1 stock split. How can i do my 2012 federal tax return with h&r block You now have 200 shares of stock with a basis of $5 a share and 200 shares with a basis of $8 a share. How can i do my 2012 federal tax return with h&r block Other basis. How can i do my 2012 federal tax return with h&r block   There are other ways to figure the basis of stocks or bonds depending on how you acquired them. How can i do my 2012 federal tax return with h&r block For detailed information, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. How can i do my 2012 federal tax return with h&r block Identifying stocks or bonds sold. How can i do my 2012 federal tax return with h&r block   If you can adequately identify the shares of stock or the bonds you sold, their basis is the cost or other basis of the particular shares of stocks or bonds. How can i do my 2012 federal tax return with h&r block If you buy and sell securities at various times in varying quantities and you cannot adequately identify the shares you sell, the basis of the securities you sell is the basis of the securities you acquired first. How can i do my 2012 federal tax return with h&r block For more information about identifying securities you sell, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. How can i do my 2012 federal tax return with h&r block Mutual fund shares. How can i do my 2012 federal tax return with h&r block   If you sell mutual fund shares you acquired at various times and prices and left on deposit in an account kept by a custodian or agent, you can elect to use an average basis. How can i do my 2012 federal tax return with h&r block For more information, see Publication 550. How can i do my 2012 federal tax return with h&r block Bond premium. How can i do my 2012 federal tax return with h&r block   If you buy a taxable bond at a premium and elect to amortize the premium, reduce the basis of the bond by the amortized premium you deduct each year. How can i do my 2012 federal tax return with h&r block See Bond Premium Amortization in chapter 3 of Publication 550 for more information. How can i do my 2012 federal tax return with h&r block Although you cannot deduct the premium on a tax-exempt bond, you must amortize the premium each year and reduce your basis in the bond by the amortized amount. How can i do my 2012 federal tax return with h&r block Original issue discount (OID) on debt instruments. How can i do my 2012 federal tax return with h&r block   You must increase your basis in an OID debt instrument by the OID you include in income for that instrument. How can i do my 2012 federal tax return with h&r block See Original Issue Discount (OID) in chapter 7 and Publication 1212, Guide To Original Issue Discount (OID) Instruments. How can i do my 2012 federal tax return with h&r block Tax-exempt obligations. How can i do my 2012 federal tax return with h&r block    OID on tax-exempt obligations is generally not taxable. How can i do my 2012 federal tax return with h&r block However, when you dispose of a tax-exempt obligation issued after September 3, 1982, and acquired after March 1, 1984, you must accrue OID on the obligation to determine its adjusted basis. How can i do my 2012 federal tax return with h&r block The accrued OID is added to the basis of the obligation to determine your gain or loss. How can i do my 2012 federal tax return with h&r block See chapter 4 of Publication 550. How can i do my 2012 federal tax return with h&r block Prev  Up  Next   Home   More Online Publications