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I Need To File My 2012 Federal Taxes

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I Need To File My 2012 Federal Taxes

I need to file my 2012 federal taxes 9. I need to file my 2012 federal taxes   Dispositions of Property Used in Farming Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Section 1231 Gains and LossesNonrecaptured section 1231 losses. I need to file my 2012 federal taxes Depreciation RecaptureSection 1245 Property Section 1250 Property Installment Sale Other Dispositions Other GainsExceptions. I need to file my 2012 federal taxes Amount to report as ordinary income. I need to file my 2012 federal taxes Applicable percentage. I need to file my 2012 federal taxes Amount to report as ordinary income. I need to file my 2012 federal taxes Applicable percentage. I need to file my 2012 federal taxes Introduction When you dispose of property used in your farm business, your taxable gain or loss is usually treated as ordinary income (which is taxed at the same rates as wages and interest income) or capital gain (which is generally taxed at lower rates) under the rules for section 1231 transactions. I need to file my 2012 federal taxes When you dispose of depreciable property (section 1245 property or section 1250 property) at a gain, you may have to recognize all or part of the gain as ordinary income under the depreciation recapture rules. I need to file my 2012 federal taxes Any gain remaining after applying the depreciation recapture rules is a section 1231 gain, which may be taxed as a capital gain. I need to file my 2012 federal taxes Gains and losses from property used in farming are reported on Form 4797, Sales of Business Property. I need to file my 2012 federal taxes Table 9-1 contains examples of items reported on Form 4797 and refers to the part of that form on which they first should be reported. I need to file my 2012 federal taxes Topics - This chapter discusses: Section 1231 gains and losses Depreciation recapture Other gains Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets Form (and Instructions) 4797 Sales of Business Property See chapter 16 for information about getting publications and forms. I need to file my 2012 federal taxes Section 1231 Gains and Losses Section 1231 gains and losses are the taxable gains and losses from section 1231 transactions (explained below). I need to file my 2012 federal taxes Their treatment as ordinary or capital gains depends on whether you have a net gain or a net loss from all of your section 1231 transactions in the tax year. I need to file my 2012 federal taxes Table 9-1. I need to file my 2012 federal taxes Where to First Report Certain Items on Form 4797 Type of property Held 1 year  or less Held more than  1 year 1 Depreciable trade or business property:       a Sold or exchanged at a gain Part II Part III (1245, 1250)   b Sold or exchanged at a loss Part II Part I 2 Farmland held less than 10 years for which soil, water, or land clearing expenses were deducted:       a Sold at a gain Part II Part III (1252)   b Sold at a loss Part II Part I 3 All other farmland Part II Part I 4 Disposition of cost-sharing payment property described in section 126 Part II Part III (1255) 5 Cattle and horses used in a trade or business for draft, breeding, dairy, or sporting purposes: Held less  than 24 mos. I need to file my 2012 federal taxes Held 24 mos. I need to file my 2012 federal taxes  or more   a Sold at a gain Part II Part III (1245)   b Sold at a loss Part II Part I   c Raised cattle and horses sold at a gain Part II Part I 6 Livestock other than cattle and horses used in a trade or business for draft, breeding, dairy, or sporting purposes: Held less  than 12 mos. I need to file my 2012 federal taxes Held 12 mos. I need to file my 2012 federal taxes   or more   a Sold at a gain Part II Part III (1245)   b Sold at a loss Part II Part I   c Raised livestock sold at a gain Part II Part I If you have a gain from a section 1231 transaction, first determine whether any of the gain is ordinary income under the depreciation recapture rules (explained later). I need to file my 2012 federal taxes Do not take that gain into account as section 1231 gain. I need to file my 2012 federal taxes Section 1231 transactions. I need to file my 2012 federal taxes   Gain or loss on the following transactions is subject to section 1231 treatment. I need to file my 2012 federal taxes Sale or exchange of cattle and horses. I need to file my 2012 federal taxes The cattle and horses must be held for draft, breeding, dairy, or sporting purposes and held for 24 months or longer. I need to file my 2012 federal taxes Sale or exchange of other livestock. I need to file my 2012 federal taxes This livestock must be held for draft, breeding, dairy, or sporting purposes and held for 12 months or longer. I need to file my 2012 federal taxes Other livestock includes hogs, mules, sheep, goats, donkeys, and other fur-bearing animals. I need to file my 2012 federal taxes Other livestock does not include poultry. I need to file my 2012 federal taxes Sale or exchange of depreciable personal property. I need to file my 2012 federal taxes This property must be used in your business and held longer than 1 year. I need to file my 2012 federal taxes Generally, property held for the production of rents or royalties is considered to be used in a trade or business. I need to file my 2012 federal taxes Examples of depreciable personal property include farm machinery and trucks. I need to file my 2012 federal taxes It also includes amortizable section 197 intangibles. I need to file my 2012 federal taxes Sale or exchange of real estate. I need to file my 2012 federal taxes This property must be used in your business and held longer than 1 year. I need to file my 2012 federal taxes Examples are your farm or ranch (including barns and sheds). I need to file my 2012 federal taxes Sale or exchange of unharvested crops. I need to file my 2012 federal taxes The crop and land must be sold, exchanged, or involuntarily converted at the same time and to the same person, and the land must have been held longer than 1 year. I need to file my 2012 federal taxes You cannot keep any right or option to reacquire the land directly or indirectly (other than a right customarily incident to a mortgage or other security transaction). I need to file my 2012 federal taxes Growing crops sold with a leasehold on the land, even if sold to the same person in a single transaction, are not included. I need to file my 2012 federal taxes Distributive share of partnership gains and losses. I need to file my 2012 federal taxes Your distributive share must be from the sale or exchange of property listed above and held longer than 1 year (or for the required period for certain livestock). I need to file my 2012 federal taxes Cutting or disposal of timber. I need to file my 2012 federal taxes Special rules apply if you owned the timber longer than 1 year and elect to treat timber cutting as a sale or exchange, or you enter into a cutting contract, as described in chapter 8 under Timber . I need to file my 2012 federal taxes Condemnation. I need to file my 2012 federal taxes The condemned property (defined in chapter 11) must have been held longer than 1 year. I need to file my 2012 federal taxes It must be business property or a capital asset held in connection with a trade or business or a transaction entered into for profit, such as investment property. I need to file my 2012 federal taxes It cannot be property held for personal use. I need to file my 2012 federal taxes Casualty or theft. I need to file my 2012 federal taxes The casualty or theft must have affected business property, property held for the production of rents or royalties, or investment property (such as notes and bonds). I need to file my 2012 federal taxes You must have held the property longer than 1 year. I need to file my 2012 federal taxes However, if your casualty or theft losses are more than your casualty or theft gains, neither the gains nor the losses are taken into account in the section 1231 computation. I need to file my 2012 federal taxes Section 1231 does not apply to personal casualty gains and losses. I need to file my 2012 federal taxes See chapter 11 for information on how to treat those gains and losses. I need to file my 2012 federal taxes If the property is not held for the required holding period, the transaction is not subject to section 1231 treatment, and any gain or loss is ordinary income reported in Part II of Form 4797. I need to file my 2012 federal taxes See Table 9-1. I need to file my 2012 federal taxes Property for sale to customers. I need to file my 2012 federal taxes   A sale, exchange, or involuntary conversion of property held mainly for sale to customers is not a section 1231 transaction. I need to file my 2012 federal taxes If you will get back all, or nearly all, of your investment in the property by selling it rather than by using it up in your business, it is property held mainly for sale to customers. I need to file my 2012 federal taxes Treatment as ordinary or capital. I need to file my 2012 federal taxes   To determine the treatment of section 1231 gains and losses, combine all of your section 1231 gains and losses for the year. I need to file my 2012 federal taxes If you have a net section 1231 loss, it is an ordinary loss. I need to file my 2012 federal taxes If you have a net section 1231 gain, it is ordinary income up to your nonrecaptured section 1231 losses from previous years, explained next. I need to file my 2012 federal taxes The rest, if any, is long-term capital gain. I need to file my 2012 federal taxes Nonrecaptured section 1231 losses. I need to file my 2012 federal taxes   Your nonrecaptured section 1231 losses are your net section 1231 losses for the previous 5 years that have not been applied against a net section 1231 gain by treating the gain as ordinary income. I need to file my 2012 federal taxes These losses are applied against your net section 1231 gain beginning with the earliest loss in the 5-year period. I need to file my 2012 federal taxes Example. I need to file my 2012 federal taxes In 2013, Ben has a $2,000 net section 1231 gain. I need to file my 2012 federal taxes To figure how much he has to report as ordinary income and long-term capital gain, he must first determine his section 1231 gains and losses from the previous 5-year period. I need to file my 2012 federal taxes From 2008 through 2012 he had the following section 1231 gains and losses. I need to file my 2012 federal taxes Year Amount 2008 -0- 2009 -0- 2010 ($2,500) 2011 -0- 2012 $1,800   Ben uses this information to figure how to report his net section 1231 gain for 2013 as shown below. I need to file my 2012 federal taxes 1) Net section 1231 gain (2013) $2,000 2) Net section 1231 loss (2010) ($2,500)   3) Net section 1231 gain (2012) 1,800   4) Remaining net section 1231 loss from prior 5 years ($700)   5) Gain treated as  ordinary income $700 6) Gain treated as long-term  capital gain $1,300 His remaining net section 1231 loss from 2010 is completely recaptured in 2013. I need to file my 2012 federal taxes Depreciation Recapture If you dispose of depreciable or amortizable property at a gain, you may have to treat all or part of the gain (even if it is otherwise nontaxable) as ordinary income. I need to file my 2012 federal taxes To figure any gain that must be reported as ordinary income, you must keep permanent records of the facts necessary to figure the depreciation or amortization allowed or allowable on your property. I need to file my 2012 federal taxes For more information, see chapter 3 of Publication 544. I need to file my 2012 federal taxes Section 1245 Property A gain on the disposition of section 1245 property is treated as ordinary income to the extent of depreciation allowed or allowable. I need to file my 2012 federal taxes Any recognized gain that is more than the part that is ordinary income is a section 1231 gain. I need to file my 2012 federal taxes See Treatment as ordinary or capital under Section 1231 Gains and Losses , earlier. I need to file my 2012 federal taxes Section 1245 property includes any property that is or has been subject to an allowance for depreciation or amortization and that is any of the following types of property. I need to file my 2012 federal taxes Personal property (either tangible or intangible). I need to file my 2012 federal taxes Other tangible property (except buildings and their structural components) used as any of the following. I need to file my 2012 federal taxes See Buildings and structural components below. I need to file my 2012 federal taxes An integral part of manufacturing, production, or extraction, or of furnishing certain services. I need to file my 2012 federal taxes A research facility in any of the activities in (a). I need to file my 2012 federal taxes A facility in any of the activities in (a) above, for the bulk storage of fungible commodities (discussed later). I need to file my 2012 federal taxes That part of real property (not included in (2)) with an adjusted basis reduced by (but not limited to) the following. I need to file my 2012 federal taxes Amortization of certified pollution control facilities. I need to file my 2012 federal taxes The section 179 expense deduction. I need to file my 2012 federal taxes Deduction for clean-fuel vehicles and certain refueling property. I need to file my 2012 federal taxes Expenditures to remove architectural and transportation barriers to the handicapped and elderly. I need to file my 2012 federal taxes Certain reforestation expenditures (as described under Reforestation Costs in chapter 7. I need to file my 2012 federal taxes Single purpose agricultural (livestock) or horticultural structures. I need to file my 2012 federal taxes Storage facilities (except buildings and their structural components) used in distributing petroleum or any primary product of petroleum. I need to file my 2012 federal taxes Buildings and structural components. I need to file my 2012 federal taxes   Section 1245 property does not include buildings and structural components. I need to file my 2012 federal taxes The term building includes a house, barn, warehouse, or garage. I need to file my 2012 federal taxes The term structural component includes walls, floors, windows, doors, central air conditioning systems, light fixtures, etc. I need to file my 2012 federal taxes   Do not treat a structure that is essentially machinery or equipment as a building or structural component. I need to file my 2012 federal taxes Also, do not treat a structure that houses property used as an integral part of an activity as a building or structural component if the structure's use is so closely related to the property's use that the structure can be expected to be replaced when the property it initially houses is replaced. I need to file my 2012 federal taxes   The fact that the structure is specially designed to withstand the stress and other demands of the property and cannot be used economically for other purposes indicates it is closely related to the use of the property it houses. I need to file my 2012 federal taxes Structures such as oil and gas storage tanks, grain storage bins, and silos are not treated as buildings, but as section 1245 property. I need to file my 2012 federal taxes Facility for bulk storage of fungible commodities. I need to file my 2012 federal taxes   This is a facility used mainly for the bulk storage of fungible commodities. I need to file my 2012 federal taxes Bulk storage means storage of a commodity in a large mass before it is used. I need to file my 2012 federal taxes For example, if a facility is used to store oranges that have been sorted and boxed, it is not used for bulk storage. I need to file my 2012 federal taxes To be fungible, a commodity must be such that one part may be used in place of another. I need to file my 2012 federal taxes Gain Treated as Ordinary Income The gain treated as ordinary income on the sale, exchange, or involuntary conversion of section 1245 property, including a sale and leaseback transaction, is the lesser of the following amounts. I need to file my 2012 federal taxes The depreciation (which includes any section 179 deduction claimed) and amortization allowed or allowable on the property. I need to file my 2012 federal taxes The gain realized on the disposition (the amount realized from the disposition minus the adjusted basis of the property). I need to file my 2012 federal taxes For any other disposition of section 1245 property, ordinary income is the lesser of (1) above or the amount by which its fair market value (FMV) is more than its adjusted basis. I need to file my 2012 federal taxes For details, see chapter 3 of Publication 544. I need to file my 2012 federal taxes Use Part III of Form 4797 to figure the ordinary income part of the gain. I need to file my 2012 federal taxes Depreciation claimed on other property or claimed by other taxpayers. I need to file my 2012 federal taxes   Depreciation and amortization include the amounts you claimed on the section 1245 property as well as the following depreciation and amortization amounts. I need to file my 2012 federal taxes Amounts you claimed on property you exchanged for, or converted to, your section 1245 property in a like-kind exchange or involuntary conversion. I need to file my 2012 federal taxes For details on exchanges of property that are not taxable, see Like-Kind Exchanges in chapter 8. I need to file my 2012 federal taxes Amounts a previous owner of the section 1245 property claimed if your basis is determined with reference to that person's adjusted basis (for example, the donor's depreciation deductions on property you received as a gift and part of the transfer is a sale or exchange). I need to file my 2012 federal taxes Example. I need to file my 2012 federal taxes Jeff Free paid $120,000 for a tractor in 2012. I need to file my 2012 federal taxes On February 23, 2013, he traded it for a chopper and paid an additional $30,000. I need to file my 2012 federal taxes To figure his depreciation deduction on the chopper for the current year, Jeff continues to use the basis of the tractor as he would have before the trade. I need to file my 2012 federal taxes Jeff can also depreciate the additional $30,000 for the chopper. I need to file my 2012 federal taxes Depreciation and amortization. I need to file my 2012 federal taxes   Depreciation and amortization deductions that must be recaptured as ordinary income include (but are not limited to) the following items. I need to file my 2012 federal taxes See Depreciation Recapture in chapter 3 of Publication 544 for more details. I need to file my 2012 federal taxes Ordinary depreciation deductions. I need to file my 2012 federal taxes Section 179 deduction (see chapter 7). I need to file my 2012 federal taxes Any special depreciation allowance. I need to file my 2012 federal taxes Amortization deductions for all the following costs. I need to file my 2012 federal taxes Acquiring a lease. I need to file my 2012 federal taxes Lessee improvements. I need to file my 2012 federal taxes Pollution control facilities. I need to file my 2012 federal taxes Reforestation expenses. I need to file my 2012 federal taxes Section 197 intangibles. I need to file my 2012 federal taxes Qualified disaster expenses. I need to file my 2012 federal taxes Franchises, trademarks, and trade names acquired before August 11, 1993. I need to file my 2012 federal taxes Example. I need to file my 2012 federal taxes You file your returns on a calendar year basis. I need to file my 2012 federal taxes In February 2011, you bought and placed in service for 100% use in your farming business a light-duty truck (5-year property) that cost $10,000. I need to file my 2012 federal taxes You used the half-year convention and your MACRS deductions for the truck were $1,500 in 2011 and $2,550 in 2012. I need to file my 2012 federal taxes You did not claim the section 179 expense deduction for the truck. I need to file my 2012 federal taxes You sold it in May 2013 for $7,000. I need to file my 2012 federal taxes The MACRS deduction in 2013, the year of sale, is $893 (½ of $1,785). I need to file my 2012 federal taxes Figure the gain treated as ordinary income as follows. I need to file my 2012 federal taxes 1) Amount realized $7,000 2) Cost (February 2011) $10,000   3) Depreciation allowed or allowable (MACRS deductions: $1,500 + $2,550 + $893) 4,943   4) Adjusted basis (subtract line 3 from line 2) $5,057 5) Gain realized (subtract line 4 from line 1) 1,943 6) Gain treated as ordinary income (lesser of line 3 or line 5) $1,943 Depreciation allowed or allowable. I need to file my 2012 federal taxes   You generally use the greater of the depreciation allowed or allowable when figuring the part of gain to report as ordinary income. I need to file my 2012 federal taxes If, in prior years, you have consistently taken proper deductions under one method, the amount allowed for your prior years will not be increased even though a greater amount would have been allowed under another proper method. I need to file my 2012 federal taxes If you did not take any deduction at all for depreciation, your adjustments to basis for depreciation allowable are figured by using the straight line method. I need to file my 2012 federal taxes This treatment applies only when figuring what part of the gain is treated as ordinary income under the rules for section 1245 depreciation recapture. I need to file my 2012 federal taxes Disposition of plants and animals. I need to file my 2012 federal taxes   If you elect not to use the uniform capitalization rules (see chapter 6), you must treat any plant you produce as section 1245 property. I need to file my 2012 federal taxes If you have a gain on the property's disposition, you must recapture the pre-productive expenses you would have capitalized if you had not made the election by treating the gain, up to the amount of these expenses, as ordinary income. I need to file my 2012 federal taxes For section 1231 transactions, show these expenses as depreciation on Form 4797, Part III, line 22. I need to file my 2012 federal taxes For plant sales that are reported on Schedule F (1040), Profit or Loss From Farming, this recapture rule does not change the reporting of income because the gain is already ordinary income. I need to file my 2012 federal taxes You can use the farm-price method or the unit-livestock-price method discussed in  chapter 2 to figure these expenses. I need to file my 2012 federal taxes Example. I need to file my 2012 federal taxes Janet Maple sold her apple orchard in 2013 for $80,000. I need to file my 2012 federal taxes Her adjusted basis at the time of sale was $60,000. I need to file my 2012 federal taxes She bought the orchard in 2006, but the trees did not produce a crop until 2009. I need to file my 2012 federal taxes Her pre-productive expenses were $6,000. I need to file my 2012 federal taxes She elected not to use the uniform capitalization rules. I need to file my 2012 federal taxes Janet must treat $6,000 of the gain as ordinary income. I need to file my 2012 federal taxes Section 1250 Property Section 1250 property includes all real property subject to an allowance for depreciation that is not and never has been section 1245 property. I need to file my 2012 federal taxes It includes buildings and structural components that are not section 1245 property (discussed earlier). I need to file my 2012 federal taxes It includes a leasehold of land or section 1250 property subject to an allowance for depreciation. I need to file my 2012 federal taxes A fee simple interest in land is not section 1250 property because, like land, it is not depreciable. I need to file my 2012 federal taxes Gain on the disposition of section 1250 property is treated as ordinary income to the extent of additional depreciation allowed or allowable. I need to file my 2012 federal taxes To determine the additional depreciation on section 1250 property, see Depreciation Recapture in chapter 3 of Publication 544. I need to file my 2012 federal taxes You will not have additional depreciation if any of the following apply to the property disposed of. I need to file my 2012 federal taxes You figured depreciation for the property using the straight line method or any other method that does not result in depreciation that is more than the amount figured by the straight line method and you have held the property longer than 1 year. I need to file my 2012 federal taxes You chose the alternate ACRS (straight line) method for the property, which was a type of 15-, 18-, or 19-year real property covered by the section 1250 rules. I need to file my 2012 federal taxes The property was nonresidential real property placed in service after 1986 (or after July 31, 1986, if the choice to use MACRS was made) and you held it longer than 1 year. I need to file my 2012 federal taxes These properties are depreciated using the straight line method. I need to file my 2012 federal taxes Installment Sale If you report the sale of property under the installment method, any depreciation recapture under section 1245 or 1250 is taxable as ordinary income in the year of sale. I need to file my 2012 federal taxes This applies even if no payments are received in that year. I need to file my 2012 federal taxes If the gain is more than the depreciation recapture income, report the rest of the gain using the rules of the installment method. I need to file my 2012 federal taxes For this purpose, include the recapture income in your installment sale basis to determine your gross profit on the installment sale. I need to file my 2012 federal taxes If you dispose of more than one asset in a single transaction, you must separately figure the gain on each asset so that it may be properly reported. I need to file my 2012 federal taxes To do this, allocate the selling price and the payments you receive in the year of sale to each asset. I need to file my 2012 federal taxes Report any depreciation recapture income in the year of sale before using the installment method for any remaining gain. I need to file my 2012 federal taxes For more information on installment sales, see chapter 10. I need to file my 2012 federal taxes Other Dispositions Chapter 3 of Publication 544 discusses the tax treatment of the following transfers of depreciable property. I need to file my 2012 federal taxes By gift. I need to file my 2012 federal taxes At death. I need to file my 2012 federal taxes In like-kind exchanges. I need to file my 2012 federal taxes In involuntary conversions. I need to file my 2012 federal taxes Publication 544 also explains how to handle a single transaction involving multiple properties. I need to file my 2012 federal taxes Other Gains This section discusses gain on the disposition of farmland for which you were allowed either of the following. I need to file my 2012 federal taxes Deductions for soil and water conservation expenditures (section 1252 property). I need to file my 2012 federal taxes Exclusions from income for certain cost sharing payments (section 1255 property). I need to file my 2012 federal taxes Section 1252 property. I need to file my 2012 federal taxes   If you disposed of farmland you held more than 1 year and less than 10 years at a gain and you were allowed deductions for soil and water conservation expenses for the land, as discussed in chapter 5, you must treat part of the gain as ordinary income and treat the balance as section 1231 gain. I need to file my 2012 federal taxes Exceptions. I need to file my 2012 federal taxes   Do not treat gain on the following transactions as gain on section 1252 property. I need to file my 2012 federal taxes Disposition of farmland by gift. I need to file my 2012 federal taxes Transfer of farm property at death (except for income in respect of a decedent). I need to file my 2012 federal taxes For more information, see Regulations section 1. I need to file my 2012 federal taxes 1252-2. I need to file my 2012 federal taxes Amount to report as ordinary income. I need to file my 2012 federal taxes   You report as ordinary income the lesser of the following amounts. I need to file my 2012 federal taxes Your gain (determined by subtracting the adjusted basis from the amount realized from a sale, exchange, or involuntary conversion, or the FMV for all other dispositions). I need to file my 2012 federal taxes The total deductions allowed for soil and water conservation expenses multiplied by the applicable percentage, discussed next. I need to file my 2012 federal taxes Applicable percentage. I need to file my 2012 federal taxes   The applicable percentage is based on the length of time you held the land. I need to file my 2012 federal taxes If you dispose of your farmland within 5 years after the date you acquired it, the percentage is 100%. I need to file my 2012 federal taxes If you dispose of the land within the 6th through 9th year after you acquired it, the applicable percentage is reduced by 20% a year for each year or part of a year you hold the land after the 5th year. I need to file my 2012 federal taxes If you dispose of the land 10 or more years after you acquired it, the percentage is 0%, and the entire gain is a section 1231 gain. I need to file my 2012 federal taxes Example. I need to file my 2012 federal taxes You acquired farmland on January 19, 2005. I need to file my 2012 federal taxes On October 3, 2013, you sold the land at a $30,000 gain. I need to file my 2012 federal taxes Between January 1 and October 3, 2013, you incur soil and water conservation expenditures of $15,000 for the land that are fully deductible in 2013. I need to file my 2012 federal taxes The applicable percentage is 40% since you sold the land within the 8th year after you acquired it. I need to file my 2012 federal taxes You treat $6,000 (40% of $15,000) of the $30,000 gain as ordinary income and the $24,000 balance as a section 1231 gain. I need to file my 2012 federal taxes Section 1255 property. I need to file my 2012 federal taxes   If you receive certain cost-sharing payments on property and you exclude those payments from income (as discussed in chapter 3), you may have to treat part of any gain as ordinary income and treat the balance as a section 1231 gain. I need to file my 2012 federal taxes If you chose not to exclude these payments, you will not have to recognize ordinary income under this provision. I need to file my 2012 federal taxes Amount to report as ordinary income. I need to file my 2012 federal taxes   You report as ordinary income the lesser of the following amounts. I need to file my 2012 federal taxes The applicable percentage of the total excluded cost-sharing payments. I need to file my 2012 federal taxes The gain on the disposition of the property. I need to file my 2012 federal taxes You do not report ordinary income under this rule to the extent the gain is recognized as ordinary income under sections 1231 through 1254, 1256, and 1257. I need to file my 2012 federal taxes However, if applicable, gain reported under this rule must be reported regardless of any contrary provisions (including nonrecognition provisions) under any other section. I need to file my 2012 federal taxes Applicable percentage. I need to file my 2012 federal taxes   The applicable percentage of the excluded cost-sharing payments to be reported as ordinary income is based on the length of time you hold the property after receiving the payments. I need to file my 2012 federal taxes If the property is held less than 10 years after you receive the payments, the percentage is 100%. I need to file my 2012 federal taxes After 10 years, the percentage is reduced by 10% a year, or part of a year, until the rate is 0%. I need to file my 2012 federal taxes Form 4797, Part III. I need to file my 2012 federal taxes   Use Form 4797, Part III, to figure the ordinary income part of a gain from the sale, exchange, or involuntary conversion of section 1252 property and section 1255 property. I need to file my 2012 federal taxes Prev  Up  Next   Home   More Online Publications
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The I Need To File My 2012 Federal Taxes

I need to file my 2012 federal taxes 2. I need to file my 2012 federal taxes   Roth IRAs Table of Contents What's New for 2013 What's New for 2014 Reminders Introduction What Is a Roth IRA? When Can a Roth IRA Be Opened? Can You Contribute to a Roth IRA?How Much Can Be Contributed? When Can You Make Contributions? What if You Contribute Too Much? Can You Move Amounts Into a Roth IRA?Conversions Rollover From Employer's Plan Into a Roth IRA Military Death Gratuities and Servicemembers' Group Life Insurance (SGLI) Payments Rollover From a Roth IRA Rollover of Exxon Valdez Settlement Income Rollover of Airline Payments Are Distributions Taxable?What Are Qualified Distributions? Additional Tax on Early Distributions Ordering Rules for Distributions How Do You Figure the Taxable Part? Must You Withdraw or Use Assets?Minimum distributions. I need to file my 2012 federal taxes Recognizing Losses on Investments Distributions After Owner's Death What's New for 2013 Roth IRA contribution limit. I need to file my 2012 federal taxes  If contributions on your behalf are made only to Roth IRAs, your contribution limit for 2013 will generally be the lesser of: $5,500, or Your taxable compensation for the year. I need to file my 2012 federal taxes If you were age 50 or older before 2014 and contributions on your behalf were made only to Roth IRAs, your contribution limit for 2013 will generally be the lesser of: $6,500, or Your taxable compensation for the year. I need to file my 2012 federal taxes However, if your modified adjusted gross income (AGI) is above a certain amount, your contribution limit may be reduced. I need to file my 2012 federal taxes For more information, see How Much Can Be Contributed? under Can You Contribute to a Roth IRA? in this chapter. I need to file my 2012 federal taxes Modified AGI limit for Roth IRA contributions increased. I need to file my 2012 federal taxes  For 2013, your Roth IRA contribution limit is reduced (phased out) in the following situations. I need to file my 2012 federal taxes Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $178,000. I need to file my 2012 federal taxes You cannot make a Roth IRA contribution if your modified AGI is $188,000 or more. I need to file my 2012 federal taxes Your filing status is single, head of household, or married filing separately and you did not live with your spouse at any time in 2013 and your modified AGI is at least $112,000. I need to file my 2012 federal taxes You cannot make a Roth IRA contribution if your modified AGI is $127,000 or more. I need to file my 2012 federal taxes Your filing status is married filing separately, you lived with your spouse at any time during the year, and your modified AGI is more than -0-. I need to file my 2012 federal taxes You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more. I need to file my 2012 federal taxes See Can You Contribute to a Roth IRA? in this chapter. I need to file my 2012 federal taxes Net Investment Income Tax. I need to file my 2012 federal taxes  For purposes of the Net Investment Income Tax (NIIT), net investment income does not include distributions from a qualified retirement plan (for example, 401(a), 403(a), 403(b), 457(b) plans, and IRAs). I need to file my 2012 federal taxes However, these distributions are taken into account when determining the modified adjusted gross income threshold. I need to file my 2012 federal taxes Distributions from a nonqualified retirement plan are included in net investment income. I need to file my 2012 federal taxes See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information. I need to file my 2012 federal taxes What's New for 2014 Modified AGI limit for Roth IRA contributions increased. I need to file my 2012 federal taxes  For 2014, your Roth IRA contribution limit is reduced (phased out) in the following situations. I need to file my 2012 federal taxes Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $181,000. I need to file my 2012 federal taxes You cannot make a Roth IRA contribution if your modified AGI is $191,000 or more. I need to file my 2012 federal taxes Your filing status is single, head of household, or married filing separately and you did not live with your spouse at any time in 2014 and your modified AGI is at least $114,000. I need to file my 2012 federal taxes You cannot make a Roth IRA contribution if your modified AGI is $129,000 or more. I need to file my 2012 federal taxes Your filing status is married filing separately, you lived with your spouse at any time during the year, and your modified AGI is more than -0-. I need to file my 2012 federal taxes You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more. I need to file my 2012 federal taxes Reminders Deemed IRAs. I need to file my 2012 federal taxes  For plan years beginning after 2002, a qualified employer plan (retirement plan) can maintain a separate account or annuity under the plan (a deemed IRA) to receive voluntary employee contributions. I need to file my 2012 federal taxes If the separate account or annuity otherwise meets the requirements of an IRA, it will be subject only to IRA rules. I need to file my 2012 federal taxes An employee's account can be treated as a traditional IRA or a Roth IRA. I need to file my 2012 federal taxes For this purpose, a “qualified employer plan” includes: A qualified pension, profit-sharing, or stock bonus plan (section 401(a) plan), A qualified employee annuity plan (section 403(a) plan), A tax-sheltered annuity plan (section 403(b) plan), and A deferred compensation plan (section 457 plan) maintained by a state, a political subdivision of a state, or an agency or instrumentality of a state or political subdivision of a state. I need to file my 2012 federal taxes Designated Roth accounts. I need to file my 2012 federal taxes  Designated Roth accounts are separate accounts under 401(k), 403(b), or 457(b) plans that accept elective deferrals that are referred to as Roth contributions. I need to file my 2012 federal taxes These elective deferrals are included in your income, but qualified distributions from these accounts are not included in your income. I need to file my 2012 federal taxes Designated Roth accounts are not IRAs and should not be confused with Roth IRAs. I need to file my 2012 federal taxes Contributions, up to their respective limits, can be made to Roth IRAs and designated Roth accounts according to your eligibility to participate. I need to file my 2012 federal taxes A contribution to one does not impact your eligibility to contribute to the other. I need to file my 2012 federal taxes See Publication 575, for more information on designated Roth accounts. I need to file my 2012 federal taxes Introduction Regardless of your age, you may be able to establish and make nondeductible contributions to an individual retirement plan called a Roth IRA. I need to file my 2012 federal taxes Contributions not reported. I need to file my 2012 federal taxes   You do not report Roth IRA contributions on your return. I need to file my 2012 federal taxes What Is a Roth IRA? A Roth IRA is an individual retirement plan that, except as explained in this chapter, is subject to the rules that apply to a traditional IRA (defined next). I need to file my 2012 federal taxes It can be either an account or an annuity. I need to file my 2012 federal taxes Individual retirement accounts and annuities are described in chapter 1 under How Can a Traditional IRA Be Opened. I need to file my 2012 federal taxes To be a Roth IRA, the account or annuity must be designated as a Roth IRA when it is opened. I need to file my 2012 federal taxes A deemed IRA can be a Roth IRA, but neither a SEP IRA nor a SIMPLE IRA can be designated as a Roth IRA. I need to file my 2012 federal taxes Unlike a traditional IRA, you cannot deduct contributions to a Roth IRA. I need to file my 2012 federal taxes But, if you satisfy the requirements, qualified distributions (discussed later) are tax free. I need to file my 2012 federal taxes Contributions can be made to your Roth IRA after you reach age 70½ and you can leave amounts in your Roth IRA as long as you live. I need to file my 2012 federal taxes Traditional IRA. I need to file my 2012 federal taxes   A traditional IRA is any IRA that is not a Roth IRA or SIMPLE IRA. I need to file my 2012 federal taxes Traditional IRAs are discussed in chapter 1. I need to file my 2012 federal taxes When Can a Roth IRA Be Opened? You can open a Roth IRA at any time. I need to file my 2012 federal taxes However, the time for making contributions for any year is limited. I need to file my 2012 federal taxes See When Can You Make Contributions , later under Can You Contribute to a Roth IRA. I need to file my 2012 federal taxes Can You Contribute to a Roth IRA? Generally, you can contribute to a Roth IRA if you have taxable compensation (defined later) and your modified AGI (defined later) is less than: $188,000 for married filing jointly or qualifying widow(er), $127,000 for single, head of household, or married filing separately and you did not live with your spouse at any time during the year, and $10,000 for married filing separately and you lived with your spouse at any time during the year. I need to file my 2012 federal taxes You may be able to claim a credit for contributions to your Roth IRA. I need to file my 2012 federal taxes For more information, see chapter 4. I need to file my 2012 federal taxes Is there an age limit for contributions?   Contributions can be made to your Roth IRA regardless of your age. I need to file my 2012 federal taxes Can you contribute to a Roth IRA for your spouse?   You can contribute to a Roth IRA for your spouse provided the contributions satisfy the Kay Bailey Hutchison Spousal IRA limit discussed in chapter 1 under How Much Can Be Contributed, you file jointly, and your modified AGI is less than $188,000. I need to file my 2012 federal taxes Compensation. I need to file my 2012 federal taxes   Compensation includes wages, salaries, tips, professional fees, bonuses, and other amounts received for providing personal services. I need to file my 2012 federal taxes It also includes commissions, self-employment income, nontaxable combat pay, military differential pay, and taxable alimony and separate maintenance payments. I need to file my 2012 federal taxes For more information, see What Is Compensation? under Who Can Open a Traditional IRA? in chapter 1. I need to file my 2012 federal taxes Modified AGI. I need to file my 2012 federal taxes   Your modified AGI for Roth IRA purposes is your adjusted gross income (AGI) as shown on your return with some adjustments. I need to file my 2012 federal taxes Use Worksheet 2-1 , later, to determine your modified AGI. I need to file my 2012 federal taxes    Do not subtract conversion income when figuring your other AGI-based phaseouts and taxable income, such as your deduction for medical and dental expenses. I need to file my 2012 federal taxes Subtract them from AGI only for the purpose of figuring your modified AGI for Roth IRA purposes. I need to file my 2012 federal taxes How Much Can Be Contributed? The contribution limit for Roth IRAs generally depends on whether contributions are made only to Roth IRAs or to both traditional IRAs and Roth IRAs. I need to file my 2012 federal taxes Worksheet 2-1. I need to file my 2012 federal taxes Modified Adjusted Gross Income for Roth IRA Purposes Use this worksheet to figure your modified adjusted gross income for Roth IRA purposes. I need to file my 2012 federal taxes 1. I need to file my 2012 federal taxes Enter your adjusted gross income from Form 1040, line 38; Form 1040A, line 22; or Form 1040NR, line 37 1. I need to file my 2012 federal taxes   2. I need to file my 2012 federal taxes Enter any income resulting from the conversion of an IRA (other than a Roth IRA) to a Roth IRA (included on Form 1040, line 15b, Form 1040A, line 11b, or Form 1040NR, line 16b) and a rollover from a qualified retirement plan to a Roth IRA (included on Form 1040, line 16b, Form 1040A, line 12b, or Form 1040NR, line 17b) 2. I need to file my 2012 federal taxes   3. I need to file my 2012 federal taxes Subtract line 2 from line 1 3. I need to file my 2012 federal taxes   4. I need to file my 2012 federal taxes Enter any traditional IRA deduction from Form 1040, line 32; Form 1040A, line 17; or Form 1040NR, line 32 4. I need to file my 2012 federal taxes   5. I need to file my 2012 federal taxes Enter any student loan interest deduction from Form 1040, line 33; Form 1040A, line 18; or Form 1040NR, line 33 5. I need to file my 2012 federal taxes   6. I need to file my 2012 federal taxes Enter any tuition and fees deduction from Form 1040, line 34, or Form 1040A, line 19 6. I need to file my 2012 federal taxes   7. I need to file my 2012 federal taxes Enter any domestic production activities deduction from Form 1040, line 35, or Form 1040NR, line 34 7. I need to file my 2012 federal taxes   8. I need to file my 2012 federal taxes Enter any foreign earned income exclusion and/or housing exclusion from Form 2555, line 45, or Form 2555-EZ, line 18 8. I need to file my 2012 federal taxes   9. I need to file my 2012 federal taxes Enter any foreign housing deduction from Form 2555, line 50 9. I need to file my 2012 federal taxes   10. I need to file my 2012 federal taxes Enter any excludable qualified savings bond interest from Form 8815, line 14 10. I need to file my 2012 federal taxes   11. I need to file my 2012 federal taxes Enter any excluded employer-provided adoption benefits from Form 8839, line 28 11. I need to file my 2012 federal taxes   12. I need to file my 2012 federal taxes Add the amounts on lines 3 through 11 12. I need to file my 2012 federal taxes   13. I need to file my 2012 federal taxes Enter: $188,000 if married filing jointly or qualifying widow(er), $10,000 if married filing separately and you lived with your spouse at any time during the year, or $127,000 for all others 13. I need to file my 2012 federal taxes   Is the amount on line 12 more than the amount on line 13? If yes, see the note below. I need to file my 2012 federal taxes  If no, the amount on line 12 is your modified adjusted gross income for Roth IRA purposes. I need to file my 2012 federal taxes       Note. I need to file my 2012 federal taxes If the amount on line 12 is more than the amount on line 13 and you have other income or loss items, such as social security income or passive activity losses, that are subject to AGI-based phaseouts, you can refigure your AGI solely for the purpose of figuring your modified AGI for Roth IRA purposes. I need to file my 2012 federal taxes (If you receive social security benefits, use Worksheet 1 in Appendix B to refigure your AGI. I need to file my 2012 federal taxes ) Then go to line 3 above in this Worksheet 2-1 to refigure your modified AGI. I need to file my 2012 federal taxes If you do not have other income or loss items subject to AGI-based phaseouts, your modified adjusted gross income for Roth IRA purposes is the amount on line 12 above. I need to file my 2012 federal taxes Roth IRAs only. I need to file my 2012 federal taxes   If contributions are made only to Roth IRAs, your contribution limit generally is the lesser of: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation. I need to file my 2012 federal taxes   However, if your modified AGI is above a certain amount, your contribution limit may be reduced, as explained later under Contribution limit reduced . I need to file my 2012 federal taxes Roth IRAs and traditional IRAs. I need to file my 2012 federal taxes   If contributions are made to both Roth IRAs and traditional IRAs established for your benefit, your contribution limit for Roth IRAs generally is the same as your limit would be if contributions were made only to Roth IRAs, but then reduced by all contributions for the year to all IRAs other than Roth IRAs. I need to file my 2012 federal taxes Employer contributions under a SEP or SIMPLE IRA plan do not affect this limit. I need to file my 2012 federal taxes   This means that your contribution limit is the lesser of: $5,500 ($6,500 if you are age 50 or older) minus all contributions (other than employer contributions under a SEP or SIMPLE IRA plan) for the year to all IRAs other than Roth IRAs, or Your taxable compensation minus all contributions (other than employer contributions under a SEP or SIMPLE IRA plan) for the year to all IRAs other than Roth IRAs. I need to file my 2012 federal taxes   However, if your modified AGI is above a certain amount, your contribution limit may be reduced, as explained below under Contribution limit reduced . I need to file my 2012 federal taxes   Simplified employee pensions (SEPs) are discussed in Publication 560. I need to file my 2012 federal taxes Savings incentive match plans for employees (SIMPLEs) are discussed in chapter 3. I need to file my 2012 federal taxes Repayment of reservist distributions. I need to file my 2012 federal taxes   You can repay qualified reservist distributions even if the repayments would cause your total contributions to the Roth IRA to be more than the general limit on contributions. I need to file my 2012 federal taxes However, the total repayments cannot be more than the amount of your distribution. I need to file my 2012 federal taxes Note. I need to file my 2012 federal taxes If you make repayments of qualified reservist distributions to a Roth IRA, increase your basis in the Roth IRA by the amount of the repayment. I need to file my 2012 federal taxes For more information, see Qualified reservist repayments under How Much Can Be Contributed? in chapter 1. I need to file my 2012 federal taxes Contribution limit reduced. I need to file my 2012 federal taxes   If your modified AGI is above a certain amount, your contribution limit is gradually reduced. I need to file my 2012 federal taxes Use Table 2-1, later, to determine if this reduction applies to you. I need to file my 2012 federal taxes Table 2-1. I need to file my 2012 federal taxes Effect of Modified AGI on Roth IRA Contribution This table shows whether your contribution to a Roth IRA is affected by the amount of your modified adjusted gross income (modified AGI). I need to file my 2012 federal taxes IF you have taxable compensation and your filing status is . I need to file my 2012 federal taxes . I need to file my 2012 federal taxes . I need to file my 2012 federal taxes AND your modified AGI is . I need to file my 2012 federal taxes . I need to file my 2012 federal taxes . I need to file my 2012 federal taxes THEN . I need to file my 2012 federal taxes . I need to file my 2012 federal taxes . I need to file my 2012 federal taxes married filing jointly or  qualifying widow(er) less than $178,000 you can contribute up to $5,500 ($6,500 if you are age 50 or older) as explained under How Much Can Be Contributed . I need to file my 2012 federal taxes at least $178,000 but less than $188,000 the amount you can contribute is reduced as explained under Contribution limit reduced . I need to file my 2012 federal taxes $188,000 or more you cannot contribute to a Roth IRA. I need to file my 2012 federal taxes married filing separately and you lived with your spouse at any time during the year zero (-0-) you can contribute up to $5,500 ($6,500 if you are age 50 or older) as explained under How Much Can Be Contributed . I need to file my 2012 federal taxes more than zero (-0-) but less than $10,000 the amount you can contribute is reduced as explained under Contribution limit reduced . I need to file my 2012 federal taxes $10,000 or more you cannot contribute to a Roth IRA. I need to file my 2012 federal taxes single, head of household,  or married filing separately and you did not live with your spouse at any time during the year less than $112,000 you can contribute up to $5,500 ($6,500 if you are age 50 or older) as explained under How Much Can Be Contributed . I need to file my 2012 federal taxes at least $112,000 but less than $127,000 the amount you can contribute is reduced as explained under Contribution limit reduced . I need to file my 2012 federal taxes $127,000 or more you cannot contribute to a Roth IRA. I need to file my 2012 federal taxes Figuring the reduction. I need to file my 2012 federal taxes   If the amount you can contribute must be reduced, use Worksheet 2-2, later, to figure your reduced contribution limit. I need to file my 2012 federal taxes Worksheet 2-2. I need to file my 2012 federal taxes Determining Your Reduced Roth IRA Contribution Limit Before using this worksheet, check Table 2-1, earlier, to determine whether or not your Roth IRA contribution limit is reduced. I need to file my 2012 federal taxes If it is, use this worksheet to determine how much it is reduced. I need to file my 2012 federal taxes 1. I need to file my 2012 federal taxes Enter your modified AGI for Roth IRA purposes (Worksheet 2-1, line 12) 1. I need to file my 2012 federal taxes   2. I need to file my 2012 federal taxes Enter: $178,000 if filing a joint return or qualifying widow(er), $-0- if married filing a separate return and you lived with your spouse at any time in 2013, or $112,000 for all others 2. I need to file my 2012 federal taxes   3. I need to file my 2012 federal taxes Subtract line 2 from line 1 3. I need to file my 2012 federal taxes   4. I need to file my 2012 federal taxes Enter: $10,000 if filing a joint return or qualifying widow(er) or married filing a separate return and you lived with your spouse at any time during the year, or $15,000 for all others 4. I need to file my 2012 federal taxes   5. I need to file my 2012 federal taxes Divide line 3 by line 4 and enter the result as a decimal (rounded to at least three places). I need to file my 2012 federal taxes If the result is 1. I need to file my 2012 federal taxes 000 or more, enter 1. I need to file my 2012 federal taxes 000 5. I need to file my 2012 federal taxes   6. I need to file my 2012 federal taxes Enter the lesser of: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation 6. I need to file my 2012 federal taxes   7. I need to file my 2012 federal taxes Multiply line 5 by line 6 7. I need to file my 2012 federal taxes   8. I need to file my 2012 federal taxes Subtract line 7 from line 6. I need to file my 2012 federal taxes Round the result up to the nearest $10. I need to file my 2012 federal taxes If the result is less than $200, enter $200 8. I need to file my 2012 federal taxes   9. I need to file my 2012 federal taxes Enter contributions for the year to other IRAs 9. I need to file my 2012 federal taxes   10. I need to file my 2012 federal taxes Subtract line 9 from line 6 10. I need to file my 2012 federal taxes   11. I need to file my 2012 federal taxes Enter the lesser of line 8 or line 10. I need to file my 2012 federal taxes This is your reduced Roth IRA contribution limit 11. I need to file my 2012 federal taxes      Round your reduced contribution limit up to the nearest $10. I need to file my 2012 federal taxes If your reduced contribution limit is more than $0, but less than $200, increase the limit to $200. I need to file my 2012 federal taxes Example. I need to file my 2012 federal taxes You are a 45-year-old, single individual with taxable compensation of $113,000. I need to file my 2012 federal taxes You want to make the maximum allowable contribution to your Roth IRA for 2013. I need to file my 2012 federal taxes Your modified AGI for 2013 is $113,000. I need to file my 2012 federal taxes You have not contributed to any traditional IRA, so the maximum contribution limit before the modified AGI reduction is $5,500. I need to file my 2012 federal taxes You figure your reduced Roth IRA contribution of $5,140 as shown on Worksheet 2-2. I need to file my 2012 federal taxes Example—Illustrated, later. I need to file my 2012 federal taxes   Worksheet 2-2. I need to file my 2012 federal taxes Example—Illustrated Before using this worksheet, check Table 2-1, earlier, to determine whether or not your Roth IRA contribution limit is reduced. I need to file my 2012 federal taxes If it is, use this worksheet to determine how much it is reduced. I need to file my 2012 federal taxes 1. I need to file my 2012 federal taxes Enter your modified AGI for Roth IRA purposes (Worksheet 2-1, line 12) 1. I need to file my 2012 federal taxes 113,000 2. I need to file my 2012 federal taxes Enter: $178,000 if filing a joint return or qualifying widow(er), $-0- if married filing a separate return and you lived with your spouse at any time in 2013, or $112,000 for all others 2. I need to file my 2012 federal taxes 112,000 3. I need to file my 2012 federal taxes Subtract line 2 from line 1 3. I need to file my 2012 federal taxes 1,000 4. I need to file my 2012 federal taxes Enter: $10,000 if filing a joint return or qualifying widow(er) or married filing a separate return and you lived with your spouse at any time during the year, or $15,000 for all others 4. I need to file my 2012 federal taxes 15,000 5. I need to file my 2012 federal taxes Divide line 3 by line 4 and enter the result as a decimal (rounded to at least three places). I need to file my 2012 federal taxes If the result is 1. I need to file my 2012 federal taxes 000 or more, enter 1. I need to file my 2012 federal taxes 000 5. I need to file my 2012 federal taxes . I need to file my 2012 federal taxes 067 6. I need to file my 2012 federal taxes Enter the lesser of: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation 6. I need to file my 2012 federal taxes 5,500 7. I need to file my 2012 federal taxes Multiply line 5 by line 6 7. I need to file my 2012 federal taxes 369 8. I need to file my 2012 federal taxes Subtract line 7 from line 6. I need to file my 2012 federal taxes Round the result up to the nearest $10. I need to file my 2012 federal taxes If the result is less than $200, enter $200 8. I need to file my 2012 federal taxes 5,140 9. I need to file my 2012 federal taxes Enter contributions for the year to other IRAs 9. I need to file my 2012 federal taxes 0 10. I need to file my 2012 federal taxes Subtract line 9 from line 6 10. I need to file my 2012 federal taxes 5,500 11. I need to file my 2012 federal taxes Enter the lesser of line 8 or line 10. I need to file my 2012 federal taxes This is your reduced Roth IRA contribution limit 11. I need to file my 2012 federal taxes 5,140 When Can You Make Contributions? You can make contributions to a Roth IRA for a year at any time during the year or by the due date of your return for that year (not including extensions). I need to file my 2012 federal taxes You can make contributions for 2013 by the due date (not including extensions) for filing your 2013 tax return. I need to file my 2012 federal taxes This means that most people can make contributions for 2013 by April 15, 2014. I need to file my 2012 federal taxes What if You Contribute Too Much? A 6% excise tax applies to any excess contribution to a Roth IRA. I need to file my 2012 federal taxes Excess contributions. I need to file my 2012 federal taxes   These are the contributions to your Roth IRAs for a year that equal the total of: Amounts contributed for the tax year to your Roth IRAs (other than amounts properly and timely rolled over from a Roth IRA or properly converted from a traditional IRA or rolled over from a qualified retirement plan, as described later) that are more than your contribution limit for the year (explained earlier under How Much Can Be Contributed? ), plus Any excess contributions for the preceding year, reduced by the total of: Any distributions out of your Roth IRAs for the year, plus Your contribution limit for the year minus your contributions to all your IRAs for the year. I need to file my 2012 federal taxes Withdrawal of excess contributions. I need to file my 2012 federal taxes   For purposes of determining excess contributions, any contribution that is withdrawn on or before the due date (including extensions) for filing your tax return for the year is treated as an amount not contributed. I need to file my 2012 federal taxes This treatment only applies if any earnings on the contributions are also withdrawn. I need to file my 2012 federal taxes The earnings are considered earned and received in the year the excess contribution was made. I need to file my 2012 federal taxes   If you timely filed your 2013 tax return without withdrawing a contribution that you made in 2013, you can still have the contribution returned to you within 6 months of the due date of your 2013 tax return, excluding extensions. I need to file my 2012 federal taxes If you do, file an amended return with “Filed pursuant to section 301. I need to file my 2012 federal taxes 9100-2” written at the top. I need to file my 2012 federal taxes Report any related earnings on the amended return and include an explanation of the withdrawal. I need to file my 2012 federal taxes Make any other necessary changes on the amended return. I need to file my 2012 federal taxes Applying excess contributions. I need to file my 2012 federal taxes    If contributions to your Roth IRA for a year were more than the limit, you can apply the excess contribution in one year to a later year if the contributions for that later year are less than the maximum allowed for that year. I need to file my 2012 federal taxes Can You Move Amounts Into a Roth IRA? You may be able to convert amounts from either a traditional, SEP, or SIMPLE IRA into a Roth IRA. I need to file my 2012 federal taxes You may be able to roll over amounts from a qualified retirement plan to a Roth IRA. I need to file my 2012 federal taxes You may be able to recharacterize contributions made to one IRA as having been made directly to a different IRA. I need to file my 2012 federal taxes You can roll amounts over from a designated Roth account or from one Roth IRA to another Roth IRA. I need to file my 2012 federal taxes Conversions You can convert a traditional IRA to a Roth IRA. I need to file my 2012 federal taxes The conversion is treated as a rollover, regardless of the conversion method used. I need to file my 2012 federal taxes Most of the rules for rollovers, described in chapter 1 under Rollover From One IRA Into Another , apply to these rollovers. I need to file my 2012 federal taxes However, the 1-year waiting period does not apply. I need to file my 2012 federal taxes Conversion methods. I need to file my 2012 federal taxes   You can convert amounts from a traditional IRA to a Roth IRA in any of the following three ways. I need to file my 2012 federal taxes Rollover. I need to file my 2012 federal taxes You can receive a distribution from a traditional IRA and roll it over (contribute it) to a Roth IRA within 60 days after the distribution. I need to file my 2012 federal taxes Trustee-to-trustee transfer. I need to file my 2012 federal taxes You can direct the trustee of the traditional IRA to transfer an amount from the traditional IRA to the trustee of the Roth IRA. I need to file my 2012 federal taxes Same trustee transfer. I need to file my 2012 federal taxes If the trustee of the traditional IRA also maintains the Roth IRA, you can direct the trustee to transfer an amount from the traditional IRA to the Roth IRA. I need to file my 2012 federal taxes Same trustee. I need to file my 2012 federal taxes   Conversions made with the same trustee can be made by redesignating the traditional IRA as a Roth IRA, rather than opening a new account or issuing a new contract. I need to file my 2012 federal taxes Income. I need to file my 2012 federal taxes   You must include in your gross income distributions from a traditional IRA that you would have had to include in income if you had not converted them into a Roth IRA. I need to file my 2012 federal taxes These amounts are normally included in income on your return for the year that you converted them from a traditional IRA to a Roth IRA. I need to file my 2012 federal taxes If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. I need to file my 2012 federal taxes See Publication 505, Tax Withholding and Estimated Tax. I need to file my 2012 federal taxes More information. I need to file my 2012 federal taxes   For more information on conversions, see Converting From Any Traditional IRA Into a Roth IRA in chapter 1. I need to file my 2012 federal taxes Rollover From Employer's Plan Into a Roth IRA You can roll over into a Roth IRA all or part of an eligible rollover distribution you receive from your (or your deceased spouse's): Employer's qualified pension, profit-sharing, or stock bonus plan (including a 401(k) plan); Annuity plan; Tax-sheltered annuity plan (section 403(b) plan); or Governmental deferred compensation plan (section 457 plan). I need to file my 2012 federal taxes Any amount rolled over is subject to the same rules for converting a traditional IRA into a Roth IRA. I need to file my 2012 federal taxes See Converting From Any Traditional IRA Into a Roth IRA in chapter 1. I need to file my 2012 federal taxes Also, the rollover contribution must meet the rollover requirements that apply to the specific type of retirement plan. I need to file my 2012 federal taxes Rollover methods. I need to file my 2012 federal taxes   You can roll over amounts from a qualified retirement plan to a Roth IRA in one of the following ways. I need to file my 2012 federal taxes Rollover. I need to file my 2012 federal taxes You can receive a distribution from a qualified retirement plan and roll it over (contribute) to a Roth IRA within 60 days after the distribution. I need to file my 2012 federal taxes Since the distribution is paid directly to you, the payer generally must withhold 20% of it. I need to file my 2012 federal taxes Direct rollover option. I need to file my 2012 federal taxes Your employer's qualified plan must give you the option to have any part of an eligible rollover distribution paid directly to a Roth IRA. I need to file my 2012 federal taxes Generally, no tax is withheld from any part of the designated distribution that is directly paid to the trustee of the Roth IRA. I need to file my 2012 federal taxes Rollover by nonspouse beneficiary. I need to file my 2012 federal taxes   If you are a designated beneficiary (other than a surviving spouse) of a deceased employee, you can roll over all or part of an eligible rollover distribution from one of the types of plans listed above into a Roth IRA. I need to file my 2012 federal taxes You must make the rollover by a direct trustee-to-trustee transfer into an inherited Roth IRA. I need to file my 2012 federal taxes   You will determine your required minimum distributions in years after you make the rollover based on whether the employee died before his or her required beginning date for taking distributions from the plan. I need to file my 2012 federal taxes For more information, see Distributions after the employee’s death under Tax on Excess Accumulation in Publication 575. I need to file my 2012 federal taxes Income. I need to file my 2012 federal taxes   You must include in your gross income distributions from a qualified retirement plan that you would have had to include in income if you had not rolled them over into a Roth IRA. I need to file my 2012 federal taxes You do not include in gross income any part of a distribution from a qualified retirement plan that is a return of contributions (after-tax contributions) to the plan that were taxable to you when paid. I need to file my 2012 federal taxes These amounts are normally included in income on your return for the year of the rollover from the qualified employer plan to a Roth IRA. I need to file my 2012 federal taxes If you must include any amount in your gross income, you may have to increase your withholding or make estimated tax payments. I need to file my 2012 federal taxes See Publication 505, Tax Withholding and Estimated Tax. I need to file my 2012 federal taxes For more information on eligible rollover distributions from qualified retirement plans and withholding, see Rollover From Employer's Plan Into an IRA in chapter 1. I need to file my 2012 federal taxes Military Death Gratuities and Servicemembers' Group Life Insurance (SGLI) Payments If you received a military death gratuity or SGLI payment with respect to a death from injury that occurred after October 6, 2001, you can contribute (roll over) all or part of the amount received to your Roth IRA. I need to file my 2012 federal taxes The contribution is treated as a qualified rollover contribution. I need to file my 2012 federal taxes The amount you can roll over to your Roth IRA cannot exceed the total amount that you received reduced by any part of that amount that was contributed to a Coverdell ESA or another Roth IRA. I need to file my 2012 federal taxes Any military death gratuity or SGLI payment contributed to a Roth IRA is disregarded for purposes of the 1-year waiting period between rollovers. I need to file my 2012 federal taxes The rollover must be completed before the end of the 1-year period beginning on the date you received the payment. I need to file my 2012 federal taxes The amount contributed to your Roth IRA is treated as part of your cost basis (investment in the contract) in the Roth IRA that is not taxable when distributed. I need to file my 2012 federal taxes Rollover From a Roth IRA You can withdraw, tax free, all or part of the assets from one Roth IRA if you contribute them within 60 days to another Roth IRA. I need to file my 2012 federal taxes Most of the rules for rollovers, described in chapter 1 under Rollover From One IRA Into Another , apply to these rollovers. I need to file my 2012 federal taxes However, rollovers from retirement plans other than Roth IRAs are disregarded for purposes of the 1-year waiting period between rollovers. I need to file my 2012 federal taxes A rollover from a Roth IRA to an employer retirement plan is not allowed. I need to file my 2012 federal taxes A rollover from a designated Roth account can only be made to another designated Roth account or to a Roth IRA. I need to file my 2012 federal taxes If you roll over an amount from one Roth IRA to another Roth IRA, the 5-year period used to determine qualified distributions does not change. I need to file my 2012 federal taxes The 5-year period begins with the first taxable year for which the contribution was made to the initial Roth IRA. I need to file my 2012 federal taxes See What are Qualified Distributions , later. I need to file my 2012 federal taxes Rollover of Exxon Valdez Settlement Income If you are a qualified taxpayer (defined in chapter 1, earlier) and you received qualified settlement income (defined in chapter 1, earlier), you can contribute all or part of the amount received to an eligible retirement plan which includes a Roth IRA. I need to file my 2012 federal taxes The rules for contributing qualified settlement income to a Roth IRA are the same as the rules for contributing qualified settlement income to a traditional IRA with the following exception. I need to file my 2012 federal taxes Qualified settlement income that is contributed to a Roth IRA, or to a designated Roth account, will be: Included in your taxable income for the year the qualified settlement income was received, and Treated as part of your cost basis (investment in the contract) in the Roth IRA that is not taxable when distributed. I need to file my 2012 federal taxes For more information, see Rollover of Exxon Valdez Settlement Income in chapter 1. I need to file my 2012 federal taxes Rollover of Airline Payments If you are a qualified airline employee (defined next), you may contribute any portion of an airline payment (defined below) you receive to a Roth IRA. I need to file my 2012 federal taxes The contribution must be made within 180 days from the date you received the payment. I need to file my 2012 federal taxes The contribution will be treated as a qualified rollover contribution. I need to file my 2012 federal taxes The rollover contribution is included in income to the extent it would be included in income if it were not part of the rollover contribution. I need to file my 2012 federal taxes Also, any reduction in the airline payment amount on account of employment taxes shall be disregarded when figuring the amount you can contribute to your Roth IRA. I need to file my 2012 federal taxes Qualified airline employee. I need to file my 2012 federal taxes    A current or former employee of a commercial airline carrier who was a participant in a qualified defined benefit plan maintained by the carrier which was terminated or became subject to restrictions under Section 402(b) of the Pension Protection Act of 2006. I need to file my 2012 federal taxes These provisions also apply to surviving spouses of qualified airline employees. I need to file my 2012 federal taxes Airline payment. I need to file my 2012 federal taxes    An airline payment is any payment of money or other property that is paid to a qualified airline employee from a commercial airline carrier. I need to file my 2012 federal taxes The payment also must be made both: Under the approval of an order of federal bankruptcy court in a case filed after September 11, 2001, and before January 1, 2007, and In respect of the qualified airline employee’s interest in a bankruptcy claim against the airline carrier, any note of the carrier (or amount paid in lieu of a note being issued), or any other fixed obligation of the carrier to pay a lump sum amount. I need to file my 2012 federal taxes Any reduction in the airline payment amount on account of employment taxes shall be disregarded when figuring the amount you can roll over to your traditional IRA. I need to file my 2012 federal taxes Also, an airline payment shall not include any amount payable on the basis of the airline carrier’s future earnings or profits. I need to file my 2012 federal taxes Are Distributions Taxable? You do not include in your gross income qualified distributions or distributions that are a return of your regular contributions from your Roth IRA(s). I need to file my 2012 federal taxes You also do not include distributions from your Roth IRA that you roll over tax free into another Roth IRA. I need to file my 2012 federal taxes You may have to include part of other distributions in your income. I need to file my 2012 federal taxes See Ordering Rules for Distributions , later. I need to file my 2012 federal taxes Basis of distributed property. I need to file my 2012 federal taxes   The basis of property distributed from a Roth IRA is its fair market value (FMV) on the date of distribution, whether or not the distribution is a qualified distribution. I need to file my 2012 federal taxes Withdrawals of contributions by due date. I need to file my 2012 federal taxes   If you withdraw contributions (including any net earnings on the contributions) by the due date of your return for the year in which you made the contribution, the contributions are treated as if you never made them. I need to file my 2012 federal taxes If you have an extension of time to file your return, you can withdraw the contributions and earnings by the extended due date. I need to file my 2012 federal taxes The withdrawal of contributions is tax free, but you must include the earnings on the contributions in income for the year in which you made the contributions. I need to file my 2012 federal taxes What Are Qualified Distributions? A qualified distribution is any payment or distribution from your Roth IRA that meets the following requirements. I need to file my 2012 federal taxes It is made after the 5-year period beginning with the first taxable year for which a contribution was made to a Roth IRA set up for your benefit, and The payment or distribution is: Made on or after the date you reach age 59½, Made because you are disabled (defined earlier), Made to a beneficiary or to your estate after your death, or One that meets the requirements listed under First home under Exceptions in chapter 1 (up to a $10,000 lifetime limit). I need to file my 2012 federal taxes Additional Tax on Early Distributions If you receive a distribution that is not a qualified distribution, you may have to pay the 10% additional tax on early distributions as explained in the following paragraphs. I need to file my 2012 federal taxes Distributions of conversion and certain rollover contributions within 5-year period. I need to file my 2012 federal taxes   If, within the 5-year period starting with the first day of your tax year in which you convert an amount from a traditional IRA or rollover an amount from a qualified retirement plan to a Roth IRA, you take a distribution from a Roth IRA, you may have to pay the 10% additional tax on early distributions. I need to file my 2012 federal taxes You generally must pay the 10% additional tax on any amount attributable to the part of the amount converted or rolled over (the conversion or rollover contribution) that you had to include in income (recapture amount). I need to file my 2012 federal taxes A separate 5-year period applies to each conversion and rollover. I need to file my 2012 federal taxes See Ordering Rules for Distributions , later, to determine the recapture amount, if any. I need to file my 2012 federal taxes   The 5-year period used for determining whether the 10% early distribution tax applies to a distribution from a conversion or rollover contribution is separately determined for each conversion and rollover, and is not necessarily the same as the 5-year period used for determining whether a distribution is a qualified distribution. I need to file my 2012 federal taxes See What Are Qualified Distributions , earlier. I need to file my 2012 federal taxes   For example, if a calendar-year taxpayer makes a conversion contribution on February 25, 2013, and makes a regular contribution for 2012 on the same date, the 5-year period for the conversion begins January 1, 2013, while the 5-year period for the regular contribution begins on January 1, 2012. I need to file my 2012 federal taxes   Unless one of the exceptions listed later applies, you must pay the additional tax on the portion of the distribution attributable to the part of the conversion or rollover contribution that you had to include in income because of the conversion or rollover. I need to file my 2012 federal taxes   You must pay the 10% additional tax in the year of the distribution, even if you had included the conversion or rollover contribution in an earlier year. I need to file my 2012 federal taxes You also must pay the additional tax on any portion of the distribution attributable to earnings on contributions. I need to file my 2012 federal taxes Other early distributions. I need to file my 2012 federal taxes   Unless one of the exceptions listed below applies, you must pay the 10% additional tax on the taxable part of any distributions that are not qualified distributions. I need to file my 2012 federal taxes Exceptions. I need to file my 2012 federal taxes   You may not have to pay the 10% additional tax in the following situations. I need to file my 2012 federal taxes You have reached age 59½. I need to file my 2012 federal taxes You are totally and permanently disabled. I need to file my 2012 federal taxes You are the beneficiary of a deceased IRA owner. I need to file my 2012 federal taxes You use the distribution to buy, build, or rebuild a first home. I need to file my 2012 federal taxes The distributions are part of a series of substantially equal payments. I need to file my 2012 federal taxes You have unreimbursed medical expenses that are more than 10% (or 7. I need to file my 2012 federal taxes 5% if you or your spouse was born before January 2, 1949) of your adjusted gross income (defined earlier) for the year. I need to file my 2012 federal taxes You are paying medical insurance premiums during a period of unemployment. I need to file my 2012 federal taxes The distributions are not more than your qualified higher education expenses. I need to file my 2012 federal taxes The distribution is due to an IRS levy of the qualified plan. I need to file my 2012 federal taxes The distribution is a qualified reservist distribution. I need to file my 2012 federal taxes Most of these exceptions are discussed earlier in chapter 1 under Early Distributions . I need to file my 2012 federal taxes Please click here for the text description of the image. I need to file my 2012 federal taxes Is Roth Distributions a Qualified Distribution? Ordering Rules for Distributions If you receive a distribution from your Roth IRA that is not a qualified distribution, part of it may be taxable. I need to file my 2012 federal taxes There is a set order in which contributions (including conversion contributions and rollover contributions from qualified retirement plans) and earnings are considered to be distributed from your Roth IRA. I need to file my 2012 federal taxes For these purposes, disregard the withdrawal of excess contributions and the earnings on them (discussed earlier under What if You Contribute Too Much ). I need to file my 2012 federal taxes Order the distributions as follows. I need to file my 2012 federal taxes Regular contributions. I need to file my 2012 federal taxes Conversion and rollover contributions, on a first-in, first-out basis (generally, total conversions and rollovers from the earliest year first). I need to file my 2012 federal taxes See Aggregation (grouping and adding) rules, later. I need to file my 2012 federal taxes Take these conversion and rollover contributions into account as follows: Taxable portion (the amount required to be included in gross income because of the conversion or rollover) first, and then the Nontaxable portion. I need to file my 2012 federal taxes Earnings on contributions. I need to file my 2012 federal taxes Disregard rollover contributions from other Roth IRAs for this purpose. I need to file my 2012 federal taxes Aggregation (grouping and adding) rules. I need to file my 2012 federal taxes   Determine the taxable amounts distributed (withdrawn), distributions, and contributions by grouping and adding them together as follows. I need to file my 2012 federal taxes Add all distributions from all your Roth IRAs during the year together. I need to file my 2012 federal taxes Add all regular contributions made for the year (including contributions made after the close of the year, but before the due date of your return) together. I need to file my 2012 federal taxes Add this total to the total undistributed regular contributions made in prior years. I need to file my 2012 federal taxes Add all conversion and rollover contributions made during the year together. I need to file my 2012 federal taxes For purposes of the ordering rules, in the case of any conversion or rollover in which the conversion or rollover distribution is made in 2013 and the conversion or rollover contribution is made in 2014, treat the conversion or rollover contribution as contributed before any other conversion or rollover contributions made in 2014. I need to file my 2012 federal taxes Add any recharacterized contributions that end up in a Roth IRA to the appropriate contribution group for the year that the original contribution would have been taken into account if it had been made directly to the Roth IRA. I need to file my 2012 federal taxes   Disregard any recharacterized contribution that ends up in an IRA other than a Roth IRA for the purpose of grouping (aggregating) both contributions and distributions. I need to file my 2012 federal taxes Also disregard any amount withdrawn to correct an excess contribution (including the earnings withdrawn) for this purpose. I need to file my 2012 federal taxes Example. I need to file my 2012 federal taxes On October 15, 2009, Justin converted all $80,000 in his traditional IRA to his Roth IRA. I need to file my 2012 federal taxes His Forms 8606 from prior years show that $20,000 of the amount converted is his basis. I need to file my 2012 federal taxes Justin included $60,000 ($80,000 − $20,000) in his gross income. I need to file my 2012 federal taxes On February 23, 2013, Justin made a regular contribution of $5,000 to a Roth IRA. I need to file my 2012 federal taxes On November 8, 2013, at age 60, Justin took a $7,000 distribution from his Roth IRA. I need to file my 2012 federal taxes The first $5,000 of the distribution is a return of Justin's regular contribution and is not includible in his income. I need to file my 2012 federal taxes The next $2,000 of the distribution is not includible in income because it was included previously. I need to file my 2012 federal taxes Figuring your recapture amount. I need to file my 2012 federal taxes   If you had an early distribution from your Roth IRAs in 2013, you must allocate the early distribution by using the Recapture Amount—Allocation Chart, later. I need to file my 2012 federal taxes Recapture Amount—Allocation Chart Enter the amount from your 2013 Form 8606, line 19   Before you begin: You will need your prior year Form(s) 8606 and income tax return(s) if you entered an amount on any line(s) as indicated below. I need to file my 2012 federal taxes   You will now allocate the amount you entered above (2013 Form 8606, line 19) in the order shown, to the amounts on the lines listed below (to the extent a prior year distribution was not allocable to the amount). I need to file my 2012 federal taxes The maximum amount you can enter on each line below is the amount entered on the referenced lines of the form for that year. I need to file my 2012 federal taxes Note. I need to file my 2012 federal taxes Once you have allocated the full amount from your 2013 Form 8606, line 19, STOP. I need to file my 2012 federal taxes See the Example , earlier. I need to file my 2012 federal taxes Tax Year Your Form 2013 Form 8606, line 20   Form 8606, line 22   1998 Form 8606, line 16   Form 8606, line 15   1999 Form 8606, line 16   Form 8606, line 15   2000 Form 8606, line 16   Form 8606, line 15   2001 Form 8606, line 18   Form 8606, line 17   2002 Form 8606, line 18   Form 8606, line 17   2003 Form 8606, line 18   Form 8606, line 17   2004 Form 8606, line 18   Form 8606, line 17   2005 Form 8606, line 18   Form 8606, line 17   2006 Form 8606, line 18   Form 8606, line 17   2007 Form 8606, line 18   Form 8606, line 17   2008 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2009 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2010 Form 8606, lines 18 and 23   Form 8606, lines 17 and 22   2011 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2012 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2013 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2013 Form 8606, line 25       *Only include those amounts rolled over to a Roth IRA. I need to file my 2012 federal taxes  **Only include any contributions (usually Form 1099-R, box 5) that were taxable to you when made and rolled over to a Roth IRA. I need to file my 2012 federal taxes Amount to include on Form 5329, line 1. I need to file my 2012 federal taxes   Include on line 1 of your 2013 Form 5329 the following four amounts from the Recapture Amount—Allocation Chart that you filled out. I need to file my 2012 federal taxes The amount you allocated to line 20 of your 2013 Form 8606. I need to file my 2012 federal taxes The amount(s) allocated to your 2009 through 2013 Forms 8606, line 18, and your 2010 Form 8606, line 23. I need to file my 2012 federal taxes The amount(s) allocated to your 2009, 2011, 2012, and 2013 Forms 1040, line 16b; Forms 1040A, line 12b; and Forms 1040NR, line 17b. I need to file my 2012 federal taxes The amount from your 2013 Form 8606, line 25. I need to file my 2012 federal taxes   Also, include any amount you allocated to line 20 of your 2013 Form 8606 on your 2013 Form 5329, line 2, and enter exception number 09. I need to file my 2012 federal taxes Example. I need to file my 2012 federal taxes Ishmael, age 32, opened a Roth IRA in 2000. I need to file my 2012 federal taxes He made the maximum contributions to it every year. I need to file my 2012 federal taxes In addition, he made the following transactions into his Roth IRA. I need to file my 2012 federal taxes In 2005, he converted $10,000 from his traditional IRA into his Roth IRA. I need to file my 2012 federal taxes He filled out a 2005 Form 8606 and attached it with his 2005 Form 1040. I need to file my 2012 federal taxes He entered $0 on line 17 of Form 8606 because he took a deduction for all the contributions to the traditional IRA, therefore he has no basis. I need to file my 2012 federal taxes He entered $10,000 on line 18 of Form 8606. I need to file my 2012 federal taxes In 2011, he rolled over the entire balance of his qualified retirement plan, $20,000, into a Roth IRA when he changed jobs. I need to file my 2012 federal taxes He used a 2011 Form 1040 to file his taxes. I need to file my 2012 federal taxes He entered $20,000 on line 16a of Form 1040 because that was the amount reported in box 1 of his 2011 Form 1099-R. I need to file my 2012 federal taxes Box 5 of his 2011 Form 1099-R reported $0 since he did not make any after-tax contributions to the qualified retirement plan. I need to file my 2012 federal taxes He entered $20,000 on line 16b of Form 1040 since that is the taxable amount that was rolled over in 2011. I need to file my 2012 federal taxes The total balance in his Roth IRA as of January 1, 2013 was $105,000 ($50,000 in contributions from 2000 through 2012 + $10,000 from the 2005 conversion + $20,000 from the 2011 rollover + $25,000 from earnings). I need to file my 2012 federal taxes He has not taken any early distribution from his Roth IRA before 2013. I need to file my 2012 federal taxes In 2013, he made the maximum contribution of $5,500 to his Roth IRA. I need to file my 2012 federal taxes In August of 2013, he took a $85,500 early distribution from his Roth IRA to use as a down payment on the purchase of his first home. I need to file my 2012 federal taxes See his filled out Illustrated Recapture Amount—Allocation Chart, later, to see how he allocated the amounts from the above transactions. I need to file my 2012 federal taxes Based on his allocation, he would enter $20,000 on his 2013 Form 5329, line 1 (see Amount to include on Form 5329, line 1 , above). I need to file my 2012 federal taxes He should also report $10,000 on his 2013 Form 5329, line 2, and enter exception 09 since that amount is not subject to the 10% additional tax on early distributions. I need to file my 2012 federal taxes Illustrated Recapture Amount—Allocation Chart Enter the amount from your 2013 Form 8606, line 19 $85,500 Before you begin: You will need your prior year Form(s) 8606 and income tax return(s) if you entered an amount on any line(s) as indicated below. I need to file my 2012 federal taxes   You will now allocate the amount you entered above (2013 Form 8606, line 19) in the order shown, to the amounts on the lines listed below (to the extent a prior year distribution was not allocable to the amount). I need to file my 2012 federal taxes The maximum amount you can enter on each line below is the amount entered on the referenced lines of the form for that year. I need to file my 2012 federal taxes Note. I need to file my 2012 federal taxes Once you have allocated the full amount from your 2013 Form 8606, line 19, STOP. I need to file my 2012 federal taxes See the Example , earlier. I need to file my 2012 federal taxes Tax Year Your Form 2013 Form 8606, line 20 $10,000 Form 8606, line 22 $55,500 1998 Form 8606, line 16   Form 8606, line 15   1999 Form 8606, line 16   Form 8606, line 15   2000 Form 8606, line 16   Form 8606, line 15   2001 Form 8606, line 18   Form 8606, line 17   2002 Form 8606, line 18   Form 8606, line 17   2003 Form 8606, line 18   Form 8606, line 17   2004 Form 8606, line 18   Form 8606, line 17   2005 Form 8606, line 18 $10,000 Form 8606, line 17 $-0- 2006 Form 8606, line 18   Form 8606, line 17   2007 Form 8606, line 18   Form 8606, line 17   2008 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2009 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2010 Form 8606, lines 18 and 23   Form 8606, lines 17 and 22   2011 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b* $10,000 Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2012 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2013 Form 8606, line 18  and  Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b*   Form 8606, line 17  and  Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a**   2013 Form 8606, line 25       *Only include those amounts rolled over to a Roth IRA. I need to file my 2012 federal taxes  **Only include any contributions (usually Form 1099-R, box 5) that were taxable to you when made and rolled over to a Roth IRA. I need to file my 2012 federal taxes How Do You Figure the Taxable Part? To figure the taxable part of a distribution that is not a qualified distribution, complete Form 8606, Part III. I need to file my 2012 federal taxes Must You Withdraw or Use Assets? You are not required to take distributions from your Roth IRA at any age. I need to file my 2012 federal taxes The minimum distribution rules that apply to traditional IRAs do not apply to Roth IRAs while the owner is alive. I need to file my 2012 federal taxes However, after the death of a Roth IRA owner, certain of the minimum distribution rules that apply to traditional IRAs also apply to Roth IRAs as explained later under Distributions After Owner's Death . I need to file my 2012 federal taxes Minimum distributions. I need to file my 2012 federal taxes   You cannot use your Roth IRA to satisfy minimum distribution requirements for your traditional IRA. I need to file my 2012 federal taxes Nor can you use distributions from traditional IRAs for required distributions from Roth IRAs. I need to file my 2012 federal taxes See Distributions to beneficiaries , later. I need to file my 2012 federal taxes Recognizing Losses on Investments If you have a loss on your Roth IRA investment, you can recognize the loss on your income tax return, but only when all the amounts in all of your Roth IRA accounts have been distributed to you and the total distributions are less than your unrecovered basis. I need to file my 2012 federal taxes Your basis is the total amount of contributions in your Roth IRAs. I need to file my 2012 federal taxes You claim the loss as a miscellaneous itemized deduction, subject to the 2%-of-adjusted-gross-income limit that applies to certain miscellaneous itemized deductions on Schedule A (Form 1040). I need to file my 2012 federal taxes Any such losses are added back to taxable income for purposes of calculating the alternative minimum tax. I need to file my 2012 federal taxes Distributions After Owner's Death If a Roth IRA owner dies, the minimum distribution rules that apply to traditional IRAs apply to Roth IRAs as though the Roth IRA owner died before his or her required beginning date. I need to file my 2012 federal taxes See When Can You Withdraw or Use Assets? in chapter 1. I need to file my 2012 federal taxes Distributions to beneficiaries. I need to file my 2012 federal taxes   Generally, the entire interest in the Roth IRA must be distributed by the end of the fifth calendar year after the year of the owner's death unless the interest is payable to a designated beneficiary over the life or life expectancy of the designated beneficiary. I need to file my 2012 federal taxes (See When Must You Withdraw Assets? (Required Minimum Distributions) in chapter 1. I need to file my 2012 federal taxes )   If paid as an annuity, the entire interest must be payable over a period not greater than the designated beneficiary's life expectancy and distributions must begin before the end of the calendar year following the year of death. I need to file my 2012 federal taxes Distributions from another Roth IRA cannot be substituted for these distributions unless the other Roth IRA was inherited from the same decedent. I need to file my 2012 federal taxes   If the sole beneficiary is the spouse, he or she can either delay distributions until the decedent would have reached age 70½ or treat the Roth IRA as his or her own. I need to file my 2012 federal taxes Combining with other Roth IRAs. I need to file my 2012 federal taxes   A beneficiary can combine an inherited Roth IRA with another Roth IRA maintained by the beneficiary only if the beneficiary either: Inherited the other Roth IRA from the same decedent, or Was the spouse of the decedent and the sole beneficiary of the Roth IRA and elects to treat it as his or her own IRA. I need to file my 2012 federal taxes Distributions that are not qualified distributions. I need to file my 2012 federal taxes   If a distribution to a beneficiary is not a qualified distribution, it is generally includible in the beneficiary's gross income in the same manner as it would have been included in the owner's income had it been distributed to the IRA owner when he or she was alive. I need to file my 2012 federal taxes   If the owner of a Roth IRA dies before the end of: The 5-year period beginning with the first taxable year for which a contribution was made to a Roth IRA set up for the owner's benefit, or The 5-year period starting with the year of a conversion contribution from a traditional IRA or a rollover from a qualified retirement plan to a Roth IRA, each type of contribution is divided among multiple beneficiaries according to the pro-rata share of each. I need to file my 2012 federal taxes See Ordering Rules for Distributions , earlier in this chapter under Are Distributions Taxable. I need to file my 2012 federal taxes Example. I need to file my 2012 federal taxes When Ms. I need to file my 2012 federal taxes Hibbard died in 2013, her Roth IRA contained regular contributions of $4,000, a conversion contribution of $10,000 that was made in 2009, and earnings of $2,000. I need to file my 2012 federal taxes No distributions had been made from her IRA. I need to file my 2012 federal taxes She had no basis in the conversion contribution in 2009. I need to file my 2012 federal taxes When she established this Roth IRA (her first) in 2009, she named each of her four children as equal beneficiaries. I need to file my 2012 federal taxes Each child will receive one-fourth of each type of contribution and one-fourth of the earnings. I need to file my 2012 federal taxes An immediate distribution of $4,000 to each child will be treated as $1,000 from regular contributions, $2,500 from conversion contributions, and $500 from earnings. I need to file my 2012 federal taxes In this case, because the distributions are made before the end of the applicable 5-year period for a qualified distribution, each beneficiary includes $500 in income for 2013. I need to file my 2012 federal taxes The 10% additional tax on early distributions does not apply because the distribution was made to the beneficiaries as a result of the death of the IRA owner. I need to file my 2012 federal taxes If distributions from an inherited Roth IRA are less than the required minimum distribution for the year, discussed in chapter 1 under When Must You Withdraw Assets? (Required Minimum Distributions), you may have to pay a 50% excise tax for that year on the amount not distributed as required. I need to file my 2012 federal taxes For the tax on excess accumulations (insufficient distributions), see Excess Accumulations (Insufficient Distributions) under What Acts Result in Penalties or Additional Taxes? in chapter 1. I need to file my 2012 federal taxes If this applies to you, substitute “Roth IRA” for “traditional IRA” in that discussion. I need to file my 2012 federal taxes Prev  Up  Next   Home   More Online Publications