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Instructions For 1040x 2012

Amend Tax FormsFree 1040x FormFile An Amended Tax ReturnTax Deductions For College StudentsState Income Tax Charts2010 Income TaxH&r Block Advantage Free FileFree Tax Efile1040ez Tax TablesFreestatetaxfiling2011 Tax BracketsState TaxesFile My 2011 Taxes For FreeHow To File An Amended Tax Return 2013Tax Forms For 2012ExtensionHow To File Taxes When Self EmployedH & R Block ComAmend A Tax Return 2011Taxes Online 1040ezPrior Year Tax FormsHow To File A Amended Tax Return For 2011Www 1040ezTaxact OnlineFile State Income Tax FreeHow To File 1040ez Online1040ez2013 FormWww Irs Gov EoHow To File An Amended Tax ReturnWhere Can I File 2012 Taxes1040ez Calculator1040 Ez FormAmend My 2011 Tax ReturnFree Tax Filing 2012File 2008 Taxes2012 Irs Form 10401040ez Online FormH&r Block Free Tax Returns2010 Tax Filing SoftwareHow To File An Amended Tax Return For 2012

Instructions For 1040x 2012

Instructions for 1040x 2012 Publication 584-B - Additional Material Table of Contents This image is too large to be displayed in the current screen. Instructions for 1040x 2012 Please click the link to view the image. Instructions for 1040x 2012 Office Furniture and Fixtures This image is too large to be displayed in the current screen. Instructions for 1040x 2012 Please click the link to view the image. Instructions for 1040x 2012 Information Systems This image is too large to be displayed in the current screen. Instructions for 1040x 2012 Please click the link to view the image. Instructions for 1040x 2012 Motor Vehicles This image is too large to be displayed in the current screen. Instructions for 1040x 2012 Please click the link to view the image. Instructions for 1040x 2012 Office Supplies This image is too large to be displayed in the current screen. Instructions for 1040x 2012 Please click the link to view the image. Instructions for 1040x 2012 Building, Components, and Land This image is too large to be displayed in the current screen. Instructions for 1040x 2012 Please click the link to view the image. Instructions for 1040x 2012 Equipment Tax Publications for Individual TaxpayersSee How To Get Tax Help for a variety of ways to get publications, including by computer, phone, and mail. Instructions for 1040x 2012 General Guides 1 Your Rights as a Taxpayer 17 Your Federal Income Tax For Individuals 334 Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ) 509 Tax Calendars for 2012 910 IRS Guide to Free Tax Services Specialized Publications 3 Armed Forces’ Tax Guide 54 Tax Guide for U. Instructions for 1040x 2012 S. Instructions for 1040x 2012 Citizens and Resident Aliens Abroad 225 Farmer’s Tax Guide 463 Travel, Entertainment, Gift, and Car Expenses 501 Exemptions, Standard Deduction, and Filing Information 502 Medical and Dental Expenses (Including the Health Coverage Tax Credit) 503 Child and Dependent Care Expenses 504 Divorced or Separated Individuals 505 Tax Withholding and Estimated Tax 514 Foreign Tax Credit for Individuals 516 U. Instructions for 1040x 2012 S. Instructions for 1040x 2012 Government Civilian Employees Stationed Abroad 517 Social Security and Other Information for Members of the Clergy and Religious Workers 519 U. Instructions for 1040x 2012 S. Instructions for 1040x 2012 Tax Guide for Aliens 521 Moving Expenses 523 Selling Your Home 524 Credit for the Elderly or the Disabled 525 Taxable and Nontaxable Income 526 Charitable Contributions 527 Residential Rental Property (Including Rental of Vacation Homes) 529 Miscellaneous Deductions 530 Tax Information for Homeowners 531 Reporting Tip Income 535 Business Expenses 536 Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 537 Installment Sales 541 Partnerships 544 Sales and Other Dispositions of Assets 547 Casualties, Disasters, and Thefts 550 Investment Income and Expenses (Including Capital Gains and Losses) 551 Basis of Assets 554 Tax Guide for Seniors 555 Community Property 556 Examination of Returns, Appeal Rights, and Claims for Refund 559 Survivors, Executors, and Administrators 561 Determining the Value of Donated Property 570 Tax Guide for Individuals With Income From U. Instructions for 1040x 2012 S. Instructions for 1040x 2012 Possessions 571 Tax-Sheltered Annuity Plans (403(b) Plans) For Employees of Public Schools and Certain Tax-Exempt Organizations 575 Pension and Annuity Income 584 Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property) 587 Business Use of Your Home (Including Use by Daycare Providers) 590 Individual Retirement Arrangements (IRAs) 594 The IRS Collection Process 596 Earned Income Credit (EIC) 721 Tax Guide to U. Instructions for 1040x 2012 S. Instructions for 1040x 2012 Civil Service Retirement Benefits 901 U. Instructions for 1040x 2012 S. Instructions for 1040x 2012 Tax Treaties 907 Tax Highlights for Persons with Disabilities 908 Bankruptcy Tax Guide 915 Social Security and Equivalent Railroad Retirement Benefits 925 Passive Activity and At-Risk Rules 926 Household Employer’s Tax Guide For Wages Paid in 2012 929 Tax Rules for Children and Dependents 936 Home Mortgage Interest Deduction 946 How To Depreciate Property 947 Practice Before the IRS and Power of Attorney 950 Introduction to Estate and Gift Taxes 969 Health Savings Accounts and Other Tax-Favored Health Plans 970 Tax Benefits for Education 971 Innocent Spouse Relief 972 Child Tax Credit 1542 Per Diem Rates (For Travel Within the Continental United States) 1544 Reporting Cash Payments of Over $10,000 (Received in a Trade or Business) 1546 Taxpayer Advocate Service – Your Voice at the IRS Spanish Language Publications 1SP Derechos del Contribuyente 17(SP) El Impuesto Federal sobre los Ingresos Para Personas Fisicas 547(SP) Hechos Fortuitos Desastres y Robos 584(SP) Registro de Pérdidas por Hechos Fortuitos (Imprevistos), Desastres y Robos (Propiedad de Uso Personal) 594SP El Proceso de Cobro del IRS 596SP Crédito por Ingreso del Trabajo 850(EN/SP) English-Spanish Glossary of Words and Phrases Used in Publications Issued by the Internal Revenue Service 1544 (SP) Informe de Pagos en Efectivo en Exceso de $10,000 (Recibidos en una Ocupación o Negocio) Commonly Used Tax FormsSee How To Get Tax Help for a variety of ways to get forms, including by computer, phone, and mail. Instructions for 1040x 2012 Form Number and Title 1040 U. Instructions for 1040x 2012 S. Instructions for 1040x 2012 Individual Income Tax Return Sch A Itemized Deductions Sch B Interest and Ordinary Dividends Sch C Profit or Loss From Business Sch C-EZ Net Profit From Business Sch D Capital Gains and Losses Sch E Supplemental Income and Loss Sch EIC Earned Income Credit Sch F Profit or Loss From Farming Sch H Household Employment Taxes Sch J Income Averaging for Farmers and Fishermen Sch R Credit for the Elderly or the Disabled Sch SE Self-Employment Tax 1040A U. Instructions for 1040x 2012 S. Instructions for 1040x 2012 Individual Income Tax Return Sch B Interest and Ordinary Dividends 1040EZ Income Tax Return for Single and Joint Filers With No Dependents 1040-ES Estimated Tax for Individuals 1040X Amended U. Instructions for 1040x 2012 S. Instructions for 1040x 2012 Individual Income Tax Return 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2441 Child and Dependent Care Expenses 2848 Power of Attorney and Declaration of Representative 2848(SP) Poder Legal y Declaración del Representante 3903 Moving Expenses 4562 Depreciation and Amortization 4868 Application for Automatic Extension of Time To File U. Instructions for 1040x 2012 S. Instructions for 1040x 2012 Individual Income Tax Return 4868(SP) Solicitud de Prórroga Automática para Presentar la Declaración del Impuesto sobre el Ingreso Personal de los Estados Unidos 4952 Investment Interest Expense Deduction 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts 6251 Alternative Minimum Tax—Individuals 8283 Noncash Charitable Contributions 8582 Passive Activity Loss Limitations 8606 Nondeductible IRAs 8812 Additional Child Tax Credit 8822 Change of Address 8829 Expenses for Business Use of Your Home 8863 Education Credits (American Opportunity and Lifetime Learning Credits) 8949 Sales and Other Dispositions of Capital Assets 9465 Installment Agreement Request 9465(SP) Solicitud para un Plan de Pagos a Plazos         Prev  Up  Next   Home   More Online Publications
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Contact My Local Office in New Mexico

Face-to-face Tax Help

IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.

Keep in mind, many questions can be resolved online without waiting in line. Through IRS.gov you can:
• Set up a payment plan.
• Get a transcript of your tax return.
• Make a payment.
• Check on your refund.
• Find answers to many of your tax questions.

We are now referring all requests for tax return preparation services to other available resources. You can take advantage of free tax preparation through Free File, Free File Fillable Forms or through a volunteer site in your community. To find the nearest volunteer site location or to get more information about Free File, go to the top of the page and enter “Free Tax Help” in the Search box.

If you have a tax account issues and feel that it requires talking with someone face-to-face, visit your local TAC.

Caution:  Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.

Multilingual assistance is available in every office. Hours of operation are subject to change.

Before visiting your local office click on "Services Provided" in the chart below to see what services are available. Services are limited and not all services are available at every TAC office and may vary from site to site. You can get these services on a walk-in basis.

City  Street Address  Days/Hours of Service  Telephone* 
Albuquerque  5338 Montgomery Blvd. N.E.
Albuquerque, NM 87109 

Monday-Friday - 8:30 a.m. - 4:30 p.m.

 

Services Provided

(505) 837-5631 
Farmington  800 E. 30th St.
Farmington, NM 87401 

Wednesday & Thursday - 8:30 a.m.- 4:30 p.m.; Friday - 8:30 a.m.-11:30 a.m. 
(Closed for lunch 11:30 a.m. - 12:30 p.m.)
 

**This office will be open 2/12-2/14, 2/26-2/28, 3/12-3/14, 3/26-3/28, 4/09-4/11, 4/23-4/25, 5/07-5/09 and 5/21-5/23. Closed all other days/times.**


Services Provided

(505) 327-7906 
Las Cruces  505 S. Main, Ste. 149
Las Cruces, NM 88001 

Monday-Friday - 8:30 a.m. - 4:30 p.m.
 

Services Provided

(575) 526-0161 
Roswell  500 N. Richardson
Roswell, NM 88201 

This Office is Temporarily Closed

 

(575) 624-9442 
Roswell/remote Taxpayer Assistance
available at New
Mexico Legal Aid
200 E. 4th Street
Suite 200
Roswell, NM 88202

Monday-Friday - 8:30 a.m. - 3:00 p.m.
(Closed for lunch 12:00 noon - 1:00 p.m.)

 

Virtual Services Provided

(575) 624-9442
Santa Fe  2945 Rodeo Park Dr. East
Santa Fe, NM  87505 

Monday-Friday - 8:30 a.m. - 4:30 p.m. 
(Closed for lunch 11:30 a.m.- 12:30 p.m.)

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(505) 424-5961

* Note: The phone numbers in the chart above are not toll-free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If  face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses).

For information on where to file your tax return please see Where to File Addresses.

The Taxpayer Advocate Service: Call (505) 837-5505 in Albuquerque or 1-877-777-4778 elsewhere, or see Publication 1546, The Taxpayer Advocate Service of the IRS.

For further information, see Tax Topic 104.

Partnerships

IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.

For more information about these programs for individuals and families, contact the Stakeholder Partnerships, Education and Communication Office at:

Internal Revenue Service
5338 Montgomery Blvd., NE
MS 4040ALB
Albuquerque, NM 87109

For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:

Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.

Page Last Reviewed or Updated: 28-Mar-2014

The Instructions For 1040x 2012

Instructions for 1040x 2012 13. Instructions for 1040x 2012   Basis of Property Table of Contents Introduction Useful Items - You may want to see: Cost BasisReal Property Adjusted BasisIncreases to Basis Decreases to Basis Basis Other Than CostProperty Received for Services Taxable Exchanges Involuntary Conversions Nontaxable Exchanges Property Transferred From a Spouse Property Received as a Gift Inherited Property Property Changed From Personal to Business or Rental Use Stocks and Bonds Introduction This chapter discusses how to figure your basis in property. Instructions for 1040x 2012 It is divided into the following sections. Instructions for 1040x 2012 Cost basis. Instructions for 1040x 2012 Adjusted basis. Instructions for 1040x 2012 Basis other than cost. Instructions for 1040x 2012 Your basis is the amount of your investment in property for tax purposes. Instructions for 1040x 2012 Use the basis to figure gain or loss on the sale, exchange, or other disposition of property. Instructions for 1040x 2012 Also use it to figure deductions for depreciation, amortization, depletion, and casualty losses. Instructions for 1040x 2012 If you use property for both business or investment purposes and for personal purposes, you must allocate the basis based on the use. Instructions for 1040x 2012 Only the basis allocated to the business or investment use of the property can be depreciated. Instructions for 1040x 2012 Your original basis in property is adjusted (increased or decreased) by certain events. Instructions for 1040x 2012 For example, if you make improvements to the property, increase your basis. Instructions for 1040x 2012 If you take deductions for depreciation or casualty losses, or claim certain credits, reduce your basis. Instructions for 1040x 2012 Keep accurate records of all items that affect the basis of your property. Instructions for 1040x 2012 For more information on keeping records, see chapter 1. Instructions for 1040x 2012 Useful Items - You may want to see: Publication 15-B Employer's Tax Guide to Fringe Benefits 525 Taxable and Nontaxable Income 535 Business Expenses 537 Installment Sales 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 551 Basis of Assets 946 How To Depreciate Property Cost Basis The basis of property you buy is usually its cost. Instructions for 1040x 2012 The cost is the amount you pay in cash, debt obligations, other property, or services. Instructions for 1040x 2012 Your cost also includes amounts you pay for the following items: Sales tax, Freight, Installation and testing, Excise taxes, Legal and accounting fees (when they must be capitalized), Revenue stamps, Recording fees, and Real estate taxes (if you assume liability for the seller). Instructions for 1040x 2012 In addition, the basis of real estate and business assets may include other items. Instructions for 1040x 2012 Loans with low or no interest. Instructions for 1040x 2012    If you buy property on a time-payment plan that charges little or no interest, the basis of your property is your stated purchase price minus any amount considered to be unstated interest. Instructions for 1040x 2012 You generally have unstated interest if your interest rate is less than the applicable federal rate. Instructions for 1040x 2012   For more information, see Unstated Interest and Original Issue Discount (OID) in Publication 537. Instructions for 1040x 2012 Real Property Real property, also called real estate, is land and generally anything built on, growing on, or attached to land. Instructions for 1040x 2012 If you buy real property, certain fees and other expenses you pay are part of your cost basis in the property. Instructions for 1040x 2012 Lump sum purchase. Instructions for 1040x 2012   If you buy buildings and the land on which they stand for a lump sum, allocate the cost basis among the land and the buildings. Instructions for 1040x 2012 Allocate the cost basis according to the respective fair market values (FMVs) of the land and buildings at the time of purchase. Instructions for 1040x 2012 Figure the basis of each asset by multiplying the lump sum by a fraction. Instructions for 1040x 2012 The numerator is the FMV of that asset and the denominator is the FMV of the whole property at the time of purchase. Instructions for 1040x 2012    If you are not certain of the FMVs of the land and buildings, you can allocate the basis according to their assessed values for real estate tax purposes. Instructions for 1040x 2012 Fair market value (FMV). Instructions for 1040x 2012   FMV is the price at which the property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the necessary facts. Instructions for 1040x 2012 Sales of similar property on or about the same date may be helpful in figuring the FMV of the property. Instructions for 1040x 2012 Assumption of mortgage. Instructions for 1040x 2012   If you buy property and assume (or buy the property subject to) an existing mortgage on the property, your basis includes the amount you pay for the property plus the amount to be paid on the mortgage. Instructions for 1040x 2012 Settlement costs. Instructions for 1040x 2012   Your basis includes the settlement fees and closing costs you paid for buying the property. Instructions for 1040x 2012 (A fee for buying property is a cost that must be paid even if you buy the property for cash. Instructions for 1040x 2012 ) Do not include fees and costs for getting a loan on the property in your basis. Instructions for 1040x 2012   The following are some of the settlement fees or closing costs you can include in the basis of your property. Instructions for 1040x 2012 Abstract fees (abstract of title fees). Instructions for 1040x 2012 Charges for installing utility services. Instructions for 1040x 2012 Legal fees (including fees for the title search and preparation of the sales contract and deed). Instructions for 1040x 2012 Recording fees. Instructions for 1040x 2012 Survey fees. Instructions for 1040x 2012 Transfer taxes. Instructions for 1040x 2012 Owner's title insurance. Instructions for 1040x 2012 Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions. Instructions for 1040x 2012   Settlement costs do not include amounts placed in escrow for the future payment of items such as taxes and insurance. Instructions for 1040x 2012   The following are some of the settlement fees and closing costs you cannot include in the basis of property. Instructions for 1040x 2012 Casualty insurance premiums. Instructions for 1040x 2012 Rent for occupancy of the property before closing. Instructions for 1040x 2012 Charges for utilities or other services related to occupancy of the property before closing. Instructions for 1040x 2012 Charges connected with getting a loan, such as points (discount points, loan origination fees), mortgage insurance premiums, loan assumption fees, cost of a credit report, and fees for an appraisal required by a lender. Instructions for 1040x 2012 Fees for refinancing a mortgage. Instructions for 1040x 2012 Real estate taxes. Instructions for 1040x 2012   If you pay real estate taxes the seller owed on real property you bought, and the seller did not reimburse you, treat those taxes as part of your basis. Instructions for 1040x 2012 You cannot deduct them as an expense. Instructions for 1040x 2012    If you reimburse the seller for taxes the seller paid for you, you can usually deduct that amount as an expense in the year of purchase. Instructions for 1040x 2012 Do not include that amount in the basis of your property. Instructions for 1040x 2012 If you did not reimburse the seller, you must reduce your basis by the amount of those taxes. Instructions for 1040x 2012 Points. Instructions for 1040x 2012   If you pay points to get a loan (including a mortgage, second mortgage, line of credit, or a home equity loan), do not add the points to the basis of the related property. Instructions for 1040x 2012 Generally, you deduct the points over the term of the loan. Instructions for 1040x 2012 For more information on how to deduct points, see chapter 23. Instructions for 1040x 2012 Points on home mortgage. Instructions for 1040x 2012   Special rules may apply to points you and the seller pay when you get a mortgage to buy your main home. Instructions for 1040x 2012 If certain requirements are met, you can deduct the points in full for the year in which they are paid. Instructions for 1040x 2012 Reduce the basis of your home by any seller-paid points. Instructions for 1040x 2012 Adjusted Basis Before figuring gain or loss on a sale, exchange, or other disposition of property or figuring allowable depreciation, depletion, or amortization, you must usually make certain adjustments (increases and decreases) to the cost basis or basis other than cost (discussed later) of the property. Instructions for 1040x 2012 The result is the adjusted basis. Instructions for 1040x 2012 Increases to Basis Increase the basis of any property by all items properly added to a capital account. Instructions for 1040x 2012 Examples of items that increase basis are shown in Table 13-1. Instructions for 1040x 2012 These include the items discussed below. Instructions for 1040x 2012 Improvements. Instructions for 1040x 2012   Add to your basis in property the cost of improvements having a useful life of more than 1 year, that increase the value of the property, lengthen its life, or adapt it to a different use. Instructions for 1040x 2012 For example, improvements include putting a recreation room in your unfinished basement, adding another bathroom or bedroom, putting up a fence, putting in new plumbing or wiring, installing a new roof, or paving your driveway. Instructions for 1040x 2012 Assessments for local improvements. Instructions for 1040x 2012   Add to the basis of property assessments for improvements such as streets and sidewalks if they increase the value of the property assessed. Instructions for 1040x 2012 Do not deduct them as taxes. Instructions for 1040x 2012 However, you can deduct as taxes assessments for maintenance or repairs, or for meeting interest charges related to the improvements. Instructions for 1040x 2012 Example. Instructions for 1040x 2012 Your city changes the street in front of your store into an enclosed pedestrian mall and assesses you and other affected property owners for the cost of the conversion. Instructions for 1040x 2012 Add the assessment to your property's basis. Instructions for 1040x 2012 In this example, the assessment is a depreciable asset. Instructions for 1040x 2012 Decreases to Basis Decrease the basis of any property by all items that represent a return of capital for the period during which you held the property. Instructions for 1040x 2012 Examples of items that decrease basis are shown in Table 13-1. Instructions for 1040x 2012 These include the items discussed below. Instructions for 1040x 2012 Table 13-1. Instructions for 1040x 2012 Examples of Adjustments to Basis Increases to Basis Decreases to Basis • Capital improvements: • Exclusion from income of   Putting an addition on your home subsidies for energy conservation   Replacing an entire roof measures   Paving your driveway     Installing central air conditioning • Casualty or theft loss deductions   Rewiring your home and insurance reimbursements       • Assessments for local improvements:     Water connections     Extending utility service lines to the property • Postponed gain from the sale of a home   Sidewalks • Alternative motor vehicle credit  (Form 8910)   Roads       • Alternative fuel vehicle refueling     property credit (Form 8911)           • Residential energy credits (Form 5695)       • Casualty losses: • Depreciation and section 179 deduction   Restoring damaged property     • Nontaxable corporate distributions • Legal fees:     Cost of defending and perfecting a title • Certain canceled debt excluded from   Fees for getting a reduction of an assessment income     • Zoning costs • Easements           • Adoption tax benefits Casualty and theft losses. Instructions for 1040x 2012   If you have a casualty or theft loss, decrease the basis in your property by any insurance proceeds or other reimbursement and by any deductible loss not covered by insurance. Instructions for 1040x 2012    You must increase your basis in the property by the amount you spend on repairs that restore the property to its pre-casualty condition. Instructions for 1040x 2012   For more information on casualty and theft losses, see chapter 25. Instructions for 1040x 2012 Depreciation and section 179 deduction. Instructions for 1040x 2012   Decrease the basis of your qualifying business property by any section 179 deduction you take and the depreciation you deducted, or could have deducted (including any special depreciation allowance), on your tax returns under the method of depreciation you selected. Instructions for 1040x 2012   For more information about depreciation and the section 179 deduction, see Publication 946 and the Instructions for Form 4562. Instructions for 1040x 2012 Example. Instructions for 1040x 2012 You owned a duplex used as rental property that cost you $40,000, of which $35,000 was allocated to the building and $5,000 to the land. Instructions for 1040x 2012 You added an improvement to the duplex that cost $10,000. Instructions for 1040x 2012 In February last year, the duplex was damaged by fire. Instructions for 1040x 2012 Up to that time, you had been allowed depreciation of $23,000. Instructions for 1040x 2012 You sold some salvaged material for $1,300 and collected $19,700 from your insurance company. Instructions for 1040x 2012 You deducted a casualty loss of $1,000 on your income tax return for last year. Instructions for 1040x 2012 You spent $19,000 of the insurance proceeds for restoration of the duplex, which was completed this year. Instructions for 1040x 2012 You must use the duplex's adjusted basis after the restoration to determine depreciation for the rest of the property's recovery period. Instructions for 1040x 2012 Figure the adjusted basis of the duplex as follows: Original cost of duplex $35,000 Addition to duplex 10,000 Total cost of duplex $45,000 Minus: Depreciation 23,000 Adjusted basis before casualty $22,000 Minus: Insurance proceeds $19,700     Deducted casualty loss 1,000     Salvage proceeds 1,300 22,000 Adjusted basis after casualty $-0- Add: Cost of restoring duplex 19,000 Adjusted basis after restoration $19,000 Note. Instructions for 1040x 2012 Your basis in the land is its original cost of $5,000. Instructions for 1040x 2012 Easements. Instructions for 1040x 2012   The amount you receive for granting an easement is generally considered to be proceeds from the sale of an interest in real property. Instructions for 1040x 2012 It reduces the basis of the affected part of the property. Instructions for 1040x 2012 If the amount received is more than the basis of the part of the property affected by the easement, reduce your basis in that part to zero and treat the excess as a recognized gain. Instructions for 1040x 2012   If the gain is on a capital asset, see chapter 16 for information about how to report it. Instructions for 1040x 2012 If the gain is on property used in a trade or business, see Publication 544 for information about how to report it. Instructions for 1040x 2012 Exclusion of subsidies for energy conservation measures. Instructions for 1040x 2012   You can exclude from gross income any subsidy you received from a public utility company for the purchase or installation of an energy conservation measure for a dwelling unit. Instructions for 1040x 2012 Reduce the basis of the property for which you received the subsidy by the excluded amount. Instructions for 1040x 2012 For more information about this subsidy, see chapter 12. Instructions for 1040x 2012 Postponed gain from sale of home. Instructions for 1040x 2012    If you postponed gain from the sale of your main home under rules in effect before May 7, 1997, you must reduce the basis of the home you acquired as a replacement by the amount of the postponed gain. Instructions for 1040x 2012 For more information on the rules for the sale of a home, see chapter 15. Instructions for 1040x 2012 Basis Other Than Cost There are many times when you cannot use cost as basis. Instructions for 1040x 2012 In these cases, the fair market value or the adjusted basis of the property can be used. Instructions for 1040x 2012 Fair market value (FMV) and adjusted basis were discussed earlier. Instructions for 1040x 2012 Property Received for Services If you receive property for your services, include the FMV of the property in income. Instructions for 1040x 2012 The amount you include in income becomes your basis. Instructions for 1040x 2012 If the services were performed for a price agreed on beforehand, it will be accepted as the FMV of the property if there is no evidence to the contrary. Instructions for 1040x 2012 Restricted property. Instructions for 1040x 2012   If you receive property for your services and the property is subject to certain restrictions, your basis in the property is its FMV when it becomes substantially vested. Instructions for 1040x 2012 However, this rule does not apply if you make an election to include in income the FMV of the property at the time it is transferred to you, less any amount you paid for it. Instructions for 1040x 2012 Property is substantially vested when it is transferable or when it is not subject to a substantial risk of forfeiture (you do not have a good chance of losing it). Instructions for 1040x 2012 For more information, see Restricted Property in Publication 525. Instructions for 1040x 2012 Bargain purchases. Instructions for 1040x 2012   A bargain purchase is a purchase of an item for less than its FMV. Instructions for 1040x 2012 If, as compensation for services, you buy goods or other property at less than FMV, include the difference between the purchase price and the property's FMV in your income. Instructions for 1040x 2012 Your basis in the property is its FMV (your purchase price plus the amount you include in income). Instructions for 1040x 2012   If the difference between your purchase price and the FMV is a qualified employee discount, do not include the difference in income. Instructions for 1040x 2012 However, your basis in the property is still its FMV. Instructions for 1040x 2012 See Employee Discounts in Publication 15-B. Instructions for 1040x 2012 Taxable Exchanges A taxable exchange is one in which the gain is taxable or the loss is deductible. Instructions for 1040x 2012 A taxable gain or deductible loss also is known as a recognized gain or loss. Instructions for 1040x 2012 If you receive property in exchange for other property in a taxable exchange, the basis of the property you receive is usually its FMV at the time of the exchange. Instructions for 1040x 2012 Involuntary Conversions If you receive replacement property as a result of an involuntary conversion, such as a casualty, theft, or condemnation, figure the basis of the replacement property using the basis of the converted property. Instructions for 1040x 2012 Similar or related property. Instructions for 1040x 2012   If you receive replacement property similar or related in service or use to the converted property, the replacement property's basis is the same as the converted property's basis on the date of the conversion, with the following adjustments. Instructions for 1040x 2012 Decrease the basis by the following. Instructions for 1040x 2012 Any loss you recognize on the involuntary conversion. Instructions for 1040x 2012 Any money you receive that you do not spend on similar property. Instructions for 1040x 2012 Increase the basis by the following. Instructions for 1040x 2012 Any gain you recognize on the involuntary conversion. Instructions for 1040x 2012 Any cost of acquiring the replacement property. Instructions for 1040x 2012 Money or property not similar or related. Instructions for 1040x 2012    If you receive money or property not similar or related in service or use to the converted property, and you buy replacement property similar or related in service or use to the converted property, the basis of the replacement property is its cost decreased by the gain not recognized on the conversion. Instructions for 1040x 2012 Example. Instructions for 1040x 2012 The state condemned your property. Instructions for 1040x 2012 The adjusted basis of the property was $26,000 and the state paid you $31,000 for it. Instructions for 1040x 2012 You realized a gain of $5,000 ($31,000 − $26,000). Instructions for 1040x 2012 You bought replacement property similar in use to the converted property for $29,000. Instructions for 1040x 2012 You recognize a gain of $2,000 ($31,000 − $29,000), the unspent part of the payment from the state. Instructions for 1040x 2012 Your unrecognized gain is $3,000, the difference between the $5,000 realized gain and the $2,000 recognized gain. Instructions for 1040x 2012 The basis of the replacement property is figured as follows: Cost of replacement property $29,000 Minus: Gain not recognized 3,000 Basis of replacement property $26,000 Allocating the basis. Instructions for 1040x 2012   If you buy more than one piece of replacement property, allocate your basis among the properties based on their respective costs. Instructions for 1040x 2012 Basis for depreciation. Instructions for 1040x 2012   Special rules apply in determining and depreciating the basis of MACRS property acquired in an involuntary conversion. Instructions for 1040x 2012 For information, see What Is the Basis of Your Depreciable Property? in chapter 1 of Publication 946. Instructions for 1040x 2012 Nontaxable Exchanges A nontaxable exchange is an exchange in which you are not taxed on any gain and you cannot deduct any loss. Instructions for 1040x 2012 If you receive property in a nontaxable exchange, its basis is generally the same as the basis of the property you transferred. Instructions for 1040x 2012 See Nontaxable Trades in chapter 14. Instructions for 1040x 2012 Like-Kind Exchanges The exchange of property for the same kind of property is the most common type of nontaxable exchange. Instructions for 1040x 2012 To qualify as a like-kind exchange, the property traded and the property received must be both of the following. Instructions for 1040x 2012 Qualifying property. Instructions for 1040x 2012 Like-kind property. Instructions for 1040x 2012 The basis of the property you receive is generally the same as the adjusted basis of the property you gave up. Instructions for 1040x 2012 If you trade property in a like-kind exchange and also pay money, the basis of the property received is the adjusted basis of the property you gave up increased by the money you paid. Instructions for 1040x 2012 Qualifying property. Instructions for 1040x 2012   In a like-kind exchange, you must hold for investment or for productive use in your trade or business both the property you give up and the property you receive. Instructions for 1040x 2012 Like-kind property. Instructions for 1040x 2012   There must be an exchange of like-kind property. Instructions for 1040x 2012 Like-kind properties are properties of the same nature or character, even if they differ in grade or quality. Instructions for 1040x 2012 The exchange of real estate for real estate and personal property for similar personal property are exchanges of like-kind property. Instructions for 1040x 2012 Example. Instructions for 1040x 2012 You trade in an old truck used in your business with an adjusted basis of $1,700 for a new one costing $6,800. Instructions for 1040x 2012 The dealer allows you $2,000 on the old truck, and you pay $4,800. Instructions for 1040x 2012 This is a like-kind exchange. Instructions for 1040x 2012 The basis of the new truck is $6,500 (the adjusted basis of the old one, $1,700, plus the amount you paid, $4,800). Instructions for 1040x 2012 If you sell your old truck to a third party for $2,000 instead of trading it in and then buy a new one from the dealer, you have a taxable gain of $300 on the sale (the $2,000 sale price minus the $1,700 adjusted basis). Instructions for 1040x 2012 The basis of the new truck is the price you pay the dealer. Instructions for 1040x 2012 Partially nontaxable exchanges. Instructions for 1040x 2012   A partially nontaxable exchange is an exchange in which you receive unlike property or money in addition to like-kind property. Instructions for 1040x 2012 The basis of the property you receive is the same as the adjusted basis of the property you gave up, with the following adjustments. Instructions for 1040x 2012 Decrease the basis by the following amounts. Instructions for 1040x 2012 Any money you receive. Instructions for 1040x 2012 Any loss you recognize on the exchange. Instructions for 1040x 2012 Increase the basis by the following amounts. Instructions for 1040x 2012 Any additional costs you incur. Instructions for 1040x 2012 Any gain you recognize on the exchange. Instructions for 1040x 2012 If the other party to the exchange assumes your liabilities, treat the debt assumption as money you received in the exchange. Instructions for 1040x 2012 Allocation of basis. Instructions for 1040x 2012   If you receive like-kind and unlike properties in the exchange, allocate the basis first to the unlike property, other than money, up to its FMV on the date of the exchange. Instructions for 1040x 2012 The rest is the basis of the like-kind property. Instructions for 1040x 2012 More information. Instructions for 1040x 2012   See Like-Kind Exchanges in chapter 1 of Publication 544 for more information. Instructions for 1040x 2012 Basis for depreciation. Instructions for 1040x 2012   Special rules apply in determining and depreciating the basis of MACRS property acquired in a like-kind exchange. Instructions for 1040x 2012 For information, see What Is the Basis of Your Depreciable Property? in chapter 1 of Publication 946. Instructions for 1040x 2012 Property Transferred From a Spouse The basis of property transferred to you or transferred in trust for your benefit by your spouse is the same as your spouse's adjusted basis. Instructions for 1040x 2012 The same rule applies to a transfer by your former spouse that is incident to divorce. Instructions for 1040x 2012 However, for property transferred in trust, adjust your basis for any gain recognized by your spouse or former spouse if the liabilities assumed, plus the liabilities to which the property is subject, are more than the adjusted basis of the property transferred. Instructions for 1040x 2012 If the property transferred to you is a series E, series EE, or series I U. Instructions for 1040x 2012 S. Instructions for 1040x 2012 savings bond, the transferor must include in income the interest accrued to the date of transfer. Instructions for 1040x 2012 Your basis in the bond immediately after the transfer is equal to the transferor's basis increased by the interest income includible in the transferor's income. Instructions for 1040x 2012 For more information on these bonds, see chapter 7. Instructions for 1040x 2012 At the time of the transfer, the transferor must give you the records needed to determine the adjusted basis and holding period of the property as of the date of the transfer. Instructions for 1040x 2012 For more information about the transfer of property from a spouse, see chapter 14. Instructions for 1040x 2012 Property Received as a Gift To figure the basis of property you receive as a gift, you must know its adjusted basis to the donor just before it was given to you, its FMV at the time it was given to you, and any gift tax paid on it. Instructions for 1040x 2012 FMV less than donor's adjusted basis. Instructions for 1040x 2012   If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property. Instructions for 1040x 2012 Your basis for figuring gain is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you held the property. Instructions for 1040x 2012 Your basis for figuring loss is its FMV when you received the gift plus or minus any required adjustments to basis while you held the property. Instructions for 1040x 2012 See Adjusted Basis , earlier. Instructions for 1040x 2012 Example. Instructions for 1040x 2012 You received an acre of land as a gift. Instructions for 1040x 2012 At the time of the gift, the land had an FMV of $8,000. Instructions for 1040x 2012 The donor's adjusted basis was $10,000. Instructions for 1040x 2012 After you received the property, no events occurred to increase or decrease your basis. Instructions for 1040x 2012 If you later sell the property for $12,000, you will have a $2,000 gain because you must use the donor's adjusted basis at the time of the gift ($10,000) as your basis to figure gain. Instructions for 1040x 2012 If you sell the property for $7,000, you will have a $1,000 loss because you must use the FMV at the time of the gift ($8,000) as your basis to figure loss. Instructions for 1040x 2012 If the sales price is between $8,000 and $10,000, you have neither gain nor loss. Instructions for 1040x 2012 Business property. Instructions for 1040x 2012   If you hold the gift as business property, your basis for figuring any depreciation, depletion, or amortization deductions is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you hold the property. Instructions for 1040x 2012 FMV equal to or greater than donor's adjusted basis. Instructions for 1040x 2012   If the FMV of the property is equal to or greater than the donor's adjusted basis, your basis is the donor's adjusted basis at the time you received the gift. Instructions for 1040x 2012 Increase your basis by all or part of any gift tax paid, depending on the date of the gift, explained later. Instructions for 1040x 2012   Also, for figuring gain or loss from a sale or other disposition or for figuring depreciation, depletion, or amortization deductions on business property, you must increase or decrease your basis (the donor's adjusted basis) by any required adjustments to basis while you held the property. Instructions for 1040x 2012 See Adjusted Basis , earlier. Instructions for 1040x 2012   If you received a gift during the tax year, increase your basis in the gift (the donor's adjusted basis) by the part of the gift tax paid on it due to the net increase in value of the gift. Instructions for 1040x 2012 Figure the increase by multiplying the gift tax paid by a fraction. Instructions for 1040x 2012 The numerator of the fraction is the net increase in value of the gift and the denominator is the amount of the gift. Instructions for 1040x 2012   The net increase in value of the gift is the FMV of the gift minus the donor's adjusted basis. Instructions for 1040x 2012 The amount of the gift is its value for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. Instructions for 1040x 2012 Example. Instructions for 1040x 2012 In 2013, you received a gift of property from your mother that had an FMV of $50,000. Instructions for 1040x 2012 Her adjusted basis was $20,000. Instructions for 1040x 2012 The amount of the gift for gift tax purposes was $36,000 ($50,000 minus the $14,000 annual exclusion). Instructions for 1040x 2012 She paid a gift tax of $7,320 on the property. Instructions for 1040x 2012 Your basis is $26,076, figured as follows: Fair market value $50,000 Minus: Adjusted basis −20,000 Net increase in value $30,000     Gift tax paid $7,320 Multiplied by ($30,000 ÷ $36,000) × . Instructions for 1040x 2012 83 Gift tax due to net increase in value $6,076 Adjusted basis of property to your mother +20,000 Your basis in the property $26,076 Note. Instructions for 1040x 2012 If you received a gift before 1977, your basis in the gift (the donor's adjusted basis) includes any gift tax paid on it. Instructions for 1040x 2012 However, your basis cannot exceed the FMV of the gift at the time it was given to you. Instructions for 1040x 2012 Inherited Property Your basis in property you inherited from a decedent, who died before January 1, 2010, or after December 31, 2010, is generally one of the following: The FMV of the property at the date of the decedent's death. Instructions for 1040x 2012 The FMV on the alternate valuation date if the personal representative for the estate elects to use alternate valuation. Instructions for 1040x 2012 The value under the special-use valuation method for real property used in farming or a closely held business if elected for estate tax purposes. Instructions for 1040x 2012 The decedent's adjusted basis in land to the extent of the value excluded from the decedent's taxable estate as a qualified conservation easement. Instructions for 1040x 2012 If a federal estate tax return does not have to be filed, your basis in the inherited property is its appraised value at the date of death for state inheritance or transmission taxes. Instructions for 1040x 2012 For more information, see the instructions to Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return. Instructions for 1040x 2012 Property inherited from a decedent who died in 2010. Instructions for 1040x 2012   If you inherited property from a decedent who died in 2010, special rules may apply. Instructions for 1040x 2012 For more information, see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010. Instructions for 1040x 2012 Community property. Instructions for 1040x 2012   In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), husband and wife are each usually considered to own half the community property. Instructions for 1040x 2012 When either spouse dies, the total value of the community property, even the part belonging to the surviving spouse, generally becomes the basis of the entire property. Instructions for 1040x 2012 For this rule to apply, at least half the value of the community property interest must be includible in the decedent's gross estate, whether or not the estate must file a return. Instructions for 1040x 2012 Example. Instructions for 1040x 2012 You and your spouse owned community property that had a basis of $80,000. Instructions for 1040x 2012 When your spouse died, half the FMV of the community interest was includible in your spouse's estate. Instructions for 1040x 2012 The FMV of the community interest was $100,000. Instructions for 1040x 2012 The basis of your half of the property after the death of your spouse is $50,000 (half of the $100,000 FMV). Instructions for 1040x 2012 The basis of the other half to your spouse's heirs is also $50,000. Instructions for 1040x 2012 For more information about community property, see Publication 555, Community Property. Instructions for 1040x 2012 Property Changed From Personal to Business or Rental Use If you hold property for personal use and then change it to business use or use it to produce rent, you can begin to depreciate the property at the time of the change. Instructions for 1040x 2012 To do so, you must figure its basis for depreciation at the time of the change. Instructions for 1040x 2012 An example of changing property held for personal use to business or rental use would be renting out your former personal residence. Instructions for 1040x 2012 Basis for depreciation. Instructions for 1040x 2012   The basis for depreciation is the lesser of the following amounts. Instructions for 1040x 2012 The FMV of the property on the date of the change. Instructions for 1040x 2012 Your adjusted basis on the date of the change. Instructions for 1040x 2012 Example. Instructions for 1040x 2012 Several years ago, you paid $160,000 to have your house built on a lot that cost $25,000. Instructions for 1040x 2012 You paid $20,000 for permanent improvements to the house and claimed a $2,000 casualty loss deduction for damage to the house before changing the property to rental use last year. Instructions for 1040x 2012 Because land is not depreciable, you include only the cost of the house when figuring the basis for depreciation. Instructions for 1040x 2012 Your adjusted basis in the house when you changed its use was $178,000 ($160,000 + $20,000 − $2,000). Instructions for 1040x 2012 On the same date, your property had an FMV of $180,000, of which $15,000 was for the land and $165,000 was for the house. Instructions for 1040x 2012 The basis for figuring depreciation on the house is its FMV on the date of the change ($165,000) because it is less than your adjusted basis ($178,000). Instructions for 1040x 2012 Sale of property. Instructions for 1040x 2012   If you later sell or dispose of property changed to business or rental use, the basis you use will depend on whether you are figuring gain or loss. Instructions for 1040x 2012 Gain. Instructions for 1040x 2012   The basis for figuring a gain is your adjusted basis in the property when you sell the property. Instructions for 1040x 2012 Example. Instructions for 1040x 2012 Assume the same facts as in the previous example except that you sell the property at a gain after being allowed depreciation deductions of $37,500. Instructions for 1040x 2012 Your adjusted basis for figuring gain is $165,500 ($178,000 + $25,000 (land) − $37,500). Instructions for 1040x 2012 Loss. Instructions for 1040x 2012   Figure the basis for a loss starting with the smaller of your adjusted basis or the FMV of the property at the time of the change to business or rental use. Instructions for 1040x 2012 Then make adjustments (increases and decreases) for the period after the change in the property's use, as discussed earlier under Adjusted Basis . Instructions for 1040x 2012 Example. Instructions for 1040x 2012 Assume the same facts as in the previous example, except that you sell the property at a loss after being allowed depreciation deductions of $37,500. Instructions for 1040x 2012 In this case, you would start with the FMV on the date of the change to rental use ($180,000), because it is less than the adjusted basis of $203,000 ($178,000 + $25,000 (land)) on that date. Instructions for 1040x 2012 Reduce that amount ($180,000) by the depreciation deductions ($37,500). Instructions for 1040x 2012 The basis for loss is $142,500 ($180,000 − $37,500). Instructions for 1040x 2012 Stocks and Bonds The basis of stocks or bonds you buy generally is the purchase price plus any costs of purchase, such as commissions and recording or transfer fees. Instructions for 1040x 2012 If you get stocks or bonds other than by purchase, your basis is usually determined by the FMV or the previous owner's adjusted basis, as discussed earlier. Instructions for 1040x 2012 You must adjust the basis of stocks for certain events that occur after purchase. Instructions for 1040x 2012 For example, if you receive additional stock from nontaxable stock dividends or stock splits, reduce your basis for each share of stock by dividing the adjusted basis of the old stock by the number of shares of old and new stock. Instructions for 1040x 2012 This rule applies only when the additional stock received is identical to the stock held. Instructions for 1040x 2012 Also reduce your basis when you receive nontaxable distributions. Instructions for 1040x 2012 They are a return of capital. Instructions for 1040x 2012 Example. Instructions for 1040x 2012 In 2011 you bought 100 shares of XYZ stock for $1,000 or $10 a share. Instructions for 1040x 2012 In 2012 you bought 100 shares of XYZ stock for $1,600 or $16 a share. Instructions for 1040x 2012 In 2013 XYZ declared a 2-for-1 stock split. Instructions for 1040x 2012 You now have 200 shares of stock with a basis of $5 a share and 200 shares with a basis of $8 a share. Instructions for 1040x 2012 Other basis. Instructions for 1040x 2012   There are other ways to figure the basis of stocks or bonds depending on how you acquired them. Instructions for 1040x 2012 For detailed information, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. Instructions for 1040x 2012 Identifying stocks or bonds sold. Instructions for 1040x 2012   If you can adequately identify the shares of stock or the bonds you sold, their basis is the cost or other basis of the particular shares of stocks or bonds. Instructions for 1040x 2012 If you buy and sell securities at various times in varying quantities and you cannot adequately identify the shares you sell, the basis of the securities you sell is the basis of the securities you acquired first. Instructions for 1040x 2012 For more information about identifying securities you sell, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. Instructions for 1040x 2012 Mutual fund shares. Instructions for 1040x 2012   If you sell mutual fund shares you acquired at various times and prices and left on deposit in an account kept by a custodian or agent, you can elect to use an average basis. Instructions for 1040x 2012 For more information, see Publication 550. Instructions for 1040x 2012 Bond premium. Instructions for 1040x 2012   If you buy a taxable bond at a premium and elect to amortize the premium, reduce the basis of the bond by the amortized premium you deduct each year. Instructions for 1040x 2012 See Bond Premium Amortization in chapter 3 of Publication 550 for more information. Instructions for 1040x 2012 Although you cannot deduct the premium on a tax-exempt bond, you must amortize the premium each year and reduce your basis in the bond by the amortized amount. Instructions for 1040x 2012 Original issue discount (OID) on debt instruments. Instructions for 1040x 2012   You must increase your basis in an OID debt instrument by the OID you include in income for that instrument. Instructions for 1040x 2012 See Original Issue Discount (OID) in chapter 7 and Publication 1212, Guide To Original Issue Discount (OID) Instruments. Instructions for 1040x 2012 Tax-exempt obligations. Instructions for 1040x 2012    OID on tax-exempt obligations is generally not taxable. Instructions for 1040x 2012 However, when you dispose of a tax-exempt obligation issued after September 3, 1982, and acquired after March 1, 1984, you must accrue OID on the obligation to determine its adjusted basis. Instructions for 1040x 2012 The accrued OID is added to the basis of the obligation to determine your gain or loss. Instructions for 1040x 2012 See chapter 4 of Publication 550. Instructions for 1040x 2012 Prev  Up  Next   Home   More Online Publications