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Irs Tax Return Forms 2011

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Irs Tax Return Forms 2011

Irs tax return forms 2011 Publication 3920 - Main Contents Table of Contents Tax ForgivenessYears Eligible for Tax Forgiveness Amount of Tax Forgiven Refund of Taxes Paid How To Claim Tax Forgiveness Payments to SurvivorsSeptember 11th Victim Compensation Fund of 2001 Qualified Disaster Relief Payments Disability Payments Death Benefits Canceled Debt Payments to Survivors of Public Safety Officers Postponed Tax DeadlinesCovered area. Irs tax return forms 2011 Disaster Area Losses Estate Tax Reduction Structured Settlement Factoring Transactions Illustrated Worksheets B and C Additional Worksheets How To Get Tax Help Tax Forgiveness The IRS will forgive the federal income tax liabilities of decedents who died as a result of the Oklahoma City attack, September 11 attacks, and anthrax attacks. Irs tax return forms 2011 Income tax is forgiven for these decedents whether they were killed in an attack or in rescue or recovery operations. Irs tax return forms 2011 Any forgiven tax liability owed to the IRS will not have to be paid. Irs tax return forms 2011 Any forgiven tax liability that has already been paid will be refunded. Irs tax return forms 2011 (See Refund of Taxes Paid, later. Irs tax return forms 2011 ) To determine the amount of tax to be forgiven, read Years Eligible for Tax Forgiveness first. Irs tax return forms 2011 Then read Amount of Tax Forgiven. Irs tax return forms 2011 Decedents whose total forgiven tax liability for all eligible years is less than $10,000 are entitled to $10,000 minimum relief. Irs tax return forms 2011 Even decedents who were not required to file tax returns for the eligible tax years are entitled to $10,000 minimum relief. Irs tax return forms 2011 See Minimum Amount of Relief later under Amount of Tax Forgiven. Irs tax return forms 2011 Years Eligible for Tax Forgiveness The following paragraphs explain which years are eligible for tax forgiveness. Irs tax return forms 2011 Oklahoma City attack. Irs tax return forms 2011   For those who died from this attack, income tax is forgiven for 1994 and all later years up to and including the year of death. Irs tax return forms 2011 Example 1. Irs tax return forms 2011 A man was killed in the bombing of the federal building in Oklahoma City on April 19, 1995. Irs tax return forms 2011 His income tax is forgiven for 1994 and 1995. Irs tax return forms 2011 Example 2. Irs tax return forms 2011 A woman was wounded while walking outside the federal building in Oklahoma City on April 19, 1995. Irs tax return forms 2011 She subsequently died of her wounds in 1996. Irs tax return forms 2011 Her income tax is forgiven for 1994, 1995, and 1996. Irs tax return forms 2011 September 11 attacks and anthrax attacks. Irs tax return forms 2011   For those who die from these attacks, income tax is forgiven for 2000 and all later years up to and including the year of death. Irs tax return forms 2011 Example 1. Irs tax return forms 2011 A Pentagon employee died in the September 11 attack. Irs tax return forms 2011 Her income tax is forgiven for 2000 and 2001. Irs tax return forms 2011 Example 2. Irs tax return forms 2011 A visitor to the World Trade Center died in 2002 of wounds he sustained in the September 11 attack. Irs tax return forms 2011 His income tax liability is forgiven for 2000, 2001, and 2002. Irs tax return forms 2011 Amount of Tax Forgiven The IRS will forgive the decedent's income tax liability for all years eligible for tax forgiveness. Irs tax return forms 2011 On a joint return, only the decedent's part of the joint income tax liability is eligible for forgiveness. Irs tax return forms 2011 To figure the tax to be forgiven, use the following worksheets. Irs tax return forms 2011 Use Worksheet A for any eligible year the decedent filed a return as single, married filing separately, head of household, or qualifying widow(er). Irs tax return forms 2011 Use Worksheet B for any eligible year the decedent filed a joint return. Irs tax return forms 2011 See the illustrated Worksheet B near the end of this publication. Irs tax return forms 2011 Do not complete Worksheet A or B if the decedent was not required to file tax returns for the eligible tax years. Irs tax return forms 2011 Instead, complete Worksheet C and file a return for the decedent's last tax year. Irs tax return forms 2011 See Minimum Amount of Relief, later. Irs tax return forms 2011 If you need assistance, call the IRS at 1–866–562–5227 Monday through Friday during the following times. Irs tax return forms 2011 In English–7 a. Irs tax return forms 2011 m. Irs tax return forms 2011 to 10 p. Irs tax return forms 2011 m. Irs tax return forms 2011 local time. Irs tax return forms 2011 In Spanish–8 a. Irs tax return forms 2011 m. Irs tax return forms 2011 to 9:30 p. Irs tax return forms 2011 m. Irs tax return forms 2011 local time. Irs tax return forms 2011 Both spouses died. Irs tax return forms 2011   If both spouses died as a result of a terrorist attack and they filed a joint return for an eligible tax year, fill out Worksheet B for each spouse for that year. Irs tax return forms 2011 Do this to determine if each spouse qualifies for the minimum relief of $10,000 (discussed later under Minimum Amount of Relief). Irs tax return forms 2011 If you are certain that neither spouse's total forgiven tax liability for all eligible years is less than $10,000, skip Worksheet B. Irs tax return forms 2011 However, attach a computation of the forgiven tax liability to the final income tax return or amended tax return for each eligible year. Irs tax return forms 2011 The forgiven tax liability is the total tax shown on the joint return minus the taxes listed in the instructions for line 4 of Worksheet B. Irs tax return forms 2011 Residents of community property states. Irs tax return forms 2011   If the decedent was domiciled in a community property state and the spouse reported half the community income on a separate return, the surviving spouse can get a refund of taxes paid on his or her share of the decedent's income for the eligible years. Irs tax return forms 2011 Also, all of the decedent's income taxes paid for the eligible years will be refunded to either the executor or administrator of the estate, or to the surviving spouse if there is no legal representative. Irs tax return forms 2011 Worksheet B. Irs tax return forms 2011 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Irs tax return forms 2011 1       2 Enter the decedent's taxable income. Irs tax return forms 2011 Figure taxable income as if a separate return had been filed. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 2       3 Enter the decedent's total tax. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 4       5 Subtract line 4 from line 3. Irs tax return forms 2011 5       6 Enter the surviving spouse's taxable income. Irs tax return forms 2011 Figure taxable income as if a separate return had been filed. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 6       7 Enter the surviving spouse's total tax. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Irs tax return forms 2011 8       9 Subtract line 8 from line 7. Irs tax return forms 2011 9       10 Add lines 5 and 9. Irs tax return forms 2011 10       11 Enter the total tax from the joint return. Irs tax return forms 2011 See Table 1 on page 5 for the line number for years before 2002. Irs tax return forms 2011 11       12 Add lines 4 and 8. Irs tax return forms 2011 12       13 Subtract line 12 from line 11. Irs tax return forms 2011 13       14 Divide line 5 by line 10. Irs tax return forms 2011 Enter the result as a decimal. Irs tax return forms 2011 14       15 Tax to be forgiven. Irs tax return forms 2011 Multiply line 13 by line 14 and enter the result. Irs tax return forms 2011 15       Note. Irs tax return forms 2011 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Irs tax return forms 2011 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Irs tax return forms 2011 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Irs tax return forms 2011 The IRS will determine the amount to be refunded. Irs tax return forms 2011 Worksheet B. Irs tax return forms 2011 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Irs tax return forms 2011 1       2 Enter the decedent's taxable income. Irs tax return forms 2011 Figure taxable income as if a separate return had been filed. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 2       3 Enter the decedent's total tax. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 4       5 Subtract line 4 from line 3. Irs tax return forms 2011 5       6 Enter the surviving spouse's taxable income. Irs tax return forms 2011 Figure taxable income as if a separate return had been filed. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 6       7 Enter the surviving spouse's total tax. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Irs tax return forms 2011 8       9 Subtract line 8 from line 7. Irs tax return forms 2011 9       10 Add lines 5 and 9. Irs tax return forms 2011 10       11 Enter the total tax from the joint return. Irs tax return forms 2011 See Table 1 on page 5 for the line number for years before 2002. Irs tax return forms 2011 11       12 Add lines 4 and 8. Irs tax return forms 2011 12       13 Subtract line 12 from line 11. Irs tax return forms 2011 13       14 Divide line 5 by line 10. Irs tax return forms 2011 Enter the result as a decimal. Irs tax return forms 2011 14       15 Tax to be forgiven. Irs tax return forms 2011 Multiply line 13 by line 14 and enter the result. Irs tax return forms 2011 15       Note. Irs tax return forms 2011 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Irs tax return forms 2011 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Irs tax return forms 2011 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Irs tax return forms 2011 The IRS will determine the amount to be refunded. Irs tax return forms 2011 Instructions for Worksheet B Table 1. Irs tax return forms 2011 Total Tax Line on Decedent's Return Note: Use this table to find the total tax line on the decedent's income tax return. Irs tax return forms 2011 * Form 1994 1995 1996 2000 2001 1040 Line 53 Line 54 Line 51 Line 57 Line 58 1040A Line 27 Line 28 Line 28 Line 35 File Form 1040 1040EZ Line 9 Line 10 Line 10 Line 10 TeleFile Tax Record ** Line E Line J Line K 1040NR Line 51 Line 52 Line 49 Line 54 Line 54 1040NR–EZ N/A Line 17 Line 17 Line 18 File Form 1040NR * Line numbers for the 2002 forms were not available when this publication went to print. Irs tax return forms 2011 ** File Form 4506 to get a transcript of the decedent's account. Irs tax return forms 2011 Table 1. Irs tax return forms 2011 Total Tax Line on Decedent's Return Note: Use this table to find the total tax line on the decedent's income tax return. Irs tax return forms 2011 * Form 1994 1995 1996 2000 2001 1040 Line 53 Line 54 Line 51 Line 57 Line 58 1040A Line 27 Line 28 Line 28 Line 35 File Form 1040 1040EZ Line 9 Line 10 Line 10 Line 10 TeleFile Tax Record ** Line E Line J Line K 1040NR Line 51 Line 52 Line 49 Line 54 Line 54 1040NR–EZ N/A Line 17 Line 17 Line 18 File Form 1040NR * Line numbers for the 2002 forms were not available when this publication went to print. Irs tax return forms 2011 ** File Form 4506 to get a transcript of the decedent's account. Irs tax return forms 2011 Lines 2 and 6. Irs tax return forms 2011   Allocate income and deductions in the same manner they would have been allocated if the spouses had filed separate returns. Irs tax return forms 2011   Allocate wages and salaries to the spouse who performed the services and received the Form W-2. Irs tax return forms 2011 Business and investment income (including capital gains) are generally allocated to the spouse who owned the business or investment that produced the income. Irs tax return forms 2011 Income from a jointly owned business or investment should be allocated equally between the spouses unless there is evidence that shows a different allocation is appropriate. Irs tax return forms 2011   Allocate business deductions to the owner of the business. Irs tax return forms 2011 Allocate personal deductions (such as itemized deductions for mortgage interest and taxes) equally between the spouses unless there is evidence that shows a different allocation is appropriate. Irs tax return forms 2011 Lines 3 and 7. Irs tax return forms 2011   Figure the total tax as if a separate return had been filed. Irs tax return forms 2011 The total tax is the tax that would have been entered on the tax return line shown in Table 1 if a separate return had been filed. Irs tax return forms 2011 When figuring the tax using the Tax Table or Tax Rate Schedule, use the “Married filing separately” column in the Tax Table or Tax Rate Schedule Y-2. Irs tax return forms 2011   When figuring the total tax, allocate credits and other taxes, if any, in the same manner as they would have been allocated if the spouses had filed separate returns. Irs tax return forms 2011 If a credit would not have been allowed on a separate return, allocate the credit shown on the joint return between the spouses. Irs tax return forms 2011 Examples of credits generally not allowed on a separate return are the child and dependent care credit, credit for the elderly, adoption credit, education credits, and earned income credit. Irs tax return forms 2011 Line 4. Irs tax return forms 2011   Enter the total, if any, of the following taxes. Irs tax return forms 2011 Self-employment tax. Irs tax return forms 2011 Social security and Medicare tax on tip income not reported to employer. Irs tax return forms 2011 Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). Irs tax return forms 2011 Tax on excess accumulation in qualified retirement plans. Irs tax return forms 2011 Household employment taxes. Irs tax return forms 2011 Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. Irs tax return forms 2011 Tax on golden parachute payments. Irs tax return forms 2011 Minimum Amount of Relief The minimum amount of relief is $10,000. Irs tax return forms 2011 If the decedent's total forgiven tax liability for all eligible years is less than $10,000, the difference between $10,000 and the total forgiven tax liability for those years will be treated as a tax payment for the decedent's last tax year. Irs tax return forms 2011 The IRS will refund the difference as explained under Refund of Taxes Paid. Irs tax return forms 2011 Use Worksheet C to figure the additional tax payment. Irs tax return forms 2011 But first complete Worksheet A or B, unless the decedent was not required to file tax returns for the eligible tax years. Irs tax return forms 2011 Example 1. Irs tax return forms 2011 An individual who died in the September 11 attacks had an income tax liability of $-0- for 2000 and $6,400 for 2001. Irs tax return forms 2011 The $6,400 is eligible for forgiveness. Irs tax return forms 2011 The IRS will forgive $6,400 and treat the difference between $10,000 and $6,400 ($3,600) as a tax payment for 2001. Irs tax return forms 2011 Example 2. Irs tax return forms 2011 A child who died in the September 11 attacks had no (-0-) income tax liability for 2000 or 2001. Irs tax return forms 2011 The IRS will treat $10,000 as a tax payment for 2001. Irs tax return forms 2011 Income received after date of death. Irs tax return forms 2011   Generally, income of the decedent received after the date of death must be reported on Form 1041 if the estate has gross income for the tax year of $600 or more. Irs tax return forms 2011 Examples are the final paycheck or dividends on stock owned by the decedent. Irs tax return forms 2011 However, this income is exempt from income tax and is not included on Form 1041 if it is received: After the date of the decedent's death, and Before the end of the decedent's tax year (determined without regard to death). Irs tax return forms 2011 Nonqualifying income. Irs tax return forms 2011   The following income is not exempt from tax. Irs tax return forms 2011 The tax on it is not eligible for forgiveness. Irs tax return forms 2011 Deferred compensation that would have been payable if the death had occurred because of an event other than these attacks. Irs tax return forms 2011 Amounts that would not have been payable but for an action taken after September 11, 2001. Irs tax return forms 2011 The following are examples of nonqualifying income. Irs tax return forms 2011 Amounts payable from a qualified retirement plan or IRA to the beneficiary or estate of the decedent. Irs tax return forms 2011 Amounts payable only as death or survivor's benefits from pre-existing arrangements that would have been paid if the death had occurred for another reason. Irs tax return forms 2011 Income received as a result of adjustments made by the decedent's employer to a plan or arrangement to accelerate the vesting of restricted property or the payment of nonqualified deferred compensation after the date of the attack. Irs tax return forms 2011 Interest on savings bonds cashed by the beneficiary of the decedent. Irs tax return forms 2011 If you are responsible for the estate of a decedent, see Publication 559. Irs tax return forms 2011 Publication 559 discusses how to complete and file federal income tax returns and explains your responsibility to pay any taxes due. Irs tax return forms 2011 Instructions for lines 2–9 of Worksheet C. Irs tax return forms 2011   The tax that would have been payable on the exempt income (discussed earlier) must be considered when determining whether a decedent is entitled to the $10,000 minimum relief. Irs tax return forms 2011 To figure the tax that would have been payable, you can use lines 2 through 9 of Worksheet C. Irs tax return forms 2011 Or, if special requirements are met, you can use the alternative computation instead. Irs tax return forms 2011 See Alternative computation, later. Irs tax return forms 2011   You have to use lines 2–9 (or the alternative computation) to figure the tax that would have been payable even if Form 1041 was not required to be filed. Irs tax return forms 2011 Use Form 1041 to figure what the taxable income would be without including the exempt income. Irs tax return forms 2011 Then enter that taxable income (even if a negative number) on line 2 of Worksheet C (or line 1 of Worksheet D, Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C)). Irs tax return forms 2011 Alternative computation. Irs tax return forms 2011   Instead of using lines 2–8 of Worksheet C to figure the tax on exempt income (line 9 of Worksheet C), you may be able to use Worksheet D. Irs tax return forms 2011 You can use Worksheet D to figure the tax on the exempt income payable by the estate and its beneficiaries only if both of the following requirements are met. Irs tax return forms 2011 The estate claimed an income distribution deduction on line 18 (Form 1041). Irs tax return forms 2011 Each beneficiary submits the information necessary to refigure the income tax payable on the exempt income received from the decedent's estate. Irs tax return forms 2011 If requirement (2) is met but requirement (1) is not, you can still use Worksheet D if: Form 1041 was not required because exempt income was received, and The estate would have claimed an income distribution deduction if the exempt income were taxable. Irs tax return forms 2011 If you use this alternative computation, skip lines 2–8 of Worksheet C and enter the amount from line 8 of Worksheet D on line 9 of Worksheet C. Irs tax return forms 2011 Complete the rest of Worksheet C to determine the additional payment allowed. Irs tax return forms 2011 Worksheet C. Irs tax return forms 2011 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. Irs tax return forms 2011 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Irs tax return forms 2011 1 Minimum relief amount. Irs tax return forms 2011 Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Irs tax return forms 2011 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . Irs tax return forms 2011 3       4 Add lines 2 and 3. Irs tax return forms 2011 4       5 Enter exempt income received after death minus expenses allocable to exempt income. Irs tax return forms 2011 (See Income received after date of death on page 5. Irs tax return forms 2011 ) 5       6 Add lines 4 and 5. Irs tax return forms 2011 6       7 Figure the tax on line 6 using Schedule G (Form 1041). Irs tax return forms 2011 7       8 Figure the tax on line 4 using Schedule G (Form 1041). Irs tax return forms 2011 8       9 Tax on exempt income. Irs tax return forms 2011 Subtract line 8 from line 7. Irs tax return forms 2011 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Irs tax return forms 2011 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Irs tax return forms 2011 10       11 Add lines 9 and 10. Irs tax return forms 2011 11   12 Additional payment allowed. Irs tax return forms 2011 If line 11 is $10,000 or more, enter -0- and stop here. Irs tax return forms 2011 No additional amount is allowed as a tax payment. Irs tax return forms 2011 Otherwise, subtract line 11 from line 1 and enter the result. Irs tax return forms 2011 12   Note. Irs tax return forms 2011 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Irs tax return forms 2011 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Irs tax return forms 2011 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Irs tax return forms 2011 Write "Sec. Irs tax return forms 2011 692(d)(2) Payment" and the amount to the right of the entry space. Irs tax return forms 2011 Also indicate whether a Form 1041 is being filed for the decedent's estate. Irs tax return forms 2011 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Irs tax return forms 2011 Write “Sec. Irs tax return forms 2011 692(d)(2) Payment” on the dotted line to the left of the entry space. Irs tax return forms 2011 Worksheet C. Irs tax return forms 2011 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. Irs tax return forms 2011 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Irs tax return forms 2011 1 Minimum relief amount. Irs tax return forms 2011 Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Irs tax return forms 2011 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . Irs tax return forms 2011 3       4 Add lines 2 and 3. Irs tax return forms 2011 4       5 Enter exempt income received after death minus expenses allocable to exempt income. Irs tax return forms 2011 (See Income received after date of death on page 5. Irs tax return forms 2011 ) 5       6 Add lines 4 and 5. Irs tax return forms 2011 6       7 Figure the tax on line 6 using Schedule G (Form 1041). Irs tax return forms 2011 7       8 Figure the tax on line 4 using Schedule G (Form 1041). Irs tax return forms 2011 8       9 Tax on exempt income. Irs tax return forms 2011 Subtract line 8 from line 7. Irs tax return forms 2011 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Irs tax return forms 2011 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Irs tax return forms 2011 10       11 Add lines 9 and 10. Irs tax return forms 2011 11   12 Additional payment allowed. Irs tax return forms 2011 If line 11 is $10,000 or more, enter -0- and stop here. Irs tax return forms 2011 No additional amount is allowed as a tax payment. Irs tax return forms 2011 Otherwise, subtract line 11 from line 1 and enter the result. Irs tax return forms 2011 12   Note. Irs tax return forms 2011 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Irs tax return forms 2011 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Irs tax return forms 2011 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Irs tax return forms 2011 Write "Sec. Irs tax return forms 2011 692(d)(2) Payment" and the amount to the right of the entry space. Irs tax return forms 2011 Also indicate whether a Form 1041 is being filed for the decedent's estate. Irs tax return forms 2011 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Irs tax return forms 2011 Write “Sec. Irs tax return forms 2011 692(d)(2) Payment” on the dotted line to the left of the entry space. Irs tax return forms 2011 Worksheet D. Irs tax return forms 2011 Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C) 1 Enter the taxable income from line 22 (Form 1041) 1   2 Enter exempt income received after death minus expenses allocable to exempt income. Irs tax return forms 2011 (See Income received after date of death on page 5. Irs tax return forms 2011 ) 2   3 Add lines 1 and 2 3   4 Figure the tax on line 3 using Schedule G (Form 1041). Irs tax return forms 2011 4   5 Figure the tax on line 1 using Schedule G (Form 1041). Irs tax return forms 2011 5   6 Estate's tax on exempt income. Irs tax return forms 2011 Subtract line 5 from line 4 6   7 Beneficiaries' tax on exempt income. Irs tax return forms 2011 Figure the total tax that would have been payable by all beneficiaries. Irs tax return forms 2011 Do this by including in each beneficiary's gross income the exempt income received from the decedent's estate and refiguring the income tax. Irs tax return forms 2011 Add the amounts by which each beneficiary's income tax is increased. Irs tax return forms 2011 7   8 Add lines 6 and 7. Irs tax return forms 2011 Enter this amount on line 9 of Worksheet C. Irs tax return forms 2011 8   Worksheet D. Irs tax return forms 2011 Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C) 1 Enter the taxable income from line 22 (Form 1041) 1   2 Enter exempt income received after death minus expenses allocable to exempt income. Irs tax return forms 2011 (See Income received after date of death on page 5. Irs tax return forms 2011 ) 2   3 Add lines 1 and 2 3   4 Figure the tax on line 3 using Schedule G (Form 1041). Irs tax return forms 2011 4   5 Figure the tax on line 1 using Schedule G (Form 1041). Irs tax return forms 2011 5   6 Estate's tax on exempt income. Irs tax return forms 2011 Subtract line 5 from line 4 6   7 Beneficiaries' tax on exempt income. Irs tax return forms 2011 Figure the total tax that would have been payable by all beneficiaries. Irs tax return forms 2011 Do this by including in each beneficiary's gross income the exempt income received from the decedent's estate and refiguring the income tax. Irs tax return forms 2011 Add the amounts by which each beneficiary's income tax is increased. Irs tax return forms 2011 7   8 Add lines 6 and 7. Irs tax return forms 2011 Enter this amount on line 9 of Worksheet C. Irs tax return forms 2011 8   Refund of Taxes Paid The IRS will refund the following forgiven income tax liabilities. Irs tax return forms 2011 Income tax liabilities that have been paid. Irs tax return forms 2011 Income tax liabilities treated as paid because the total tax liability for all years eligible for tax forgiveness is less than $10,000. Irs tax return forms 2011 See Minimum Amount of Relief, earlier. Irs tax return forms 2011 Example 1. Irs tax return forms 2011 A man who died in the September 11 attacks had an income tax liability of $7,500 for 2000 and $6,500 for 2001. Irs tax return forms 2011 The total, $14,000, is eligible for tax forgiveness. Irs tax return forms 2011 However, he paid only $13,000 of that amount. Irs tax return forms 2011 The IRS will refund the $13,000 paid. Irs tax return forms 2011 Example 2. Irs tax return forms 2011 A child who died in the September 11 attacks had no income tax liability for 2000 or 2001. Irs tax return forms 2011 The child qualifies for the minimum relief of $10,000. Irs tax return forms 2011 The $10,000 is treated as a tax payment for 2001 and will be refunded. Irs tax return forms 2011 Period for filing a claim for credit or refund. Irs tax return forms 2011   To obtain a tax refund on a previously filed income tax return, file an amended return (Form 1040X or an amended Form 1041) within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever is later. Irs tax return forms 2011 For example, you have until April 15, 2004, to file an amended return on a 2000 Form 1040, 1040A, or 1040EZ that was filed by April 16, 2001, and for which the tax was paid when due. Irs tax return forms 2011 To obtain a refund on a return that has not been filed, file the return within 3 years of the original due date of the return. Irs tax return forms 2011 Extension of time for victims of Oklahoma City attack. Irs tax return forms 2011   The period described above has been extended for victims of the Oklahoma City attack. Irs tax return forms 2011 Survivors and personal representatives of these victims have until January 22, 2003, to file an original or amended return. Irs tax return forms 2011 How To Claim Tax Forgiveness Use the following procedures to claim income tax forgiveness. Irs tax return forms 2011 Which Form To Use The form you use depends on whether an income tax return for the eligible year was already filed for the decedent. Irs tax return forms 2011 Return required but not yet filed. Irs tax return forms 2011   File Form 1040 if the decedent was a U. Irs tax return forms 2011 S. Irs tax return forms 2011 citizen or resident. Irs tax return forms 2011 File Form 1040NR if the decedent was a nonresident alien. Irs tax return forms 2011 A nonresident alien is someone who is not a U. Irs tax return forms 2011 S. Irs tax return forms 2011 citizen or resident. Irs tax return forms 2011 Return required and already filed. Irs tax return forms 2011   File a separate Form 1040X for each year you are claiming tax relief. Irs tax return forms 2011 Return not required and not filed. Irs tax return forms 2011   File Form 1040 only for the year of death if the decedent was a U. Irs tax return forms 2011 S. Irs tax return forms 2011 citizen or resident. Irs tax return forms 2011 File Form 1040NR if the decedent was a nonresident alien. Irs tax return forms 2011 Return not required but already filed. Irs tax return forms 2011   File Form 1040X only for the year of death. Irs tax return forms 2011 How to complete the returns. Irs tax return forms 2011   Fill out Form 1040 or 1040NR according to its instructions but do not reduce the decedent's tax liability by any taxes that will be forgiven. Irs tax return forms 2011 Attach to each return a computation of the income tax to be forgiven or a copy of Worksheet A or B. Irs tax return forms 2011 If filing Form 1040 or Form 1040NR, also attach any Forms W–2. Irs tax return forms 2011 If the total forgiven tax liability for all eligible years is less than $10,000, attach to the decedent's final return a computation of the additional tax payment allowed or a copy of Worksheet C. Irs tax return forms 2011 Also, please write one of the following across the top of page 1 of each return. Irs tax return forms 2011 KITA—Oklahoma City KITA—9/11 KITA—Anthrax “KITA” means “killed in terrorist attack. Irs tax return forms 2011 ” Need a copy of a previously filed return?   You will find it easier to prepare Form 1040X if you have a copy of the decedent's previously filed tax return. Irs tax return forms 2011 If you need a copy, use Form 4506. Irs tax return forms 2011 The IRS will provide a free copy of the tax return if you write “DISASTER” in the top margin of Form 4506. Irs tax return forms 2011 Attach Letters Testamentary or other evidence to establish that you are authorized to act for the decedent's estate. Irs tax return forms 2011 Send Form 4506 to the address shown in the form instructions. Irs tax return forms 2011 Taxpayer identification number. Irs tax return forms 2011   A taxpayer identification number must be furnished on the decedent's returns. Irs tax return forms 2011 This is usually the decedent's social security number (SSN). Irs tax return forms 2011 However, a nonresident alien who is not eligible to get an SSN should have an individual taxpayer identification number (ITIN). Irs tax return forms 2011 If the decedent was a nonresident alien, had neither an SSN nor an ITIN, and was not required to file a U. Irs tax return forms 2011 S. Irs tax return forms 2011 income tax return for any tax year, do not apply for an ITIN. Irs tax return forms 2011 You may claim a refund by filing Form 1040NR without an SSN or ITIN. Irs tax return forms 2011 Necessary Documents Please attach the following documents to the return or amended return. Irs tax return forms 2011 Proof of death. Irs tax return forms 2011   Attach a copy of the death certificate. Irs tax return forms 2011 If the Department of Defense issued DD Form 1300, Report of Casualty, you can attach that form instead of the death certificate. Irs tax return forms 2011 Form 1310. Irs tax return forms 2011   You must send Form 1310 with all returns and claims for refund, unless either of the following applies. Irs tax return forms 2011 You are a surviving spouse filing an original or amended joint return with the decedent. Irs tax return forms 2011 You are a personal representative filing an original Form 1040 or Form 1040NR for the decedent and a court certificate showing your appointment is attached to the return. Irs tax return forms 2011 A personal representative is an executor or administrator of a decedent's estate, as certified or appointed by the court. Irs tax return forms 2011 A copy of the decedent's will cannot be accepted as evidence that you are the personal representative. Irs tax return forms 2011      If you have proof of death but do not have enough tax information to file a timely claim for a refund, file Form 1040X with Form 1310. Irs tax return forms 2011 Include a statement saying an amended return will be filed as soon as the necessary tax information is available. Irs tax return forms 2011 Where To File The IRS has set up a special office for processing returns and claims for tax forgiveness. Irs tax return forms 2011 Use one of the addresses shown below. Irs tax return forms 2011 Where you file the returns or claims depends on whether you use the U. Irs tax return forms 2011 S. Irs tax return forms 2011 Postal Service or a private delivery service. Irs tax return forms 2011 Please do not send these returns or claims to any of the addresses shown in the tax form instructions. Irs tax return forms 2011 U. Irs tax return forms 2011 S. Irs tax return forms 2011 Postal Service. Irs tax return forms 2011   If you use the U. Irs tax return forms 2011 S. Irs tax return forms 2011 Postal Service, file these returns and claims at the following address. Irs tax return forms 2011 Internal Revenue Service P. Irs tax return forms 2011 O. Irs tax return forms 2011 Box 4053 Woburn, MA 01888 Private delivery service. Irs tax return forms 2011   Private delivery services cannot deliver items to P. Irs tax return forms 2011 O. Irs tax return forms 2011 boxes. Irs tax return forms 2011 If you use a private delivery service, file these returns and claims at the following address. Irs tax return forms 2011 Internal Revenue Service Stop 661 310 Lowell St. Irs tax return forms 2011 Andover, MA 01810 Designated private delivery services. Irs tax return forms 2011   You can use the following private delivery services to file these returns and claims. Irs tax return forms 2011 Airborne Express (Airborne): Overnight Air Express Service, Next Afternoon Service, and Second Day Service. Irs tax return forms 2011 DHL Worldwide Express (DHL): DHL “Same Day” Service, and DHL USA Overnight. Irs tax return forms 2011 Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, and FedEx 2Day. Irs tax return forms 2011 United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. Irs tax return forms 2011 M. Irs tax return forms 2011 , UPS Worldwide Express Plus, and UPS Worldwide Express. Irs tax return forms 2011 The private delivery service can tell you how to get written proof of the mailing date. Irs tax return forms 2011 Payments to Survivors The following section discusses the tax treatment of certain amounts received by survivors. Irs tax return forms 2011 September 11th Victim Compensation Fund of 2001 Payments from the September 11th Victim Compensation Fund of 2001 are not included in income. Irs tax return forms 2011 Qualified Disaster Relief Payments Qualified disaster relief payments are not included in income. Irs tax return forms 2011 These payments are not subject to income tax, self-employment tax, or employment taxes (social security, Medicare, and federal unemployment taxes). Irs tax return forms 2011 No withholding applies to these payments. Irs tax return forms 2011 Qualified disaster relief payments include payments you receive (regardless of the source) after September 10, 2001, for the following expenses. Irs tax return forms 2011 Reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a terrorist attack. Irs tax return forms 2011 Reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence due to a terrorist attack. Irs tax return forms 2011 (A personal residence can be a rented residence or one you own. Irs tax return forms 2011 ) Reasonable and necessary expenses incurred for the repair or replacement of the contents of a personal residence due to a terrorist attack. Irs tax return forms 2011 Qualified disaster relief payments also include the following. Irs tax return forms 2011 Payments made by common carriers (for example, American Airlines and United Airlines regarding the September 11 attacks) because of death or physical injury incurred as a result of a terrorist attack. Irs tax return forms 2011 Amounts paid by a federal, state, or local government in connection with a terrorist attack to those affected by the attack. Irs tax return forms 2011 Qualified disaster relief payments do not include: Insurance or other reimbursements for expenses, or Income replacement payments, such as payments of lost wages, lost business income, or unemployment compensation. Irs tax return forms 2011 Disability Payments For tax years ending after September 10, 2001, disability payments for injuries incurred as a direct result of a terrorist attack directed against the United States (or its allies), whether outside or within the United States, are not included in income. Irs tax return forms 2011 Death Benefits Payments received by an individual or the estate of a decedent from the employer of an employee who died as a result of the Oklahoma City or September 11 terrorist attacks, or as a result of the anthrax attacks, are not included in income. Irs tax return forms 2011 Only the amount that exceeds the benefits that would have been payable if the death had occurred for a reason other than a terrorist or anthrax attack is excludable. Irs tax return forms 2011 However, the exclusion does apply to incidental death benefits paid under a qualified retirement plan even if these amounts would have been payable if the death had occurred for a reason other than a terrorist or anthrax attack. Irs tax return forms 2011 If you included death benefits in income on a previously filed return and they are now excludable under the above rule, file Form 1040X to amend that return. Irs tax return forms 2011 For information on the period for filing Form 1040X, see Period for filing claim for credit or refund earlier under Refund of Taxes Paid. Irs tax return forms 2011 If that period has expired, you are granted an extension. Irs tax return forms 2011 You have until January 22, 2003, to file Form 1040X to exclude the death benefits. Irs tax return forms 2011 On top of page 1 of Form 1040X, write “Extension of Limitations Under PL 107–134, sec. Irs tax return forms 2011 102(b)(2). Irs tax return forms 2011 ” Canceled Debt Canceled debt is not included in your income (or the income of the estate) if: You (or the estate) were liable, or became liable, for the debt of a decedent, and The debt was canceled after September 10, 2001, and before January 1, 2002, because the decedent died as a result of the September 11 attacks or anthrax attacks. Irs tax return forms 2011 The lender is not required to report the canceled debt on Form 1099–C, Cancellation of Debt. Irs tax return forms 2011 Payments to Survivors of Public Safety Officers If you are a survivor of a public safety officer who died in the line of duty, certain amounts you receive are not included in income. Irs tax return forms 2011 Bureau of Justice Assistance payments. Irs tax return forms 2011   If you are a surviving dependent of a public safety officer (law enforcement officer or firefighter) who died in the line of duty, do not include in your income the death benefit paid to you by the Bureau of Justice Assistance. Irs tax return forms 2011 Government plan annuity. Irs tax return forms 2011   If you receive a survivor annuity as the child or spouse (or former spouse) of a public safety officer who was killed in the line of duty, you generally do not have to include it in income. Irs tax return forms 2011 This exclusion applies to the amount of the annuity based on the officer's service as a public safety officer. Irs tax return forms 2011 For this purpose, the term public safety officer includes police and law enforcement officers, firefighters, and rescue squad and ambulance crews. Irs tax return forms 2011 More information. Irs tax return forms 2011   For more information, see Publication 559. Irs tax return forms 2011 Postponed Tax Deadlines The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a terrorist attack. Irs tax return forms 2011 The tax deadlines the IRS may postpone include those for filing income and employment tax returns, paying income and employment taxes, and making contributions to a traditional IRA or Roth IRA. Irs tax return forms 2011 If any tax deadline is postponed, the IRS will publicize the postponement in the affected area and publish a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin (IRB). Irs tax return forms 2011 Affected taxpayers. Irs tax return forms 2011   If the IRS postpones a tax deadline, the following taxpayers are eligible for the postponement. Irs tax return forms 2011 Any individual whose main home is located in a covered area (defined later). Irs tax return forms 2011 Any business entity or sole proprietor whose principal place of business is located in a covered area. Irs tax return forms 2011 Any individual, business entity, or sole proprietor whose records needed to meet a postponed deadline are maintained in a covered area. Irs tax return forms 2011 The main home or principal place of business does not have to be located in the covered area. Irs tax return forms 2011 Any estate or trust whose tax records necessary to meet a postponed tax deadline are maintained in a covered area. Irs tax return forms 2011 Any individual who is a relief worker affiliated with a recognized government or philanthropic organization and who is assisting in a covered area. Irs tax return forms 2011 The spouse on a joint return with a taxpayer who is eligible for postponements. Irs tax return forms 2011 Any other person determined by the IRS to be affected by a terrorist attack. Irs tax return forms 2011 Covered area. Irs tax return forms 2011   This is an area in which a terrorist attack took place and in which the IRS has decided to postpone tax deadlines for up to 1 year. Irs tax return forms 2011 Abatement of interest. Irs tax return forms 2011   The IRS may abate (forgive) the interest on any underpaid income tax for the length of any postponement. Irs tax return forms 2011 Disaster Area Losses If your property was damaged or destroyed as a result of the September 11 attacks, you can choose to deduct your disaster loss on your 2000 return (or amended return) rather than on your 2001 return. Irs tax return forms 2011 You must make this choice to deduct your loss on your 2000 return by the later of the following dates. Irs tax return forms 2011 The due date (without extensions) for filing your 2001 income tax return (April 15, 2002, if you are a calendar year taxpayer). Irs tax return forms 2011 The due date (with extensions) for the 2000 return. Irs tax return forms 2011 For more information about disaster area losses, see Publication 547. Irs tax return forms 2011 Estate Tax Reduction The federal estate tax is reduced for taxable estates of individuals who died as a result of the Oklahoma City attack, the September 11 attacks, and the anthrax attacks. Irs tax return forms 2011 The estate tax is computed using a new rate schedule on page 25 of the November 2001 revision of the instructions for Form 706. Irs tax return forms 2011 The estate tax is reduced by credits against the estate tax, including the unified credit and the state death tax credit. Irs tax return forms 2011 These credits may reduce or eliminate the estate tax due. Irs tax return forms 2011 A special rule extends until January 22, 2003, the period of time allowed to file a claim for a refund of estate taxes that have been paid. Irs tax return forms 2011 Recovery from the September 11th Victim Compensation Fund. Irs tax return forms 2011   The value of claims for a decedent's pain and suffering is normally included in the gross estate. Irs tax return forms 2011 However, if the estate chooses to seek recovery from this fund, the IRS has determined that, in view of the unique circumstances of this situation and the high likelihood that such claims will be valued at a nominal or zero amount, the claims will be valued at zero for estate tax purposes. Irs tax return forms 2011 Thus, there are no federal estate tax consequences if an estate or beneficiary receives a recovery from this fund. Irs tax return forms 2011 Which estates must file a return. Irs tax return forms 2011   For decedents dying in 2001, Form 706 must be filed by the executor for the estate of every U. Irs tax return forms 2011 S. Irs tax return forms 2011 citizen or resident whose gross estate, plus adjusted taxable gifts and specific exemption, is more than $675,000. Irs tax return forms 2011 Form 706 must be filed within 9 months after the date of decedent's death unless you receive an extension of time to file. Irs tax return forms 2011 Use Form 4768, Application for Extension of Time To File a Return and/or Pay U. Irs tax return forms 2011 S. Irs tax return forms 2011 Estate (and Generation-Skipping Transfer) Taxes, to apply for an extension. Irs tax return forms 2011 Where to file. Irs tax return forms 2011   Returns on which the new rate schedule is used should be sent to the following address, which was not available when Form 706 went to print. Irs tax return forms 2011 Internal Revenue Service E & G Department/Stop 824T 201 W. Irs tax return forms 2011 Rivercenter Blvd. Irs tax return forms 2011 Covington, KY 41011 More information. Irs tax return forms 2011   For more information on the federal estate tax, see the instructions for Form 706. Irs tax return forms 2011 Structured Settlement Factoring Transactions A person who acquires payment rights in a structured settlement arrangement after February 21, 2002, may be subject to a 40% excise tax unless the transfer of the payment rights was approved in advance in a qualified order. Irs tax return forms 2011 The excise tax is figured on the excess of the undiscounted amount of the payments being acquired over the total amount actually paid to acquire them. Irs tax return forms 2011 However, this tax will not apply to transactions entered into from February 22, 2002, to July 1, 2002, if certain requirements are met. Irs tax return forms 2011 For information about these requirements, see Internal Revenue Code section 5891. Irs tax return forms 2011 Worksheet B Illustrated. Irs tax return forms 2011 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Irs tax return forms 2011 1 2000 2001   2 Enter the decedent's taxable income. Irs tax return forms 2011 Figure taxable income as if a separate return had been filed. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 2 $17,259 $14,295   3 Enter the decedent's total tax. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 3 6,123 5,250   4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 4 3,532 3,109   5 Subtract line 4 from line 3. Irs tax return forms 2011 5 2,591 2,141   6 Enter the surviving spouse's taxable income. Irs tax return forms 2011 Figure taxable income as if a separate return had been filed. Irs tax return forms 2011 See the instructions for line 2. Irs tax return forms 2011 6 29,025 29,850   7 Enter the surviving spouse's total tax. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 7 5,277 5,391   8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Irs tax return forms 2011 8 0 0   9 Subtract line 8 from line 7. Irs tax return forms 2011 9 5,277 5,391   10 Add lines 5 and 9. Irs tax return forms 2011 10 7,868 7,532   11 Enter the total tax from the joint return. Irs tax return forms 2011 See Table 1 on page 5 for the line number for years before 2002. Irs tax return forms 2011 11 10,789 9,728   12 Add lines 4 and 8. Irs tax return forms 2011 12 3,532 3,109   13 Subtract line 12 from line 11. Irs tax return forms 2011 13 7,257 6,619   14 Divide line 5 by line 10. Irs tax return forms 2011 Enter the result as a decimal. Irs tax return forms 2011 14 . Irs tax return forms 2011 329 . Irs tax return forms 2011 284   15 Tax to be forgiven. Irs tax return forms 2011 Multiply line 13 by line 14 and enter the result. Irs tax return forms 2011 15 $2,388 $1,880   Note. Irs tax return forms 2011 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Irs tax return forms 2011 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Irs tax return forms 2011 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Irs tax return forms 2011 The IRS will determine the amount to be refunded. Irs tax return forms 2011 Worksheet B Illustrated. Irs tax return forms 2011 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Irs tax return forms 2011 1 2000 2001   2 Enter the decedent's taxable income. Irs tax return forms 2011 Figure taxable income as if a separate return had been filed. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 2 $17,259 $14,295   3 Enter the decedent's total tax. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 3 6,123 5,250   4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 4 3,532 3,109   5 Subtract line 4 from line 3. Irs tax return forms 2011 5 2,591 2,141   6 Enter the surviving spouse's taxable income. Irs tax return forms 2011 Figure taxable income as if a separate return had been filed. Irs tax return forms 2011 See the instructions for line 2. Irs tax return forms 2011 6 29,025 29,850   7 Enter the surviving spouse's total tax. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 7 5,277 5,391   8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Irs tax return forms 2011 8 0 0   9 Subtract line 8 from line 7. Irs tax return forms 2011 9 5,277 5,391   10 Add lines 5 and 9. Irs tax return forms 2011 10 7,868 7,532   11 Enter the total tax from the joint return. Irs tax return forms 2011 See Table 1 on page 5 for the line number for years before 2002. Irs tax return forms 2011 11 10,789 9,728   12 Add lines 4 and 8. Irs tax return forms 2011 12 3,532 3,109   13 Subtract line 12 from line 11. Irs tax return forms 2011 13 7,257 6,619   14 Divide line 5 by line 10. Irs tax return forms 2011 Enter the result as a decimal. Irs tax return forms 2011 14 . Irs tax return forms 2011 329 . Irs tax return forms 2011 284   15 Tax to be forgiven. Irs tax return forms 2011 Multiply line 13 by line 14 and enter the result. Irs tax return forms 2011 15 $2,388 $1,880   Note. Irs tax return forms 2011 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Irs tax return forms 2011 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Irs tax return forms 2011 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Irs tax return forms 2011 The IRS will determine the amount to be refunded. Irs tax return forms 2011 Illustrated Worksheets B and C A wife lost her husband in the September 11 attack on the World Trade Center. Irs tax return forms 2011 They filed a joint return for 2000 and the wife chose to file a joint return as a surviving spouse for 2001. Irs tax return forms 2011 The returns for 2000 and 2001 showed the following income, deductions, and tax liabilities. Irs tax return forms 2011 After the husband died, his estate received income of $4,000. Irs tax return forms 2011 Of that amount, $1,000 is net profit from Schedule C received before the end of 2001. Irs tax return forms 2011 This net profit is exempt from income tax as explained earlier under Income received after date of death. Irs tax return forms 2011 The wife files Form 1041 because the gross income of the estate for the tax year ($3,000) is $600 or more. Irs tax return forms 2011 To determine how much of the husband's tax liability for 2000 and 2001 is to be forgiven, the wife completes Worksheet B. Irs tax return forms 2011 She also completes Worksheet C because the forgiven tax liabilities for 2000 and 2001 (line 15 of Worksheet B) total less than $10,000. Irs tax return forms 2011 To claim tax relief for 2000, the wife files Form 1040X and attaches a copy of Worksheet B. Irs tax return forms 2011 To claim tax relief for 2001, she files Form 1040 and attaches copies of Worksheets B and C. Irs tax return forms 2011   2000 2001 Wages (wife) $35,000 $36,000 Net profit from Schedule C, Profit or Loss From Business (husband) 25,000 22,000 Interest income (joint account) 1,000 1,100 Deduction for ½ of self-employment tax (husband) (1,766) (1,555) Standard deduction (7,350) (7,600) Personal exemptions (2) (5,600) (5,800) Taxable income $46,284 $44,145 Joint income tax liability $7,257 $6,619 Plus: Self-employment tax (husband) 3,532 3,109 Total tax liability $10,789 $9,728   2000 2001 Wages (wife) $35,000 $36,000 Net profit from Schedule C, Profit or Loss From Business (husband) 25,000 22,000 Interest income (joint account) 1,000 1,100 Deduction for ½ of self-employment tax (husband) (1,766) (1,555) Standard deduction (7,350) (7,600) Personal exemptions (2) (5,600) (5,800) Taxable income $46,284 $44,145 Joint income tax liability $7,257 $6,619 Plus: Self-employment tax (husband) 3,532 3,109 Total tax liability $10,789 $9,728 Worksheet C Illustrated. Irs tax return forms 2011 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. Irs tax return forms 2011 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Irs tax return forms 2011 1 Minimum relief amount. Irs tax return forms 2011 Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Irs tax return forms 2011 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2 2,400     3 Enter the distribution deduction from line 18 (Form 1041) . Irs tax return forms 2011 3 0     4 Add lines 2 and 3. Irs tax return forms 2011 4 2,400     5 Enter exempt income received after death minus expenses allocable to exempt income. Irs tax return forms 2011 (See Income received after date of death on page 5. Irs tax return forms 2011 ) 5 1,000     6 Add lines 4 and 5. Irs tax return forms 2011 6 3,400     7 Figure the tax on line 6 using Schedule G (Form 1041). Irs tax return forms 2011 7 710     8 Figure the tax on line 4 using Schedule G (Form 1041). Irs tax return forms 2011 8 435     9 Tax on exempt income. Irs tax return forms 2011 Subtract line 8 from line 7. Irs tax return forms 2011 9 275     10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Irs tax return forms 2011 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Irs tax return forms 2011 10 4,268     11 Add lines 9 and 10. Irs tax return forms 2011 11 $4,543 12 Additional payment allowed. Irs tax return forms 2011 If line 11 is $10,000 or more, enter -0- and stop here. Irs tax return forms 2011 No additional amount is allowed as a tax payment. Irs tax return forms 2011 Otherwise, subtract line 11 from line 1 and enter the result. Irs tax return forms 2011 12 $5,457 Note. Irs tax return forms 2011 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Irs tax return forms 2011 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Irs tax return forms 2011 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Irs tax return forms 2011 Write "Sec. Irs tax return forms 2011 692(d)(2) Payment" and the amount to the right of the entry space. Irs tax return forms 2011 Also indicate whether a Form 1041 is being filed for the decedent's estate. Irs tax return forms 2011 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Irs tax return forms 2011 Write “Sec. Irs tax return forms 2011 692(d)(2) Payment” on the dotted line to the left of the entry space. Irs tax return forms 2011 Worksheet C Illustrated. Irs tax return forms 2011 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. Irs tax return forms 2011 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Irs tax return forms 2011 1 Minimum relief amount. Irs tax return forms 2011 Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Irs tax return forms 2011 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2 2,400     3 Enter the distribution deduction from line 18 (Form 1041) . Irs tax return forms 2011 3 0     4 Add lines 2 and 3. Irs tax return forms 2011 4 2,400     5 Enter exempt income received after death minus expenses allocable to exempt income. Irs tax return forms 2011 (See Income received after date of death on page 5. Irs tax return forms 2011 ) 5 1,000     6 Add lines 4 and 5. Irs tax return forms 2011 6 3,400     7 Figure the tax on line 6 using Schedule G (Form 1041). Irs tax return forms 2011 7 710     8 Figure the tax on line 4 using Schedule G (Form 1041). Irs tax return forms 2011 8 435     9 Tax on exempt income. Irs tax return forms 2011 Subtract line 8 from line 7. Irs tax return forms 2011 9 275     10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Irs tax return forms 2011 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Irs tax return forms 2011 10 4,268     11 Add lines 9 and 10. Irs tax return forms 2011 11 $4,543 12 Additional payment allowed. Irs tax return forms 2011 If line 11 is $10,000 or more, enter -0- and stop here. Irs tax return forms 2011 No additional amount is allowed as a tax payment. Irs tax return forms 2011 Otherwise, subtract line 11 from line 1 and enter the result. Irs tax return forms 2011 12 $5,457 Note. Irs tax return forms 2011 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Irs tax return forms 2011 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Irs tax return forms 2011 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Irs tax return forms 2011 Write "Sec. Irs tax return forms 2011 692(d)(2) Payment" and the amount to the right of the entry space. Irs tax return forms 2011 Also indicate whether a Form 1041 is being filed for the decedent's estate. Irs tax return forms 2011 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Irs tax return forms 2011 Write “Sec. Irs tax return forms 2011 692(d)(2) Payment” on the dotted line to the left of the entry space. Irs tax return forms 2011 Additional Worksheets The following additional worksheets are provided for your convenience. Irs tax return forms 2011 Worksheet A. Irs tax return forms 2011 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Return as Single, Married Filing Separately, Head of Household, or Qualifying Widow(er))         (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for tax forgiveness. Irs tax return forms 2011 1       2 Enter the total tax from the decedent's income tax return. Irs tax return forms 2011 See Table 1 on page 5 for the line number for years before 2002. Irs tax return forms 2011 2       3 Enter the following taxes, if any, shown on the decedent's income tax return. Irs tax return forms 2011 (These taxes are not eligible for forgiveness. Irs tax return forms 2011 )           a Self-employment tax. Irs tax return forms 2011 3a         b Social security and Medicare tax on tip income not reported to employer. Irs tax return forms 2011 3b         c Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). Irs tax return forms 2011 3c         d Tax on excess accumulation in qualified retirement plans. Irs tax return forms 2011 3d         e Household employment taxes. Irs tax return forms 2011 3e         f Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. Irs tax return forms 2011 3f         g Tax on golden parachute payments. Irs tax return forms 2011 3g       4 Add lines 3a through 3g. Irs tax return forms 2011 4       5 Tax to be forgiven. Irs tax return forms 2011 Subtract line 4 from line 2. Irs tax return forms 2011 5       Note. Irs tax return forms 2011 If the total of columns (A), (B), and (C) of line 5 (including any amounts shown on line 15 of Worksheet B) is less than $10,000, also complete Worksheet C. Irs tax return forms 2011 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Irs tax return forms 2011 If filing Form 1040X for an eligible year, enter the amount from line 5 above on Form 1040X in column B of line 10 as a decrease in tax. Irs tax return forms 2011 The IRS will determine the amount to be refunded. Irs tax return forms 2011 Worksheet A. Irs tax return forms 2011 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Return as Single, Married Filing Separately, Head of Household, or Qualifying Widow(er))         (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for tax forgiveness. Irs tax return forms 2011 1       2 Enter the total tax from the decedent's income tax return. Irs tax return forms 2011 See Table 1 on page 5 for the line number for years before 2002. Irs tax return forms 2011 2       3 Enter the following taxes, if any, shown on the decedent's income tax return. Irs tax return forms 2011 (These taxes are not eligible for forgiveness. Irs tax return forms 2011 )           a Self-employment tax. Irs tax return forms 2011 3a         b Social security and Medicare tax on tip income not reported to employer. Irs tax return forms 2011 3b         c Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). Irs tax return forms 2011 3c         d Tax on excess accumulation in qualified retirement plans. Irs tax return forms 2011 3d         e Household employment taxes. Irs tax return forms 2011 3e         f Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. Irs tax return forms 2011 3f         g Tax on golden parachute payments. Irs tax return forms 2011 3g       4 Add lines 3a through 3g. Irs tax return forms 2011 4       5 Tax to be forgiven. Irs tax return forms 2011 Subtract line 4 from line 2. Irs tax return forms 2011 5       Note. Irs tax return forms 2011 If the total of columns (A), (B), and (C) of line 5 (including any amounts shown on line 15 of Worksheet B) is less than $10,000, also complete Worksheet C. Irs tax return forms 2011 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Irs tax return forms 2011 If filing Form 1040X for an eligible year, enter the amount from line 5 above on Form 1040X in column B of line 10 as a decrease in tax. Irs tax return forms 2011 The IRS will determine the amount to be refunded. Irs tax return forms 2011 Worksheet B. Irs tax return forms 2011 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Irs tax return forms 2011 1       2 Enter the decedent's taxable income. Irs tax return forms 2011 Figure taxable income as if a separate return had been filed. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 2       3 Enter the decedent's total tax. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 4       5 Subtract line 4 from line 3. Irs tax return forms 2011 5       6 Enter the surviving spouse's taxable income. Irs tax return forms 2011 Figure taxable income as if a separate return had been filed. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 6       7 Enter the surviving spouse's total tax. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Irs tax return forms 2011 8       9 Subtract line 8 from line 7. Irs tax return forms 2011 9       10 Add lines 5 and 9. Irs tax return forms 2011 10       11 Enter the total tax from the joint return. Irs tax return forms 2011 See Table 1 on page 5 for the line number for years before 2002. Irs tax return forms 2011 11       12 Add lines 4 and 8. Irs tax return forms 2011 12       13 Subtract line 12 from line 11. Irs tax return forms 2011 13       14 Divide line 5 by line 10. Irs tax return forms 2011 Enter the result as a decimal. Irs tax return forms 2011 14       15 Tax to be forgiven. Irs tax return forms 2011 Multiply line 13 by line 14 and enter the result. Irs tax return forms 2011 15       Note. Irs tax return forms 2011 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Irs tax return forms 2011 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Irs tax return forms 2011 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Irs tax return forms 2011 The IRS will determine the amount to be refunded. Irs tax return forms 2011 Worksheet B. Irs tax return forms 2011 Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. Irs tax return forms 2011 1       2 Enter the decedent's taxable income. Irs tax return forms 2011 Figure taxable income as if a separate return had been filed. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 2       3 Enter the decedent's total tax. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 4       5 Subtract line 4 from line 3. Irs tax return forms 2011 5       6 Enter the surviving spouse's taxable income. Irs tax return forms 2011 Figure taxable income as if a separate return had been filed. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 6       7 Enter the surviving spouse's total tax. Irs tax return forms 2011 See the instructions. Irs tax return forms 2011 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. Irs tax return forms 2011 8       9 Subtract line 8 from line 7. Irs tax return forms 2011 9       10 Add lines 5 and 9. Irs tax return forms 2011 10       11 Enter the total tax from the joint return. Irs tax return forms 2011 See Table 1 on page 5 for the line number for years before 2002. Irs tax return forms 2011 11       12 Add lines 4 and 8. Irs tax return forms 2011 12       13 Subtract line 12 from line 11. Irs tax return forms 2011 13       14 Divide line 5 by line 10. Irs tax return forms 2011 Enter the result as a decimal. Irs tax return forms 2011 14       15 Tax to be forgiven. Irs tax return forms 2011 Multiply line 13 by line 14 and enter the result. Irs tax return forms 2011 15       Note. Irs tax return forms 2011 If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. Irs tax return forms 2011 Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. Irs tax return forms 2011 If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. Irs tax return forms 2011 The IRS will determine the amount to be refunded. Irs tax return forms 2011 Worksheet C. Irs tax return forms 2011 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum tax forgiveness of $10,000. Irs tax return forms 2011 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Irs tax return forms 2011 1 Minimum tax forgiveness. Irs tax return forms 2011 Note. Irs tax return forms 2011 Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Irs tax return forms 2011 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . Irs tax return forms 2011 3       4 Add lines 2 and 3. Irs tax return forms 2011 4       5 Enter exempt income received after death minus expenses allocable to exempt income. Irs tax return forms 2011 (See Income received after date of death on page 5. Irs tax return forms 2011 ) 5       6 Add lines 4 and 5. Irs tax return forms 2011 6       7 Figure the tax on line 6 using Schedule G (Form 1041). Irs tax return forms 2011 7       8 Figure the tax on line 4 using Schedule G (Form 1041). Irs tax return forms 2011 8       9 Tax on exempt income. Irs tax return forms 2011 Subtract line 8 from line 7. Irs tax return forms 2011 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Irs tax return forms 2011 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Irs tax return forms 2011 10       11 Add lines 9 and 10. Irs tax return forms 2011 11   12 Additional payment allowed. Irs tax return forms 2011 If line 11 is $10,000 or more, enter -0- and stop here. Irs tax return forms 2011 No additional amount is allowed as a tax payment. Irs tax return forms 2011 Otherwise, subtract line 11 from line 1 and enter the result. Irs tax return forms 2011 12   Note. Irs tax return forms 2011 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Irs tax return forms 2011 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Irs tax return forms 2011 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Irs tax return forms 2011 Write "Sec. Irs tax return forms 2011 692(d)(2) Payment" and the amount to the right of the entry space. Irs tax return forms 2011 Also indicate whether a Form 1041 is being filed for the decedent's estate. Irs tax return forms 2011 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Irs tax return forms 2011 Write “Sec. Irs tax return forms 2011 692(d)(2) Payment” on the dotted line to the left of the entry space. Irs tax return forms 2011 Worksheet C. Irs tax return forms 2011 Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum tax forgiveness of $10,000. Irs tax return forms 2011 Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. Irs tax return forms 2011 1 Minimum tax forgiveness. Irs tax return forms 2011 Note. Irs tax return forms 2011 Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. Irs tax return forms 2011 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . Irs tax return forms 2011 3       4 Add lines 2 and 3. Irs tax return forms 2011 4       5 Enter exempt income received after death minus expenses allocable to exempt income. Irs tax return forms 2011 (See Income received after date of death on page 5. Irs tax return forms 2011 ) 5       6 Add lines 4 and 5. Irs tax return forms 2011 6       7 Figure the tax on line 6 using Schedule G (Form 1041). Irs tax return forms 2011 7       8 Figure the tax on line 4 using Schedule G (Form 1041). Irs tax return forms 2011 8       9 Tax on exempt income. Irs tax return forms 2011 Subtract line 8 from line 7. Irs tax return forms 2011 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. Irs tax return forms 2011 If the decedent was not required to file tax returns for the eligible tax years, enter -0-. Irs tax return forms 2011 10       11 Add lines 9 and 10. Irs tax return forms 2011 11   12 Additional payment allowed. Irs tax return forms 2011 If line 11 is $10,000 or more, enter -0- and stop here. Irs tax return forms 2011 No additional amount is allowed as a tax payment. Irs tax return forms 2011 Otherwise, subtract line 11 from line 1 and enter the result. Irs tax return forms 2011 12   Note. Irs tax return forms 2011 The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). Irs tax return forms 2011 Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. Irs tax return forms 2011 If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Irs tax return forms 2011 Write "Sec. Irs tax return forms 2011 692(d)(2) Payment" and the amount to the right of the entry space. Irs tax return forms 2011 Also indicate whether a Form 1041 is being filed for the decedent's estate. Irs tax return forms 2011 If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Irs tax return forms 2011 Write “Sec. Irs tax return forms 2011 692(d)(2) Payment” on the dotted line to the left of the entry space. Irs tax return forms 2011 How To Get Tax Help Special IRS assistance. Irs tax return forms 2011   The IRS is providing special help for those affected by the terrorist attacks, as well as survivors and personal representatives of the victims. Irs tax return forms 2011 We have set up a special toll-free number for people who may have trouble filing or paying their taxes because they were affected by the terrorist attacks, or who have other tax issues related to the attacks. Irs tax return forms 2011 Call 1–866–562–5227 Monday through Friday In English–7 a. Irs tax return forms 2011 m. Irs tax return forms 2011 to 10 p. Irs tax return forms 2011 m. Irs tax return forms 2011 local time In Spanish–8 a. Irs tax return forms 2011 m. Irs tax return forms 2011 to 9:30 p. Irs tax return forms 2011 m. Irs tax return forms 2011 local time   The IRS web site at www. Irs tax return forms 2011 irs. Irs tax return forms 2011 gov has notices and other tax relief information. Irs tax return forms 2011 Check it periodically for any new guidance or to see if Congress has enacted new legislation. Irs tax return forms 2011   Business taxpayers affected by the attacks can e-mail their questions to corp. Irs tax return forms 2011 disaster. Irs tax return forms 2011 relief@irs. Irs tax return forms 2011 gov. Irs tax return forms 2011   For current information on Presidentially declared disaster areas, check the Federal Emergency Management Agency Web site at www. Irs tax return forms 2011 fema. Irs tax return forms 2011 gov. Irs tax return forms 2011 Other help from the IRS. Irs tax return forms 2011   You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get more information from the IRS in several ways. Irs tax return forms 2011 By selecting the method that is best for you, you will have quick and easy access to tax help. Irs tax return forms 2011 Contacting your Taxpayer Advocate. Irs tax return forms 2011   If you have attempted to deal with an IRS problem unsuccessfully, you should contact your Taxpayer Advocate. Irs tax return forms 2011   The Taxpayer Advocate represents your interests and concerns within the IRS by protecting your rights and resolving problems that have not been fixed through normal channels. Irs tax return forms 2011 While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that your case is given a complete and impartial review. Irs tax return forms 2011   To contact your Taxpayer Advocate: Call the Taxpayer Advocate at 1–877–777–4778. Irs tax return forms 2011 Call the IRS at 1–800–829–1040. Irs tax return forms 2011 Call, write, or fax the Taxpayer Advocate office in your area. Irs tax return forms 2011 Call 1–800–829–4059 if you are a TTY/TDD user. Irs tax return forms 2011   For more information, see Publication 1546, The Taxpayer Advocate Service of the IRS. Irs tax return forms 2011 Free tax services. Irs tax return forms 2011   To find out what services are available, get Publication 910, Guide to Free Tax Services. Irs tax return forms 2011 It contains a list of free tax publications and an index of tax topics. Irs tax return forms 2011 It also describes other free tax information services, including tax education and assistance programs and a list of TeleTax topics. Irs tax return forms 2011 Personal computer. Irs tax return forms 2011 With your personal computer and modem, you can access the IRS on the Internet at www. Irs tax return forms 2011 irs. Irs tax return forms 2011 gov. Irs tax return forms 2011 While visiting our web site, you can: Find answers to questions you may have. Irs tax return forms 2011 Download forms and publications or search for forms and pub
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Understanding Your CP518 Business Notice

This is a final reminder notice that our records still indicate you haven't filed a business tax return.


What you need to do

  • File your required business return immediately.
  • If eligible, file your return electronically with all required schedules, using your e-file provider, or
  • File a paper return with all required schedules
  • Complete the Response form enclosed with your notice and mail it to us, using the enclosed envelope:
    • To explain why you are filing late.
    • To explain why you don’t think you need to file.
    • If you already filed and it's been more than four weeks, or if you used a different name or employer ID number (EIN) than shown on the notice when filing.
  • If you filed within the last four weeks using the same name and EIN shown on the notice, you may disregard this notice.

You may want to...

  • Review Tax Information for Businesses which provides information regarding various business filing issues.
  • Review your records and ensure all returns are filed timely.

If we don't hear from you

  • We may determine your tax for you, and penalty and interest will continue to accrue.
  • If you are owed a refund for the current tax period, or any prior period, it may be delayed because of these unfiled return(s).

Answers to Common Questions

Why did I receive multiple CP 515 notices?
If your business hasn't filed tax returns, a notice will be generated and mailed for each tax form and tax period the IRS shows as delinquent.

I have never had employees and or filed this return previously so why did I receive a notice requesting me to file?
When you apply for an employer identification number, filing requirements are established requiring specific types of returns to be filed (e.g. Form 940, Employer's Annual Federal Unemployment Tax Return; Form 941, Employer's Quarterly Federal Tax Return; Form 1120, U.S. Corporation Income Tax Return, etc.). When the return isn't filed, the IRS considers it to be delinquent and generates a notice requesting the return be filed.

Do I still need to file a tax return even if I had no employees or business activity during the tax period(s) in question?
If you had no employees or business activity during a tax period, you aren't required to file a return for that tax period. You still need to respond to this notice. 

If you made Federal Tax Deposits or other payments or credits for the tax period, you must file a signed return showing the payments to get a refund.


Tips for next year

File all required returns by the appropriate due date.


  • Understanding your notice

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

    Notice CP518B, Page 1

    Notice CP518B, Page 2

    Notice CP518B, Page 3

    Notice CP518B, Page 4

    Notice CP518B, Page 5

Page Last Reviewed or Updated: 09-Jan-2014

Printable samples of this notice (PDF)

 

 

How to get help

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

The Irs Tax Return Forms 2011

Irs tax return forms 2011 Publication 514 - Main Content Table of Contents Choosing To Take Credit or DeductionChoice Applies to All Qualified Foreign Taxes Making or Changing Your Choice Why Choose the Credit?Credit for Taxes Paid or Accrued Foreign Currency and Exchange Rates Foreign Tax Redetermination Who Can Take the Credit?U. Irs tax return forms 2011 S. Irs tax return forms 2011 Citizens Resident Aliens Nonresident Aliens What Foreign Taxes Qualify for the Credit?Tax Must Be Imposed on You You Must Have Paid or Accrued the Tax Tax Must Be the Legal and Actual Foreign Tax Liability Tax Must Be an Income Tax (or Tax in Lieu of Income Tax) Foreign Taxes for Which You Cannot Take a CreditTaxes on Excluded Income Taxes for Which You Can Only Take an Itemized Deduction Taxes on Foreign Mineral Income Taxes From International Boycott Operations Taxes on Combined Foreign Oil and Gas Income Taxes of U. Irs tax return forms 2011 S. Irs tax return forms 2011 Persons Controlling Foreign Corporations and Partnerships Taxes Related to a Foreign Tax Credit Splitting Event How To Figure the CreditLimit on the Credit Separate Limit Income Allocation of Foreign Taxes Foreign Taxes From a Partnership or an S Corporation Figuring the Limit Qualified Dividends Capital Gains and Losses Allocation of Foreign and U. Irs tax return forms 2011 S. Irs tax return forms 2011 Losses Tax Treaties Carryback and CarryoverTime Limit on Tax Assessment Claim for Refund Taxes All Credited or All Deducted Married Couples How To Claim the CreditForm 1116 Records To Keep Simple Example — Filled-In Form 1116Part I—Taxable Income or Loss From Sources Outside the United States (for Category Checked Above) Part II—Foreign Taxes Paid or Accrued Part III—Figuring the Credit Part IV—Summary of Credits From Separate Parts III Comprehensive Example — Filled-In Form 1116Foreign earned income. Irs tax return forms 2011 Employee business expenses. Irs tax return forms 2011 Forms 1116 Computation of Taxable Income Part I—Taxable Income or Loss From Sources Outside the United States (for Category Checked Above) Part II—Foreign Taxes Paid or Accrued Part III—Figuring the Credit Part IV—Summary of Credits From Separate Parts III Unused Foreign Taxes How To Get Tax HelpLow Income Taxpayer Clinics Choosing To Take Credit or Deduction You can choose whether to take the amount of any qualified foreign taxes paid or accrued during the year as a foreign tax credit or as an itemized deduction. Irs tax return forms 2011 You can change your choice for each year's taxes. Irs tax return forms 2011 To choose the foreign tax credit, in most cases you must complete Form 1116 and attach it to your U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax return. Irs tax return forms 2011 However, you may qualify for the exception that allows you to claim the foreign tax credit without using Form 1116. Irs tax return forms 2011 See How To Figure the Credit , later. Irs tax return forms 2011 To choose to claim the taxes as an itemized deduction, use Schedule A (Form 1040), Itemized Deductions. Irs tax return forms 2011 Figure your tax both ways—claiming the credit and claiming the deduction. Irs tax return forms 2011 Then fill out your return the way that benefits you more. Irs tax return forms 2011 See Why Choose the Credit, later. Irs tax return forms 2011 Choice Applies to All Qualified Foreign Taxes As a general rule, you must choose to take either a credit or a deduction for all qualified foreign taxes. Irs tax return forms 2011 If you choose to take a credit for qualified foreign taxes, you must take the credit for all of them. Irs tax return forms 2011 You cannot deduct any of them. Irs tax return forms 2011 Conversely, if you choose to deduct qualified foreign taxes, you must deduct all of them. Irs tax return forms 2011 You cannot take a credit for any of them. Irs tax return forms 2011 See What Foreign Taxes Qualify for the Credit , later, for the meaning of qualified foreign taxes. Irs tax return forms 2011 There are exceptions to this general rule, which are described next. Irs tax return forms 2011 Exceptions for foreign taxes not allowed as a credit. Irs tax return forms 2011   Even if you claim a credit for other foreign taxes, you can deduct any foreign tax that is not allowed as a credit if: You paid the tax to a country for which a credit is not allowed because it provides support for acts of international terrorism, or because the United States does not have or does not conduct diplomatic relations with it or recognize its government and that government is not otherwise eligible to purchase defense articles or services under the Arms Export Control Act, You paid withholding tax on dividends from foreign corporations whose stock you did not hold for the required period of time, You paid withholding tax on income or gain (other than dividends) from property you did not hold for the required period of time, You paid withholding tax on income or gain to the extent you had to make related payments on positions in substantially similar or related property, You participated in or cooperated with an international boycott, You paid taxes in connection with the purchase or sale of oil or gas, or You paid or accrued taxes on income or gain in connection with a covered asset acquisition. Irs tax return forms 2011 Covered asset acquisitions include certain acquisitions that result in a stepped-up basis for U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax purposes. Irs tax return forms 2011 For more information, see Internal Revenue Code section 901(m). Irs tax return forms 2011 The IRS intends to issue guidance that will explain this provision in greater detail. Irs tax return forms 2011   For more information on these items, see Taxes for Which You Can Only Take an Itemized Deduction , later, under Foreign Taxes for Which You Cannot Take a Credit. Irs tax return forms 2011 Foreign taxes that are not income taxes. Irs tax return forms 2011   In most cases, only foreign income taxes qualify for the foreign tax credit. Irs tax return forms 2011 Other taxes, such as foreign real and personal property taxes, do not qualify. Irs tax return forms 2011 But you may be able to deduct these other taxes even if you claim the foreign tax credit for foreign income taxes. Irs tax return forms 2011   In most cases, you can deduct these other taxes only if they are expenses incurred in a trade or business or in the production of income. Irs tax return forms 2011 However, you can deduct foreign real property taxes that are not trade or business expenses as an itemized deduction on Schedule A (Form 1040). Irs tax return forms 2011 Carrybacks and carryovers. Irs tax return forms 2011   There is a limit on the credit you can claim in a tax year. Irs tax return forms 2011 If your qualified foreign taxes exceed the credit limit, you may be able to carry over or carry back the excess to another tax year. Irs tax return forms 2011 If you deduct qualified foreign taxes in a tax year, you cannot use a carryback or carryover in that year. Irs tax return forms 2011 That is because you cannot take both a deduction and a credit for qualified foreign taxes in the same tax year. Irs tax return forms 2011   For more information on the limit, see How To Figure the Credit , later. Irs tax return forms 2011 For more information on carrybacks and carryovers, see Carryback and Carryover , later. Irs tax return forms 2011 Making or Changing Your Choice You can make or change your choice to claim a deduction or credit at any time during the period within 10 years from the regular due date for filing the return (without regard to any extension of time to file) for the tax year in which the taxes were actually paid or accrued. Irs tax return forms 2011 You make or change your choice on your tax return (or on an amended return) for the year your choice is to be effective. Irs tax return forms 2011 Example. Irs tax return forms 2011 You paid foreign taxes for the last 13 years and chose to deduct them on your U. Irs tax return forms 2011 S. Irs tax return forms 2011 income tax returns. Irs tax return forms 2011 You were timely in both filing your returns and paying your U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax liability. Irs tax return forms 2011 In February 2013, you file an amended return for tax year 2002 choosing to take a credit for your 2002 foreign taxes because you now realize that the credit is more advantageous than the deduction for that year. Irs tax return forms 2011 Because the regular due date of your 2002 return was April 15, 2003, this choice is timely (within 10 years). Irs tax return forms 2011 Because there is a limit on the credit for your 2002 foreign tax, you have unused 2002 foreign taxes. Irs tax return forms 2011 Ordinarily, you first carry back unused foreign taxes arising in 2002 to, and claim them as a credit in, the 2 preceding tax years. Irs tax return forms 2011 If you are unable to claim all of them in those 2 years, you carry them forward to the 10 years following the year in which they arose. Irs tax return forms 2011 Because you originally chose to deduct your foreign taxes and the 10-year period for changing the choice for 2000 and 2001 has passed, you cannot change your choice and carry the unused 2002 foreign taxes back to tax years 2000 and 2001. Irs tax return forms 2011 Because the 10-year periods for changing the choice have not passed for your 2003 through 2012 income tax returns, you can still choose to claim the credit for those years and carry forward any unused 2002 foreign taxes. Irs tax return forms 2011 However, you must reduce the unused 2002 foreign taxes that you carry forward by the amount that would have been allowed as a carryback if you had timely carried back the foreign tax to tax years 2000 and 2001. Irs tax return forms 2011 You cannot take a credit or a deduction for foreign taxes paid on income you exclude under the foreign earned income exclusion or the foreign housing exclusion. Irs tax return forms 2011 See Foreign Earned Income and Housing Exclusions under Foreign Taxes for Which You Cannot Take a Credit, later. Irs tax return forms 2011 Why Choose the Credit? The foreign tax credit is intended to relieve you of a double tax burden when your foreign source income is taxed by both the United States and the foreign country. Irs tax return forms 2011 In most cases, if the foreign tax rate is higher than the U. Irs tax return forms 2011 S. Irs tax return forms 2011 rate, there will be no U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax on the foreign income. Irs tax return forms 2011 If the foreign tax rate is lower than the U. Irs tax return forms 2011 S. Irs tax return forms 2011 rate, U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax on the foreign income will be limited to the difference between the rates. Irs tax return forms 2011 The foreign tax credit can only reduce U. Irs tax return forms 2011 S. Irs tax return forms 2011 taxes on foreign source income; it cannot reduce U. Irs tax return forms 2011 S. Irs tax return forms 2011 taxes on U. Irs tax return forms 2011 S. Irs tax return forms 2011 source income. Irs tax return forms 2011 Although no one rule covers all situations, in most cases it is better to take a credit for qualified foreign taxes than to deduct them as an itemized deduction. Irs tax return forms 2011 This is because: A credit reduces your actual U. Irs tax return forms 2011 S. Irs tax return forms 2011 income tax on a dollar-for-dollar basis, while a deduction reduces only your income subject to tax, You can choose to take the foreign tax credit even if you do not itemize your deductions. Irs tax return forms 2011 You then are allowed the standard deduction in addition to the credit, and If you choose to take the foreign tax credit, and the taxes paid or accrued exceed the credit limit for the tax year, you may be able to carry over or carry back the excess to another tax year. Irs tax return forms 2011 (See Limit on credit under How To Figure the Credit, later. Irs tax return forms 2011 ) Example 1. Irs tax return forms 2011 For 2013, you and your spouse have adjusted gross income of $80,300, including $20,000 of dividend income from foreign sources. Irs tax return forms 2011 None of the dividends are qualified dividends. Irs tax return forms 2011 You file a joint return and can claim two $3,900 exemptions. Irs tax return forms 2011 You had to pay $2,000 in foreign income taxes on the dividend income. Irs tax return forms 2011 If you take the foreign taxes as an itemized deduction, your total itemized deductions are $15,000. Irs tax return forms 2011 Your taxable income then is $57,500 and your tax is $7,736. Irs tax return forms 2011 If you take the credit instead, your itemized deductions are only $13,000. Irs tax return forms 2011 Your taxable income then is $59,500 and your tax before the credit is $8,036. Irs tax return forms 2011 After the credit, however, your tax is only $6,036. Irs tax return forms 2011 Therefore, your tax is $1,700 lower ($7,736 − $6,036) by taking the credit. Irs tax return forms 2011 Example 2. Irs tax return forms 2011 In 2013, you receive investment income of $5,000 from a foreign country, which imposes a tax of $1,500 on that income. Irs tax return forms 2011 You report on your U. Irs tax return forms 2011 S. Irs tax return forms 2011 return this income as well as $56,000 of U. Irs tax return forms 2011 S. Irs tax return forms 2011 source wages and an allowable $49,000 partnership loss from a U. Irs tax return forms 2011 S. Irs tax return forms 2011 partnership. Irs tax return forms 2011 Your share of the partnership's gross income is $25,000 and your share of its expenses is $74,000. Irs tax return forms 2011 You are single, entitled to one $3,900 exemption, and have other itemized deductions of $6,850. Irs tax return forms 2011 If you deduct the foreign tax on your U. Irs tax return forms 2011 S. Irs tax return forms 2011 return, your taxable income is a negative $250 ($5,000 + $56,000 − $49,000 − $1,500 − $6,850 − $3,900) and your tax is $0. Irs tax return forms 2011 If you take the credit instead, your taxable income is $1,250 ($5,000 + $56,000 − $49,000 − $3,900 − $6,850) and your tax before the credit is $126. Irs tax return forms 2011 You can take a credit of only $113 because of limits discussed later. Irs tax return forms 2011 Your tax after the credit is $13 ($126 − $113), which is $13 more than if you deduct the foreign tax. Irs tax return forms 2011 If you choose the credit, you will have unused foreign taxes of $1,387 ($1,500 − $113). Irs tax return forms 2011 When deciding whether to take the credit or the deduction this year, you will need to consider whether you can benefit from a carryback or carryover of that unused foreign tax. Irs tax return forms 2011 Credit for Taxes Paid or Accrued You can claim the credit for a qualified foreign tax in the tax year in which you pay it or accrue it, depending on your method of accounting. Irs tax return forms 2011 “Tax year” refers to the tax year for which your U. Irs tax return forms 2011 S. Irs tax return forms 2011 return is filed, not the tax year for which your foreign return is filed. Irs tax return forms 2011 Accrual method of accounting. Irs tax return forms 2011   If you use an accrual method of accounting, you can claim the credit only in the year in which you accrue the tax. Irs tax return forms 2011 You are using an accrual method of accounting if you report income when you earn it, rather than when you receive it, and you deduct your expenses when you incur them, rather than when you pay them. Irs tax return forms 2011   In most cases, foreign taxes accrue when all the events have taken place that fix the amount of the tax and your liability to pay it. Irs tax return forms 2011 Generally, this occurs on the last day of the tax year for which your foreign return is filed. Irs tax return forms 2011 Contesting your foreign tax liability. Irs tax return forms 2011   If you are contesting your foreign tax liability, you cannot accrue it and take a credit until the amount of foreign tax due is finally determined. Irs tax return forms 2011 However, if you choose to pay the tax liability you are contesting, you can take a credit for the amount you pay before a final determination of foreign tax liability is made. Irs tax return forms 2011 Once your liability is determined, the foreign tax credit is allowable for the year to which the foreign tax relates. Irs tax return forms 2011 If the amount of foreign taxes taken as a credit differs from the final foreign tax liability, you may have to adjust the credit, as discussed later under Foreign Tax Redetermination . Irs tax return forms 2011 You may have to post a bond. Irs tax return forms 2011   If you claim a credit for taxes accrued but not paid, you may have to post an income tax bond to guarantee your payment of any tax due in the event the amount of foreign tax paid differs from the amount claimed. Irs tax return forms 2011   The IRS can request this bond at any time without regard to the Time Limit on Tax Assessment discussed later under Carryback and Carryover. Irs tax return forms 2011 Cash method of accounting. Irs tax return forms 2011   If you use the cash method of accounting, you can choose to take the credit either in the year you pay the tax or in the year you accrue it. Irs tax return forms 2011 You are using the cash method of accounting if you report income in the year you actually or constructively receive it, and deduct expenses in the year you pay them. Irs tax return forms 2011 Choosing to take credit in the year taxes accrue. Irs tax return forms 2011   Even if you use the cash method of accounting, you can choose to take a credit for foreign taxes in the year they accrue. Irs tax return forms 2011 You make the choice by checking the box in Part II of Form 1116. Irs tax return forms 2011 Once you make that choice, you must follow it in all later years and take a credit for foreign taxes in the year they accrue. Irs tax return forms 2011   In addition, the choice to take the credit when foreign taxes accrue applies to all foreign taxes qualifying for the credit. Irs tax return forms 2011 You cannot take a credit for some foreign taxes when paid and take a credit for others when accrued. Irs tax return forms 2011   If you make the choice to take the credit when foreign taxes accrue and pay them in a later year, you cannot claim a deduction for any part of the previously accrued taxes. Irs tax return forms 2011 Credit based on taxes paid in earlier year. Irs tax return forms 2011   If, in earlier years, you took the credit based on taxes paid, and this year you choose to take the credit based on taxes accrued, you may be able to take the credit this year for taxes from more than one year. Irs tax return forms 2011 Example. Irs tax return forms 2011 Last year you took the credit based on taxes paid. Irs tax return forms 2011 This year you chose to take the credit based on taxes accrued. Irs tax return forms 2011 During the year you paid foreign income taxes owed for last year. Irs tax return forms 2011 You also accrued foreign income taxes for this year that you did not pay by the end of the year. Irs tax return forms 2011 You can base the credit on your return for this year on both last year's taxes that you paid and this year's taxes that you accrued. Irs tax return forms 2011 Foreign Currency and Exchange Rates U. Irs tax return forms 2011 S. Irs tax return forms 2011 income tax is imposed on income expressed in U. Irs tax return forms 2011 S. Irs tax return forms 2011 dollars, while in most cases the foreign tax is imposed on income expressed in foreign currency. Irs tax return forms 2011 Therefore, fluctuations in the value of the foreign currency relative to the U. Irs tax return forms 2011 S. Irs tax return forms 2011 dollar may affect the foreign tax credit. Irs tax return forms 2011 Translating foreign currency into U. Irs tax return forms 2011 S. Irs tax return forms 2011 dollars. Irs tax return forms 2011   If you receive all or part of your income or pay some or all of your expenses in foreign currency, you must translate the foreign currency into U. Irs tax return forms 2011 S. Irs tax return forms 2011 dollars. Irs tax return forms 2011 How and when you do this depends on your functional currency. Irs tax return forms 2011 In most cases, your functional currency is the U. Irs tax return forms 2011 S. Irs tax return forms 2011 dollar unless you are required to use the currency of a foreign country. Irs tax return forms 2011   You must make all federal income tax determinations in your functional currency. Irs tax return forms 2011 The U. Irs tax return forms 2011 S. Irs tax return forms 2011 dollar is the functional currency for all taxpayers except some qualified business units. Irs tax return forms 2011 A qualified business unit is a separate and clearly identified unit of a trade or business that maintains separate books and records. Irs tax return forms 2011 Unless you are self-employed, your functional currency is the U. Irs tax return forms 2011 S. Irs tax return forms 2011 dollar. Irs tax return forms 2011   Even if you are self-employed and have a qualified business unit, your functional currency is the U. Irs tax return forms 2011 S. Irs tax return forms 2011 dollar if any of the following apply. Irs tax return forms 2011 You conduct the business primarily in dollars. Irs tax return forms 2011 The principal place of business is located in the United States. Irs tax return forms 2011 You choose to or are required to use the dollar as your functional currency. Irs tax return forms 2011 The business books and records are not kept in the currency of the economic environment in which a significant part of the business activities is conducted. Irs tax return forms 2011   If your functional currency is the U. Irs tax return forms 2011 S. Irs tax return forms 2011 dollar, you must immediately translate into dollars all items of income, expense, etc. Irs tax return forms 2011 , that you receive, pay, or accrue in a foreign currency and that will affect computation of your income tax. Irs tax return forms 2011 If there is more than one exchange rate, use the one that most properly reflects your income. Irs tax return forms 2011 In most cases, you can get exchange rates from banks and U. Irs tax return forms 2011 S. Irs tax return forms 2011 Embassies. Irs tax return forms 2011   If your functional currency is not the U. Irs tax return forms 2011 S. Irs tax return forms 2011 dollar, make all income tax determinations in your functional currency. Irs tax return forms 2011 At the end of the year, translate the results, such as income or loss, into U. Irs tax return forms 2011 S. Irs tax return forms 2011 dollars to report on your income tax return. Irs tax return forms 2011    For more information, write to: Internal Revenue Service International Section Philadelphia, PA 19255-0725 Rate of exchange for foreign taxes paid. Irs tax return forms 2011   Use the rate of exchange in effect on the date you paid the foreign taxes to the foreign country unless you meet the exception discussed next. Irs tax return forms 2011 If your tax was withheld in foreign currency, use the rate of exchange in effect for the date on which the tax was withheld. Irs tax return forms 2011 If you make foreign estimated tax payments, you use the rate of exchange in effect for the date on which you made the estimated tax payment. Irs tax return forms 2011   The exchange rate rules discussed here apply even if the foreign taxes are paid or accrued with respect to a foreign tax credit splitting event (discussed later). Irs tax return forms 2011 Exception. Irs tax return forms 2011   If you claim the credit for foreign taxes on an accrual basis, in most cases you must use the average exchange rate for the tax year to which the taxes relate. Irs tax return forms 2011 This rule applies to accrued taxes relating to tax years beginning after 1997 and only under the following conditions. Irs tax return forms 2011 The foreign taxes are paid on or after the first day of the tax year to which they relate. Irs tax return forms 2011 The foreign taxes are paid not later than 2 years after the close of the tax year to which they relate. Irs tax return forms 2011 The foreign tax liability is not denominated in an inflationary currency (defined in the Form 1116 instructions). Irs tax return forms 2011 (This condition applies to taxes paid or accrued in tax years beginning after November 6, 2007. Irs tax return forms 2011 )   For all other foreign taxes, you should use the exchange rate in effect on the date you paid them. Irs tax return forms 2011 Election to use exchange rate on date paid. Irs tax return forms 2011   If you have accrued foreign taxes that you are otherwise required to convert using the average exchange rate, you may elect to use the exchange rate in effect on the date the foreign taxes are paid if the taxes are denominated in a nonfunctional foreign currency. Irs tax return forms 2011 If any of the accrued taxes are unpaid, you must translate them into U. Irs tax return forms 2011 S. Irs tax return forms 2011 dollars using the exchange rate on the last day of the U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax year to which those taxes relate. Irs tax return forms 2011 You may make the election for all nonfunctional currency foreign income taxes or only those nonfunctional currency foreign income taxes that are attributable to qualified business units with a U. Irs tax return forms 2011 S. Irs tax return forms 2011 dollar functional currency. Irs tax return forms 2011 Once made, the election applies to the tax year for which made and all subsequent tax years unless revoked with the consent of the IRS. Irs tax return forms 2011 The election is available for tax years beginning after 2004. Irs tax return forms 2011 It must be made by the due date (including extensions) for filing the tax return for the first tax year to which the election applies. Irs tax return forms 2011 Make the election by attaching a statement to the applicable tax return. Irs tax return forms 2011 The statement must identify whether the election is made for all foreign taxes or only for foreign taxes attributable to qualified business units with a U. Irs tax return forms 2011 S. Irs tax return forms 2011 dollar functional currency. Irs tax return forms 2011 Foreign Tax Redetermination A foreign tax redetermination is any change in your foreign tax liability that may affect your U. Irs tax return forms 2011 S. Irs tax return forms 2011 foreign tax credit claimed. Irs tax return forms 2011 The year in which to claim the credit remains the year to which the foreign taxes paid or accrued relate, even if the change in foreign tax liability occurs in a later year. Irs tax return forms 2011 If a foreign tax redetermination occurs, a redetermination of your U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax liability is required if any of the following conditions apply. Irs tax return forms 2011 The accrued taxes when paid differ from the amounts claimed as a credit. Irs tax return forms 2011 The accrued taxes you claimed as a credit in one tax year are not paid within 2 years after the end of that tax year. Irs tax return forms 2011 If this applies to you, you must reduce the credit previously claimed by the amount of the unpaid taxes. Irs tax return forms 2011 You will not be allowed a credit for the unpaid taxes until you pay them. Irs tax return forms 2011 When you pay the accrued taxes, a new foreign tax redetermination occurs and you must translate the taxes into U. Irs tax return forms 2011 S. Irs tax return forms 2011 dollars using the exchange rate as of the date they were paid. Irs tax return forms 2011 The foreign tax credit is allowed for the year to which the foreign tax relates. Irs tax return forms 2011 See Rate of exchange for foreign taxes paid , earlier, under Foreign Currency and Exchange Rates. Irs tax return forms 2011 The foreign taxes you paid are refunded in whole or in part. Irs tax return forms 2011 For taxes taken into account when accrued but translated into dollars on the date of payment, the dollar value of the accrued tax differs from the dollar value of the tax paid because of fluctuations in the exchange rate between the date of accrual and the date of payment. Irs tax return forms 2011 However, no redetermination is required if the change in foreign tax liability for each foreign country is solely attributable to exchange rate fluctuations and is less than the smaller of: $10,000, or 2% of the total dollar amount of the foreign tax initially accrued for that foreign country for the U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax year. Irs tax return forms 2011 In this case, you must adjust your U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax in the tax year in which the accrued foreign taxes are paid. Irs tax return forms 2011 Notice to the Internal Revenue Service (IRS) of Redetermination You are required to notify the IRS about a foreign tax credit redetermination that affects your U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax liability for each tax year affected by the redetermination. Irs tax return forms 2011 In most cases, you must file Form 1040X, Amended U. Irs tax return forms 2011 S. Irs tax return forms 2011 Individual Income Tax Return, with a revised Form 1116 and a statement that contains information sufficient for the IRS to redetermine your U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax liability for the year or years affected. Irs tax return forms 2011 See Contents of statement , later. Irs tax return forms 2011 You are not required to attach Form 1116 for a tax year affected by a redetermination if: The amount of your creditable taxes paid or accrued during the tax year is not more than $300 ($600 if married filing a joint return) as a result of the foreign tax redetermination, and You meet the requirements listed under Exemption from foreign tax credit limit under How To Figure the Credit, later. Irs tax return forms 2011 There are other exceptions to this requirement. Irs tax return forms 2011 They are discussed later under Due date of notification to IRS . Irs tax return forms 2011 Contents of statement. Irs tax return forms 2011   The statement must include all of the following. Irs tax return forms 2011 Your name, address, and taxpayer identification number. Irs tax return forms 2011 The tax year or years that are affected by the foreign tax redetermination. Irs tax return forms 2011 The date or dates the foreign taxes were accrued, if applicable. Irs tax return forms 2011 The date or dates the foreign taxes were paid. Irs tax return forms 2011 The amount of foreign taxes paid or accrued on each date (in foreign currency) and the exchange rate used to translate each amount. Irs tax return forms 2011 Information sufficient to determine any interest due from or owing to you, including the amount of any interest paid to you by the foreign government and the dates received. Irs tax return forms 2011   In the case of any foreign taxes that were not paid before the date two years after the close of the tax year to which those taxes relate, you must provide the amount of those taxes in foreign currency and the exchange rate that was used to translate that amount when originally claimed as a credit. Irs tax return forms 2011   If any foreign tax was refunded in whole or in part, you must provide the date and amount (in foreign currency) of each refund, the exchange rate that was used to translate each amount when originally claimed as a credit, and the exchange rate for the date the refund was received (for purposes of computing foreign currency gain or loss under Internal Revenue Code section 988). Irs tax return forms 2011 Due date of notification to IRS. Irs tax return forms 2011   If you pay less foreign tax than you originally claimed a credit for, in most cases you must file a notification by the due date (with extensions) of your original return for your tax year in which the foreign tax redetermination occurred. Irs tax return forms 2011 There is no limit on the time the IRS has to redetermine and assess the correct U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax due. Irs tax return forms 2011 If you pay more foreign tax than you originally claimed a credit for, you have 10 years to file a claim for refund of U. Irs tax return forms 2011 S. Irs tax return forms 2011 taxes. Irs tax return forms 2011 See Time Limit on Refund Claims , later. Irs tax return forms 2011   Exceptions to this due date are explained in the next two paragraphs. Irs tax return forms 2011 Multiple redeterminations of U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax liability for same tax year. Irs tax return forms 2011   Where more than one foreign tax redetermination requires a redetermination of U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax liability for the same tax year and those redeterminations occur in the same tax year or within two consecutive tax years, you can file for that tax year one notification (Form 1040X with a Form 1116 and the required statement) that reflects all those tax redeterminations. Irs tax return forms 2011 If you choose to file one notification, the due date for that notification is the due date of the original return (with extensions) for the year in which the first foreign tax redetermination that reduced your foreign tax liability occurred. Irs tax return forms 2011 However, foreign tax redeterminations with respect to the tax year for which a redetermination of U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax liability is required may occur after the due date for providing that notification. Irs tax return forms 2011 In this situation, you may have to file more than one Form 1040X for that tax year. Irs tax return forms 2011 Additional U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax due eliminated by foreign tax credit carryback or carryover. Irs tax return forms 2011   If a foreign tax redetermination requires a redetermination of U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax liability that would otherwise result in an additional amount of U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax due, but the additional tax is eliminated by a carryback or carryover of an unused foreign tax, you do not have to amend your tax return for the year affected by the redetermination. Irs tax return forms 2011 Instead, you can notify the IRS by attaching a statement to the original return for the tax year in which the foreign tax redetermination occurred. Irs tax return forms 2011 You must file the statement by the due date (with extensions) of that return. Irs tax return forms 2011 The statement must show the amount of the unused foreign taxes paid or accrued and a detailed schedule showing the computation of the carryback or carryover (including the amounts carried back or over to the year for which a redetermination on U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax liability is required). Irs tax return forms 2011 Failure-to-notify penalty. Irs tax return forms 2011   If you fail to notify the IRS of a foreign tax redetermination and cannot show reasonable cause for the failure, you may have to pay a penalty. Irs tax return forms 2011   For each month, or part of a month, that the failure continues, you pay a penalty of 5% of the tax due resulting from a redetermination of your U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax. Irs tax return forms 2011 This penalty cannot be more than 25% of the tax due. Irs tax return forms 2011 Foreign tax refund. Irs tax return forms 2011   If you receive a foreign tax refund without interest from the foreign government, you will not have to pay interest on the amount of tax due resulting from the adjustment to your U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax for the time before the date of the refund. Irs tax return forms 2011   However, if you receive a foreign tax refund with interest, you must pay interest to the IRS up to the amount of the interest paid to you by the foreign government. Irs tax return forms 2011 The interest you must pay cannot be more than the interest you would have had to pay on taxes that were unpaid for any other reason for the same period. Irs tax return forms 2011 Interest also is owed from the time you receive a refund until you pay the additional tax due. Irs tax return forms 2011 Foreign tax imposed on foreign refund. Irs tax return forms 2011   If your foreign tax refund is taxed by the foreign country, you cannot take a separate credit or deduction for this additional foreign tax. Irs tax return forms 2011 However, when you refigure the foreign tax credit taken for the original foreign tax, reduce the amount of the refund by the foreign tax paid on the refund. Irs tax return forms 2011 Example. Irs tax return forms 2011 You paid a foreign income tax of $3,000 in 2011, and received a foreign tax refund of $500 in 2013 on which a foreign tax of $100 was imposed. Irs tax return forms 2011 When you refigure your credit for 2011, you must reduce the $3,000 you paid by $400. Irs tax return forms 2011 Time Limit on Refund Claims You have 10 years to file a claim for refund of U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax if you find that you paid or accrued a larger foreign tax than you claimed a credit for. Irs tax return forms 2011 The 10-year period begins the day after the regular due date for filing the return (without extensions) for the year in which the taxes were actually paid or accrued. Irs tax return forms 2011 You have 10 years to file your claim regardless of whether you claim the credit for taxes paid or taxes accrued. Irs tax return forms 2011 The 10-year period applies to claims for refund or credit based on: Fixing math errors in figuring qualified foreign taxes, Reporting qualified foreign taxes not originally reported on the return, or Any other change in the size of the credit (including one caused by correcting the foreign tax credit limit). Irs tax return forms 2011 The special 10-year period also applies to making or changing your choice to claim a deduction or credit for foreign taxes. Irs tax return forms 2011 See Making or Changing Your Choice discussed earlier under Choosing To Take Credit or Deduction. Irs tax return forms 2011 Who Can Take the Credit? U. Irs tax return forms 2011 S. Irs tax return forms 2011 citizens, resident aliens, and nonresident aliens who paid foreign income tax and are subject to U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax on foreign source income may be able to take a foreign tax credit. Irs tax return forms 2011 U. Irs tax return forms 2011 S. Irs tax return forms 2011 Citizens If you are a U. Irs tax return forms 2011 S. Irs tax return forms 2011 citizen, you are taxed by the United States on your worldwide income wherever you live. Irs tax return forms 2011 You are normally entitled to take a credit for foreign taxes you pay or accrue. Irs tax return forms 2011 Resident Aliens If you are a resident alien of the United States, you can take a credit for foreign taxes subject to the same general rules as U. Irs tax return forms 2011 S. Irs tax return forms 2011 citizens. Irs tax return forms 2011 If you are a bona fide resident of Puerto Rico for the entire tax year, you also come under the same rules. Irs tax return forms 2011 Usually, you can take a credit only for those foreign taxes imposed on income you actually or constructively received while you had resident alien status. Irs tax return forms 2011 For information on alien status, see Publication 519. Irs tax return forms 2011 Nonresident Aliens If you are a nonresident alien, you cannot take the credit in most cases. Irs tax return forms 2011 However, you may be able to take the credit if: You were a bona fide resident of Puerto Rico during your entire tax year, or You pay or accrue tax to a foreign country or U. Irs tax return forms 2011 S. Irs tax return forms 2011 possession on income from foreign sources that is effectively connected with a trade or business in the United States. Irs tax return forms 2011 But if you must pay tax to a foreign country or U. Irs tax return forms 2011 S. Irs tax return forms 2011 possession on income from U. Irs tax return forms 2011 S. Irs tax return forms 2011 sources only because you are a citizen or a resident of that country or U. Irs tax return forms 2011 S. Irs tax return forms 2011 possession, do not use that tax in figuring the amount of your credit. Irs tax return forms 2011 For information on alien status and effectively connected income, see Publication 519. Irs tax return forms 2011 What Foreign Taxes Qualify for the Credit? In most cases, the following four tests must be met for any foreign tax to qualify for the credit. Irs tax return forms 2011 The tax must be imposed on you. Irs tax return forms 2011 You must have paid or accrued the tax. Irs tax return forms 2011 The tax must be the legal and actual foreign tax liability. Irs tax return forms 2011 The tax must be an income tax (or a tax in lieu of an income tax). Irs tax return forms 2011 Certain foreign taxes do not qualify for the credit even if the four tests are met. Irs tax return forms 2011 See Foreign Taxes for Which You Cannot Take a Credit, later. Irs tax return forms 2011 Tax Must Be Imposed on You You can claim a credit only for foreign taxes that are imposed on you by a foreign country or U. Irs tax return forms 2011 S. Irs tax return forms 2011 possession. Irs tax return forms 2011 For example, a tax that is deducted from your wages is considered to be imposed on you. Irs tax return forms 2011 You cannot shift the right to claim the credit by contract or other means. Irs tax return forms 2011 Foreign country. Irs tax return forms 2011   A foreign country includes any foreign state and its political subdivisions. Irs tax return forms 2011 Income, war profits, and excess profits taxes paid or accrued to a foreign city or province qualify for the foreign tax credit. Irs tax return forms 2011 U. Irs tax return forms 2011 S. Irs tax return forms 2011 possessions. Irs tax return forms 2011   For foreign tax credit purposes, all qualified taxes paid to U. Irs tax return forms 2011 S. Irs tax return forms 2011 possessions are considered foreign taxes. Irs tax return forms 2011 For this purpose, U. Irs tax return forms 2011 S. Irs tax return forms 2011 possessions include Puerto Rico and American Samoa. Irs tax return forms 2011   When the term “foreign country” is used in this publication, it includes U. Irs tax return forms 2011 S. Irs tax return forms 2011 possessions unless otherwise stated. Irs tax return forms 2011 You Must Have Paid or Accrued the Tax In most cases, you can claim the credit only if you paid or accrued the foreign tax to a foreign country or U. Irs tax return forms 2011 S. Irs tax return forms 2011 possession. Irs tax return forms 2011 However, the paragraphs that follow describe some instances in which you can claim the credit even if you did not directly pay or accrue the tax yourself. Irs tax return forms 2011 Joint return. Irs tax return forms 2011   If you file a joint return, you can claim the credit based on the total foreign income taxes paid or accrued by you and your spouse. Irs tax return forms 2011 Combined income. Irs tax return forms 2011   If foreign tax is imposed on the combined income of two or more persons (for example, spouses), the tax is allocated among, and considered paid by, these persons on a pro rata basis in proportion to each person's portion of the combined income, as determined under foreign law and Regulations section 1. Irs tax return forms 2011 901-2(f)(3)(iii). Irs tax return forms 2011 Combined income with respect to each foreign tax that is imposed on a combined basis (and combined income subject to tax exemption or preferential tax rates) is computed separately, and the tax on that combined income is allocated separately. Irs tax return forms 2011   These rules apply to foreign taxes paid or accrued in tax years beginning after February 14, 2012. Irs tax return forms 2011 However, you can choose to apply the new rules to foreign taxes paid or accrued in tax years beginning after December 31, 2010, and before February 15, 2012. Irs tax return forms 2011 For more details, see paragraphs (f) and (h) of Regulations section 1. Irs tax return forms 2011 901-2. Irs tax return forms 2011 For similar rules applicable to prior tax years, see Regulations section 1. Irs tax return forms 2011 901-2 (revised as of April 1, 2011). Irs tax return forms 2011 Example. Irs tax return forms 2011 You and your spouse reside in Country X, which imposes income tax on your combined incomes. Irs tax return forms 2011 Both of you use the “u” as your functional currency. Irs tax return forms 2011 Country X apportions tax based on income. Irs tax return forms 2011 You had income of 30,000u and your spouse had income of 20,000u. Irs tax return forms 2011 Your filing status on your U. Irs tax return forms 2011 S. Irs tax return forms 2011 income tax return is married filing separately. Irs tax return forms 2011 You can claim only 60% (30,000u/50,000u) of the foreign taxes imposed on your income on your U. Irs tax return forms 2011 S income tax return. Irs tax return forms 2011 Your spouse can claim only 40% (20,000u/50,000u). Irs tax return forms 2011 Partner or S corporation shareholder. Irs tax return forms 2011   If you are a member of a partnership, or a shareholder in an S corporation, you can claim the credit based on your proportionate share of the foreign income taxes paid or accrued by the partnership or the S corporation. Irs tax return forms 2011 These amounts will be shown on the Schedule K-1 you receive from the partnership or S corporation. Irs tax return forms 2011 However, if you are a shareholder in an S corporation that in turn owns stock in a foreign corporation, you cannot claim a credit for your share of foreign taxes paid by the foreign corporation. Irs tax return forms 2011 Beneficiary. Irs tax return forms 2011   If you are a beneficiary of an estate or trust, you may be able to claim the credit based on your proportionate share of foreign income taxes paid or accrued by the estate or trust. Irs tax return forms 2011 This amount will be shown on the Schedule K-1 you receive from the estate or trust. Irs tax return forms 2011 However, you must show that the tax was imposed on income of the estate and not on income received by the decedent. Irs tax return forms 2011 Mutual fund shareholder. Irs tax return forms 2011   If you are a shareholder of a mutual fund or other regulated investment company (RIC), you may be able to claim the credit based on your share of foreign income taxes paid by the fund if it chooses to pass the credit on to its shareholders. Irs tax return forms 2011 You should receive from the mutual fund or other RIC a Form 1099-DIV, or similar statement, showing your share of the foreign income, and your share of the foreign taxes paid. Irs tax return forms 2011 If you do not receive this information, you will need to contact the fund. Irs tax return forms 2011 Controlled foreign corporation shareholder. Irs tax return forms 2011   If you are a shareholder of a controlled foreign corporation and choose to be taxed at corporate rates on the amount you must include in gross income from that corporation, you can claim the credit based on your share of foreign taxes paid or accrued by the controlled foreign corporation. Irs tax return forms 2011 If you make this election, you must claim the credit by filing Form 1118, Foreign Tax Credit—Corporations. Irs tax return forms 2011 Controlled foreign corporation. Irs tax return forms 2011   A controlled foreign corporation is a foreign corporation in which U. Irs tax return forms 2011 S. Irs tax return forms 2011 shareholders own more than 50% of the voting power or value of the stock. Irs tax return forms 2011 You are considered a U. Irs tax return forms 2011 S. Irs tax return forms 2011 shareholder if you own, directly or indirectly, 10% or more of the total voting power of all classes of the foreign corporation's stock. Irs tax return forms 2011 See Internal Revenue Code sections 951(b) and 958(b) for more information. Irs tax return forms 2011 Tax Must Be the Legal and Actual Foreign Tax Liability The amount of foreign tax that qualifies is not necessarily the amount of tax withheld by the foreign country. Irs tax return forms 2011 Only the legal and actual foreign tax liability that you paid or accrued during the year qualifies for the credit. Irs tax return forms 2011 Foreign tax refund. Irs tax return forms 2011   You cannot take a foreign tax credit for income taxes paid to a foreign country if it is reasonably certain the amount would be refunded, credited, rebated, abated, or forgiven if you made a claim. Irs tax return forms 2011   For example, the United States has tax treaties with many countries allowing U. Irs tax return forms 2011 S. Irs tax return forms 2011 citizens and residents reductions in the rates of tax of those foreign countries. Irs tax return forms 2011 However, some treaty countries require U. Irs tax return forms 2011 S. Irs tax return forms 2011 citizens and residents to pay the tax figured without regard to the lower treaty rates and then claim a refund for the amount by which the tax actually paid is more than the amount of tax figured using the lower treaty rate. Irs tax return forms 2011 The qualified foreign tax is the amount figured using the lower treaty rate and not the amount actually paid, because the excess tax is refundable. Irs tax return forms 2011 Subsidy received. Irs tax return forms 2011   Tax payments a foreign country returns to you in the form of a subsidy do not qualify for the foreign tax credit. Irs tax return forms 2011 This rule applies even if the subsidy is given to a person related to you, or persons who participated with you in a transaction or a related transaction. Irs tax return forms 2011 A subsidy can be provided by any means but must be determined, directly or indirectly, in relation to the amount of tax, or to the base used to figure the tax. Irs tax return forms 2011   The term “subsidy” includes any type of benefit. Irs tax return forms 2011 Some ways of providing a subsidy are refunds, credits, deductions, payments, or discharges of obligations. Irs tax return forms 2011 Shareholder receiving refund for corporate tax in integrated system. Irs tax return forms 2011   Under some foreign tax laws and treaties, a shareholder is considered to have paid part of the tax that is imposed on the corporation. Irs tax return forms 2011 You may be able to claim a refund of these taxes from the foreign government. Irs tax return forms 2011 You must include the refund (including any amount withheld) in your income in the year received. Irs tax return forms 2011 Any tax withheld from the refund is a qualified foreign tax. Irs tax return forms 2011 Example. Irs tax return forms 2011 You are a shareholder of a French corporation. Irs tax return forms 2011 You receive a $100 refund of the tax paid to France by the corporation on the earnings distributed to you as a dividend. Irs tax return forms 2011 The French government imposes a 15% withholding tax ($15) on the refund you received. Irs tax return forms 2011 You receive a check for $85. Irs tax return forms 2011 You include $100 in your income. Irs tax return forms 2011 The $15 of tax withheld is a qualified foreign tax. Irs tax return forms 2011 Tax Must Be an Income Tax (or Tax in Lieu of Income Tax) In most cases, only income, war profits, and excess profits taxes (income taxes) qualify for the foreign tax credit. Irs tax return forms 2011 Foreign taxes on wages, dividends, interest, and royalties qualify for the credit in most cases. Irs tax return forms 2011 Furthermore, foreign taxes on income can qualify even though they are not imposed under an income tax law if the tax is in lieu of an income, war profits, or excess profits tax. Irs tax return forms 2011 See Taxes in Lieu of Income Taxes , later. Irs tax return forms 2011 Income Tax Simply because the levy is called an income tax by the foreign taxing authority does not make it an income tax for this purpose. Irs tax return forms 2011 A foreign levy is an income tax only if it meets both of the following requirements. Irs tax return forms 2011 It is a tax; that is, you have to pay it and you get no specific economic benefit (discussed below) from paying it. Irs tax return forms 2011 The predominant character of the tax is that of an income tax in the U. Irs tax return forms 2011 S. Irs tax return forms 2011 sense. Irs tax return forms 2011 A foreign levy may meet these requirements even if the foreign tax law differs from U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax law. Irs tax return forms 2011 The foreign law may include in income items that U. Irs tax return forms 2011 S. Irs tax return forms 2011 law does not include, or it may allow certain exclusions or deductions that U. Irs tax return forms 2011 S. Irs tax return forms 2011 law does not allow. Irs tax return forms 2011 Specific economic benefit. Irs tax return forms 2011   In most cases, you get a specific economic benefit if you receive, or are considered to receive, an economic benefit from the foreign country imposing the levy, and: If there is a generally imposed income tax, the economic benefit is not available on substantially the same terms to all persons subject to the income tax, or If there is no generally imposed income tax, the economic benefit is not available on substantially the same terms to the population of the foreign country in general. Irs tax return forms 2011   You are considered to receive a specific economic benefit if you have a business transaction with a person who receives a specific economic benefit from the foreign country and, under the terms and conditions of the transaction, you receive directly or indirectly all or part of the benefit. Irs tax return forms 2011   However, see the exception discussed later under Pension, unemployment, and disability fund payments . Irs tax return forms 2011 Economic benefits. Irs tax return forms 2011   Economic benefits include the following. Irs tax return forms 2011 Goods. Irs tax return forms 2011 Services. Irs tax return forms 2011 Fees or other payments. Irs tax return forms 2011 Rights to use, acquire, or extract resources, patents, or other property the foreign country owns or controls. Irs tax return forms 2011 Discharges of contractual obligations. Irs tax return forms 2011   In most cases, the right or privilege merely to engage in business is not an economic benefit. Irs tax return forms 2011 Dual-capacity taxpayers. Irs tax return forms 2011   If you are subject to a foreign country's levy and you also receive a specific economic benefit from that foreign country, you are a “dual-capacity taxpayer. Irs tax return forms 2011 ” As a dual-capacity taxpayer, you cannot claim a credit for any part of the foreign levy, unless you establish that the amount paid under a distinct element of the foreign levy is a tax, rather than a compulsory payment for a direct or indirect specific economic benefit. Irs tax return forms 2011    For more information on how to establish amounts paid under separate elements of a levy, write to: Internal Revenue Service International Section Philadelphia, PA 19255-0725 Pension, unemployment, and disability fund payments. Irs tax return forms 2011   A foreign tax imposed on an individual to pay for retirement, old-age, death, survivor, unemployment, illness, or disability benefits, or for substantially similar purposes, is not payment for a specific economic benefit if the amount of the tax does not depend on the age, life expectancy, or similar characteristics of that individual. Irs tax return forms 2011    No deduction or credit is allowed, however, for social security taxes paid or accrued to a foreign country with which the United States has a social security agreement. Irs tax return forms 2011 For more information about these agreements, see Publication 54. Irs tax return forms 2011 Soak-up taxes. Irs tax return forms 2011   A foreign tax is not predominantly an income tax and does not qualify for credit to the extent it is a soak-up tax. Irs tax return forms 2011 A tax is a soak-up tax to the extent that liability for it depends on the availability of a credit for it against income tax imposed by another country. Irs tax return forms 2011 This rule applies only if and to the extent that the foreign tax would not be imposed if the credit were not available. Irs tax return forms 2011 Penalties and interest. Irs tax return forms 2011   Amounts paid to a foreign government to satisfy a liability for interest, fines, penalties, or any similar obligation are not taxes and do not qualify for the credit. Irs tax return forms 2011 Taxes not based on income. Irs tax return forms 2011   Foreign taxes based on gross receipts or the number of units produced, rather than on realized net income, do not qualify unless they are imposed in lieu of an income tax, as discussed next. Irs tax return forms 2011 Taxes based on assets, such as property taxes, do not qualify for the credit. Irs tax return forms 2011 Taxes in Lieu of Income Taxes A tax paid or accrued to a foreign country qualifies for the credit if it is imposed in lieu of an income tax otherwise generally imposed. Irs tax return forms 2011 A foreign levy is a tax in lieu of an income tax only if: It is not payment for a specific economic benefit as discussed earlier, and The tax is imposed in place of, and not in addition to, an income tax otherwise generally imposed. Irs tax return forms 2011 A tax in lieu of an income tax does not have to be based on realized net income. Irs tax return forms 2011 A foreign tax imposed on gross income, gross receipts or sales, or the number of units produced or exported can qualify for the credit. Irs tax return forms 2011 In most cases, a soak-up tax (discussed earlier) does not qualify as a tax in lieu of an income tax. Irs tax return forms 2011 However, if the foreign country imposes a soak-up tax in lieu of an income tax, the amount that does not qualify for foreign tax credit is the lesser of the following amounts. Irs tax return forms 2011 The soak-up tax. Irs tax return forms 2011 The foreign tax you paid that is more than the amount you would have paid if you had been subject to the generally imposed income tax. Irs tax return forms 2011 Foreign Taxes for Which You Cannot Take a Credit This part discusses the foreign taxes for which you cannot take a credit. Irs tax return forms 2011 These are: Taxes on excluded income, Taxes for which you can only take an itemized deduction, Taxes on foreign mineral income, Taxes from international boycott operations, A portion of taxes on combined foreign oil and gas income, Taxes of U. Irs tax return forms 2011 S. Irs tax return forms 2011 persons controlling foreign corporations and partnerships who fail to file required information returns, and Taxes related to a foreign tax splitting event. Irs tax return forms 2011 Taxes on Excluded Income You cannot take a credit for foreign taxes paid or accrued on certain income that is excluded from U. Irs tax return forms 2011 S. Irs tax return forms 2011 gross income. Irs tax return forms 2011 Foreign Earned Income and Housing Exclusions You must reduce your foreign taxes available for the credit by the amount of those taxes paid or accrued on income that is excluded from U. Irs tax return forms 2011 S. Irs tax return forms 2011 income under the foreign earned income exclusion or the foreign housing exclusion. Irs tax return forms 2011 See Publication 54 for more information on the foreign earned income and housing exclusions. Irs tax return forms 2011 Wages completely excluded. Irs tax return forms 2011   If your wages are completely excluded, you cannot take a credit for any of the foreign taxes paid or accrued on these wages. Irs tax return forms 2011 Wages partly excluded. Irs tax return forms 2011   If only part of your wages is excluded, you cannot take a credit for the foreign income taxes allocable to the excluded part. Irs tax return forms 2011 You find the amount allocable to your excluded wages by multiplying the foreign tax paid or accrued on foreign earned income received or accrued during the tax year by a fraction. Irs tax return forms 2011   The numerator of the fraction is your foreign earned income and housing amounts excluded under the foreign earned income and housing exclusions for the tax year minus otherwise deductible expenses definitely related and properly apportioned to that income. Irs tax return forms 2011 Deductible expenses do not include the foreign housing deduction. Irs tax return forms 2011   The denominator is your total foreign earned income received or accrued during the tax year minus all deductible expenses allocable to that income (including the foreign housing deduction). Irs tax return forms 2011 If the foreign law taxes foreign earned income and some other income (for example, earned income from U. Irs tax return forms 2011 S. Irs tax return forms 2011 sources or a type of income not subject to U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax), and the taxes on the other income cannot be segregated, the denominator of the fraction is the total amount of income subject to the foreign tax minus deductible expenses allocable to that income. Irs tax return forms 2011 Example. Irs tax return forms 2011 You are a U. Irs tax return forms 2011 S. Irs tax return forms 2011 citizen and a cash basis taxpayer, employed by Company X and living in Country A. Irs tax return forms 2011 Your records show the following: Foreign earned income received $125,000 Unreimbursed business travel expenses 20,000 Income tax paid to Country A 30,000 Exclusion of foreign earned  income and housing allowance 97,600     Because you can exclude part of your wages, you cannot claim a credit for part of the foreign taxes. Irs tax return forms 2011 To find that part, do the following. Irs tax return forms 2011 First, find the amount of business expenses allocable to excluded wages and therefore not deductible. Irs tax return forms 2011 To do this, multiply the otherwise deductible expenses by a fraction. Irs tax return forms 2011 That fraction is the excluded wages over your foreign earned income. Irs tax return forms 2011   $20,000 × $97,600 $125,000 = $15,616             Next, find the numerator of the fraction by which you will multiply the foreign taxes paid. Irs tax return forms 2011 To do this, subtract business expenses allocable to excluded wages ($15,616) from excluded wages ($97,600). Irs tax return forms 2011 The result is $81,984. Irs tax return forms 2011 Then, find the denominator of the fraction by subtracting all your deductible expenses from all your foreign earned income ($125,000 − $20,000 = $105,000). Irs tax return forms 2011 Finally, multiply the foreign tax you paid by the resulting fraction. Irs tax return forms 2011   $30,000 × $81,984  $105,000 = $23,424 The amount of Country A tax you cannot take a credit for is $23,424. Irs tax return forms 2011 Taxes on Income From Puerto Rico Exempt From U. Irs tax return forms 2011 S. Irs tax return forms 2011 Tax If you have income from Puerto Rican sources that is not taxable, you must reduce your foreign taxes paid or accrued by the taxes allocable to the exempt income. Irs tax return forms 2011 For information on figuring the reduction, see Publication 570. Irs tax return forms 2011 Possession Exclusion If you are a bona fide resident of American Samoa and exclude income from sources in American Samoa, you cannot take a credit for the taxes you pay or accrue on the excluded income. Irs tax return forms 2011 For more information on this exclusion, see Publication 570. Irs tax return forms 2011 Extraterritorial Income Exclusion You cannot take a credit for taxes you pay on qualifying foreign trade income excluded on Form 8873, Extraterritorial Income Exclusion. Irs tax return forms 2011 However, see Internal Revenue Code section 943(d) for an exception for certain withholding taxes. Irs tax return forms 2011 Taxes for Which You Can Only Take an Itemized Deduction You cannot claim a foreign tax credit for foreign income taxes paid or accrued under the following circumstances. Irs tax return forms 2011 However, you can claim an itemized deduction for these taxes. Irs tax return forms 2011 See Choosing To Take Credit or Deduction , earlier. Irs tax return forms 2011 Taxes Imposed By Sanctioned Countries (Section 901(j) Income) You cannot claim a foreign tax credit for income taxes paid or accrued to any country if the income giving rise to the tax is for a period (the sanction period) during which: The Secretary of State has designated the country as one that repeatedly provides support for acts of international terrorism, The United States has severed or does not conduct diplomatic relations with the country, or The United States does not recognize the country's government, and that government is not otherwise eligible to purchase defense articles or services under the Arms Export Control Act. Irs tax return forms 2011 The following countries meet this description for 2013. Irs tax return forms 2011 Income taxes paid or accrued to these countries in 2013 do not qualify for the credit. Irs tax return forms 2011 Cuba. Irs tax return forms 2011 Iran. Irs tax return forms 2011 Libya (but see Note later). Irs tax return forms 2011 North Korea. Irs tax return forms 2011 Sudan. Irs tax return forms 2011 Syria. Irs tax return forms 2011 Waiver of denial of the credit. Irs tax return forms 2011   A waiver can be granted to a sanctioned country if the President of the United States determines that granting the waiver is in the national interest of the United States and will expand trade and investment opportunities for U. Irs tax return forms 2011 S. Irs tax return forms 2011 companies in the sanctioned country. Irs tax return forms 2011 The President must report to Congress his intentions to grant the waiver and his reasons for granting the waiver not less than 30 days before the date on which the waiver is granted. Irs tax return forms 2011 Note. Irs tax return forms 2011 Effective December 10, 2004, the President granted a waiver to Libya. Irs tax return forms 2011 Income taxes arising on or after this date qualify for the credit if they meet the other requirements in this publication. Irs tax return forms 2011 Limit on credit. Irs tax return forms 2011   In figuring the foreign tax credit limit, discussed later, income from a sanctioned country is a separate category of foreign income unless a Presidential waiver is granted. Irs tax return forms 2011 You must fill out a separate Form 1116 for this income. Irs tax return forms 2011 This will prevent you from claiming a credit for foreign taxes paid or accrued to the sanctioned country. Irs tax return forms 2011 Example. Irs tax return forms 2011 You lived and worked in Iran until August, when you were transferred to Italy. Irs tax return forms 2011 You paid taxes to each country on the income earned in that country. Irs tax return forms 2011 You cannot claim a foreign tax credit for the foreign taxes paid on the income earned in Iran. Irs tax return forms 2011 Because the income earned in Iran is a separate category of foreign income, you must fill out a separate Form 1116 for that income. Irs tax return forms 2011 You cannot take a credit for taxes paid on the income earned in Iran, but that income is taxable by the United States. Irs tax return forms 2011 Figuring the credit when a sanction ends. Irs tax return forms 2011    Table 1 lists the countries for which sanctions have ended or for which a Presidential waiver has been granted. Irs tax return forms 2011 For any of these countries, you can claim a foreign tax credit for the taxes paid or accrued to that country on the income for the period that begins after the end of the sanction period or the date the Presidential waiver was granted. Irs tax return forms 2011 Example. Irs tax return forms 2011 The sanctions against Country X ended on July 31. Irs tax return forms 2011 On August 19, you receive a distribution from a mutual fund of Country X income. Irs tax return forms 2011 The fund paid Country X income tax for you on the distribution. Irs tax return forms 2011 Because the distribution was made after the sanction ended, you may include the foreign tax paid on the distribution to compute your foreign tax credit. Irs tax return forms 2011 Amounts for the nonsanctioned period. Irs tax return forms 2011   If a sanction period ends (or a Presidential waiver is granted) during your tax year and you are not able to determine the actual income and taxes for that period, you can allocate amounts to that period based on the number of days in the period that fall in your tax year. Irs tax return forms 2011 Multiply the income or taxes for the year by the following fraction to determine the amounts allocable to that period. Irs tax return forms 2011   Number of nonsanctioned days in year  Number of days in year Example. Irs tax return forms 2011 You are a calendar year filer and received $20,000 of income from Country X in 2013 on which you paid tax of $4,500. Irs tax return forms 2011 Sanctions against Country X ended on July 11, 2013. Irs tax return forms 2011 You are unable to determine how much of the income or tax is for the nonsanctioned period. Irs tax return forms 2011 Because your tax year starts on January 1, and the Country X sanction ended on July 11, 2013, 173 days of your tax year are in the nonsanctioned period. Irs tax return forms 2011 You would compute the income for the nonsanctioned period as follows. Irs tax return forms 2011 173 365 × $20,000 = $9,479             You would figure the tax for the nonsanctioned period as follows. Irs tax return forms 2011 173 365 × $4,500 = $2,133 To figure your foreign tax credit, you would use $9,479 as the income from Country X and $2,133 as the tax. Irs tax return forms 2011 Further information. Irs tax return forms 2011   The rules for figuring the foreign tax credit after a country's sanction period ends are more fully explained in Revenue Ruling 92-62, Cumulative Bulletin 1992-2, page 193. Irs tax return forms 2011 This Cumulative Bulletin can be found in many libraries and IRS offices. Irs tax return forms 2011 Table 1. Irs tax return forms 2011 Countries Removed From the Sanction List or Granted Presidential Waiver   Sanction Period Country Starting Date Ending Date Iraq February 1, 1991 June 27, 2004 Libya January 1, 1987 December 9, 2004* *Presidential waiver granted for qualified income taxes arising after December 9, 2004. Irs tax return forms 2011 Taxes Imposed on Certain Dividends You cannot claim a foreign tax credit for withholding tax (defined later ) on dividends paid or accrued if either of the following applies to the dividends. Irs tax return forms 2011 The dividends are on stock you held for less than 16 days during the 31-day period that begins 15 days before the ex-dividend date (defined later). Irs tax return forms 2011 The dividends are for a period or periods totaling more than 366 days on preferred stock you held for less than 46 days during the 91-day period that begins 45 days before the ex-dividend date. Irs tax return forms 2011 If the dividend is not for more than 366 days, rule (1) applies to the preferred stock. Irs tax return forms 2011 When figuring how long you held the stock, count the day you sold it, but do not count the day you acquired it or any days on which you were protected from risk of loss. Irs tax return forms 2011 Regardless of how long you held the stock, you cannot claim the credit to the extent you have an obligation under a short sale or otherwise to make payments related to the dividend for positions in substantially similar or related property. Irs tax return forms 2011 Withholding tax. Irs tax return forms 2011   For this purpose, withholding tax includes any tax determined on a gross basis. Irs tax return forms 2011 It does not include any tax which is in the nature of a prepayment of a tax imposed on a net basis. Irs tax return forms 2011 Ex-dividend date. Irs tax return forms 2011   The ex-dividend date is the first date following the declaration of a dividend on which the purchaser of a stock is not entitled to receive the next dividend payment. Irs tax return forms 2011 Example 1. Irs tax return forms 2011 You bought common stock from a foreign corporation on November 3. Irs tax return forms 2011 You sold the stock on November 19. Irs tax return forms 2011 You received a dividend on this stock because you owned it on the ex-dividend date of November 5. Irs tax return forms 2011 To claim the credit, you must have held the stock for at least 16 days within the 31-day period that began on October 21 (15 days before the ex-dividend date). Irs tax return forms 2011 Because you held the stock for 16 days, from November 4 until November 19, you are entitled to the credit. Irs tax return forms 2011 Example 2. Irs tax return forms 2011 The facts are the same as in Example 1 except that you sold the stock on November 14. Irs tax return forms 2011 You held the stock for only 11 days. Irs tax return forms 2011 You are not entitled to the credit. Irs tax return forms 2011 Exception. Irs tax return forms 2011   If you are a securities dealer who actively conducts business in a foreign country, you may be able to claim a foreign tax credit for qualified taxes paid on dividends regardless of how long you held the stock or whether you were obligated to make payments for positions in substantially similar or related property. Irs tax return forms 2011 See section 901(k)(4) of the Internal Revenue Code for more information. Irs tax return forms 2011 Taxes Withheld on Income or Gain (Other Than Dividends) For income or gain (other than dividends) paid or accrued on property, you cannot claim a foreign tax credit for withholding tax (defined later): If you have not held the property for at least 16 days during the 31-day period that begins 15 days before the date on which the right to receive the payment arises, or To the extent you have to make related payments on positions in substantially similar or related property. Irs tax return forms 2011 When figuring how long you held the property, count the day you sold it, but do not count the day you acquired it or any days on which you were protected from risk of loss. Irs tax return forms 2011 Withholding tax. Irs tax return forms 2011   For this purpose, withholding tax includes any tax determined on a gross basis. Irs tax return forms 2011 It does not include any tax which is in the nature of a prepayment of a tax imposed on a net basis. Irs tax return forms 2011 Exception for dealers. Irs tax return forms 2011   If you are a dealer in property who actively conducts business in a foreign country, you may be able to claim a foreign tax credit for qualified taxes withheld on income or gain from that property regardless of how long you held it or whether you have to make related payments on positions in substantially similar or related property. Irs tax return forms 2011 See section 901(I)(2) of the Internal Revenue Code for more information. Irs tax return forms 2011 Covered Asset Acquisition ???You cannot take a credit for the disqualified portion of any foreign tax paid or accrued in connection with a covered asset acquisition. Irs tax return forms 2011 A covered asset acquisition includes certain acquisitions that result in a stepped-up basis for U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax purposes but not for foreign tax purposes. Irs tax return forms 2011 For more information, see Internal Revenue Code section 901(m). Irs tax return forms 2011 The IRS intends to issue guidance that will explain this provision in greater detail. Irs tax return forms 2011 Taxes in Connection With the Purchase or Sale of Oil or Gas You cannot claim a foreign tax credit for taxes paid or accrued to a foreign country in connection with the purchase or sale of oil or gas extracted in that country if you do not have an economic interest in the oil or gas, and the purchase price or sales price is different from the fair market value of the oil or gas at the time of purchase or sale. Irs tax return forms 2011 Taxes on Foreign Mineral Income You must reduce any taxes paid or accrued to a foreign country or possession on mineral income from that country or possession if you were allowed a deduction for percentage depletion for any part of the mineral income. Irs tax return forms 2011 For details, see Regulations section 1. Irs tax return forms 2011 901-3. Irs tax return forms 2011 Taxes From International Boycott Operations If you participate in or cooperate with an international boycott during the tax year, your foreign taxes resulting from boycott activities will reduce the total taxes available for credit. Irs tax return forms 2011 See the instructions for line 12 in the Form 1116 instructions to figure this reduction. Irs tax return forms 2011 In most cases, this rule does not apply to employees with wages who are working and living in boycotting countries, or to retirees with pensions who are living in these countries. Irs tax return forms 2011 List of boycotting countries. Irs tax return forms 2011   A list of the countries which may require participation in or cooperation with an international boycott is published by the Department of the Treasury. Irs tax return forms 2011 As of November 2013, the following countries are listed. Irs tax return forms 2011 Iraq. Irs tax return forms 2011 Kuwait. Irs tax return forms 2011 Lebanon. Irs tax return forms 2011 Libya. Irs tax return forms 2011 Qatar. Irs tax return forms 2011 Saudi Arabia. Irs tax return forms 2011 Syria. Irs tax return forms 2011 United Arab Emirates. Irs tax return forms 2011 Yemen. Irs tax return forms 2011    For information concerning changes to the list, write to: Internal Revenue Service International Section Philadelphia, PA 19255-0725 Determinations of whether the boycott rule applies. Irs tax return forms 2011   You may request a determination from the Internal Revenue Service as to whether a particular operation constitutes participation in or cooperation with an international boycott. Irs tax return forms 2011 The procedures for obtaining a determination from the Service are outlined in Revenue Procedure 77-9 in Cumulative Bulletin 1977-1. Irs tax return forms 2011 Cumulative Bulletins are available in most IRS offices and you are welcome to read them there. Irs tax return forms 2011 Public inspection. Irs tax return forms 2011   A determination and any related background file is open to public inspection. Irs tax return forms 2011 However, your identity and certain other information will remain confidential. Irs tax return forms 2011 Reporting requirements. Irs tax return forms 2011   You must file a report with the IRS if you or any of the following persons have operations in or related to a boycotting country or with the government, a company, or a national of a boycotting country. Irs tax return forms 2011 A foreign corporation in which you own 10% or more of the voting power of all voting stock but only if you own the stock of the foreign corporation directly or through foreign entities. Irs tax return forms 2011 A partnership in which you are a partner. Irs tax return forms 2011 A trust you are treated as owning. Irs tax return forms 2011 Form 5713 required. Irs tax return forms 2011   If you have to file a report, you must use Form 5713, International Boycott Report, and attach all supporting schedules. Irs tax return forms 2011 See the Instructions for Form 5713 for information on when and where to file the form. Irs tax return forms 2011 Penalty for failure to file. Irs tax return forms 2011   If you willfully fail to make a report, in addition to other penalties, you may be fined $25,000 or imprisoned for no more than one year, or both. Irs tax return forms 2011 Taxes on Combined Foreign Oil and Gas Income You must reduce your foreign taxes by a portion of any foreign taxes imposed on combined foreign oil and gas income. Irs tax return forms 2011 The amount of the reduction is the amount by which your foreign oil and gas taxes exceed the amount of your combined foreign oil and gas income multiplied by a fraction equal to your pre-credit U. Irs tax return forms 2011 S. Irs tax return forms 2011 tax liability (Form 1040, line 44) divided by your worldwide taxable income. Irs tax return forms 2011 You may be entitled to carry over to other years taxes reduced under this rule. Irs tax return forms 2011 See Internal Revenue Code section 907(f). Irs tax return forms 2011 Combined foreign oil and gas income means the sum of foreign oil related income and foreign oil and gas extraction income. Irs tax return forms 2011 Foreign oil and gas taxes are the sum of foreign oil and gas extraction taxes and foreign oil related taxes. Irs tax return forms 2011 Taxes of U. Irs tax return forms 2011 S. Irs tax return forms 2011 Persons Controlling Foreign Corporations and Partnerships If you had control of a foreign corporation or a foreign partnership for the annual accounting period of that corporation or partnership that ended with or within your tax year, you may have to file an annual information return. Irs tax return forms 2011 If you do not file the required information return, you may have to reduce the foreign taxes that may be used for the foreign tax credit. Irs tax return forms 2011 See Penalty for not filing Form 5471 or Form 8865 , later. Irs tax return forms 2011 U. Irs tax return forms 2011 S. Irs tax return forms 2011 persons controlling foreign corporations. Irs tax return forms 2011   If you are a U. Irs tax return forms 2011 S. Irs tax return forms 2011 citizen or resident who had control of a foreign corporation for an uninterrupted period of at least 30 days during the annual accounting period of that corporation, you may have to file an annual information return on Form 5471, Information Return of U. Irs tax return forms 2011 S. Irs tax return forms 2011 Persons With Respect To Certain Foreign Corporations. Irs tax return forms 2011 Under this rule, you generally had control of a foreign corporation if at any time during your tax year you owned: Stock possessing more than 50% of the total combined voting power of all classes of stock entitled to vote, or More than 50% of the total value of shares of all classes of stock of the foreign corporation. Irs tax return forms 2011 U. Irs tax return forms 2011 S. Irs tax return forms 2011 persons controlling foreign partnerships. Irs tax return forms 2011   If you are a U. Irs tax return forms 2011 S. Irs tax return forms 2011 citizen or resident who had control of a foreign partnership at any time during the partnership's tax year, you may have to file