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Revised Tax Return

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Revised Tax Return

Revised tax return Index , Hardest Hit Fund and Emergency Homeowners' Loan Programs. Revised tax return , Form 1098. Revised tax return , How To Report, Form 1098. Revised tax return A Acquisition debt, Fully deductible interest. Revised tax return , Home Acquisition Debt, Part of home not a qualified home. Revised tax return Alimony, Divorced or separated individuals. Revised tax return Amortization Points, General Rule Appraisal fees, Amounts charged for services. Revised tax return Armed forces Housing allowance, Ministers' and military housing allowance. Revised tax return Assistance (see Tax help) Average mortgage balance, Average Mortgage Balance B Borrowers More than one, More than one borrower. Revised tax return Seller-paid points, treatment by buyer, Treatment by buyer. Revised tax return Business Average mortgage balance, total amount of interest otherwise allowable to each activity, Line 13 Mortgage proceeds used for, Mortgage proceeds used for business or investment. Revised tax return C Clergy Ministers' and military housing allowance, Ministers' and military housing allowance. Revised tax return Cooperative housing, Cooperative apartment owner. Revised tax return , Cooperative apartment owner. Revised tax return , Special Rule for Tenant-Stockholders in Cooperative Housing Corporations, Form 1098. Revised tax return Cost of home or improvements, Cost of home or improvements. Revised tax return Credits, Mortgage interest credit. Revised tax return D Date of mortgage, Date of the mortgage. Revised tax return Debt Choice to treat as not secured by home, Choice to treat the debt as not secured by your home. Revised tax return Grandfathered, Fully deductible interest. Revised tax return , Grandfathered Debt, Line-of-credit mortgage. Revised tax return Home acquisition, Fully deductible interest. Revised tax return , Home Acquisition Debt Home equity, Fully deductible interest. Revised tax return , Home Equity Debt Home equity only (Table 1), Home equity debt only. Revised tax return Not secured by home, Debt not secured by home. Revised tax return Secured, Secured Debt Deductions, Part I. Revised tax return Home Mortgage Interest, Hardest Hit Fund and Emergency Homeowners' Loan Programs. Revised tax return Home office, Office in home. Revised tax return Mortgage insurance premiums, Claiming your deductible mortgage insurance premiums. Revised tax return Points, General Rule, Claiming your deductible points. Revised tax return Deed preparation costs, Amounts charged for services. Revised tax return Divorced taxpayers, Divorced or separated individuals. Revised tax return , Acquiring an interest in a home because of a divorce. Revised tax return E Emergency Homeowners' Loan Program, Hardest Hit Fund and Emergency Homeowners' Loan Programs. Revised tax return Equity debt, Fully deductible interest. Revised tax return , Home Equity Debt, Fair market value (FMV). Revised tax return Equity debt only (Table 1), Home equity debt only. Revised tax return F Fair market value (FMV), Fair market value (FMV). Revised tax return Fees Appraisal, Amounts charged for services. Revised tax return Notaries, Amounts charged for services. Revised tax return Points (see Points) Figures (see Tables and figures) Form 1040, Schedule A, How To Report, Table 2. Revised tax return Where To Deduct Your Interest Expense Form 1040, Schedule C or C-EZ, Table 2. Revised tax return Where To Deduct Your Interest Expense Form 1040, Schedule E, Table 2. Revised tax return Where To Deduct Your Interest Expense Form 1040, Schedule F, Table 2. Revised tax return Where To Deduct Your Interest Expense Form 1098, Form 1098, Mortgage Interest Statement Mortgage insurance premiums, Form 1098. Revised tax return Form 8396, Mortgage interest credit. Revised tax return Free tax services, Free help with your tax return. Revised tax return G Grandfathered debt, Fully deductible interest. Revised tax return , Grandfathered Debt, Line-of-credit mortgage. Revised tax return Ground rents, Redeemable ground rents. Revised tax return H Hardest Hit Fund Program, Hardest Hit Fund and Emergency Homeowners' Loan Programs. Revised tax return Help (see Tax help) Home, Publication 936 - Introductory Material Acquisition debt, Fully deductible interest. Revised tax return , Home Acquisition Debt Construction, Home under construction. Revised tax return Cost of, Cost of home or improvements. Revised tax return Destroyed, Home destroyed. Revised tax return Divided use, Divided use of your home. Revised tax return , Part of home not a qualified home. Revised tax return , Part of home not a qualified home. Revised tax return Equity debt, Fully deductible interest. Revised tax return , Home Equity Debt Equity debt only (Table 1), Home equity debt only. Revised tax return Fair market value, Fair market value (FMV). Revised tax return Grandfathered debt, Fully deductible interest. Revised tax return , Grandfathered Debt, Line-of-credit mortgage. Revised tax return Improvement loan, points, Home improvement loan. Revised tax return Main, Main home. Revised tax return Office in, Office in home. Revised tax return Qualified, Qualified Home Renting out part of, Renting out part of home. Revised tax return Sale of, Sale of home. Revised tax return Second, Second home. Revised tax return Time-sharing arrangements, Time-sharing arrangements. Revised tax return Housing allowance Ministers and military, Ministers' and military housing allowance. Revised tax return I Improvements Cost of, Cost of home or improvements. Revised tax return Home acquisition debt, Mortgage treated as used to buy, build, or improve home. Revised tax return Points, Home improvement loan. Revised tax return Substantial, Substantial improvement. Revised tax return Interest, Part I. Revised tax return Home Mortgage Interest (see also Mortgage interest) Interest rate method, Interest paid divided by interest rate method. Revised tax return Refunded, Refunds of interest. Revised tax return , Refunded interest. Revised tax return Where to deduct, Table 2. Revised tax return Where To Deduct Your Interest Expense Investments Average mortgage balance and total amount of interest allowable, Line 13 Mortgage proceeds used for, Mortgage proceeds invested in tax-exempt securities. Revised tax return , Mortgage proceeds used for business or investment. Revised tax return J Joint returns, Married taxpayers. Revised tax return L Lender mortgage statements, Statements provided by your lender. Revised tax return Limits Cooperative housing, mortgage interest deduction, Limits on deduction. Revised tax return Deductibility of mortgage insurance premiums, Limit on deduction. Revised tax return Deductibility of points, Limits on deduction. Revised tax return Home acquisition debt, Home acquisition debt limit. Revised tax return Home equity debt, Home equity debt limit. Revised tax return Home mortgage interest deduction, Form 1098. Revised tax return Qualified loan limit, Table 1. Revised tax return Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest For the Current Year See the Table 1 Instructions. Revised tax return , Average Mortgage Balance Line-of-credit mortgage, Line-of-credit mortgage. Revised tax return Loans, Mortgage proceeds used for business or investment. Revised tax return , Mortgage treated as used to buy, build, or improve home. Revised tax return (see also Mortgages) Home improvement, points, Home improvement loan. Revised tax return Qualified loan limit, Table 1. Revised tax return Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest For the Current Year See the Table 1 Instructions. Revised tax return M Main home, Main home. Revised tax return Married taxpayers, Married taxpayers. Revised tax return Military housing allowance, Ministers' and military housing allowance. Revised tax return Ministers' housing allowance, Ministers' and military housing allowance. Revised tax return Missing children, photographs of, Reminders Mixed-use mortgages, Mixed-use mortgages. Revised tax return Mortgage insurance premiums Claiming deductible, Claiming your deductible mortgage insurance premiums. Revised tax return Mortgage interest, Publication 936 - Introductory Material, Part I. Revised tax return Home Mortgage Interest Cooperative housing, Figuring deductible home mortgage interest. Revised tax return Credit, Mortgage interest credit. Revised tax return Fully deductible interest, Fully deductible interest. Revised tax return Home mortgage interest, Part I. Revised tax return Home Mortgage Interest, Hardest Hit Fund and Emergency Homeowners' Loan Programs. Revised tax return How to report, How To Report Late payment charges, Late payment charge on mortgage payment. Revised tax return Limits on deduction, Part II. Revised tax return Limits on Home Mortgage Interest Deduction Ministers' and military housing allowance, Ministers' and military housing allowance. Revised tax return Prepaid interest, Prepaid interest. Revised tax return , Prepaid interest on Form 1098. Revised tax return Prepayment penalty, Mortgage prepayment penalty. Revised tax return Refunds, Refunds of interest. Revised tax return , Refunded interest. Revised tax return Sale of home, Sale of home. Revised tax return Special situations, Special Situations Statement, Form 1098, Mortgage Interest Statement Where to deduct, Table 2. Revised tax return Where To Deduct Your Interest Expense Worksheet to figure (Table 1), Table 1. Revised tax return Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest For the Current Year See the Table 1 Instructions. Revised tax return Mortgages Assistance payments (under sec. Revised tax return 235 of National Housing Act), Mortgage assistance payments under section 235 of the National Housing Act. Revised tax return Average balance, Average Mortgage Balance Date of, Date of the mortgage. Revised tax return Ending early, Mortgage ending early. Revised tax return Late qualifying, Mortgage that qualifies later. Revised tax return Line-of-credit, Line-of-credit mortgage. Revised tax return Mixed-use, Mixed-use mortgages. Revised tax return Preparation costs for note or deed of trust, Amounts charged for services. Revised tax return Proceeds invested in tax-exempt securities, Mortgage proceeds invested in tax-exempt securities. Revised tax return Proceeds used for business, Mortgage proceeds used for business or investment. Revised tax return Proceeds used for investment, Mortgage proceeds used for business or investment. Revised tax return Qualified loan limit, Table 1. Revised tax return Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest For the Current Year See the Table 1 Instructions. Revised tax return , Average Mortgage Balance Refinanced, Refinancing. Revised tax return , Refinanced home acquisition debt. Revised tax return , Refinanced grandfathered debt. Revised tax return Reverse, Reverse mortgages. Revised tax return Statements provided by lender, Statements provided by your lender. Revised tax return To buy, build, or improve, Mortgage treated as used to buy, build, or improve home. Revised tax return Wraparound, Wraparound mortgage. Revised tax return N Nonredeemable ground rents, Nonredeemable ground rents. Revised tax return Notary fees, Amounts charged for services. Revised tax return O Office in home, Office in home. Revised tax return P Penalties Mortgage prepayment, Mortgage prepayment penalty. Revised tax return Points, Points, Deduction Allowed in Year Paid, Form 1098. Revised tax return Claiming deductible, Claiming your deductible points. Revised tax return Exception to general rule, Deduction Allowed in Year Paid Excess, Excess points. Revised tax return Funds provided less than, Funds provided are less than points. Revised tax return General rule, General Rule Home improvement loans, Home improvement loan. Revised tax return Seller paid, Points paid by the seller. Revised tax return Prepaid interest, Prepaid interest. Revised tax return , Prepaid interest on Form 1098. Revised tax return Prepayment penalties, Mortgage prepayment penalty. Revised tax return Publications (see Tax help) Q Qualified homes, Qualified Home Qualified loan limit Average mortgage balance, Average Mortgage Balance Worksheet to figure (Table 1), Table 1. Revised tax return Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest For the Current Year See the Table 1 Instructions. Revised tax return R Redeemable ground rents, Redeemable ground rents. Revised tax return Refinancing, Refinancing. Revised tax return Grandfathered debt, Refinanced grandfathered debt. Revised tax return Home acquisition debt, Refinanced home acquisition debt. Revised tax return Refunds, Refunds of interest. Revised tax return , Refunded interest. Revised tax return Rent Nonredeemable ground rents, Nonredeemable ground rents. Revised tax return Redeemable ground rents, Redeemable ground rents. Revised tax return Rental payments, Rental payments. Revised tax return Renting of home Part of, Renting out part of home. Revised tax return Time-sharing arrangements, Rental of time-share. Revised tax return Repairs, Substantial improvement. Revised tax return Reverse Mortgages, Reverse mortgages. Revised tax return S Sale of home, Sale of home. Revised tax return Second home, Second home. Revised tax return , Deduction Allowed in Year Paid Secured debt, Secured Debt Seller-paid points, Points paid by the seller. Revised tax return Separate returns, Separate returns. Revised tax return Separated taxpayers, Divorced or separated individuals. Revised tax return Spouses, Married taxpayers. Revised tax return Statements provided by lender, Statements provided by your lender. Revised tax return Stock Cooperative housing, Stock used to secure debt. Revised tax return T Tables and figures Deductible home mortgage interest Fully deductible, determination of (Figure A), Fully deductible interest. Revised tax return How to figure (Table 1), Table 1. Revised tax return Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest For the Current Year See the Table 1 Instructions. Revised tax return Mortgage to buy, build, or improve home (Figure C), Mortgage treated as used to buy, build, or improve home. Revised tax return Points (Figure B), Points Qualified loan limit worksheet (Table 1), Table 1. Revised tax return Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest For the Current Year See the Table 1 Instructions. Revised tax return Tax credits, Mortgage interest credit. Revised tax return Tax help, How To Get Tax Help Tax-exempt securities Mortgage proceeds invested in, Mortgage proceeds invested in tax-exempt securities. Revised tax return Time-sharing arrangements, Time-sharing arrangements. Revised tax return V Valuation Fair market value, Fair market value (FMV). Revised tax return W Worksheets Deductible home mortgage interest, Table 1. Revised tax return Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest For the Current Year See the Table 1 Instructions. Revised tax return Qualified loan limit, Table 1. Revised tax return Worksheet To Figure Your Qualified Loan Limit and Deductible Home Mortgage Interest For the Current Year See the Table 1 Instructions. Revised tax return Wraparound mortgages, Wraparound mortgage. Revised tax return Prev  Up     Home   More Online Publications
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Page Last Reviewed or Updated: 31-Mar-2014

The Revised Tax Return

Revised tax return 3. Revised tax return   Claiming the Special Depreciation Allowance Table of Contents Introduction What Is Qualified Property?Qualified Reuse and Recycling Property Qualified Cellulosic Biofuel Plant Property Qualified Disaster Assistance Property Certain Qualified Property Acquired After December 31, 2007 Election to Accelerate Certain Credits in Lieu of the Special Depreciation Allowance How Much Can You Deduct? How Can You Elect Not To Claim an Allowance? When Must You Recapture an Allowance? Introduction You can take a special depreciation allowance to recover part of the cost of qualified property (defined next), placed in service during the tax year. Revised tax return The allowance applies only for the first year you place the property in service. Revised tax return For qualified property placed in service in 2013, you can take an additional 50% special allowance. Revised tax return The allowance is an additional deduction you can take after any section 179 deduction and before you figure regular depreciation under MACRS for the year you place the property in service. Revised tax return This chapter explains what is qualified property. Revised tax return It also includes rules regarding how to figure an allowance, how to elect not to claim an allowance, and when you must recapture an allowance. Revised tax return Corporations can elect to accelerate certain minimum tax credits in lieu of claiming the special depreciation allowance for eligible qualified property. Revised tax return See Election to Accelerate Certain Credits in Lieu of the Special Depreciation Allowance , later. Revised tax return See chapter 6 for information about getting publications and forms. Revised tax return What Is Qualified Property? Your property is qualified property if it is one of the following. Revised tax return Qualified reuse and recycling property. Revised tax return Qualified cellulosic biofuel plant property. Revised tax return Qualified disaster assistance property. Revised tax return Certain qualified property acquired after December 31, 2007. Revised tax return The following discussions provide information about the types of qualified property listed above for which you can take the special depreciation allowance. Revised tax return Qualified Reuse and Recycling Property You can take a 50% special depreciation allowance for qualified reuse and recycling property. Revised tax return Qualified reuse and recycling property is any machinery or equipment (not including buildings or real estate), along with any appurtenance, that is used exclusively to collect, distribute, or recycle qualified reuse and recyclable materials (as defined in section 168(m)(3)(B) of the Internal Revenue Code). Revised tax return Qualified reuse and recycling property also includes software necessary to operate such equipment. Revised tax return The property must meet the following requirements. Revised tax return The property must be depreciated under MACRS. Revised tax return The property must have a useful life of at least 5 years. Revised tax return The original use of the property must begin with you after August 31, 2008. Revised tax return You must have acquired the property by purchase (as discussed under Property Acquired by Purchase in chapter 2 ) after August 31, 2008, with no binding written contract for the acquisition in effect before September 1, 2008. Revised tax return The property must be placed in service for use in your trade or business after August 31, 2008. Revised tax return Excepted Property Qualified reuse and recycling property does not include any of the following. Revised tax return Any rolling stock or other equipment used to transport reuse or recyclable materials. Revised tax return Property required to be depreciated using the Alternative Depreciation System (ADS). Revised tax return For other property required to be depreciated using ADS, see Required use of ADS under Which Depreciation System (GDS or ADS) Applies , in chapter 4 . Revised tax return Other bonus depreciation property to which section 168(k) of the Internal Revenue Code applies. Revised tax return Property for which you elected not to claim any special depreciation allowance (discussed later). Revised tax return Property placed in service and disposed of in the same tax year. Revised tax return Property converted from business use to personal use in the same tax year acquired. Revised tax return Property converted from personal use to business use in the same or later tax year may be qualified reuse and recycling property. Revised tax return Qualified Cellulosic Biofuel Plant Property You can take a 50% special depreciation allowance for qualified cellulosic biofuel plant property. Revised tax return Cellulosic biofuel is any liquid fuel which is produced from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis. Revised tax return Examples include bagasse (from sugar cane), corn stalks, and switchgrass. Revised tax return The property must meet the following requirements. Revised tax return The property is used in the United States solely to produce cellulosic biofuel. Revised tax return The original use of the property must begin with you after December 20, 2006. Revised tax return You must have acquired the property by purchase (as discussed under Property Acquired by Purchase in chapter 2 ) after December 20, 2006, with no binding written contract for acquisition in effect before December 21, 2006. Revised tax return The property must be placed in service for use in your trade or business or for the production of income after October 3, 2008, and before January 3, 2013. Revised tax return Note. Revised tax return For property placed in service after January 2, 2013, and before January 1, 2014, you can take a 50% special depreciation allowance for qualified second generation biofuel plant property that is used solely in the United States to produce second generation biofuel (as defined in section 40(b)(6)(E)). Revised tax return The other requirements for qualified second generation biofuel plant property to be eligible for the special depreciation allowance are identical to the requirements discussed for Qualified Cellulosic Biofuel Plant Property above. Revised tax return Special Rules Sale-leaseback. Revised tax return   If you sold qualified cellulosic biofuel plant property you placed in service after October 3, 2008, and leased it back within 3 months after you originally placed it in service, the property is treated as originally placed in service no earlier than the date it is used by you under the leaseback. Revised tax return   The property will not qualify for the special allowance if the lessee or a related person to the lessee or lessor had a written binding contract in effect for the acquisition of the property before December 21, 2006. Revised tax return Syndicated leasing transactions. Revised tax return   If qualified cellulosic biofuel plant property is originally placed in service by a lessor after October 3, 2008, the property is sold within 3 months of the date it was placed in service, and the user of the property does not change, then the property is treated as originally placed in service by the taxpayer no earlier than the date of the last sale. Revised tax return   Multiple units of property subject to the same lease will be treated as originally placed in service no earlier than the date of sale if the property is sold within 3 months after the final unit is placed in service and the period between the times the first and last units are placed in service does not exceed 12 months. Revised tax return Excepted Property Qualified cellulosic biofuel plant property does not include any of the following. Revised tax return Property placed in service and disposed of in the same tax year. Revised tax return Property converted from business use to personal use in the same tax year it is acquired. Revised tax return Property converted from personal use to business use in the same or later tax year may be qualified cellulosic biomass ethanol plant property. Revised tax return Property required to be depreciated using the Alternative Depreciation System (ADS). Revised tax return For other property required to be depreciated using ADS, see Required use of ADS under Which Depreciation System (GDS or ADS) Applies , in chapter 4 . Revised tax return Property any portion of which is financed with the proceeds of any obligation the interest on which is exempt from tax under section 103 of the Internal Revenue Code. Revised tax return Property for which you elected not to claim any special depreciation allowance (discussed later). Revised tax return Property for which a deduction was taken under section 179C for certain qualified refinery property. Revised tax return Other bonus depreciation property to which section 168(k) of the Internal Revenue Code applies. Revised tax return Qualified Disaster Assistance Property You can take a 50% special depreciation allowance for qualified disaster assistance property placed in service in federally declared disaster areas in which the disaster occurred in 2009. Revised tax return A list of the federally declared disaster areas is available at the FEMA website at www. Revised tax return fema. Revised tax return gov. Revised tax return Your property is qualified disaster assistance property if it meets the following requirements. Revised tax return The property is nonresidential real property or residential real property placed in service before January 1, 2014, in a federally declared disaster area in which the disaster occurred in 2009. Revised tax return You must have acquired the property by purchase (as discussed under Property Acquired by Purchase in chapter 2 ) on or after the applicable disaster date, with no binding written contract for the acquisition in effect before the applicable disaster date. Revised tax return The property must rehabilitate property damaged, or replace property destroyed or condemned, as a result of the applicable federally declared disaster. Revised tax return The property must be similar in nature to, and located in the same county as, the rehabilitated or replaced property. Revised tax return The original use of the property within the applicable disaster area must have begun with you on or after the applicable disaster date. Revised tax return The property is placed in service by you on or before the date which is the last day of the fourth calendar year. Revised tax return Substantially all (80% or more) of the use of the property must be in the active conduct of your trade or business in a federally declared disaster area, occurring in 2009. Revised tax return It is not excepted property (explained later in Excepted Property ). Revised tax return Special Rules Sale-leaseback. Revised tax return   If you sold qualified disaster assistance property you placed in service after the applicable disaster date and leased it back within 3 months after you originally placed it in service, the property is treated as originally placed in service no earlier than the date it is used by you under the leaseback. Revised tax return   The property will not qualify for the special allowance if the lessee or a related person to the lessee or lessor had a written binding contract in effect for the acquisition of the property before the applicable disaster date. Revised tax return Syndicated leasing transactions. Revised tax return   If qualified disaster assistance property is originally placed in service by a lessor after the applicable disaster date, the property is sold within 3 months of the date it was placed in service, and the user of the property does not change, then the property is treated as originally placed in service by the taxpayer no earlier than the date of the last sale. Revised tax return   Multiple units of property subject to the same lease will be treated as originally placed in service no earlier than the date of sale if the property is sold within 3 months after the final unit is placed in service and the period between the times the first and last units are placed in service does not exceed 12 months. Revised tax return Excepted Property Qualified disaster assistance property does not include any of the following. Revised tax return Property required to be depreciated using the Alternative Depreciation System (ADS). Revised tax return For other property required to be depreciated using ADS, see Required use of ADS under Which Depreciation System (GDS or ADS) Applies , in chapter 4 . Revised tax return Property any portion of which is financed with the proceeds of a tax-exempt obligation under section 103 of the Internal Revenue Code. Revised tax return Any qualified revitalization building (defined later) placed in service before January 1, 2010, for which you have elected to claim a commercial revitalization deduction for qualified revitalization expenditures. Revised tax return Any property used in connection with any private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, or any store, the principal business of which is the sale of alcoholic beverages for consumption off premises. Revised tax return Any property for which the special allowance under section 168(k) or section 1400N(d) of the Internal Revenue Code applies. Revised tax return Property for which you elected not to claim any special depreciation allowance (discussed later). Revised tax return Property placed in service and disposed of in the same tax year. Revised tax return Property converted from business use to personal use in the same tax year acquired. Revised tax return Property converted from personal use to business use in the same or later tax year may be qualified disaster assistance property. Revised tax return Any gambling or animal racing property (defined later). Revised tax return Qualified revitalization building. Revised tax return   This is a commercial building and its structural components that you placed in service in a renewal community before January 1, 2010. Revised tax return If the building is new, the original use of the building must begin with you. Revised tax return If the building is not new, you must substantially rehabilitate the building and then place it in service. Revised tax return For more information, including definitions of substantially rehabilitated building and qualified revitalization expenditure, see section 1400I(b) of the Internal Revenue Code. Revised tax return Gambling or animal racing property. Revised tax return   Gambling or animal racing property includes the following personal and real property. Revised tax return Any equipment, furniture, software, or other property used directly in connection with gambling, the racing of animals, or the on-site viewing of such racing. Revised tax return Any real property determined by square footage (other than any portion that is less than 100 square feet) that is dedicated to gambling, the racing of animals, or the on-site viewing of such racing. Revised tax return Certain Qualified Property Acquired After December 31, 2007 You can take a 50% special depreciation deduction allowance for certain qualified property acquired after December 31, 2007. Revised tax return Your property is qualified property if it meets the following requirements. Revised tax return It is one of the following types of property. Revised tax return Tangible property depreciated under MACRS with a recovery period of 20 years or less. Revised tax return Water utility property. Revised tax return Computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. Revised tax return (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. Revised tax return ) Qualified leasehold improvement property (defined under Qualified leasehold improvement property later). Revised tax return You must have acquired the property after December 31, 2007, with no binding written contract for the acquisition in effect before January 1, 2008. Revised tax return The property must be placed in service for use in your trade or business or for the production of income before January 1, 2014 (before January 1, 2015, for certain property with a long production period and certain aircraft (defined next)). Revised tax return The original use of the property must begin with you after December 31, 2007. Revised tax return It is not excepted property (explained later in Excepted property). Revised tax return Qualified leasehold improvement property. Revised tax return    Generally, this is any improvement to an interior part of a building that is nonresidential real property, if all the following requirements are met. Revised tax return The improvement is made under or according to a lease by the lessee (or any sublessee) or the lessor of that part of the building. Revised tax return That part of the building is to be occupied exclusively by the lessee (or any sublessee) of that part. Revised tax return The improvement is placed in service more than 3 years after the date the building was first placed in service by any person. Revised tax return The improvement is section 1250 property. Revised tax return See chapter 3 in Publication 544, Sales and Other Dispositions of Assets, for the definition of section 1250 property. Revised tax return   However, a qualified leasehold improvement does not include any improvement for which the expenditure is attributable to any of the following. Revised tax return The enlargement of the building. Revised tax return Any elevator or escalator. Revised tax return Any structural component benefiting a common area. Revised tax return The internal structural framework of the building. Revised tax return   Generally, a binding commitment to enter into a lease is treated as a lease and the parties to the commitment are treated as the lessor and lessee. Revised tax return However, a lease between related persons is not treated as a lease. Revised tax return Related persons. Revised tax return   For this purpose, the following are related persons. Revised tax return Members of an affiliated group. Revised tax return An individual and a member of his or her family, including only a spouse, child, parent, brother, sister, half-brother, half-sister, ancestor, and lineal descendant. Revised tax return A corporation and an individual who directly or indirectly owns 80% or more of the value of the outstanding stock of that corporation. Revised tax return Two corporations that are members of the same controlled group. Revised tax return A trust fiduciary and a corporation if 80% or more of the value of the outstanding stock is directly or indirectly owned by or for the trust or grantor of the trust. Revised tax return The grantor and fiduciary, and the fiduciary and beneficiary, of any trust. Revised tax return The fiduciaries of two different trusts, and the fiduciaries and beneficiaries of two different trusts, if the same person is the grantor of both trusts. Revised tax return A tax-exempt educational or charitable organization and any person (or, if that person is an individual, a member of that person's family) who directly or indirectly controls the organization. Revised tax return Two S corporations, and an S corporation and a regular corporation, if the same persons own 80% or more of the value of the outstanding stock of each corporation. Revised tax return A corporation and a partnership if the same persons own both of the following. Revised tax return 80% or more of the value of the outstanding stock of the corporation. Revised tax return 80% or more of the capital or profits interest in the partnership. Revised tax return The executor and beneficiary of any estate. Revised tax return Long Production Period Property To be qualified property, long production period property must meet the following requirements. Revised tax return It must meet the requirements in (2)-(5), above. Revised tax return The property has a recovery period of at least 10 years or is transportation property. Revised tax return Transportation property is tangible personal property used in the trade or business of transporting persons or property. Revised tax return The property is subject to section 263A of the Internal Revenue Code. Revised tax return The property has an estimated production period exceeding 1 year and an estimated production cost exceeding $1,000,000. Revised tax return Noncommercial Aircraft To be qualified property, noncommercial aircraft must meet the following requirements. Revised tax return It must meet the requirements in (2)-(5), above. Revised tax return The aircraft must not be tangible personal property used in the trade or business of transporting persons or property (except for agricultural or firefighting purposes). Revised tax return The aircraft must be purchased (as discussed under Property Acquired by Purchase in chapter 2 ) by a purchaser who at the time of the contract for purchase, makes a nonrefundable deposit of the lesser of 10% of the cost or $100,000. Revised tax return The aircraft must have an estimated production period exceeding four months and a cost exceeding $200,000. Revised tax return Special Rules Sale-leaseback. Revised tax return   If you sold qualified property you placed in service after December 31, 2007, and leased it back within 3 months after you originally placed in service, the property is treated as originally placed in service no earlier than the date it is used by you under the leaseback. Revised tax return   The property will not qualify for the special depreciation allowance if the lessee or a related person to the lessee or lessor had a written binding contract in effect for the acquisition of the property before January 1, 2008. Revised tax return Syndicated leasing transactions. Revised tax return   If qualified property is originally placed in service by a lessor after December 31, 2007, the property is sold within 3 months of the date it was placed in service, and the user of the property does not change, then the property is treated as originally placed in service by the taxpayer no earlier than the date of the last sale. Revised tax return   Multiple units of property subject to the same lease will be treated as originally placed in service no earlier than the date of the last sale if the property is sold within 3 months after the final unit is placed in service and the period between the time the first and last units are placed in service does not exceed 12 months. Revised tax return Excepted Property Qualified property does not include any of the following. Revised tax return Property placed in service and disposed of in the same tax year. Revised tax return Property converted from business use to personal use in the same tax year acquired. Revised tax return Property converted from personal use to business use in the same or later tax year may be qualified property. Revised tax return Property required to be depreciated under the Alternative Depreciation System (ADS). Revised tax return This includes listed property used 50% or less in a qualified business use. Revised tax return For other property required to be depreciated using ADS, see Required use of ADS under Which Depreciation System (GDS or ADS) Applies , in chapter 4 . Revised tax return Qualified restaurant property (as defined in section 168(e)(7) of the Internal Revenue Code). Revised tax return Qualified retail improvement property (as defined in section 168(e)(8) of the Internal Revenue Code). Revised tax return Property for which you elected not to claim any special depreciation allowance (discussed later). Revised tax return Property for which you elected to accelerate certain credits in lieu of the special depreciation allowance (discussed next). Revised tax return Election to Accelerate Certain Credits in Lieu of the Special Depreciation Allowance An election made by a corporation to claim pre-2006 unused minimum tax credits in lieu of claiming the special depreciation allowance for either its first tax year ending after March 31, 2008, its first tax year ending after December 31, 2008, or its first tax year ending after December 31, 2010, continues to apply to round 2 extension property (as defined in section 168(k)(4)(I)(iv)), unless the corporation made an election not to apply the section 168(k)(4) election to round 2 extension property for its first tax year ending after December 31, 2010. Revised tax return For 2013, round 2 extension property generally is long production period and noncommercial aircraft if acquired after March 31, 2008, and placed in service after December 31, 2012, but before January 1, 2014. Revised tax return An election made by a corporation to claim pre-2006 unused minimum tax credits in lieu of claiming the special depreciation allowance for either its first tax year ending after March 31, 2008, its first tax year ending after December 31, 2008, or its first tax year ending after December 31, 2010, continues to apply to round 3 extension property (as defined in section 168(k)(4)(J)(iv)), unless the corporation makes an election not to apply the section 168(k)(4) election to round 3 extension property. Revised tax return If a corporation did not make a section 168(k)(4) election for either its first tax year ending after March 31, 2008, its first tax year ending after December 31, 2008, or its first tax year ending after December 31, 2010, the corporation may elect for its first tax year ending after December 31, 2012, to claim pre-2006 unused minimum tax credits in lieu of claiming the special depreciation allowance for only round 3 extension property. Revised tax return If you make an election to accelerate these credits in lieu of claiming the special depreciation allowance for eligible property, you must not take the 50% special depreciation allowance for the property and must depreciate the basis in the property under MACRS using the straight line method. Revised tax return See Which Depreciation Method Applies in chapter 4 . Revised tax return Once made, the election cannot be revoked without IRS consent. Revised tax return Additional guidance. Revised tax return   For additional guidance on the election to accelerate the research or minimum tax credit in lieu of claiming the special depreciation allowance, see Rev. Revised tax return Proc. Revised tax return 2008-65 on page 1082 of Internal Revenue Bulletin 2008-44, available at www. Revised tax return irs. Revised tax return gov/pub/irs-irbs/irb08-44. Revised tax return pdf, Rev. Revised tax return Proc. Revised tax return 2009-16 on page 449 of Internal Revenue Bulletin 2009-06, available at www. Revised tax return irs. Revised tax return gov/pub/irs-irbs/irb09-06. Revised tax return pdf, and Rev. Revised tax return Proc. Revised tax return 2009-33 on page 150 of Internal Revenue Bulletin 2009-29, available at www. Revised tax return irs. Revised tax return gov/pub/irs-irbs/irb09-29. Revised tax return pdf. Revised tax return Also, see Form 3800, General Business Credit; Form 8827, Credit for Prior Year Minimum Tax — Corporations; and related instructions. Revised tax return   Additional guidance regarding the election to accelerate the minimum tax credit in lieu of claiming the special depreciation allowance for round 2 extension property and round 3 extension property may also be available in later Internal Revenue Bulletins available at www. Revised tax return irs. Revised tax return gov/irb. Revised tax return How Much Can You Deduct? Figure the special depreciation allowance by multiplying the depreciable basis of qualified reuse and recycling property, qualified cellulosic biofuel plant property, qualified disaster assistance property, and certain qualified property acquired after December 31, 2007, by 50%. Revised tax return For qualified property other than listed property, enter the special allowance on line 14 in Part II of Form 4562. Revised tax return For qualified property that is listed property, enter the special allowance on line 25 in Part V of Form 4562. Revised tax return If you place qualified property in service in a short tax year, you can take the full amount of a special depreciation allowance. Revised tax return Depreciable basis. Revised tax return   This is the property's cost or other basis multiplied by the percentage of business/investment use, reduced by the total amount of any credits and deductions allocable to the property. Revised tax return   The following are examples of some credits and deductions that reduce depreciable basis. Revised tax return Any section 179 deduction. Revised tax return Any deduction for removal of barriers to the disabled and the elderly. Revised tax return Any disabled access credit, enhanced oil recovery credit, and credit for employer-provided childcare facilities and services. Revised tax return Basis adjustment to investment credit property under section 50(c) of the Internal Revenue Code. Revised tax return   For additional credits and deductions that affect basis, see section 1016 of the Internal Revenue Code. Revised tax return   For information about how to determine the cost or other basis of property, see What Is the Basis of Your Depreciable Property in chapter 1 . Revised tax return For a discussion of business/investment use, see Partial business or investment use under Property Used in Your Business or Income-Producing Activity in chapter 1 . Revised tax return Depreciating the remaining cost. Revised tax return   After you figure your special depreciation allowance for your qualified property, you can use the remaining cost to figure your regular MACRS depreciation deduction (discussed in chapter 4 . Revised tax return Therefore, you must reduce the depreciable basis of the property by the special depreciation allowance before figuring your regular MACRS depreciation deduction. Revised tax return Example. Revised tax return On November 1, 2013, Tom Brown bought and placed in service in his business qualified property that cost $450,000. Revised tax return He did not elect to claim a section 179 deduction. Revised tax return He deducts 50% of the cost ($225,000) as a special depreciation allowance for 2013. Revised tax return He uses the remaining $225,000 of cost to figure his regular MACRS depreciation deduction for 2013 and later years. Revised tax return Like-kind exchanges and involuntary conversions. Revised tax return   If you acquire qualified property in a like-kind exchange or involuntary conversion, the carryover basis of the acquired property is eligible for a special depreciation allowance. Revised tax return After you figure your special allowance, you can use the remaining carryover basis to figure your regular MACRS depreciation deduction. Revised tax return In the year you claim the allowance (the year you place in service the property received in the exchange or dispose of involuntarily converted property), you must reduce the carryover basis of the property by the allowance before figuring your regular MACRS depreciation deduction. Revised tax return See Figuring the Deduction for Property Acquired in a Nontaxable Exchange , in chapter 4 under How Is the Depreciation Deduction Figured . Revised tax return The excess basis (the part of the acquired property's basis that exceeds its carryover basis) is also eligible for a special depreciation allowance. Revised tax return How Can You Elect Not To Claim an Allowance? You can elect, for any class of property, not to deduct any special allowances for all property in such class placed in service during the tax year. Revised tax return To make an election, attach a statement to your return indicating what election you are making and the class of property for which you are making the election. Revised tax return When to make election. Revised tax return   Generally, you must make the election on a timely filed tax return (including extensions) for the year in which you place the property in service. Revised tax return   However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the original return (not including extensions). Revised tax return Attach the election statement to the amended return. Revised tax return On the amended return, write “Filed pursuant to section 301. Revised tax return 9100-2. Revised tax return ” Revoking an election. Revised tax return   Once you elect not to deduct a special depreciation allowance for a class of property, you cannot revoke the election without IRS consent. Revised tax return A request to revoke the election is a request for a letter ruling. Revised tax return If you elect not to have any special allowance apply, the property may be subject to an alternative minimum tax adjustment for depreciation. Revised tax return When Must You Recapture an Allowance? When you dispose of property for which you claimed a special depreciation allowance, any gain on the disposition is generally recaptured (included in income) as ordinary income up to the amount of the special depreciation allowance previously allowed or allowable. Revised tax return See When Do You Recapture MACRS Depreciation in chapter 4 or more information. Revised tax return Recapture of allowance deducted for qualified GO Zone property. Revised tax return   If, in any year after the year you claim the special depreciation allowance for qualified GO Zone property (including specified GO Zone extension property), the property ceases to be used in the GO Zone, you may have to recapture as ordinary income the excess benefit you received from claiming the special depreciation allowance. Revised tax return For additional guidance, see Notice 2008-25 on page 484 of Internal Revenue Bulletin 2008-9. Revised tax return Qualified cellulosic biomass ethanol plant property and qualified cellulosic biofuel plant property. Revised tax return   If, in any year after the year you claim the special depreciation allowance for any qualified cellulosic biomass ethanol plant property or qualified biofuel plant property, the property ceases to be qualified cellulosic biomass ethanol plant property or qualified biofuel plant property, you may have to recapture as ordinary income the excess benefit you received from claiming the special depreciation allowance. Revised tax return Recapture of allowance for qualified Recovery Assistance property. Revised tax return   If, in any year after the year you claim the special depreciation allowance for qualified Recovery Assistance property, the property ceases to be used in the Kansas disaster area, you may have to recapture as ordinary income the excess benefit you received from claiming the special depreciation allowance. Revised tax return For additional guidance, see Notice 2008-67 on page 307 of Internal Revenue Bulletin 2008-32. Revised tax return Recapture of allowance for qualified disaster assistance property. Revised tax return   If, in any year after the year you claim the special depreciation allowance for qualified disaster assistance property, the property ceases to be used in the applicable disaster area, you may have to recapture as ordinary income the excess benefit you received from claiming the special depreciation allowance. Revised tax return   For additional guidance, see Notice 2008-67 on page 307 of Internal Revenue Bulletin 2008-32. Revised tax return Prev  Up  Next   Home   More Online Publications