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

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

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

3. E-File for FREE

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

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

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

Tax Forms 2008

Free State Tax Return FilingHow To File A 2011 Tax Return For FreeTax Form 1040 EzDid I File 2011 TaxesMilitary Turbotax1040ez 2012 Fillable FormFile 2012 Taxes TurbotaxTax Forms Online 2012Us Military Taxes1040ez Earned Income CreditI Need To Find A Place On Line To File Back TaxesIrs Form 1040 2012Form 1040 EzPrior TaxFile 2007 TaxesInstructions For Form 1040ezH And R Block MilitaryTax Penalty UnderpaymentHow To E-file 2012 TaxesFile Taxes 2009Turbotax Premier Federal E File State 2012Amend 2012 Tax ReturnHow To Amend My 2011 Tax ReturnWww Myfreetaxes Com UnitedwaymhcTaxs 20121040 Ez File OnlineHow To File 2012 TaxesWww Irs Gov EfileFile Amended Return Online1040ez Worksheet Line FWhere To File Federal Tax Return 2012Copy 2011 TaxesIrs 1040 EzTaxes Supplemental Security Income SsiAmend 2010 Return2007 Free Tax SoftwareRevised Tax ReturnTurbotax Free State File2012 Tax Filing For FreeI Want To File My 2011 Taxes

Tax Forms 2008

Tax forms 2008 3. Tax forms 2008   Investment Expenses Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Limits on DeductionsPassive activity. Tax forms 2008 Other income (nonpassive income). Tax forms 2008 Expenses. Tax forms 2008 Additional information. Tax forms 2008 Interest ExpensesInvestment Interest Limit on Deduction Bond Premium AmortizationSpecial rules to determine amounts payable on a bond. Tax forms 2008 Basis. Tax forms 2008 How To Figure Amortization Choosing To Amortize How To Report Amortization Expenses of Producing IncomeFees to buy or sell. Tax forms 2008 Including mutual fund or REMIC expenses in income. Tax forms 2008 Nondeductible ExpensesUsed as collateral. Tax forms 2008 Short-sale expenses. Tax forms 2008 Expenses for both tax-exempt and taxable income. Tax forms 2008 State income taxes. Tax forms 2008 Nondeductible amount. Tax forms 2008 Basis adjustment. Tax forms 2008 How To Report Investment Expenses When To Report Investment Expenses Topics - This chapter discusses: Limits on Deductions , Interest Expenses , Bond Premium Amortization , Expenses of Producing Income , Nondeductible Expenses , How To Report Investment Expenses , and When To Report Investment Expenses . Tax forms 2008 Useful Items - You may want to see: Publication 535 Business Expenses 925 Passive Activity and At-Risk Rules 929 Tax Rules for Children and Dependents Form (and Instructions) Schedule A (Form 1040) Itemized Deductions 4952 Investment Interest Expense Deduction See chapter 5, How To Get Tax Help , for information about getting these publications and forms. Tax forms 2008 Limits on Deductions Your deductions for investment expenses may be limited by: The at-risk rules, The passive activity loss limits, The limit on investment interest, or The 2% limit on certain miscellaneous itemized deductions. Tax forms 2008 The at-risk rules and passive activity rules are explained briefly in this section. Tax forms 2008 The limit on investment interest is explained later in this chapter under Interest Expenses . Tax forms 2008 The 2% limit is explained later in this chapter under Expenses of Producing Income . Tax forms 2008 At-risk rules. Tax forms 2008   Special at-risk rules apply to most income-producing activities. Tax forms 2008 These rules limit the amount of loss you can deduct to the amount you risk losing in the activity. Tax forms 2008 Generally, this is the cash and the adjusted basis of property you contribute to the activity. Tax forms 2008 It also includes money you borrow for use in the activity if you are personally liable for repayment or if you use property not used in the activity as security for the loan. Tax forms 2008 For more information, see Publication 925. Tax forms 2008 Passive activity losses and credits. Tax forms 2008   The amount of losses and tax credits you can claim from passive activities is limited. Tax forms 2008 Generally, you are allowed to deduct passive activity losses only up to the amount of your passive activity income. Tax forms 2008 Also, you can use credits from passive activities only against tax on the income from passive activities. Tax forms 2008 There are exceptions for certain activities, such as rental real estate activities. Tax forms 2008 Passive activity. Tax forms 2008   A passive activity generally is any activity involving the conduct of any trade or business in which you do not materially participate and any rental activity. Tax forms 2008 However, if you are involved in renting real estate, the activity is not a passive activity if both of the following are true. Tax forms 2008 More than one-half of the personal services you perform during the year in all trades or businesses are performed in real property trades or businesses in which you materially participate. Tax forms 2008 You perform more than 750 hours of services during the year in real property trades or businesses in which you materially participate. Tax forms 2008  The term “trade or business” generally means any activity that involves the conduct of a trade or business, is conducted in anticipation of starting a trade or business, or involves certain research or experimental expenditures. Tax forms 2008 However, it does not include rental activities or certain activities treated as incidental to holding property for investment. Tax forms 2008   You are considered to materially participate in an activity if you are involved on a regular, continuous, and substantial basis in the operations of the activity. Tax forms 2008 Other income (nonpassive income). Tax forms 2008    Generally, you can use losses from passive activities only to offset income from passive activities. Tax forms 2008 You cannot use passive activity losses to offset your other income, such as your wages or your portfolio income. Tax forms 2008 Portfolio income includes gross income from interest, dividends, annuities, or royalties that is not derived in the ordinary course of a trade or business. Tax forms 2008 It also includes gains or losses (not derived in the ordinary course of a trade or business) from the sale or trade of property (other than an interest in a passive activity) producing portfolio income or held for investment. Tax forms 2008 This includes capital gain distributions from mutual funds (and other regulated investment companies) and real estate investment trusts. Tax forms 2008   You cannot use passive activity losses to offset Alaska Permanent Fund dividends. Tax forms 2008 Expenses. Tax forms 2008   Do not include in the computation of your passive activity income or loss: Expenses (other than interest) that are clearly and directly allocable to your portfolio income, or Interest expense properly allocable to portfolio income. Tax forms 2008 However, this interest and other expenses may be subject to other limits. Tax forms 2008 These limits are explained in the rest of this chapter. Tax forms 2008 Additional information. Tax forms 2008   For more information about determining and reporting income and losses from passive activities, see Publication 925. Tax forms 2008 Interest Expenses This section discusses interest expenses you may be able to deduct as an investor. Tax forms 2008 For information on business interest, see chapter 4 of Publication 535. Tax forms 2008 You cannot deduct personal interest expenses other than qualified home mortgage interest, as explained in Publication 936, Home Mortgage Interest Deduction, and interest on certain student loans, as explained in Publication 970. Tax forms 2008 Investment Interest If you borrow money to buy property you hold for investment, the interest you pay is investment interest. Tax forms 2008 You can deduct investment interest subject to the limit discussed later. Tax forms 2008 However, you cannot deduct interest you incurred to produce tax-exempt income. Tax forms 2008 See Tax-exempt income under Nondeductible Expenses, later. Tax forms 2008 You also cannot deduct interest expenses on straddles discussed under Interest expense and carrying charges on straddles , later. Tax forms 2008 Investment interest does not include any qualified home mortgage interest or any interest taken into account in computing income or loss from a passive activity. Tax forms 2008 Investment property. Tax forms 2008   Property held for investment includes property that produces interest, dividends, annuities, or royalties not derived in the ordinary course of a trade or business. Tax forms 2008 It also includes property that produces gain or loss (not derived in the ordinary course of a trade or business) from the sale or trade of property producing these types of income or held for investment (other than an interest in a passive activity). Tax forms 2008 Investment property also includes an interest in a trade or business activity in which you did not materially participate (other than a passive activity). Tax forms 2008 Partners, shareholders, and beneficiaries. Tax forms 2008   To determine your investment interest, combine your share of investment interest from a partnership, S corporation, estate, or trust with your other investment interest. Tax forms 2008 Allocation of Interest Expense If you borrow money for business or personal purposes as well as for investment, you must allocate the debt among those purposes. Tax forms 2008 Only the interest expense on the part of the debt used for investment purposes is treated as investment interest. Tax forms 2008 The allocation is not affected by the use of property that secures the debt. Tax forms 2008 Example 1. Tax forms 2008 You borrow $10,000 and use $8,000 to buy stock. Tax forms 2008 You use the other $2,000 to buy items for your home. Tax forms 2008 Since 80% of the debt is used for, and allocated to, investment purposes, 80% of the interest on that debt is investment interest. Tax forms 2008 The other 20% is nondeductible personal interest. Tax forms 2008 Debt proceeds received in cash. Tax forms 2008   If you receive debt proceeds in cash, the proceeds are generally not treated as investment property. Tax forms 2008 Debt proceeds deposited in account. Tax forms 2008   If you deposit debt proceeds in an account, that deposit is treated as investment property, regardless of whether the account bears interest. Tax forms 2008 But, if you withdraw the funds and use them for another purpose, you must reallocate the debt to determine the amount considered to be for investment purposes. Tax forms 2008 Example 2. Tax forms 2008 Assume in Example 1 that you borrowed the money on March 1 and immediately bought the stock for $8,000. Tax forms 2008 You did not buy the household items until June 1. Tax forms 2008 You had deposited the $2,000 in the bank. Tax forms 2008 You had no other transactions on the bank account until June. Tax forms 2008 You did not sell the stock, and you made no principal payments on the debt. Tax forms 2008 You paid interest from another account. Tax forms 2008 The $8,000 is treated as being used for an investment purpose. Tax forms 2008 The $2,000 is treated as being used for an investment purpose for the 3-month period. Tax forms 2008 Your total interest expense for 3 months on this debt is investment interest. Tax forms 2008 In June, when you spend the $2,000 for household items, you must begin to allocate 80% of the debt and the interest expense to investment purposes and 20% to personal purposes. Tax forms 2008 Amounts paid within 30 days. Tax forms 2008   If you receive loan proceeds in cash or if the loan proceeds are deposited in an account, you can treat any payment (up to the amount of the proceeds) made from any account you own, or from cash, as made from those proceeds. Tax forms 2008 This applies to any payment made within 30 days before or after the proceeds are received in cash or deposited in your account. Tax forms 2008   If you received the loan proceeds in cash, you can treat the payment as made on the date you received the cash instead of the date you actually made the payment. Tax forms 2008 Payments on debt may require new allocation. Tax forms 2008   As you repay a debt used for more than one purpose, you must reallocate the balance. Tax forms 2008 You must first reduce the amount allocated to personal purposes by the repayment. Tax forms 2008 You then reallocate the rest of the debt to find what part is for investment purposes. Tax forms 2008 Example 3. Tax forms 2008 If, in Example 2 , you repay $500 on November 1, the entire repayment is applied against the amount allocated to personal purposes. Tax forms 2008 The debt balance is now allocated as $8,000 for investment purposes and $1,500 for personal purposes. Tax forms 2008 Until the next reallocation is necessary, 84% ($8,000 ÷ $9,500) of the debt and the interest expense is allocated to investment. Tax forms 2008 Pass-through entities. Tax forms 2008   If you use borrowed funds to buy an interest in a partnership or S corporation, then the interest on those funds must be allocated based on the assets of the entity. Tax forms 2008 If you contribute to the capital of the entity, you can make the allocation using any reasonable method. Tax forms 2008 Additional allocation rules. Tax forms 2008   For more information about allocating interest expense, see chapter 4 of Publication 535. Tax forms 2008 When To Deduct Investment Interest If you use the cash method of accounting, you must pay the interest before you can deduct it. Tax forms 2008 If you use an accrual method of accounting, you can deduct interest over the period it accrues, regardless of when you pay it. Tax forms 2008 For an exception, see Unpaid expenses owed to related party under When To Report Investment Expenses, later in this chapter. Tax forms 2008 Example. Tax forms 2008 You borrowed $1,000 on August 26, 2013, payable in 90 days at 12% interest. Tax forms 2008 On November 26, 2013, you paid this with a new note for $1,030, due on February 26, 2014. Tax forms 2008 If you use the cash method of accounting, you cannot deduct any part of the $30 interest on your return for 2013 because you did not actually pay it. Tax forms 2008 If you use an accrual method, you may be able to deduct a portion of the interest on the loans through December 31, 2013, on your return for 2013. Tax forms 2008 Interest paid in advance. Tax forms 2008   Generally, if you pay interest in advance for a period that goes beyond the end of the tax year, you must spread the interest over the tax years to which it belongs under the OID rules discussed in chapter 1. Tax forms 2008 You can deduct in each year only the interest for that year. Tax forms 2008 Interest on margin accounts. Tax forms 2008   If you are a cash method taxpayer, you can deduct interest on margin accounts to buy taxable securities as investment interest in the year you paid it. Tax forms 2008 You are considered to have paid interest on these accounts only when you actually pay the broker or when payment becomes available to the broker through your account. Tax forms 2008 Payment may become available to the broker through your account when the broker collects dividends or interest for your account, or sells securities held for you or received from you. Tax forms 2008   You cannot deduct any interest on money borrowed for personal reasons. Tax forms 2008 Limit on interest deduction for market discount bonds. Tax forms 2008   The amount you can deduct for interest expense you paid or accrued during the year to buy or carry a market discount bond may be limited. Tax forms 2008 This limit does not apply if you accrue the market discount and include it in your income currently. Tax forms 2008   Under this limit, the interest is deductible only to the extent it is more than: The total interest and OID includible in gross income for the bond for the year, plus The market discount for the number of days you held the bond during the year. Tax forms 2008 Figure the amount in (2) above using the rules for figuring accrued market discount in chapter 1 under Market Discount Bonds . Tax forms 2008 Interest not deducted due to limit. Tax forms 2008   In the year you dispose of the bond, you can deduct any interest expense you were not allowed to deduct in earlier years because of the limit. Tax forms 2008 Choosing to deduct disallowed interest expense before the year of disposition. Tax forms 2008   You can choose to deduct disallowed interest expense in any year before the year you dispose of the bond, up to your net interest income from the bond during the year. Tax forms 2008 The rest of the disallowed interest expense remains deductible in the year you dispose of the bond. Tax forms 2008 Net interest income. Tax forms 2008   This is the interest income (including OID) from the bond that you include in income for the year, minus the interest expense paid or accrued during the year to purchase or carry the bond. Tax forms 2008 Limit on interest deduction for short-term obligations. Tax forms 2008   If the current income inclusion rules discussed in chapter 1 under Discount on Short-Term Obligations do not apply to you, the amount you can deduct for interest expense you paid or accrued during the year to buy or carry a short-term obligation is limited. Tax forms 2008   The interest is deductible only to the extent it is more than: The amount of acquisition discount or OID on the obligation for the tax year, plus The amount of any interest payable on the obligation for the year that is not included in income because of your accounting method (other than interest taken into account in determining the amount of acquisition discount or OID). Tax forms 2008 The method of determining acquisition discount and OID for short-term obligations is discussed in chapter 1 under Discount on Short-Term Obligations . Tax forms 2008 Interest not deducted due to limit. Tax forms 2008   In the year you dispose of the obligation, or, if you choose, in another year in which you have net interest income from the obligation, you can deduct any interest expense you were not allowed to deduct for an earlier year because of the limit. Tax forms 2008 Follow the same rules provided in the earlier discussion under Limit on interest deduction for market discount bonds , earlier. Tax forms 2008 Limit on Deduction Generally, your deduction for investment interest expense is limited to your net investment income. Tax forms 2008 You can carry over the amount of investment interest you could not deduct because of this limit to the next tax year. Tax forms 2008 The interest carried over is treated as investment interest paid or accrued in that next year. Tax forms 2008 You can carry over disallowed investment interest to the next tax year even if it is more than your taxable income in the year the interest was paid or accrued. Tax forms 2008 Net Investment Income Determine the amount of your net investment income by subtracting your investment expenses (other than interest expense) from your investment income. Tax forms 2008 Investment income. Tax forms 2008   This generally includes your gross income from property held for investment (such as interest, dividends, annuities, and royalties). Tax forms 2008 Investment income does not include Alaska Permanent Fund dividends. Tax forms 2008 It also does not include qualified dividends or net capital gain unless you choose to include them. Tax forms 2008 Choosing to include qualified dividends. Tax forms 2008   Investment income generally does not include qualified dividends, discussed in chapter 1. Tax forms 2008 However, you can choose to include all or part of your qualified dividends in investment income. Tax forms 2008   You make this choice by completing Form 4952, line 4g, according to its instructions. Tax forms 2008   If you choose to include any of your qualified dividends in investment income, you must reduce your qualified dividends that are eligible for the lower capital gains tax rates by the same amount. Tax forms 2008 Choosing to include net capital gain. Tax forms 2008    Investment income generally does not include net capital gain from disposing of investment property (including capital gain distributions from mutual funds). Tax forms 2008 However, you can choose to include all or part of your net capital gain in investment income. Tax forms 2008   You make this choice by completing Form 4952, line 4g, according to its instructions. Tax forms 2008   If you choose to include any of your net capital gain in investment income, you must reduce your net capital gain that is eligible for the lower capital gains tax rates by the same amount. Tax forms 2008   For more information about the capital gains rates, see Capital Gain Tax Rates in chapter 4. Tax forms 2008    Before making either choice, consider the overall effect on your tax liability. Tax forms 2008 Compare your tax if you make one or both of these choices with your tax if you do not. Tax forms 2008 Investment income of child reported on parent's return. Tax forms 2008   Investment income includes the part of your child's interest and dividend income you choose to report on your return. Tax forms 2008 If the child does not have qualified dividends, Alaska Permanent Fund dividends, or capital gain distributions, this is the amount on line 6 of Form 8814. Tax forms 2008 Include it on line 4a of Form 4952. Tax forms 2008 Example. Tax forms 2008 Your 8-year-old son has interest income of $2,200, which you choose to report on your own return. Tax forms 2008 You enter $2,200 on Form 8814, lines 1a and 4, and $200 on lines 6 and 12 and complete Part II. Tax forms 2008 Also enter $200 on Form 1040, line 21. Tax forms 2008 Your investment income includes this $200. Tax forms 2008 Child's qualified dividends. Tax forms 2008   If part of the amount you report is your child's qualified dividends, that part (which is reported on Form 1040, line 9b) generally does not count as investment income. Tax forms 2008 However, you can choose to include all or part of it in investment income, as explained under Choosing to include qualified dividends , earlier. Tax forms 2008   Your investment income also includes the amount on Form 8814, line 12 (or, if applicable, the reduced amount figured next under Child's Alaska Permanent Fund dividends). Tax forms 2008 Child's Alaska Permanent Fund dividends. Tax forms 2008   If part of the amount you report is your child's Alaska Permanent Fund dividends, that part does not count as investment income. Tax forms 2008 To figure the amount of your child's income that you can consider your investment income, start with the amount on Form 8814, line 6. Tax forms 2008 Multiply that amount by a percentage that is equal to the Alaska Permanent Fund dividends divided by the total amount on Form 8814, line 4. Tax forms 2008 Subtract the result from the amount on Form 8814, line 12. Tax forms 2008 Example. Tax forms 2008 Your 10-year-old child has taxable interest income of $4,000 and Alaska Permanent Fund dividends of $2,000. Tax forms 2008 You choose to report this on your return. Tax forms 2008 You enter $4,000 on Form 8814, line 1a, $2,000 on line 2a, and $6,000 on line 4. Tax forms 2008 You then enter $4,000 on Form 8814, lines 6 and 12, and Form 1040, line 21. Tax forms 2008 You figure the amount of your child's income that you can consider your investment income as follows: $4,000 − ($4,000 × ($2,000 ÷ $6,000)) = $2,667 You include the result, $2,667, on Form 4952, line 4a. Tax forms 2008 Child's capital gain distributions. Tax forms 2008   If part of the amount you report is your child's capital gain distributions, that part (which is reported on Schedule D (Form 1040), line 13, or Form 1040, line 13) generally does not count as investment income. Tax forms 2008 However, you can choose to include all or part of it in investment income, as explained in Choosing to include net capital gain , earlier. Tax forms 2008   Your investment income also includes the amount on Form 8814, line 12 (or, if applicable, the reduced amount figured under Child's Alaska Permanent Fund dividends , earlier). Tax forms 2008 Investment expenses. Tax forms 2008   Investment expenses are your allowed deductions (other than interest expense) directly connected with the production of investment income. Tax forms 2008 Investment expenses that are included as a miscellaneous itemized deduction on Schedule A (Form 1040) are allowable deductions after applying the 2% limit that applies to miscellaneous itemized deductions. Tax forms 2008 Use the smaller of: The investment expenses included on Schedule A (Form 1040), line 23, or The amount on Schedule A (Form 1040), line 27. Tax forms 2008 See Expenses of Producing Income , later, for a discussion of the 2% limit. Tax forms 2008 Losses from passive activities. Tax forms 2008   Income or expenses that you used in computing income or loss from a passive activity are not included in determining your investment income or investment expenses (including investment interest expense). Tax forms 2008 See Publication 925 for information about passive activities. Tax forms 2008 Example. Tax forms 2008 Ted is a partner in a partnership that operates a business. Tax forms 2008 However, he does not materially participate in the partnership's business. Tax forms 2008 Ted's interest in the partnership is considered a passive activity. Tax forms 2008 Ted's investment income from interest and dividends (other than qualified dividends) is $10,000. Tax forms 2008 His investment expenses (other than interest) are $3,200 after taking into account the 2% limit on miscellaneous itemized deductions. Tax forms 2008 His investment interest expense is $8,000. Tax forms 2008 Ted also has income from the partnership of $2,000. Tax forms 2008 Ted figures his net investment income and the limit on his investment interest expense deduction in the following way: Total investment income $10,000 Minus: Investment expenses (other than interest) 3,200 Net investment income $6,800 Deductible investment interest expense for the year $6,800 The $2,000 of income from the passive activity is not used in determining Ted's net investment income. Tax forms 2008 His investment interest deduction for the year is limited to $6,800, the amount of his net investment income. Tax forms 2008 Form 4952 Use Form 4952 to figure your deduction for investment interest. Tax forms 2008 See Form 4952 for more information. Tax forms 2008 Exception to use of Form 4952. Tax forms 2008   You do not have to complete Form 4952 or attach it to your return if you meet all of the following tests. Tax forms 2008 Your investment interest expense is not more than your investment income from interest and ordinary dividends minus any qualified dividends. Tax forms 2008 You do not have any other deductible investment expenses. Tax forms 2008 You have no carryover of investment interest expense from 2012. Tax forms 2008   If you meet all of these tests, you can deduct all of your investment interest. Tax forms 2008    Bond Premium Amortization If you pay a premium to buy a bond, the premium is part of your basis in the bond. Tax forms 2008 If the bond yields taxable interest, you can choose to amortize the premium. Tax forms 2008 This generally means that each year, over the life of the bond, you use a part of the premium to reduce the amount of interest includible in your income. Tax forms 2008 If you make this choice, you must reduce your basis in the bond by the amortization for the year. Tax forms 2008 If the bond yields tax-exempt interest, you must amortize the premium. Tax forms 2008 This amortized amount is not deductible in determining taxable income. Tax forms 2008 However, each year you must reduce your basis in the bond (and tax-exempt interest otherwise reportable on Form 1040, line 8b) by the amortization for the year. Tax forms 2008 Bond premium. Tax forms 2008   Bond premium is the amount by which your basis in the bond right after you get it is more than the total of all amounts payable on the bond after you get it (other than payments of qualified stated interest). Tax forms 2008 For example, a bond with a maturity value of $1,000 generally would have a $50 premium if you buy it for $1,050. Tax forms 2008 Special rules to determine amounts payable on a bond. Tax forms 2008   For special rules that apply to determine the amounts payable on a variable rate bond, an inflation-indexed debt instrument, a bond that provides for certain alternative payment schedules (for example, a bond callable prior to the stated maturity date of the bond), or a bond that provides for remote or incidental contingencies, see Regulations section 1. Tax forms 2008 171-3. Tax forms 2008 Basis. Tax forms 2008   In general, your basis for figuring bond premium amortization is the same as your basis for figuring any loss on the sale of the bond. Tax forms 2008 However, you may need to use a different basis for: Convertible bonds, Bonds you got in a trade, and Bonds whose basis has to be determined using the basis of the person who transferred the bond to you. Tax forms 2008 See Regulations section 1. Tax forms 2008 171-1(e). Tax forms 2008 Dealers. Tax forms 2008   A dealer in taxable bonds (or anyone who holds them mainly for sale to customers in the ordinary course of a trade or business or who would properly include bonds in inventory at the close of the tax year) cannot claim a deduction for amortizable bond premium. Tax forms 2008   See section 75 of the Internal Revenue Code for the treatment of bond premium by a dealer in tax-exempt bonds. Tax forms 2008 How To Figure Amortization For bonds issued after September 27, 1985, you must amortize bond premium using a constant yield method on the basis of the bond's yield to maturity, determined by using the bond's basis and compounding at the close of each accrual period. Tax forms 2008 Constant yield method. Tax forms 2008   Figure the bond premium amortization for each accrual period as follows. Tax forms 2008 Step 1: Determine your yield. Tax forms 2008   Your yield is the discount rate that, when used in figuring the present value of all remaining payments to be made on the bond (including payments of qualified stated interest), produces an amount equal to your basis in the bond. Tax forms 2008 Figure the yield as of the date you got the bond. Tax forms 2008 It must be constant over the term of the bond and must be figured to at least two decimal places when expressed as a percentage. Tax forms 2008   If you do not know the yield, consult your broker or tax advisor. Tax forms 2008 Databases available to them are likely to show the yield at the date of purchase. Tax forms 2008 Step 2: Determine the accrual periods. Tax forms 2008   You can choose the accrual periods to use. Tax forms 2008 They may be of any length and may vary in length over the term of the bond, but each accrual period can be no longer than 1 year and each scheduled payment of principal or interest must occur either on the first or the final day of an accrual period. Tax forms 2008 The computation is simplest if accrual periods are the same as the intervals between interest payment dates. Tax forms 2008 Step 3: Determine the bond premium for the accrual period. Tax forms 2008   To do this, multiply your adjusted acquisition price at the beginning of the accrual period by your yield. Tax forms 2008 Then subtract the result from the qualified stated interest for the period. Tax forms 2008   Your adjusted acquisition price at the beginning of the first accrual period is the same as your basis. Tax forms 2008 After that, it is your basis decreased by the amount of bond premium amortized for earlier periods and the amount of any payment previously made on the bond other than a payment of qualified stated interest. Tax forms 2008 Example. Tax forms 2008 On February 1, 2012, you bought a taxable bond for $110,000. Tax forms 2008 The bond has a stated principal amount of $100,000, payable at maturity on February 1, 2019, making your premium $10,000 ($110,000 − $100,000). Tax forms 2008 The bond pays qualified stated interest of $10,000 on February 1 of each year. Tax forms 2008 Your yield is 8. Tax forms 2008 07439% compounded annually. Tax forms 2008 You choose to use annual accrual periods ending on February 1 of each year. Tax forms 2008 To find your bond premium amortization for the accrual period ending on February 1, 2013, you multiply the adjusted acquisition price at the beginning of the period ($110,000) by your yield. Tax forms 2008 When you subtract the result ($8,881. Tax forms 2008 83) from the qualified stated interest for the period ($10,000), you find that your bond premium amortization for the period is $1,118. Tax forms 2008 17. Tax forms 2008 Special rules to figure amortization. Tax forms 2008   For special rules to figure the bond premium amortization on a variable rate bond, an inflation-indexed debt instrument, a bond that provides for certain alternative payment schedules (for example, a bond callable prior to the stated maturity date of the bond), or a bond that provides for remote or incidental contingencies, see Regulations section 1. Tax forms 2008 171-3. Tax forms 2008 Bonds Issued Before September 28, 1985 For these bonds, you can amortize bond premium using any reasonable method. Tax forms 2008 Reasonable methods include: The straight-line method, and The Revenue Ruling 82-10 method. Tax forms 2008 Straight-line method. Tax forms 2008   Under this method, the amount of your bond premium amortization is the same each month. Tax forms 2008 Divide the number of months you held the bond during the year by the number of months from the beginning of the tax year (or, if later, the date of acquisition) to the date of maturity or earlier call date. Tax forms 2008 Then multiply the result by the bond premium (reduced by any bond premium amortization claimed in earlier years). Tax forms 2008 This gives you your bond premium amortization for the year. Tax forms 2008 Revenue Ruling 82-10 method. Tax forms 2008   Under this method, the amount of your bond premium amortization increases each month over the life of the bond. Tax forms 2008 This method is explained in Revenue Ruling 82-10, 1982-1 C. Tax forms 2008 B. Tax forms 2008 46. Tax forms 2008 Choosing To Amortize You choose to amortize the premium on taxable bonds by reporting the amortization for the year on your income tax return for the first tax year you want the choice to apply. Tax forms 2008 You should attach a statement to your return that you are making this choice under section 171. Tax forms 2008 See How To Report Amortization, next. Tax forms 2008 This choice is binding for the year you make it and for later tax years. Tax forms 2008 It applies to all taxable bonds you own in the year you make the choice and also to those you acquire in later years. Tax forms 2008 You can change your decision to amortize bond premium only with the written approval of the IRS. Tax forms 2008 To request approval, use Form 3115. Tax forms 2008 For more information on requesting approval, see section 5 of the Appendix to Revenue Procedure 2011-14 in Internal Revenue Bulletin 2011-4. Tax forms 2008 You can find Revenue Procedure 2011-14 at www. Tax forms 2008 irs. Tax forms 2008 gov/irb/2011-04_IRB/ar08. Tax forms 2008 html. Tax forms 2008 How To Report Amortization Subtract the bond premium amortization from your interest income from these bonds. Tax forms 2008 Report the bond's interest on Schedule B (Form 1040A or 1040), line 1. Tax forms 2008 Under your last entry on line 1, put a subtotal of all interest listed on line 1. Tax forms 2008 Below this subtotal, print “ABP Adjustment,” and the total interest you received. Tax forms 2008 Subtract this amount from the subtotal, and enter the result on line 2. Tax forms 2008 Bond premium amortization more than interest. Tax forms 2008   If the amount of your bond premium amortization for an accrual period is more than the qualified stated interest for the period, you can deduct the difference as a miscellaneous itemized deduction on Schedule A (Form 1040), line 28. Tax forms 2008    But your deduction is limited to the amount by which your total interest inclusions on the bond in prior accrual periods is more than your total bond premium deductions on the bond in prior periods. Tax forms 2008 Any amount you cannot deduct because of this limit can be carried forward to the next accrual period. Tax forms 2008 Pre-1998 election to amortize bond premium. Tax forms 2008   Generally, if you first elected to amortize bond premium before 1998, the above treatment of the premium does not apply to bonds you acquired before 1988. Tax forms 2008 Bonds acquired before October 23, 1986. Tax forms 2008   The amortization of the premium on these bonds is a miscellaneous itemized deduction not subject to the 2%-of-adjusted-gross-income limit. Tax forms 2008 Bonds acquired after October 22, 1986, but before 1988. Tax forms 2008    The amortization of the premium on these bonds is investment interest expense subject to the investment interest limit, unless you choose to treat it as an offset to interest income on the bond. Tax forms 2008 Expenses of Producing Income You deduct investment expenses (other than interest expenses) as miscellaneous itemized deductions on Schedule A (Form 1040). Tax forms 2008 To be deductible, these expenses must be ordinary and necessary expenses paid or incurred: To produce or collect income, or To manage property held for producing income. Tax forms 2008 The expenses must be directly related to the income or income-producing property, and the income must be taxable to you. Tax forms 2008 The deduction for most income-producing expenses is subject to a 2% limit that also applies to certain other miscellaneous itemized deductions. Tax forms 2008 The amount deductible is limited to the total of these miscellaneous deductions that is more than 2% of your adjusted gross income. Tax forms 2008 For information on how to report expenses of producing income, see How To Report Investment Expenses , later. Tax forms 2008 Attorney or accounting fees. Tax forms 2008   You can deduct attorney or accounting fees that are necessary to produce or collect taxable income. Tax forms 2008 However, in some cases, attorney or accounting fees are part of the basis of property. Tax forms 2008 See Basis of Investment Property in chapter 4. Tax forms 2008 Automatic investment service and dividend reinvestment plans. Tax forms 2008   A bank may offer its checking account customers an automatic investment service so that, for a charge, each customer can choose to invest a part of the checking account each month in common stock. Tax forms 2008 Or a bank that is a dividend disbursing agent for a number of publicly-owned corporations may set up an automatic dividend reinvestment service. Tax forms 2008 Through that service, cash dividends are reinvested in more shares of stock after the bank deducts a service charge. Tax forms 2008   A corporation in which you own stock also may have a dividend reinvestment plan. Tax forms 2008 This plan lets you choose to use your dividends to buy more shares of stock in the corporation instead of receiving the dividends in cash. Tax forms 2008   You can deduct the monthly service charge you pay to a bank to participate in an automatic investment service. Tax forms 2008 If you participate in a dividend reinvestment plan, you can deduct any service charge subtracted from your cash dividends before the dividends are used to buy more shares of stock. Tax forms 2008 Deduct the charges in the year you pay them. Tax forms 2008 Clerical help and office rent. Tax forms 2008   You can deduct office expenses, such as rent and clerical help, you incurred in connection with your investments and collecting the taxable income on your investments. Tax forms 2008 Cost of replacing missing securities. Tax forms 2008   To replace your taxable securities that are mislaid, lost, stolen, or destroyed, you may have to post an indemnity bond. Tax forms 2008 You can deduct the premium you pay to buy the indemnity bond and the related incidental expenses. Tax forms 2008   You may, however, get a refund of part of the bond premium if the missing securities are recovered within a specified time. Tax forms 2008 Under certain types of insurance policies, you can recover some of the expenses. Tax forms 2008   If you receive the refund in the tax year you pay the amounts, you can deduct only the difference between the expenses paid and the amount refunded. Tax forms 2008 If the refund is made in a later tax year, you must include the refund in income in the year you received it, but only to the extent that the expenses decreased your tax in the year you deducted them. Tax forms 2008 Fees to collect income. Tax forms 2008   You can deduct fees you pay to a broker, bank, trustee, or similar agent to collect investment income, such as your taxable bond or mortgage interest, or your dividends on shares of stock. Tax forms 2008 Fees to buy or sell. Tax forms 2008   You cannot deduct a fee you pay to a broker to acquire investment property, such as stocks or bonds. Tax forms 2008 You must add the fee to the cost of the property. Tax forms 2008 See Basis of Investment Property in chapter 4. Tax forms 2008    You cannot deduct any broker's fees, commissions, or option premiums you pay (or that were netted out) in connection with the sale of investment property. Tax forms 2008 They can be used only to figure gain or loss from the sale. Tax forms 2008 See Reporting Capital Gains and Losses , in chapter 4, for more information about the treatment of these sale expenses. Tax forms 2008 Investment counsel and advice. Tax forms 2008   You can deduct fees you pay for counsel and advice about investments that produce taxable income. Tax forms 2008 This includes amounts you pay for investment advisory services. Tax forms 2008 Safe deposit box rent. Tax forms 2008   You can deduct rent you pay for a safe deposit box if you use the box to store taxable income-producing stocks, bonds, or other investment-related papers and documents. Tax forms 2008 If you also use the box to store tax-exempt securities or personal items, you can deduct only part of the rent. Tax forms 2008 See Tax-exempt income under Nondeductible Expenses, later, to figure what part you can deduct. Tax forms 2008 State and local transfer taxes. Tax forms 2008   You cannot deduct the state and local transfer taxes you pay when you buy or sell securities. Tax forms 2008 If you pay these transfer taxes when you buy securities, you must treat them as part of the cost of the property. Tax forms 2008 If you pay these transfer taxes when you sell securities, you must treat them as a reduction in the amount realized. Tax forms 2008 Trustee's commissions for revocable trust. Tax forms 2008   If you set up a revocable trust and have its income distributed to you, you can deduct the commission you pay the trustee for managing the trust to the extent it is to produce or collect taxable income or to manage property. Tax forms 2008 However, you cannot deduct any part of the commission used for producing or collecting tax-exempt income or for managing property that produces tax-exempt income. Tax forms 2008   If you are a cash-basis taxpayer and pay the commissions for several years in advance, you must deduct a part of the commission each year. Tax forms 2008 You cannot deduct the entire amount in the year you pay it. Tax forms 2008 Investment expenses from pass-through entities. Tax forms 2008   If you hold an interest in a partnership, S corporation, real estate mortgage investment conduit (REMIC), or a nonpublicly offered mutual fund, you can deduct your share of that entity's investment expenses. Tax forms 2008 A partnership or S corporation will show your share of these expenses on your Schedule K-1 (Form 1065) or Schedule K-1 (Form 1120S). Tax forms 2008 A nonpublicly offered mutual fund will indicate your share of these expenses in box 5 of Form 1099-DIV (or substitute statement). Tax forms 2008 Publicly-offered mutual funds are discussed later. Tax forms 2008   If you hold an interest in a REMIC, any expenses relating to your residual interest investment will be shown on Schedule Q (Form 1066), line 3b. Tax forms 2008 Any expenses relating to your regular interest investment will appear in box 5 of Form 1099-INT (or substitute statement) or box 9 of Form 1099-OID (or substitute statement). Tax forms 2008   Report your share of these investment expenses on Schedule A (Form 1040), subject to the 2% limit, in the same manner as your other investment expenses. Tax forms 2008 Including mutual fund or REMIC expenses in income. Tax forms 2008   Your share of the investment expenses of a REMIC or a nonpublicly offered mutual fund, as described above, are considered to be indirect deductions through that pass-through entity. Tax forms 2008 You must include in your gross income an amount equal to the expenses allocated to you, whether or not you are able to claim a deduction for those expenses. Tax forms 2008 If you are a shareholder in a nonpublicly offered mutual fund, you must include on your return the full amount of ordinary dividends or other distributions of stock, as shown in box 1a of Form 1099-DIV (or substitute statement). Tax forms 2008 If you are a residual interest holder in a REMIC, you must report as ordinary income on Schedule E (Form 1040) the total amounts shown on Schedule Q (Form 1066), lines 1b and 3b. Tax forms 2008 If you are a REMIC regular interest holder, you must include the amount of any expense allocation you received on Form 1040, line 8a. Tax forms 2008 Publicly-offered mutual funds. Tax forms 2008   Most mutual funds are publicly offered. Tax forms 2008 These mutual funds, generally, are traded on an established securities exchange. Tax forms 2008 These funds do not pass investment expenses through to you. Tax forms 2008 Instead, the dividend income they report to you in box 1a of Form 1099-DIV (or substitute statement) is already reduced by your share of investment expenses. Tax forms 2008 As a result, you cannot deduct the expenses on your return. Tax forms 2008   Include the amount from box 1a of Form 1099-DIV (or substitute statement) in your income. Tax forms 2008    A publicly offered mutual fund is one that: Is continuously offered pursuant to a public offering, Is regularly traded on an established securities market, and Is held by or for no fewer than 500 persons at any time during the year. Tax forms 2008 Contact your mutual fund if you are not sure whether it is publicly offered. Tax forms 2008 Nondeductible Expenses Some expenses that you incur as an investor are not deductible. Tax forms 2008 Stockholders' meetings. Tax forms 2008   You cannot deduct transportation and other expenses you pay to attend stockholders' meetings of companies in which you have no interest other than owning stock. Tax forms 2008 This is true even if your purpose in attending is to get information that would be useful in making further investments. Tax forms 2008 Investment-related seminar. Tax forms 2008   You cannot deduct expenses for attending a convention, seminar, or similar meeting for investment purposes. Tax forms 2008 Single-premium life insurance, endowment, and annuity contracts. Tax forms 2008   You cannot deduct interest on money you borrow to buy or carry a single-premium life insurance, endowment, or annuity contract. Tax forms 2008 Used as collateral. Tax forms 2008   If you use a single premium annuity contract as collateral to obtain or continue a mortgage loan, you cannot deduct any interest on the loan that is collateralized by the annuity contract. Tax forms 2008 Figure the amount of interest expense disallowed by multiplying the current interest rate on the mortgage loan by the lesser of the amount of the annuity contract used as collateral or the amount of the loan. Tax forms 2008 Borrowing on insurance. Tax forms 2008   Generally, you cannot deduct interest on money you borrow to buy or carry a life insurance, endowment, or annuity contract if you plan to systematically borrow part or all of the increases in the cash value of the contract. Tax forms 2008 This rule applies to the interest on the total amount borrowed to buy or carry the contract, not just the interest on the borrowed increases in the cash value. Tax forms 2008 Tax-exempt income. Tax forms 2008   You cannot deduct expenses you incur to produce tax-exempt income. Tax forms 2008 Nor can you deduct interest on money you borrow to buy tax-exempt securities or shares in a mutual fund or other regulated investment company that distributes only exempt-interest dividends. Tax forms 2008 Short-sale expenses. Tax forms 2008   The rule disallowing a deduction for interest expenses on tax-exempt securities applies to amounts you pay in connection with personal property used in a short sale or amounts paid by others for the use of any collateral in connection with the short sale. Tax forms 2008 However, it does not apply to the expenses you incur if you deposit cash as collateral for the property used in the short sale and the cash does not earn a material return during the period of the sale. Tax forms 2008 Short sales are discussed in Short Sales in chapter 4. Tax forms 2008 Expenses for both tax-exempt and taxable income. Tax forms 2008   You may have expenses that are for both tax-exempt and taxable income. Tax forms 2008 If you cannot specifically identify what part of the expenses is for each type of income, you can divide the expenses, using reasonable proportions based on facts and circumstances. Tax forms 2008 You must attach a statement to your return showing how you divided the expenses and stating that each deduction claimed is not based on tax-exempt income. Tax forms 2008   One accepted method for dividing expenses is to do it in the same proportion that each type of income is to the total income. Tax forms 2008 If the expenses relate in part to capital gains and losses, include the gains, but not the losses, in figuring this proportion. Tax forms 2008 To find the part of the expenses that is for the tax-exempt income, divide your tax-exempt income by the total income and multiply your expenses by the result. Tax forms 2008 Example. Tax forms 2008 You received $6,000 interest; $4,800 was tax-exempt and $1,200 was taxable. Tax forms 2008 In earning this income, you had $500 of expenses. Tax forms 2008 You cannot specifically identify the amount of each expense item that is for each income item, so you must divide your expenses. Tax forms 2008 80% ($4,800 tax-exempt interest divided by $6,000 total interest) of your expenses is for the tax-exempt income. Tax forms 2008 You cannot deduct $400 (80% of $500) of the expenses. Tax forms 2008 You can deduct $100 (the rest of the expenses) because they are for the taxable interest. Tax forms 2008 State income taxes. Tax forms 2008   If you itemize your deductions, you can deduct, as taxes, state income taxes on interest income that is exempt from federal income tax. Tax forms 2008 But you cannot deduct, as either taxes or investment expenses, state income taxes on other exempt income. Tax forms 2008 Interest expense and carrying charges on straddles. Tax forms 2008   You cannot deduct interest and carrying charges allocable to personal property that is part of a straddle. Tax forms 2008 The nondeductible interest and carrying charges are added to the basis of the straddle property. Tax forms 2008 However, this treatment does not apply if: All the offsetting positions making up the straddle either consist of one or more qualified covered call options and the optioned stock, or consist of section 1256 contracts (and the straddle is not part of a larger straddle); or The straddle is a hedging transaction. Tax forms 2008  For information about straddles, including definitions of the terms used in this discussion, see Straddles in chapter 4. Tax forms 2008   Interest includes any amount you pay or incur in connection with personal property used in a short sale. Tax forms 2008 However, you must first apply the rules discussed in Payments in lieu of dividends under Short Sales in chapter 4. Tax forms 2008   To determine the interest on market discount bonds and short-term obligations that are part of a straddle, you must first apply the rules discussed under Limit on interest deduction for market discount bonds and Limit on interest deduction for short-term obligations (both under Interest Expenses, earlier). Tax forms 2008 Nondeductible amount. Tax forms 2008   Figure the nondeductible interest and carrying charges on straddle property as follows. Tax forms 2008 Add: Interest on indebtedness incurred or continued to buy or carry the personal property, and All other amounts (including charges to insure, store, or transport the personal property) paid or incurred to carry the personal property. Tax forms 2008 Subtract from the amount in (1): Interest (including OID) includible in gross income for the year on the personal property, Any income from the personal property treated as ordinary income on the disposition of short-term government obligations or as ordinary income under the market discount and short-term bond provisions — see Discount on Debt Instruments in chapter 1, The dividends includible in gross income for the year from the personal property, and Any payment on a loan of the personal property for use in a short sale that is includible in gross income. Tax forms 2008 Basis adjustment. Tax forms 2008   Add the nondeductible amount to the basis of your straddle property. Tax forms 2008 How To Report Investment Expenses To deduct your investment expenses, you must itemize deductions on Schedule A (Form 1040). Tax forms 2008 Enter your deductible investment interest expense on Schedule A (Form1040), line 14. Tax forms 2008 Include any deductible short sale expenses. Tax forms 2008 (See Short Sales in chapter 4 for information on these expenses. Tax forms 2008 ) Also attach a completed Form 4952 if you used that form to figure your investment interest expense. Tax forms 2008 Enter the total amount of your other investment expenses (other than interest expenses) on Schedule A (Form 1040), line 23. Tax forms 2008 List the type and amount of each expense on the dotted lines next to line 23. Tax forms 2008 (If necessary, you can show the required information on an attached statement. Tax forms 2008 ) For information on how to report amortizable bond premium, see Bond Premium Amortization , earlier in this chapter. Tax forms 2008 When To Report Investment Expenses If you use the cash method to report income and expenses, you generally deduct your expenses, except for certain prepaid interest, in the year you pay them. Tax forms 2008 If you use an accrual method, you generally deduct your expenses when you incur a liability for them, rather than when you pay them. Tax forms 2008 Also see When To Deduct Investment Interest , earlier in this chapter. Tax forms 2008 Unpaid expenses owed to related party. Tax forms 2008   If you use an accrual method, you cannot deduct interest and other expenses owed to a related cash-basis person until payment is made and the amount is includible in the gross income of that person. Tax forms 2008 The relationship, for purposes of this rule, is determined as of the end of the tax year for which the interest or expense would otherwise be deductible. Tax forms 2008 If a deduction is denied under this rule, this rule will continue to apply even if your relationship with the person ceases to exist before the amount is includible in the gross income of that person. Tax forms 2008   This rule generally applies to those relationships listed in chapter 4 under Related Party Transactions . Tax forms 2008 It also applies to accruals by partnerships to partners, partners to partnerships, shareholders to S corporations, and S corporations to shareholders. Tax forms 2008   The postponement of deductions for unpaid expenses and interest under the related party rule does not apply to OID, regardless of when payment is made. Tax forms 2008 This rule also does not apply to loans with below-market interest rates or to certain payments for the use of property and services when the lender or recipient has to include payments periodically in income, even if a payment has not been made. Tax forms 2008 Prev  Up  Next   Home   More Online Publications
Español

Going Green- Be a Green Consumer

"Going Green" means practicing an environmentally friendly and ecologically responsible lifestyle as well as making decisions to help protect the environment and sustain natural resources. There are lots of reasons to consider going green—too much trash, greenhouse gases, air and water pollution, damage to the ozone layer, and saving money. For example, switching all the light bulbs in a home from conventional incandescent light bulbs to compact fluorescent light (CFL) bulbs could save about $40 over the life of the bulb. Other examples include:

  • Turning your thermostat down two degrees in winter and up two degrees in summer.
  • Making sure your walls and ceilings are well insulated.
  • Replacing bathroom and kitchen faucets with low-flow models.

Make Greener Product Choices

Buying only what you need is the first step to go green, but when you buy, looking for greener products and using products in ways that respect the environment can have a big impact — on the health of your family, pets and the planet. 

The U.S. Environmental Protection Agency (EPA) has a green products web portal to help you navigate the complex world of green products. You can use this portal to find links and information related to greener products from EPA and other sources.  

The EPA has a number of eco-labeling partnership programs to help you identify greener, safer, and more efficient products. The standards behind these labels are based on scientific expertise and use the best available data. Look for these EPA program labels when buying:

  • EnergyStar - for energy efficient electronics and appliances
  • WaterSense - water efficient products
  • Design for the Environment (DfE) - safer household cleaners and other products. DfE allows products that have been determined to be safer for human health and the environment and effective to carry the DfE label.
  • SmartWay Certified Vehicle - cleaner, more fuel efficient cars and trucks

By making greener product choices you are saving money on utilities and fuel, supporting companies that are driving change and most importantly — you are joining millions of people helping to protect public health and the environment.

You can also choose to buy organic or locally produced food and eco-friendly clothing. For more information about national standards covering organic food, contact the U.S. Department of Agriculture’s Agricultural Marketing Service. There are no national standards for organic clothing, but some fabrics to consider include organic cotton, bark cloth, bamboo, and organic wool.

Beware: Verify Green Marketing Claims

The number of eco-label products,  claiming that they are "eco-friendly" or "all-natural", has increased due to a growing demand for "green products. While this is a positive trend, you may have concerns about "greenwashing" and uncertainty about which environmental standards and labels can be trusted. The Federal Trade Commission's Green Guides provide guidance for companies that make marketing claims regarding the environmental attributes of their products. Here are some tips to help you sort through eco-label marketing:

  • Look for specific (ex. "contains 75% post-consumer recycled materials") rather than vague statements about environmental impact.
  • Determine whether the green marketing claims apply to the packaging, the product, or both.
  • Beware of fake third-party certification. Visit Consumer Reports' website to find reliable environmental labels.

For more information about environmental advertising, contact the FTC.

Reusing and Recycling

Along with buying greener products, you can make a big impact by using the products you buy in ways that respect the environment by: using fewer products and following instructions for product use; conserving energy, water, and materials; recycling items made of materials such as glass, metal, plastic, or paper or disposing of products properly. 

Many utility companies now offer curbside recycling programs that provide U.S. households with a responsible and convenient way to recycle materials. To locate information on recycling services and efforts in your area, call the Earth 911 toll free hotline, 1-800-CLEANUP (253-2687). 

It is easy to safely dispose of many products. Others, such as car batteries, cell phones, televisions, paints, oils, and solvents, require special handling. You can responsibly dispose of these products through your local household hazardous wasters (HHW) collection facility or at your local government's annual HHW collection day. Some items may be given to charitable organizations or even dropped off at electronics retailers. Contact the Environmental Protection Agency (EPA) to help you make the right decisions about the best way to dispose of waste.

The Tax Forms 2008

Tax forms 2008 9. Tax forms 2008   Figuring Net Profit or Loss Table of Contents Introduction Net Operating Losses (NOLs) Not-for-Profit Activities Introduction After figuring your business income and expenses, you are ready to figure the net profit or net loss from your business. Tax forms 2008 You do this by subtracting business expenses from business income. Tax forms 2008 If your expenses are less than your income, the difference is net profit and becomes part of your income on page 1 of Form 1040. Tax forms 2008 If your expenses are more than your income, the difference is a net loss. Tax forms 2008 You usually can deduct it from gross income on page 1 of Form 1040. Tax forms 2008 But in some situations your loss is limited. Tax forms 2008 This chapter briefly explains two of those situations. Tax forms 2008 Other situations that may limit your loss are explained in the Instructions for Schedule C, line G and line 32. Tax forms 2008 If you have more than one business, you must figure your net profit or loss for each business on a separate Schedule C. Tax forms 2008 Net Operating Losses (NOLs) If your deductions for the year are more than your income for the year (line 41 of your Form 1040 is a negative number), you may have a net operating loss (NOL). Tax forms 2008 You can use an NOL by deducting it from your income in another year or years. Tax forms 2008 Examples of typical losses that may produce an NOL include, but are not limited to, losses incurred from the following. Tax forms 2008 Your trade or business. Tax forms 2008 Your work as an employee (unreimbursed employee business expenses). Tax forms 2008 A casualty or theft. Tax forms 2008 Moving expenses. Tax forms 2008 Rental property. Tax forms 2008 A loss from operating a business is the most common reason for an NOL. Tax forms 2008 For details about NOLs, see Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts. Tax forms 2008 It explains how to figure an NOL, when to use it, how to claim an NOL deduction, and how to figure an NOL carryover. Tax forms 2008 Not-for-Profit Activities If you do not carry on your business to make a profit, there is a limit on the deductions you can take. Tax forms 2008 You cannot use a loss from the activity to offset other income. Tax forms 2008 Activities you do as a hobby, or mainly for sport or recreation, come under this limit. Tax forms 2008 For details about not-for-profit activities, see chapter 1 in Publication 535, Business Expenses. Tax forms 2008 That chapter explains how to determine whether your activity is carried on to make a profit and how to figure the amount of loss you can deduct. Tax forms 2008 Prev  Up  Next   Home   More Online Publications