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Tax Forms For Students

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Tax Forms For Students

Tax forms for students 11. Tax forms for students   Casualties, Thefts, and Condemnations Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Casualties and TheftsDeductible losses. Tax forms for students Nondeductible losses. Tax forms for students Family pet. Tax forms for students Progressive deterioration. Tax forms for students Decline in market value of stock. Tax forms for students Mislaid or lost property. Tax forms for students Farming Losses How To Figure a Loss Deduction Limits on Losses of Personal-Use Property When Loss Is Deductible Proof of Loss Figuring a Gain Other Involuntary ConversionsCondemnation Irrigation Project Livestock Losses Tree Seedlings Postponing GainException. Tax forms for students Related persons. Tax forms for students Replacement Property Replacement Period How To Postpone Gain Disaster Area LossesWho is eligible. Tax forms for students Covered disaster area. Tax forms for students Reporting Gains and Losses Introduction This chapter explains the tax treatment of casualties, thefts, and condemnations. Tax forms for students A casualty occurs when property is damaged, destroyed, or lost due to a sudden, unexpected, or unusual event. Tax forms for students A theft occurs when property is stolen. Tax forms for students A condemnation occurs when private property is legally taken for public use without the owner's consent. Tax forms for students A casualty, theft, or condemnation may result in a deductible loss or taxable gain on your federal income tax return. Tax forms for students You may have a deductible loss or a taxable gain even if only a portion of your property was affected by a casualty, theft, or condemnation. Tax forms for students An involuntary conversion occurs when you receive money or other property as reimbursement for a casualty, theft, condemnation, disposition of property under threat of condemnation, or certain other events discussed in this chapter. Tax forms for students If an involuntary conversion results in a gain and you buy qualified replacement property within the specified replacement period, you can postpone reporting the gain on your income tax return. Tax forms for students For more information, see Postponing Gain , later. Tax forms for students Topics - This chapter discusses: Casualties and thefts How to figure a loss or gain Other involuntary conversions Postponing gain Disaster area losses Reporting gains and losses Drought involving property connected with a trade or business or a transaction entered into for profit Useful Items - You may want to see: Publication 523 Selling Your Home 525 Taxable and Nontaxable Income 536 Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 544 Sales and Other Dispositions of Assets 547 Casualties, Disasters, and Thefts 584 Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property) 584-B Business Casualty, Disaster, and Theft Loss Workbook Form (and Instructions) Sch A (Form 1040) Itemized Deductions Sch D (Form 1040) Capital Gains and Losses Sch F (Form 1040) Profit or Loss From Farming 4684 Casualties and Thefts 4797 Sales of Business Property See chapter 16 for information about getting publications and forms. Tax forms for students Casualties and Thefts If your property is destroyed, damaged, or stolen, you may have a deductible loss. Tax forms for students If the insurance or other reimbursement is more than the adjusted basis of the destroyed, damaged, or stolen property, you may have a taxable gain. Tax forms for students Casualty. Tax forms for students   A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. Tax forms for students A sudden event is one that is swift, not gradual or progressive. Tax forms for students An unexpected event is one that is ordinarily unanticipated and unintended. Tax forms for students An unusual event is one that is not a day-to-day occurrence and that is not typical of the activity in which you were engaged. Tax forms for students Deductible losses. Tax forms for students   Deductible casualty losses can result from a number of different causes, including the following. Tax forms for students Airplane crashes. Tax forms for students Car, truck, or farm equipment accidents not resulting from your willful act or willful negligence. Tax forms for students Earthquakes. Tax forms for students Fires (but see Nondeductible losses next for exceptions). Tax forms for students Floods. Tax forms for students Freezing. Tax forms for students Government-ordered demolition or relocation of a home that is unsafe to use because of a disaster as discussed under Disaster Area Losses, in Publication 547. Tax forms for students Lightning. Tax forms for students Storms, including hurricanes and tornadoes. Tax forms for students Terrorist attacks. Tax forms for students Vandalism. Tax forms for students Volcanic eruptions. Tax forms for students Nondeductible losses. Tax forms for students   A casualty loss is not deductible if the damage or destruction is caused by the following. Tax forms for students Accidentally breaking articles such as glassware or china under normal conditions. Tax forms for students A family pet (explained below). Tax forms for students A fire if you willfully set it, or pay someone else to set it. Tax forms for students A car, truck, or farm equipment accident if your willful negligence or willful act caused it. Tax forms for students The same is true if the willful act or willful negligence of someone acting for you caused the accident. Tax forms for students Progressive deterioration (explained below). Tax forms for students Family pet. Tax forms for students   Loss of property due to damage by a family pet is not deductible as a casualty loss unless the requirements discussed above under Casualty are met. Tax forms for students Example. Tax forms for students You keep your horse in your yard. Tax forms for students The ornamental fruit trees in your yard were damaged when your horse stripped the bark from them. Tax forms for students Some of the trees were completely girdled and died. Tax forms for students Because the damage was not unexpected or unusual, the loss is not deductible. Tax forms for students Progressive deterioration. Tax forms for students   Loss of property due to progressive deterioration is not deductible as a casualty loss. Tax forms for students This is because the damage results from a steadily operating cause or a normal process, rather than from a sudden event. Tax forms for students Examples of damage due to progressive deterioration include damage from rust, corrosion, or termites. Tax forms for students However, weather-related conditions or disease may cause another type of involuntary conversion. Tax forms for students See Other Involuntary Conversions , later. Tax forms for students Theft. Tax forms for students   A theft is the taking and removing of money or property with the intent to deprive the owner of it. Tax forms for students The taking of property must be illegal under the law of the state where it occurred and it must have been done with criminal intent. Tax forms for students You do not need to show a conviction for theft. Tax forms for students   Theft includes the taking of money or property by the following means: Blackmail, Burglary, Embezzlement, Extortion, Kidnapping for ransom, Larceny, Robbery, or Threats. Tax forms for students The taking of money or property through fraud or misrepresentation is theft if it is illegal under state or local law. Tax forms for students Decline in market value of stock. Tax forms for students   You cannot deduct as a theft loss the decline in market value of stock acquired on the open market for investment if the decline is caused by disclosure of accounting fraud or other illegal misconduct by the officers or directors of the corporation that issued the stock. Tax forms for students However, you can deduct as a capital loss the loss you sustain when you sell or exchange the stock or the stock becomes completely worthless. Tax forms for students You report a capital loss on Schedule D (Form 1040). Tax forms for students For more information about stock sales, worthless stock, and capital losses, see chapter 4 of Publication 550. Tax forms for students Mislaid or lost property. Tax forms for students   The simple disappearance of money or property is not a theft. Tax forms for students However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. Tax forms for students Example. Tax forms for students A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. Tax forms for students The diamond falls from the ring and is never found. Tax forms for students The loss of the diamond is a casualty. Tax forms for students Farming Losses You can deduct certain casualty or theft losses that occur in the business of farming. Tax forms for students The following is a discussion of some losses you can deduct and some you cannot deduct. Tax forms for students Livestock or produce bought for resale. Tax forms for students   Casualty or theft losses of livestock or produce bought for resale are deductible if you report your income on the cash method. Tax forms for students If you report your income on an accrual method, take casualty and theft losses on property bought for resale by omitting the item from the closing inventory for the year of the loss. Tax forms for students You cannot take a separate deduction. Tax forms for students Livestock, plants, produce, and crops raised for sale. Tax forms for students   Losses of livestock, plants, produce, and crops raised for sale are generally not deductible if you report your income on the cash method. Tax forms for students You have already deducted the cost of raising these items as farm expenses, so their basis is equal to zero. Tax forms for students   For plants with a preproductive period of more than 2 years, you may have a deductible loss if you have a tax basis in the plants. Tax forms for students You usually have a tax basis if you capitalized the expenses associated with these plants under the uniform capitalization rules. Tax forms for students The uniform capitalization rules are discussed in chapter 6. Tax forms for students   If you report your income on an accrual method, casualty or theft losses are deductible only if you included the items in your inventory at the beginning of your tax year. Tax forms for students You get the deduction by omitting the item from your inventory at the close of your tax year. Tax forms for students You cannot take a separate casualty or theft deduction. Tax forms for students Income loss. Tax forms for students   A loss of future income is not deductible. Tax forms for students Example. Tax forms for students A severe flood destroyed your crops. Tax forms for students Because you are a cash method taxpayer and already deducted the cost of raising the crops as farm expenses, this loss is not deductible, as explained above under Livestock, plants, produce, and crops raised for sale . Tax forms for students You estimate that the crop loss will reduce your farm income by $25,000. Tax forms for students This loss of future income is also not deductible. Tax forms for students Loss of timber. Tax forms for students   If you sell timber downed as a result of a casualty, treat the proceeds from the sale as a reimbursement. Tax forms for students If you use the proceeds to buy qualified replacement property, you can postpone reporting the gain. Tax forms for students See Postponing Gain , later. Tax forms for students Property used in farming. Tax forms for students   Casualty and theft losses of property used in your farm business usually result in deductible losses. Tax forms for students If a fire or storm destroyed your barn, or you lose by casualty or theft an animal you bought for draft, breeding, dairy, or sport, you may have a deductible loss. Tax forms for students See How To Figure a Loss , later. Tax forms for students Raised draft, breeding, dairy, or sporting animals. Tax forms for students   Generally, losses of raised draft, breeding, dairy, or sporting animals do not result in deductible casualty or theft losses because you have no basis in the animals. Tax forms for students However, you may have a basis in the animal and therefore may be able to claim a deduction if either of the following situations applies to you. Tax forms for students You use inventories to determine your income and you included the animals in your inventory. Tax forms for students You capitalized the expenses associated with the animals under the uniform capitalization rules and therefore have a tax basis in the animals subject to a casualty or theft. Tax forms for students When you include livestock in inventory, its last inventory value is its basis. Tax forms for students When you lose an inventoried animal held for draft, breeding, dairy, or sport by casualty or theft during the year, decrease ending inventory by the amount you included in inventory for the animal. Tax forms for students You cannot take a separate deduction. Tax forms for students How To Figure a Loss How you figure a deductible casualty or theft loss depends on whether the loss was to farm or personal-use property and whether the property was stolen or partly or completely destroyed. Tax forms for students Farm property. Tax forms for students   Farm property is the property you use in your farming business. Tax forms for students If your farm property was completely destroyed or stolen, your loss is figured as follows:      Your adjusted basis in the property     MINUS     Any salvage value     MINUS     Any insurance or other reimbursement you  receive or expect to receive      You can use the schedules in Publication 584-B to list your stolen, damaged, or destroyed business property and to figure your loss. Tax forms for students   If your farm property was partially damaged, use the steps shown under Personal-use property next to figure your casualty loss. Tax forms for students However, the deduction limits, discussed later, do not apply to farm property. Tax forms for students Personal-use property. Tax forms for students   Personal-use property is property used by you or your family members for personal purposes and not used in your farm business or for income-producing purposes. Tax forms for students The following items are examples of personal-use property: Your main home. Tax forms for students Furniture and electronics used in your main home and not used in a home office or for business purposes. Tax forms for students Clothing and jewelry. Tax forms for students An automobile used for nonbusiness purposes. Tax forms for students You figure the casualty or theft loss on this property by taking the following steps. Tax forms for students Determine your adjusted basis in the property before the casualty or theft. Tax forms for students Determine the decrease in fair market value of the property as a result of the casualty or theft. Tax forms for students From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you receive or expect to receive. Tax forms for students You must apply the deduction limits, discussed later, to determine your deductible loss. Tax forms for students    You can use Publication 584 to list your stolen or damaged personal-use property and figure your loss. Tax forms for students It includes schedules to help you figure the loss on your home, its contents, and your motor vehicles. Tax forms for students Adjusted basis. Tax forms for students   Adjusted basis is your basis (usually cost) increased or decreased by various events, such as improvements and casualty losses. Tax forms for students For more information about adjusted basis, see chapter 6. Tax forms for students Decrease in fair market value (FMV). Tax forms for students   The decrease in FMV is the difference between the property's value immediately before the casualty or theft and its value immediately afterward. Tax forms for students FMV is defined in chapter 10 under Payments Received or Considered Received . Tax forms for students Appraisal. Tax forms for students   To figure the decrease in FMV because of a casualty or theft, you generally need a competent appraisal. Tax forms for students But other measures, such as the cost of cleaning up or making repairs (discussed next) can be used to establish decreases in FMV. Tax forms for students   An appraisal to determine the difference between the FMV of the property immediately before a casualty or theft and immediately afterward should be made by a competent appraiser. Tax forms for students The appraiser must recognize the effects of any general market decline that may occur along with the casualty. Tax forms for students This information is needed to limit any deduction to the actual loss resulting from damage to the property. Tax forms for students Cost of cleaning up or making repairs. Tax forms for students   The cost of cleaning up after a casualty is not part of a casualty loss. Tax forms for students Neither is the cost of repairing damaged property after a casualty. Tax forms for students But you can use the cost of cleaning up or making repairs after a casualty as a measure of the decrease in FMV if you meet all the following conditions. Tax forms for students The repairs are actually made. Tax forms for students The repairs are necessary to bring the property back to its condition before the casualty. Tax forms for students The amount spent for repairs is not excessive. Tax forms for students The repairs fix the damage only. Tax forms for students The value of the property after the repairs is not, due to the repairs, more than the value of the property before the casualty. Tax forms for students Related expenses. Tax forms for students   The incidental expenses due to a casualty or theft, such as expenses for the treatment of personal injuries, temporary housing, or a rental car, are not part of your casualty or theft loss. Tax forms for students However, they may be deductible as farm business expenses if the damaged or stolen property is farm property. Tax forms for students Separate computations for more than one item of property. Tax forms for students   Generally, if a single casualty or theft involves more than one item of property, you must figure your loss separately for each item of property. Tax forms for students Then combine the losses to determine your total loss. Tax forms for students    There is an exception to this rule for personal-use real property. Tax forms for students See Exception for personal-use real property, later. Tax forms for students Example. Tax forms for students A fire on your farm damaged a tractor and the barn in which it was stored. Tax forms for students The tractor had an adjusted basis of $3,300. Tax forms for students Its FMV was $28,000 just before the fire and $10,000 immediately afterward. Tax forms for students The barn had an adjusted basis of $28,000. Tax forms for students Its FMV was $55,000 just before the fire and $25,000 immediately afterward. Tax forms for students You received insurance reimbursements of $2,100 on the tractor and $26,000 on the barn. Tax forms for students Figure your deductible casualty loss separately for the two items of property. Tax forms for students     Tractor Barn 1) Adjusted basis $3,300 $28,000 2) FMV before fire $28,000 $55,000 3) FMV after fire 10,000 25,000 4) Decrease in FMV  (line 2 − line 3) $18,000 $30,000 5) Loss (lesser of line 1 or line 4) $3,300 $28,000 6) Minus: Insurance 2,100 26,000 7) Deductible casualty loss $1,200 $2,000 8) Total deductible casualty loss $3,200 Exception for personal-use real property. Tax forms for students   In figuring a casualty loss on personal-use real property, the entire property (including any improvements, such as buildings, trees, and shrubs) is treated as one item. Tax forms for students Figure the loss using the smaller of the following. Tax forms for students The decrease in FMV of the entire property. Tax forms for students The adjusted basis of the entire property. Tax forms for students Example. Tax forms for students You bought a farm in 1990 for $160,000. Tax forms for students The adjusted basis of the residential part is now $128,000. Tax forms for students In 2013, a windstorm blew down shade trees and three ornamental trees planted at a cost of $7,500 on the residential part. Tax forms for students The adjusted basis of the residential part includes the $7,500. Tax forms for students The fair market value (FMV) of the residential part immediately before the storm was $400,000, and $385,000 immediately after the storm. Tax forms for students The trees were not covered by insurance. Tax forms for students 1) Adjusted basis $128,000 2) FMV before the storm $400,000 3) FMV after the storm 385,000 4) Decrease in FMV (line 2 − line 3) $15,000 5) Loss before insurance (lesser of line 1 or line 4) $15,000 6) Minus: Insurance -0- 7) Amount of loss $15,000 Insurance and other reimbursements. Tax forms for students   If you receive an insurance or other type of reimbursement, you must subtract the reimbursement when you figure your loss. Tax forms for students You do not have a casualty or theft loss to the extent you are reimbursed. Tax forms for students   If you expect to be reimbursed for part or all of your loss, you must subtract the expected reimbursement when you figure your loss. Tax forms for students You must reduce your loss even if you do not receive payment until a later tax year. Tax forms for students    Do not subtract from your loss any insurance payments you receive for living expenses if you lose the use of your main home or are denied access to it because of a casualty. Tax forms for students You may have to include a portion of these payments in your income. Tax forms for students See Insurance payments for living expenses in Publication 547 for details. Tax forms for students Disaster relief. Tax forms for students   Food, medical supplies, and other forms of assistance you receive do not reduce your casualty loss, unless they are replacements for lost or destroyed property. Tax forms for students Excludable cash gifts you receive also do not reduce your casualty loss if there are no limits on how you can use the money. Tax forms for students   Generally, disaster relief grants received under the Robert T. Tax forms for students Stafford Disaster Relief and Emergency Assistance Act are not included in your income. Tax forms for students See Federal disaster relief grants , later, under Disaster Area Losses . Tax forms for students   Qualified disaster relief payments for expenses you incurred as a result of a federally declared disaster are not taxable income to you. Tax forms for students See Qualified disaster relief payments , later, under Disaster Area Losses . Tax forms for students Reimbursement received after deducting loss. Tax forms for students   If you figure your casualty or theft loss using your expected reimbursement, you may have to adjust your tax return for the tax year in which you get your actual reimbursement. Tax forms for students Actual reimbursement less than expected. Tax forms for students   If you later receive less reimbursement than you expected, include that difference as a loss with your other losses (if any) on your return for the year in which you can reasonably expect no more reimbursement. Tax forms for students Actual reimbursement more than expected. Tax forms for students   If you later receive more reimbursement than you expected after you have claimed a deduction for the loss, you may have to include the extra reimbursement in your income for the year you receive it. Tax forms for students However, if any part of your original deduction did not reduce your tax for the earlier year, do not include that part of the reimbursement in your income. Tax forms for students Do not refigure your tax for the year you claimed the deduction. Tax forms for students See Recoveries in Publication 525 to find out how much extra reimbursement to include in income. Tax forms for students If the total of all the reimbursements you receive is more than your adjusted basis in the destroyed or stolen property, you will have a gain on the casualty or theft. Tax forms for students See Figuring a Gain in Publication 547 for information on how to treat a gain from the reimbursement you receive because of a casualty or theft. Tax forms for students Actual reimbursement same as expected. Tax forms for students   If you receive exactly the reimbursement you expected to receive, you do not have to include any of the reimbursement in your income and you cannot deduct any additional loss. Tax forms for students Lump-sum reimbursement. Tax forms for students   If you have a casualty or theft loss of several assets at the same time without an allocation of reimbursement to specific assets, divide the lump-sum reimbursement among the assets according to the fair market value of each asset at the time of the loss. Tax forms for students Figure the gain or loss separately for each asset that has a separate basis. Tax forms for students Adjustments to basis. Tax forms for students   If you have a casualty or theft loss, you must decrease your basis in the property by any insurance or other reimbursement you receive and by any deductible loss. Tax forms for students The result is your adjusted basis in the property. Tax forms for students Amounts you spend on repairs to restore your property to its pre-casualty condition increase your adjusted basis. Tax forms for students See Adjusted Basis in chapter 6 for more information. Tax forms for students Example. Tax forms for students You built a new silo for $25,000. Tax forms for students This is the basis in your silo because that is the total cost you incurred to build it. Tax forms for students During the year, a tornado damaged your silo and your allowable casualty loss deduction was $1,000. Tax forms for students In addition, your insurance company reimbursed you $4,000 for the damage and you spent $6,000 to restore the silo to its pre-casualty condition. Tax forms for students Your adjusted basis in the silo after the casualty is $26,000 ($25,000 - $1,000 - $4,000 + $6,000). Tax forms for students Deduction Limits on Losses of Personal-Use Property Casualty and theft losses of property held for personal use may be deductible if you itemize deductions on Schedule A (Form 1040). Tax forms for students There are two limits on the deduction for casualty or theft loss of personal-use property. Tax forms for students You figure these limits on Form 4684. Tax forms for students $100 rule. Tax forms for students   You must reduce each casualty or theft loss on personal-use property by $100. Tax forms for students This rule applies after you have subtracted any reimbursement. Tax forms for students 10% rule. Tax forms for students   You must further reduce the total of all your casualty or theft losses on personal-use property by 10% of your adjusted gross income. Tax forms for students Apply this rule after you reduce each loss by $100. Tax forms for students Adjusted gross income is on line 38 of Form 1040. Tax forms for students Example. Tax forms for students In June, you discovered that your house had been burglarized. Tax forms for students Your loss after insurance reimbursement was $2,000. Tax forms for students Your adjusted gross income for the year you discovered the burglary is $57,000. Tax forms for students Figure your theft loss deduction as follows: 1. Tax forms for students Loss after insurance $2,000 2. Tax forms for students Subtract $100 100 3. Tax forms for students Loss after $100 rule $1,900 4. Tax forms for students Subtract 10% (. Tax forms for students 10) × $57,000 AGI $5,700 5. Tax forms for students Theft loss deduction -0- You do not have a theft loss deduction because your loss ($1,900) is less than 10% of your adjusted gross income ($5,700). Tax forms for students    If you have a casualty or theft gain in addition to a loss, you will have to make a special computation before you figure your 10% limit. Tax forms for students See 10% Rule in Publication 547. Tax forms for students When Loss Is Deductible Generally, you can deduct casualty losses that are not reimbursable only in the tax year in which they occur. Tax forms for students You generally can deduct theft losses that are not reimbursable only in the year you discover your property was stolen. Tax forms for students However, losses in federally declared disaster areas are subject to different rules. Tax forms for students See Disaster Area Losses , later, for an exception. Tax forms for students If you are not sure whether part of your casualty or theft loss will be reimbursed, do not deduct that part until the tax year when you become reasonably certain that it will not be reimbursed. Tax forms for students Leased property. Tax forms for students   If you lease property from someone else, you can deduct a loss on the property in the year your liability for the loss is fixed. Tax forms for students This is true even if the loss occurred or the liability was paid in a different year. Tax forms for students You are not entitled to a deduction until your liability under the lease can be determined with reasonable accuracy. Tax forms for students Your liability can be determined when a claim for recovery is settled, adjudicated, or abandoned. Tax forms for students Example. Tax forms for students Robert leased a tractor from First Implement, Inc. Tax forms for students , for use in his farm business. Tax forms for students The tractor was destroyed by a tornado in June 2012. Tax forms for students The loss was not insured. Tax forms for students First Implement billed Robert for the fair market value of the tractor on the date of the loss. Tax forms for students Robert disagreed with the bill and refused to pay it. Tax forms for students First Implement later filed suit in court against Robert. Tax forms for students In 2013, Robert and First Implement agreed to settle the suit for $20,000, and the court entered a judgment in favor of First Implement. Tax forms for students Robert paid $20,000 in June 2013. Tax forms for students He can claim the $20,000 as a loss on his 2013 tax return. Tax forms for students Net operating loss (NOL). Tax forms for students   If your deductions, including casualty or theft loss deductions, are more than your income for the year, you may have an NOL. Tax forms for students An NOL can be carried back or carried forward and deducted from income in other years. Tax forms for students See Publication 536 for more information on NOLs. Tax forms for students Proof of Loss To deduct a casualty or theft loss, you must be able to prove that there was a casualty or theft. Tax forms for students You must have records to support the amount you claim for the loss. Tax forms for students Casualty loss proof. Tax forms for students   For a casualty loss, your records should show all the following information. Tax forms for students The type of casualty (car accident, fire, storm, etc. Tax forms for students ) and when it occurred. Tax forms for students That the loss was a direct result of the casualty. Tax forms for students That you were the owner of the property or, if you leased the property from someone else, that you were contractually liable to the owner for the damage. Tax forms for students Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. Tax forms for students Theft loss proof. Tax forms for students   For a theft loss, your records should show all the following information. Tax forms for students When you discovered your property was missing. Tax forms for students That your property was stolen. Tax forms for students That you were the owner of the property. Tax forms for students Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. Tax forms for students Figuring a Gain A casualty or theft may result in a taxable gain. Tax forms for students If you receive an insurance payment or other reimbursement that is more than your adjusted basis in the destroyed, damaged, or stolen property, you have a gain from the casualty or theft. Tax forms for students You generally report your gain as income in the year you receive the reimbursement. Tax forms for students However, depending on the type of property you receive, you may not have to report your gain. Tax forms for students See Postponing Gain , later. Tax forms for students Your gain is figured as follows: The amount you receive, minus Your adjusted basis in the property at the time of the casualty or theft. Tax forms for students Even if the decrease in FMV of your property is smaller than the adjusted basis of your property, use your adjusted basis to figure the gain. Tax forms for students Amount you receive. Tax forms for students   The amount you receive includes any money plus the value of any property you receive, minus any expenses you have in obtaining reimbursement. Tax forms for students It also includes any reimbursement used to pay off a mortgage or other lien on the damaged, destroyed, or stolen property. Tax forms for students Example. Tax forms for students A tornado severely damaged your barn. Tax forms for students The adjusted basis of the barn was $25,000. Tax forms for students Your insurance company reimbursed you $40,000 for the damaged barn. Tax forms for students However, you had legal expenses of $2,000 to collect that insurance. Tax forms for students Your insurance minus your expenses to collect the insurance is more than your adjusted basis in the barn, so you have a gain. Tax forms for students 1) Insurance reimbursement $40,000 2) Legal expenses 2,000 3) Amount received  (line 1 − line 2) $38,000 4) Adjusted basis 25,000 5) Gain on casualty (line 3 − line 4) $13,000 Other Involuntary Conversions In addition to casualties and thefts, other events cause involuntary conversions of property. Tax forms for students Some of these are discussed in the following paragraphs. Tax forms for students Gain or loss from an involuntary conversion of your property is usually recognized for tax purposes. Tax forms for students You report the gain or deduct the loss on your tax return for the year you realize it. Tax forms for students However, depending on the type of property you receive, you may not have to report your gain on the involuntary conversion. Tax forms for students See Postponing Gain , later. Tax forms for students Condemnation Condemnation is the process by which private property is legally taken for public use without the owner's consent. Tax forms for students The property may be taken by the federal government, a state government, a political subdivision, or a private organization that has the power to legally take property. Tax forms for students The owner receives a condemnation award (money or property) in exchange for the property taken. Tax forms for students A condemnation is a forced sale, the owner being the seller and the condemning authority being the buyer. Tax forms for students Threat of condemnation. Tax forms for students   Treat the sale of your property under threat of condemnation as a condemnation, provided you have reasonable grounds to believe that your property will be condemned. Tax forms for students Main home condemned. Tax forms for students   If you have a gain because your main home is condemned, you generally can exclude the gain from your income as if you had sold or exchanged your home. Tax forms for students For information on this exclusion, see Publication 523. Tax forms for students If your gain is more than the amount you can exclude, but you buy replacement property, you may be able to postpone reporting the excess gain. Tax forms for students See Postponing Gain , later. Tax forms for students (You cannot deduct a loss from the condemnation of your main home. Tax forms for students ) More information. Tax forms for students   For information on how to figure the gain or loss on condemned property, see chapter 1 in Publication 544. Tax forms for students Also see Postponing Gain , later, to find out if you can postpone reporting the gain. Tax forms for students Irrigation Project The sale or other disposition of property located within an irrigation project to conform to the acreage limits of federal reclamation laws is an involuntary conversion. Tax forms for students Livestock Losses Diseased livestock. Tax forms for students   If your livestock die from disease, or are destroyed, sold, or exchanged because of disease, even though the disease is not of epidemic proportions, treat these occurrences as involuntary conversions. Tax forms for students If the livestock were raised or purchased for resale, follow the rules for livestock discussed earlier under Farming Losses . Tax forms for students Otherwise, figure the gain or loss from these conversions using the rules discussed under Determining Gain or Loss in chapter 8. Tax forms for students If you replace the livestock, you may be able to postpone reporting the gain. Tax forms for students See Postponing Gain below. Tax forms for students Reporting dispositions of diseased livestock. Tax forms for students   If you choose to postpone reporting gain on the disposition of diseased livestock, you must attach a statement to your return explaining that the livestock were disposed of because of disease. Tax forms for students You must also include other information on this statement. Tax forms for students See How To Postpone Gain , later, under Postponing Gain . Tax forms for students Weather-related sales of livestock. Tax forms for students   If you sell or exchange livestock (other than poultry) held for draft, breeding, or dairy purposes solely because of drought, flood, or other weather-related conditions, treat the sale or exchange as an involuntary conversion. Tax forms for students Only livestock sold in excess of the number you normally would sell under usual business practice, in the absence of weather-related conditions, are considered involuntary conversions. Tax forms for students Figure the gain or loss using the rules discussed under Determining Gain or Loss in chapter 8. Tax forms for students If you replace the livestock, you may be able to postpone reporting the gain. Tax forms for students See Postponing Gain below. Tax forms for students Example. Tax forms for students It is your usual business practice to sell five of your dairy animals during the year. Tax forms for students This year you sold 20 dairy animals because of drought. Tax forms for students The sale of 15 animals is treated as an involuntary conversion. Tax forms for students    If you do not replace the livestock, you may be able to report the gain in the following year's income. Tax forms for students This rule also applies to other livestock (including poultry). Tax forms for students See Sales Caused by Weather-Related Conditions in chapter 3. Tax forms for students Tree Seedlings If, because of an abnormal drought, the failure of planted tree seedlings is greater than normally anticipated, you may have a deductible loss. Tax forms for students Treat the loss as a loss from an involuntary conversion. Tax forms for students The loss equals the previously capitalized reforestation costs you had to duplicate on replanting. Tax forms for students You deduct the loss on the return for the year the seedlings died. Tax forms for students Postponing Gain Do not report a gain if you receive reimbursement in the form of property similar or related in service or use to the destroyed, stolen, or other involuntarily converted property. Tax forms for students Your basis in the new property is generally the same as your adjusted basis in the property it replaces. Tax forms for students You must ordinarily report the gain on your stolen, destroyed, or other involuntarily converted property if you receive money or unlike property as reimbursement. Tax forms for students However, you can choose to postpone reporting the gain if you purchase replacement property similar or related in service or use to your destroyed, stolen, or other involuntarily converted property within a specific replacement period. Tax forms for students If you have a gain on damaged property, you can postpone reporting the gain if you spend the reimbursement to restore the property. Tax forms for students To postpone reporting all the gain, the cost of your replacement property must be at least as much as the reimbursement you receive. Tax forms for students If the cost of the replacement property is less than the reimbursement, you must include the gain in your income up to the amount of the unspent reimbursement. Tax forms for students Example 1. Tax forms for students In 1985, you constructed a barn to store farm equipment at a cost of $20,000. Tax forms for students In 1987, you added a silo to the barn at a cost of $15,000 to store grain. Tax forms for students In May of this year, the property was worth $100,000. Tax forms for students In June the barn and silo were destroyed by a tornado. Tax forms for students At the time of the tornado, you had an adjusted basis of $0 in the property. Tax forms for students You received $85,000 from the insurance company. Tax forms for students You had a gain of $85,000 ($85,000 – $0). Tax forms for students You spent $80,000 to rebuild the barn and silo. Tax forms for students Since this is less than the insurance proceeds received, you must include $5,000 ($85,000 – $80,000) in your income. Tax forms for students Example 2. Tax forms for students In 1970, you bought a cabin in the mountains for your personal use at a cost of $18,000. Tax forms for students You made no further improvements or additions to it. Tax forms for students When a storm destroyed the cabin this January, the cabin was worth $250,000. Tax forms for students You received $146,000 from the insurance company in March. Tax forms for students You had a gain of $128,000 ($146,000 − $18,000). Tax forms for students You spent $144,000 to rebuild the cabin. Tax forms for students Since this is less than the insurance proceeds received, you must include $2,000 ($146,000 − $144,000) in your income. Tax forms for students Buying replacement property from a related person. Tax forms for students   You cannot postpone reporting a gain from a casualty, theft, or other involuntary conversion if you buy the replacement property from a related person (discussed later). Tax forms for students This rule applies to the following taxpayers. Tax forms for students C corporations. Tax forms for students Partnerships in which more than 50% of the capital or profits interest is owned by C corporations. Tax forms for students Individuals, partnerships (other than those in (2) above), and S corporations if the total realized gain for the tax year on all involuntarily converted properties on which there are realized gains is more than $100,000. Tax forms for students For involuntary conversions described in (3) above, gains cannot be offset by any losses when determining whether the total gain is more than $100,000. Tax forms for students If the property is owned by a partnership, the $100,000 limit applies to the partnership and each partner. Tax forms for students If the property is owned by an S corporation, the $100,000 limit applies to the S corporation and each shareholder. Tax forms for students Exception. Tax forms for students   This rule does not apply if the related person acquired the property from an unrelated person within the period of time allowed for replacing the involuntarily converted property. Tax forms for students Related persons. Tax forms for students   Under this rule, related persons include, for example, a parent and child, a brother and sister, a corporation and an individual who owns more than 50% of its outstanding stock, and two partnerships in which the same C corporations own more than 50% of the capital or profits interests. Tax forms for students For more information on related persons, see Nondeductible Loss under Sales and Exchanges Between Related Persons in chapter 2 of Publication 544. Tax forms for students Death of a taxpayer. Tax forms for students   If a taxpayer dies after having a gain, but before buying replacement property, the gain must be reported for the year in which the decedent realized the gain. Tax forms for students The executor of the estate or the person succeeding to the funds from the involuntary conversion cannot postpone reporting the gain by buying replacement property. Tax forms for students Replacement Property You must buy replacement property for the specific purpose of replacing your property. Tax forms for students Your replacement property must be similar or related in service or use to the property it replaces. Tax forms for students You do not have to use the same funds you receive as reimbursement for your old property to acquire the replacement property. Tax forms for students If you spend the money you receive for other purposes, and borrow money to buy replacement property, you can still choose to postpone reporting the gain if you meet the other requirements. Tax forms for students Property you acquire by gift or inheritance does not qualify as replacement property. Tax forms for students Owner-user. Tax forms for students   If you are an owner-user, similar or related in service or use means that replacement property must function in the same way as the property it replaces. Tax forms for students Examples of property that functions in the same way as the property it replaces are a home that replaces another home, a dairy cow that replaces another dairy cow, and farm land that replaces other farm land. Tax forms for students A grinding mill that replaces a tractor does not qualify. Tax forms for students Neither does a breeding or draft animal that replaces a dairy cow. Tax forms for students Soil or other environmental contamination. Tax forms for students   If, because of soil or other environmental contamination, it is not feasible for you to reinvest your insurance money or other proceeds from destroyed or damaged livestock in property similar or related in service or use to the livestock, you can treat other property (including real property) used for farming purposes, as property similar or related in service or use to the destroyed or damaged livestock. Tax forms for students Weather-related conditions. Tax forms for students   If, because of drought, flood, or other weather-related conditions, it is not feasible for you to reinvest the insurance money or other proceeds in property similar or related in service or use to the livestock, you can treat other property (excluding real property) used for farming purposes, as property similar or related in service or use to the livestock you disposed of. Tax forms for students Example. Tax forms for students Each year you normally sell 25 cows from your beef herd. Tax forms for students However, this year you had to sell 50 cows. Tax forms for students This is because a severe drought significantly reduced the amount of hay and pasture yield needed to feed your herd for the rest of the year. Tax forms for students Because, as a result of the severe drought, it is not feasible for you to use the proceeds from selling the extra cows to buy new cows, you can treat other property (excluding real property) used for farming purposes, as property similar or related in service or use to the cows you sold. Tax forms for students Standing crop destroyed by casualty. Tax forms for students   If a storm or other casualty destroyed your standing crop and you use the insurance money to acquire either another standing crop or a harvested crop, this purchase qualifies as replacement property. Tax forms for students The costs of planting and raising a new crop qualify as replacement costs for the destroyed crop only if you use the crop method of accounting (discussed in chapter 2). Tax forms for students In that case, the costs of bringing the new crop to the same level of maturity as the destroyed crop qualify as replacement costs to the extent they are incurred during the replacement period. Tax forms for students Timber loss. Tax forms for students   Standing timber you bought with the proceeds from the sale of timber downed as a result of a casualty, such as high winds, earthquakes, or volcanic eruptions, qualifies as replacement property. Tax forms for students If you bought the standing timber within the replacement period, you can postpone reporting the gain. Tax forms for students Business or income-producing property located in a federally declared disaster area. Tax forms for students   If your destroyed business or income-producing property was located in a federally declared disaster area, any tangible replacement property you acquire for use in any business is treated as similar or related in service or use to the destroyed property. Tax forms for students For more information, see Disaster Area Losses in Publication 547. Tax forms for students Substituting replacement property. Tax forms for students   Once you have acquired qualified replacement property that you designate as replacement property in a statement attached to your tax return, you cannot substitute other qualified replacement property. Tax forms for students This is true even if you acquire the other property within the replacement period. Tax forms for students However, if you discover that the original replacement property was not qualified replacement property, you can, within the replacement period, substitute the new qualified replacement property. Tax forms for students Basis of replacement property. Tax forms for students   You must reduce the basis of your replacement property (its cost) by the amount of postponed gain. Tax forms for students In this way, tax on the gain is postponed until you dispose of the replacement property. Tax forms for students Replacement Period To postpone reporting your gain, you must buy replacement property within a specified period of time. Tax forms for students This is the replacement period. Tax forms for students The replacement period begins on the date your property was damaged, destroyed, stolen, sold, or exchanged. Tax forms for students The replacement period generally ends 2 years after the close of the first tax year in which you realize any part of your gain from the involuntary conversion. Tax forms for students Example. Tax forms for students You are a calendar year taxpayer. Tax forms for students While you were on vacation, farm equipment that cost $2,200 was stolen from your farm. Tax forms for students You discovered the theft when you returned to your farm on November 11, 2012. Tax forms for students Your insurance company investigated the theft and did not settle your claim until January 5, 2013, when they paid you $3,000. Tax forms for students You first realized a gain from the reimbursement for the theft during 2013, so you have until December 31, 2015, to replace the property. Tax forms for students Main home in disaster area. Tax forms for students   For your main home (or its contents) located in a federally declared disaster area, the replacement period ends 4 years after the close of the first tax year in which you realize any part of your gain from the involuntary conversion. Tax forms for students See Disaster Area Losses , later. Tax forms for students Property in the Midwestern disaster areas. Tax forms for students   For property located in the Midwestern disaster areas (defined in Table 4 in the 2008 Publication 547) that was destroyed, damaged, stolen, or condemned, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. Tax forms for students This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Midwestern disaster areas. Tax forms for students Property in the Kansas disaster area. Tax forms for students   For property located in the Kansas disaster area that was destroyed, damaged, stolen, or condemned after May 3, 2007, as a result of the Kansas storms and tornadoes, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. Tax forms for students This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Kansas disaster area. Tax forms for students Property in the Hurricane Katrina disaster area. Tax forms for students   For property located in the Hurricane Katrina disaster area that was destroyed, damaged, stolen, or condemned after August 24, 2005, as a result of Hurricane Katrina, the replacement period ends 5 years after the close of the first tax year in which any part of your gain is realized. Tax forms for students This 5-year replacement period applies only if substantially all of the use of the replacement property is in the Hurricane Katrina disaster area. Tax forms for students Weather-related sales of livestock in an area eligible for federal assistance. Tax forms for students   For the sale or exchange of livestock due to drought, flood, or other weather-related conditions in an area eligible for federal assistance, the replacement period ends 4 years after the close of the first tax year in which you realize any part of your gain from the sale or exchange. Tax forms for students The IRS may extend the replacement period on a regional basis if the weather-related conditions continue for longer than 3 years. Tax forms for students   For information on extensions of the replacement period because of persistent drought, see Notice 2006-82, 2006-39 I. Tax forms for students R. Tax forms for students B. Tax forms for students 529, available at  www. Tax forms for students irs. Tax forms for students gov/irb/2006-39_IRB/ar11. Tax forms for students html. Tax forms for students For a list of counties for which exceptional, extreme, or severe drought was reported during the 12 months ending August 31, 2013, see Notice 2013-62, available at IRS. Tax forms for students gov. Tax forms for students Condemnation. Tax forms for students   The replacement period for a condemnation begins on the earlier of the following dates. Tax forms for students The date on which you disposed of the condemned property. Tax forms for students The date on which the threat of condemnation began. Tax forms for students The replacement period generally ends 2 years after the close of the first tax year in which any part of the gain on the condemnation is realized. Tax forms for students But see Main home in disaster area , Property in the Midwestern disaster areas , Property in the Kansas disaster area , and Property in the Hurricane Katrina disaster area , earlier, for exceptions. Tax forms for students Business or investment real property. Tax forms for students   If real property held for use in a trade or business or for investment (not including property held primarily for sale) is condemned, the replacement period ends 3 years after the close of the first tax year in which any part of the gain on the condemnation is realized. Tax forms for students Extension. Tax forms for students   You can apply for an extension of the replacement period. Tax forms for students Send your written application to the Internal Revenue Service Center where you file your tax return. Tax forms for students See your tax return instructions for the address. Tax forms for students Include all the details about your need for an extension. Tax forms for students Make your application before the end of the replacement period. Tax forms for students However, you can file an application within a reasonable time after the replacement period ends if you can show a good reason for the delay. Tax forms for students You will get an extension of the replacement period if you can show reasonable cause for not making the replacement within the regular period. Tax forms for students How To Postpone Gain You postpone reporting your gain by reporting your choice on your tax return for the year you have the gain. Tax forms for students You have the gain in the year you receive insurance proceeds or other reimbursements that result in a gain. Tax forms for students Required statement. Tax forms for students   You should attach a statement to your return for the year you have the gain. Tax forms for students This statement should include all the following information. Tax forms for students The date and details of the casualty, theft, or other involuntary conversion. Tax forms for students The insurance or other reimbursement you received. Tax forms for students How you figured the gain. Tax forms for students Replacement property acquired before return filed. Tax forms for students   If you acquire replacement property before you file your return for the year you have the gain, your statement should also include detailed information about all the following items. Tax forms for students The replacement property. Tax forms for students The postponed gain. Tax forms for students The basis adjustment that reflects the postponed gain. Tax forms for students Any gain you are reporting as income. Tax forms for students Replacement property acquired after return filed. Tax forms for students   If you intend to buy replacement property after you file your return for the year you realize gain, your statement should also say that you are choosing to replace the property within the required replacement period. Tax forms for students   You should then attach another statement to your return for the year in which you buy the replacement property. Tax forms for students This statement should contain detailed information on the replacement property. Tax forms for students If you acquire part of your replacement property in one year and part in another year, you must attach a statement to each year's return. Tax forms for students Include in the statement detailed information on the replacement property bought in that year. Tax forms for students Reporting weather-related sales of livestock. Tax forms for students   If you choose to postpone reporting the gain on weather-related sales or exchanges of livestock, show all the following information on a statement attached to your return for the tax year in which you first realize any of the gain. Tax forms for students Evidence of the weather-related conditions that forced the sale or exchange of the livestock. Tax forms for students The gain realized on the sale or exchange. Tax forms for students The number and kind of livestock sold or exchanged. Tax forms for students The number of livestock of each kind you would have sold or exchanged under your usual business practice. Tax forms for students   Show all the following information and the preceding information on the return for the year in which you replace the livestock. Tax forms for students The dates you bought the replacement property. Tax forms for students The cost of the replacement property. Tax forms for students Description of the replacement property (for example, the number and kind of the replacement livestock). Tax forms for students Amended return. Tax forms for students   You must file an amended return (Form 1040X) for the tax year of the gain in either of the following situations. Tax forms for students You do not acquire replacement property within the replacement period, plus extensions. Tax forms for students On this amended return, you must report the gain and pay any additional tax due. Tax forms for students You acquire replacement property within the required replacement period, plus extensions, but at a cost less than the amount you receive from the casualty, theft, or other involuntary conversion. Tax forms for students On this amended return, you must report the part of the gain that cannot be postponed and pay any additional tax due. Tax forms for students Disaster Area Losses Special rules apply to federally declared disaster area losses. Tax forms for students A federally declared disaster is a disaster that occurred in an area declared by the President to be eligible for federal assistance under the Robert T. Tax forms for students Stafford Disaster Relief and Emergency Assistance Act. Tax forms for students It includes a major disaster or emergency declaration under the act. Tax forms for students A list of the areas warranting public or individual assistance (or both) under the Act is available at the Federal Emergency Management Agency (FEMA) web site at www. Tax forms for students fema. Tax forms for students gov. Tax forms for students This part discusses the special rules for when to deduct a disaster area loss and what tax deadlines may be postponed. Tax forms for students For other special rules, see Disaster Area Losses in Publication 547. Tax forms for students When to deduct the loss. Tax forms for students   You generally must deduct a casualty loss in the year it occurred. Tax forms for students However, if you have a deductible loss from a disaster that occurred in an area warranting public or individual assistance (or both), you can choose to deduct that loss on your return or amended return for the tax year immediately preceding the tax year in which the disaster happened. Tax forms for students If you make this choice, the loss is treated as having occurred in the preceding year. Tax forms for students    Claiming a qualifying disaster loss on the previous year's return may result in a lower tax for that year, often producing or increasing a cash refund. Tax forms for students   You must make the choice to take your casualty loss for the disaster in the preceding year by the later of the following dates. Tax forms for students The due date (without extensions) for filing your tax return for the tax year in which the disaster actually occurred. Tax forms for students The due date (with extensions) for the return for the preceding tax year. Tax forms for students Federal disaster relief grants. Tax forms for students   Do not include post-disaster relief grants received under the Robert T. Tax forms for students Stafford Disaster Relief and Emergency Assistance Act in your income if the grant payments are made to help you meet necessary expenses or serious needs for medical, dental, housing, personal property, transportation, or funeral expenses. Tax forms for students Do not deduct casualty losses or medical expenses to the extent they are specifically reimbursed by these disaster relief grants. Tax forms for students If the casualty loss was specifically reimbursed by the grant and you received the grant after the year in which you deducted the casualty loss, see Reimbursement received after deducting loss , earlier. Tax forms for students Unemployment assistance payments under the Act are taxable unemployment compensation. Tax forms for students Qualified disaster relief payments. Tax forms for students   Qualified disaster relief payments are not included in the income of individuals to the extent any expenses compensated by these payments are not otherwise compensated for by insurance or other reimbursement. Tax forms for students These payments are not subject to income tax, self-employment tax, or employment taxes (social security, Medicare, and federal unemployment taxes). Tax forms for students No withholding applies to these payments. Tax forms for students   Qualified disaster relief payments include payments you receive (regardless of the source) for the following expenses. Tax forms for students Reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a federally declared disaster. Tax forms for students Reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence due to a federally declared disaster. Tax forms for students (A personal residence can be a rented residence or one you own. Tax forms for students ) Reasonable and necessary expenses incurred for the repair or replacement of the contents of a personal residence due to a federally declared disaster. Tax forms for students   Qualified disaster relief payments include amounts paid by a federal, state, or local government in connection with a federally declared disaster to individuals affected by the disaster. Tax forms for students    Qualified disaster relief payments do not include: Payments for expenses otherwise paid for by insurance or other reimbursements, or Income replacement payments, such as payments of lost wages, lost business income, or unemployment compensation. Tax forms for students Qualified disaster mitigation payments. Tax forms for students   Qualified disaster mitigation payments made under the Robert T. Tax forms for students Stafford Disaster Relief and Emergency Assistance Act or the National Flood Insurance Act (as in effect on April 15, 2005) are not included in income. Tax forms for students These are payments you, as a property owner, receive to reduce the risk of future damage to your property. Tax forms for students You cannot increase your basis in property, or take a deduction or credit, for expenditures made with respect to those payments. Tax forms for students Sale of property under hazard mitigation program. Tax forms for students   Generally, if you sell or otherwise transfer property, you must recognize any gain or loss for tax purposes unless the property is your main home. Tax forms for students You report the gain or deduct the loss on your tax return for the year you realize it. Tax forms for students (You cannot deduct a loss on personal-use property unless the loss resulted from a casualty, as discussed earlier. Tax forms for students ) However, if you sell or otherwise transfer property to the Federal Government, a state or local government, or an Indian tribal government under a hazard mitigation program, you can choose to postpone reporting the gain if you buy qualifying replacement property within a certain period of time. Tax forms for students See Postponing Gain , earlier, for the rules that apply. Tax forms for students Other federal assistance programs. Tax forms for students    For more information about other federal assistance programs, see Crop Insurance and Crop Disaster Payments and Feed Assistance and Payments in chapter 3 earlier. Tax forms for students Postponed tax deadlines. Tax forms for students   The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a federally declared disaster. Tax forms for students The tax deadlines the IRS may postpone include those for filing income, excise, and employment tax returns, paying income, excise, and employment taxes, and making contributions to a traditional IRA or Roth IRA. Tax forms for students   If any tax deadline is postponed, the IRS will publicize the postponement in your area and publish a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin (IRB). Tax forms for students Go to http://www. Tax forms for students irs. Tax forms for students gov/uac/Tax-Relief-in-Disaster-Situations to find out if a tax deadline has been postponed for your area. Tax forms for students Who is eligible. Tax forms for students   If the IRS postpones a tax deadline, the following taxpayers are eligible for the postponement. Tax forms for students Any individual whose main home is located in a covered disaster area (defined next). Tax forms for students Any business entity or sole proprietor whose principal place of business is located in a covered disaster area. Tax forms for students Any individual who is a relief worker affiliated with a recognized government or philanthropic organization and who is assisting in a covered disaster area. Tax forms for students Any individual, business entity, or sole proprietorship whose records are needed to meet a postponed tax deadline, provided those records are maintained in a covered disaster area. Tax forms for students The main home or principal place of business does not have to be located in the covered disaster area. Tax forms for students Any estate or trust that has tax records necessary to meet a postponed tax deadline, provided those records are maintained in a covered disaster area. Tax forms for students The spouse on a joint return with a taxpayer who is eligible for postponements. Tax forms for students Any individual, business entity, or sole proprietorship not located in a covered disaster area, but whose necessary records to meet a postponed tax deadline are located in the covered disaster area. Tax forms for students Any individual visiting the covered disaster area who was killed or injured as a result of the disaster. Tax forms for students Any other person determined by the IRS to be affected by a federally declared disaster. Tax forms for students Covered disaster area. Tax forms for students   This is an area of a federally declared disaster area in which the IRS has decided to postpone tax deadlines for up to 1 year. Tax forms for students Abatement of interest and penalties. Tax forms for students   The IRS may abate the interest and penalties on the underpaid income tax for the length of any postponement of tax deadlines. Tax forms for students Reporting Gains and Losses You will have to file one or more of the following forms to report your gains or losses from involuntary conversions. Tax forms for students Form 4684. Tax forms for students   Use this form to report your gains and losses from casualties and thefts. Tax forms for students Form 4797. Tax forms for students   Use this form to report involuntary conversions (other than from casualty or theft) of property used in your trade or business and capital assets held in connection with a trade or business or a transaction entered into for profit. Tax forms for students Also use this form if you have a gain from a casualty or theft on trade, business or income-producing property held for more than 1 year and you have to recapture some or all of your gain as ordinary income. Tax forms for students Form 8949. Tax forms for students   Use this form to report gain from an involuntary conversion (other than from casualty or theft) of personal-use property. Tax forms for students Schedule A (Form 1040). Tax forms for students   Use this form to deduct your losses from casualties and thefts of personal-use property and income-producing property, that you reported on Form 4684. Tax forms for students Schedule D (Form 1040). Tax forms for students   Use this form to carry over the following gains. Tax forms for students Net gain shown on Form 4797 from an involuntary conversion of business property held for more than 1 year. Tax forms for students Net gain shown on Form 4684 from the casualty or theft of personal-use property. Tax forms for students    Also use this form to figure the overall gain or loss from transactions reported on Form 8949. Tax forms for students Schedule F (Form 1040). Tax forms for students   Use this form to deduct your losses from casualty or theft of livestock or produce bought for sale under Other expenses in Part II, line 32, if you use the cash method of accounting and have not otherwise deducted these losses. Tax forms for students Prev  Up  Next   Home   More Online Publications
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Replace Your Vital Documents

Fortunately, you can replace most important personal records. Use these links as a starting point.

  • Address Change  – When you move, be sure to change your address with the Post Office, IRS, and other government agencies, so that you'll continue to receive mail and any government benefits at your new location.
  • Birth, Marriage, and Death Certificates  – Get records based on the location of the birth, death, marriage, or divorce.
  • Damaged Money  – The Treasury Department will exchange mutilated or damaged U.S. currency.
  • Drivers' Licenses and Vehicle Registration  – Find your state's motor vehicle department to get or replace your driver's license, and register your car.
  • Federal Civilian Personnel Records  – Go to the National Archives website for guidance on requesting personnel records for former federal civilian employees. Current federal workers can get personnel records from their human resources office.
  • Green Card Replacement  – Get instructions on how to replace a lost, stolen, or damaged permanent resident card (green card).
  • Medicare Card Replacement  – Learn how to replace a lost, stolen, or damaged Medicare card.
  • Military Service Records  – Get copies of military service records, to prove military service or to research genealogy.
  • Passport  – Report your lost or stolen passport immediately. Contact the nearest U.S. embassy or consulate if your passport is lost or stolen overseas.
  • Replace a Savings Bond  – Replace lost, stolen, or destroyed paper savings bonds.
  • Saving Family Treasures  – The National Archives provides guidelines for the care for some of the more common materials affected by natural disasters or other emergencies.
  • School Records  – Contact your former school or the appropriate school district if the school has closed.
  • Social Security Card Replacement  – Learn how to replace your lost or stolen Social Security card.
  • Tax Return  – Request a copy of your federal tax return from the Internal Revenue Service (IRS).

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The Tax Forms For Students

Tax forms for students 5. Tax forms for students   Table and Worksheets for the Self-Employed Table of Contents Community property laws. Tax forms for students As discussed in chapters 2 and 4, if you are self-employed, you must use the rate table or rate worksheet and deduction worksheet to figure your deduction for contributions you made for yourself to a SEP-IRA or qualified plan. Tax forms for students First, use either the rate table or rate worksheet to find your reduced contribution rate. Tax forms for students Then complete the deduction worksheet to figure your deduction for contributions. Tax forms for students The table and the worksheets in chapter 5 apply only to self-employed individuals who have only one defined contribution plan, such as a profit-sharing plan. Tax forms for students A SEP plan is treated as a profit-sharing plan. Tax forms for students However, do not use this worksheet for SARSEPs. Tax forms for students Rate table for self-employed. Tax forms for students   If your plan's contribution rate is a whole percentage (for example, 12% rather than 12½%), you can use the table on the next page to find your reduced contribution rate. Tax forms for students Otherwise, use the rate worksheet provided below. Tax forms for students   First, find your plan contribution rate (the contribution rate stated in your plan) in Column A of the table. Tax forms for students Then read across to the rate under Column B. Tax forms for students Enter the rate from Column B in step 4 of the Deduction Worksheet for Self-Employed on this page. Tax forms for students    Example. Tax forms for students You are a sole proprietor with no employees. Tax forms for students If your plan's contribution rate is 10% of a participant's compensation, your rate is 0. Tax forms for students 090909. Tax forms for students Enter this rate in step 4 of the Deduction Worksheet for Self-Employed on this page. Tax forms for students Deduction Worksheet for Self-Employed   Step 1           Enter your net profit from line 31, Schedule C (Form 1040); line 3, Schedule C-EZ (Form 1040); line 34, Schedule F (Form 1040)*; or box 14, code A**, Schedule K-1 (Form 1065)*. Tax forms for students For information on other income included in net profit from self-employment, see the Instructions for Schedule SE, Form 1040. Tax forms for students       *Reduce this amount by any amount reported on Schedule SE (Form 1040), line 1b. Tax forms for students       **General partners should reduce this amount by the same additional expenses subtracted from box 14, code A to determine the amount on line 1 or 2 of Schedule SE. Tax forms for students     Step 2           Enter your deduction for self-employment tax from Form 1040, line 27             Step 3           Net earnings from self-employment. Tax forms for students Subtract step 2 from step 1     Step 4           Enter your rate from the Rate Table for Self-Employed or Rate Worksheet for Self-Employed     Step 5           Multiply step 3 by step 4     Step 6           Multiply $255,000 by your plan contribution rate (not the reduced rate)     Step 7           Enter the smaller of step 5 or step 6     Step 8           Contribution dollar limit $51,000     • If you made any elective deferrals to your self-employed plan, go to step 9. Tax forms for students         • Otherwise, skip steps 9 through 20 and enter the smaller of step 7 or step 8 on step 21. Tax forms for students       Step 9           Enter your allowable elective deferrals (including designated Roth contributions) made to your self-employed plan during 2013. Tax forms for students Do not enter more than $17,500     Step 10           Subtract step 9 from step 8     Step 11           Subtract step 9 from step 3       Step 12           Enter one-half of step 11     Step 13           Enter the smallest of step 7, 10, or 12     Step 14           Subtract step 13 from step 3     Step 15           Enter the smaller of step 9 or step 14       • If you made catch-up contributions, go to step 16. Tax forms for students         • Otherwise, skip steps 16 through 18 and go to step 19. Tax forms for students       Step 16           Subtract step 15 from step 14     Step 17           Enter your catch-up contributions (including designated Roth contributions), if any. Tax forms for students Do not enter more than $5,500     Step 18           Enter the smaller of step 16 or step 17     Step 19           Add steps 13, 15, and 18. Tax forms for students     Step 20           Enter the amount of designated Roth contributions included on lines 9 and 17. Tax forms for students     Step 21           Subtract step 20 from step 19. Tax forms for students This is your maximum deductible contribution. Tax forms for students                 Next: Enter your actual contribution, not to exceed your maximum deductible contribution, on Form 1040, line 28. Tax forms for students   Rate worksheet for self-employed. Tax forms for students   If your plan's contribution rate is not a whole percentage (for example, 10½%), you cannot use the Rate Table for Self-Employed. Tax forms for students Use the following worksheet instead. Tax forms for students Rate Worksheet for Self-Employed 1) Plan contribution rate as a decimal (for example, 10½% = 0. Tax forms for students 105)   2) Rate in line 1 plus 1 (for example, 0. Tax forms for students 105 + 1 = 1. Tax forms for students 105)   3) Self-employed rate as a decimal rounded to at least 3 decimal places (line 1 ÷ line 2) (for example, 0. Tax forms for students 105 ÷ 1. Tax forms for students 105 = 0. Tax forms for students 095)   Figuring your deduction. Tax forms for students   Now that you have your self-employed rate from either the rate table or rate worksheet, you can figure your maximum deduction for contributions for yourself by completing the Deduction Worksheet for Self-Employed. Tax forms for students Community property laws. Tax forms for students   If you reside in a community property state and you are married and filing a separate return, disregard community property laws for step 1 of the Deduction Worksheet for Self-Employed. Tax forms for students Enter on step 1 the total net profit you actually earned. Tax forms for students Rate Table for Self-Employed Column A  If the plan contri- bution rate is: (shown as %) Column B  Your rate is: (shown as decimal) 1 . Tax forms for students 009901 2 . Tax forms for students 019608 3 . Tax forms for students 029126 4 . Tax forms for students 038462 5 . Tax forms for students 047619 6 . Tax forms for students 056604 7 . Tax forms for students 065421 8 . Tax forms for students 074074 9 . Tax forms for students 082569 10 . Tax forms for students 090909 11 . Tax forms for students 099099 12 . Tax forms for students 107143 13 . Tax forms for students 115044 14 . Tax forms for students 122807 15 . Tax forms for students 130435 16 . Tax forms for students 137931 17 . Tax forms for students 145299 18 . Tax forms for students 152542 19 . Tax forms for students 159664 20 . Tax forms for students 166667 21 . Tax forms for students 173554 22 . Tax forms for students 180328 23 . Tax forms for students 186992 24 . Tax forms for students 193548 25* . Tax forms for students 200000* *The deduction for annual employer contributions (other than elective deferrals) to a SEP plan, a profit-sharing plan, or a money purchase plan cannot be more than 20% of your net earnings (figured without deducting contributions for yourself) from the business that has the plan. Tax forms for students Example. Tax forms for students You are a sole proprietor with no employees. Tax forms for students The terms of your plan provide that you contribute 8½% (. Tax forms for students 085) of your compensation to your plan. Tax forms for students Your net profit from line 31, Schedule C (Form 1040) is $200,000. Tax forms for students You have no elective deferrals or catch-up contributions. Tax forms for students Your self-employment tax deduction on line 27 of Form 1040 is $9,728. Tax forms for students See the filled-in portions of both Schedule SE (Form 1040), Self-Employment Income, and Form 1040, later. Tax forms for students You figure your self-employed rate and maximum deduction for employer contributions you made for yourself as follows. Tax forms for students Deduction Worksheet for Self-Employed   Step 1           Enter your net profit from line 31, Schedule C (Form 1040); line 3, Schedule C-EZ (Form 1040); line 34, Schedule F (Form 1040)*; or box 14, code A**, Schedule K-1 (Form 1065)*. Tax forms for students For information on other income included in net profit from self-employment, see the Instructions for Schedule SE, Form 1040. Tax forms for students $200,000     *Reduce this amount by any amount reported on Schedule SE (Form 1040), line 1b. Tax forms for students       **General partners should reduce this amount by the same additional expenses subtracted from box 14, code A to determine the amount on line 1 or 2 of Schedule SE. Tax forms for students     Step 2           Enter your deduction for self-employment tax from Form 1040, line 27 9,728           Step 3           Net earnings from self-employment. Tax forms for students Subtract step 2 from step 1 190,272   Step 4           Enter your rate from the Rate Table for Self-Employed or Rate Worksheet for Self-Employed 0. Tax forms for students 078   Step 5           Multiply step 3 by step 4 14,841   Step 6           Multiply $255,000 by your plan contribution rate (not the reduced rate) 21,675   Step 7           Enter the smaller of step 5 or step 6 14,841   Step 8           Contribution dollar limit $51,000     • If you made any elective deferrals to your self-employed plan, go to step 9. Tax forms for students         • Otherwise, skip steps 9 through 20 and enter the smaller of step 7 or step 8 on step 21. Tax forms for students       Step 9           Enter your allowable elective deferrals (including designated Roth contributions) made to your self-employed plan during 2013. Tax forms for students Do not enter more than $17,500 N/A   Step 10           Subtract step 9 from step 8     Step 11           Subtract step 9 from step 3       Step 12           Enter one-half of step 11     Step 13           Enter the smallest of step 7, 10, or 12     Step 14           Subtract step 13 from step 3     Step 15           Enter the smaller of step 9 or step 14       • If you made catch-up contributions, go to step 16. Tax forms for students         • Otherwise, skip steps 16 through 18 and go to step 19. Tax forms for students       Step 16           Subtract step 15 from step 14     Step 17           Enter your catch-up contributions (including designated Roth contributions), if any. Tax forms for students Do not enter more than $5,500     Step 18           Enter the smaller of step 16 or step 17     Step 19           Add steps 13, 15, and 18. Tax forms for students     Step 20           Enter the amount of designated Roth contributions included on lines 9 and 17     Step 21           Subtract step 20 from step 19. Tax forms for students This is your maximum deductible contribution $14,841                 Next: Enter your actual contribution, not to exceed your maximum deductible contribution, on Form 1040, line 28. Tax forms for students   See the filled-in Deduction Worksheet for Self-Employed on this page. Tax forms for students Rate Worksheet for Self-Employed 1) Plan contribution rate as a decimal (for example, 10½% = 0. Tax forms for students 105) 0. Tax forms for students 085 2) Rate in line 1 plus 1 (for example, 0. Tax forms for students 105 + 1 = 1. Tax forms for students 105) 1. Tax forms for students 085 3) Self-employed rate as a decimal rounded to at least 3 decimal places (line 1 ÷ line 2) (for example, 0. Tax forms for students 105 ÷ 1. Tax forms for students 105 = 0. Tax forms for students 095) 0. Tax forms for students 078 This image is too large to be displayed in the current screen. Tax forms for students Please click the link to view the image. Tax forms for students Portion of Form 1040 and Portion of Schedule SE Prev  Up  Next   Home   More Online Publications