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 Software 2011

Didn't File Taxes Last Year2010 1040ez InstructionsDownload A 1040ez Federal Tax FormForm 1040x InstructionsFind 1040ez Irs Form 20101040nr Ez E FileFile 2011 Tax ReturnMilitary Com2012 Irs Tax Forms 1040aTax Software FreeFree State Income Tax FormsFile Taxes Online FreeAmend 2012 Tax Return TurbotaxHr Block Free E File1040 Ez Free1040ez2011Turbotax Free EditionFile 2012 State Taxes Online FreeHow To File Taxes For Free1040 Ez OnlineHow Do I File 2011 Taxes Now2012 Form 1040a InstructionsE File 2010 Taxes OnlineTurbotax Free State FilingIrs Gov File 2009 TaxesHow Do I File Back TaxesHow Much Do Students Get Back In TaxesAmended Tax Return For 2012How To Make A Tax AmendmentFile Taxes 2012 Free1040 Ez Form Online1040ez Income Tax FormCan I Efile My 2012 Taxes2011 Irs Forms PublicationsWhere Can I File 2009 Taxes Online For FreeHow To Get A 1040x FormFree 1040xFile 2012 Taxes Online FreeIrs Forms 1040xTax Return 2011

Tax Software 2011

Tax software 2011 2. Tax software 2011   Electing the Section 179 Deduction Table of Contents Introduction Useful Items - You may want to see: What Property Qualifies?Eligible Property Property Acquired for Business Use Property Acquired by Purchase What Property Does Not Qualify?Land and Improvements Excepted Property How Much Can You Deduct?Dollar Limits Business Income Limit Partnerships and Partners S Corporations Other Corporations How Do You Elect the Deduction? When Must You Recapture the Deduction? Introduction You can elect to recover all or part of the cost of certain qualifying property, up to a limit, by deducting it in the year you place the property in service. Tax software 2011 This is the section 179 deduction. Tax software 2011 You can elect the section 179 deduction instead of recovering the cost by taking depreciation deductions. Tax software 2011 Estates and trusts cannot elect the section 179 deduction. Tax software 2011 This chapter explains what property does and does not qualify for the section 179 deduction, what limits apply to the deduction (including special rules for partnerships and corporations), and how to elect it. Tax software 2011 It also explains when and how to recapture the deduction. Tax software 2011 Useful Items - You may want to see: Publication 537 Installment Sales 544 Sales and Other Dispositions of Assets 954 Tax Incentives for Distressed Communities Form (and Instructions) 4562 Depreciation and Amortization 4797 Sales of Business Property See chapter 6 for information about getting publications and forms. Tax software 2011 What Property Qualifies? To qualify for the section 179 deduction, your property must meet all the following requirements. Tax software 2011 It must be eligible property. Tax software 2011 It must be acquired for business use. Tax software 2011 It must have been acquired by purchase. Tax software 2011 It must not be property described later under What Property Does Not Qualify . Tax software 2011 The following discussions provide information about these requirements and exceptions. Tax software 2011 Eligible Property To qualify for the section 179 deduction, your property must be one of the following types of depreciable property. Tax software 2011 Tangible personal property. Tax software 2011 Other tangible property (except buildings and their structural components) used as: An integral part of manufacturing, production, or extraction or of furnishing transportation, communications, electricity, gas, water, or sewage disposal services, A research facility used in connection with any of the activities in (a) above, or A facility used in connection with any of the activities in (a) for the bulk storage of fungible commodities. Tax software 2011 Single purpose agricultural (livestock) or horticultural structures. Tax software 2011 See chapter 7 of Publication 225 for definitions and information regarding the use requirements that apply to these structures. Tax software 2011 Storage facilities (except buildings and their structural components) used in connection with distributing petroleum or any primary product of petroleum. Tax software 2011 Off-the-shelf computer software. Tax software 2011 Qualified real property (described below). Tax software 2011 Tangible personal property. Tax software 2011   Tangible personal property is any tangible property that is not real property. Tax software 2011 It includes the following property. Tax software 2011 Machinery and equipment. Tax software 2011 Property contained in or attached to a building (other than structural components), such as refrigerators, grocery store counters, office equipment, printing presses, testing equipment, and signs. Tax software 2011 Gasoline storage tanks and pumps at retail service stations. Tax software 2011 Livestock, including horses, cattle, hogs, sheep, goats, and mink and other furbearing animals. Tax software 2011   The treatment of property as tangible personal property for the section 179 deduction is not controlled by its treatment under local law. Tax software 2011 For example, property may not be tangible personal property for the deduction even if treated so under local law, and some property (such as fixtures) may be tangible personal property for the deduction even if treated as real property under local law. Tax software 2011 Off-the-shelf computer software. Tax software 2011   Off-the-shelf computer software placed in service during the tax year is qualifying property for purposes of the section 179 deduction. Tax software 2011 This is computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. Tax software 2011 It includes any program designed to cause a computer to perform a desired function. Tax software 2011 However, a database or similar item is not considered computer software unless it is in the public domain and is incidental to the operation of otherwise qualifying software. Tax software 2011 Qualified real property. Tax software 2011   You can elect to treat certain qualified real property you placed in service as section 179 property for tax years beginning in 2013. Tax software 2011 If this election is made, the term “section 179 property” will include any qualified real property that is: Qualified leasehold improvement property, Qualified restaurant property, or Qualified retail improvement property. Tax software 2011 The maximum section 179 expense deduction that can be elected for qualified section 179 real property is $250,000 of the maximum section 179 deduction of $500,000 in 2013. Tax software 2011 For more information, see Special rules for qualified section 179 real property, later. Tax software 2011 Also, see Election for certain qualified section 179 real property, later, for information on how to make this election. Tax software 2011 Qualified leasehold improvement property. Tax software 2011   Generally, this is any improvement to an interior part of a building (placed in service before January 1, 2014) that is nonresidential real property, provided all of the requirements discussed in chapter 3 under Qualified leasehold improvement property are met. Tax software 2011   In addition, an improvement made by the lessor does not qualify as qualified leasehold improvement property to any subsequent owner unless it is acquired from the original lessor by reason of the lessor’s death or in any of the following types of transactions. Tax software 2011 A transaction to which section 381(a) applies, A mere change in the form of conducting the trade or business so long as the property is retained in the trade or business as qualified leasehold improvement property and the taxpayer retains a substantial interest in the trade or business, A like-kind exchange, involuntary conversion, or re-acquisition of real property to the extent that the basis in the property represents the carryover basis, or Certain nonrecognition transactions to the extent that your basis in the property is determined by reference to the transferor’s or distributor’s basis in the property. Tax software 2011 Examples include the following. Tax software 2011 A complete liquidation of a subsidiary. Tax software 2011 A transfer to a corporation controlled by the transferor. Tax software 2011 An exchange of property by a corporation solely for stock or securities in another corporation in a reorganization. Tax software 2011 Qualified restaurant property. Tax software 2011   Qualified restaurant property is any section 1250 property that is a building or an improvement to a building placed in service after December 31, 2008, and before January 1, 2014. Tax software 2011 Also, more than 50% of the building’s square footage must be devoted to preparation of meals and seating for on-premise consumption of prepared meals. Tax software 2011 Qualified retail improvement property. Tax software 2011   Generally, this is any improvement (placed in service after December 31, 2008, and before January 1, 2014) to an interior portion of nonresidential real property if it meets the following requirements. Tax software 2011 The portion is open to the general public and is used in the retail trade or business of selling tangible property to the general public. Tax software 2011 The improvement is placed in service more than 3 years after the date the building was first placed in service. Tax software 2011 The expenses are not for the enlargement of the building, any elevator or escalator, any structural components benefiting a common area, or the internal structural framework of the building. Tax software 2011 In addition, an improvement made by the lessor does not qualify as qualified retail improvement property to any subsequent owner unless it is acquired from the original lessor by reason of the lessor’s death or in any of the following types of transactions. Tax software 2011 A transaction to which section 381(a) applies, A mere change in the form of conducting the trade or business so long as the property is retained in the trade or business as qualified leasehold improvement property and the taxpayer retains a substantial interest in the trade or business, A like-kind exchange, involuntary conversion, or re-acquisition of real property to the extent that the basis in the property represents the carryover basis, or Certain nonrecognition transactions to the extent that your basis in the property is determined by reference to the transferor’s or distributor’s basis in the property. Tax software 2011 Examples include the following. Tax software 2011 A complete liquidation of a subsidiary. Tax software 2011 A transfer to a corporation controlled by the transferor. Tax software 2011 An exchange of property by a corporation solely for stock or securities in another corporation in a reorganization. Tax software 2011 Property Acquired for Business Use To qualify for the section 179 deduction, your property must have been acquired for use in your trade or business. Tax software 2011 Property you acquire only for the production of income, such as investment property, rental property (if renting property is not your trade or business), and property that produces royalties, does not qualify. Tax software 2011 Partial business use. Tax software 2011   When you use property for both business and nonbusiness purposes, you can elect the section 179 deduction only if you use the property more than 50% for business in the year you place it in service. Tax software 2011 If you use the property more than 50% for business, multiply the cost of the property by the percentage of business use. Tax software 2011 Use the resulting business cost to figure your section 179 deduction. Tax software 2011 Example. Tax software 2011 May Oak bought and placed in service an item of section 179 property costing $11,000. Tax software 2011 She used the property 80% for her business and 20% for personal purposes. Tax software 2011 The business part of the cost of the property is $8,800 (80% × $11,000). Tax software 2011 Property Acquired by Purchase To qualify for the section 179 deduction, your property must have been acquired by purchase. Tax software 2011 For example, property acquired by gift or inheritance does not qualify. Tax software 2011 Property is not considered acquired by purchase in the following situations. Tax software 2011 It is acquired by one component member of a controlled group from another component member of the same group. Tax software 2011 Its basis is determined either— In whole or in part by its adjusted basis in the hands of the person from whom it was acquired, or Under the stepped-up basis rules for property acquired from a decedent. Tax software 2011 It is acquired from a related person. Tax software 2011 Related persons. Tax software 2011   Related persons are described under Related persons earlier. Tax software 2011 However, to determine whether property qualifies for the section 179 deduction, treat as an individual's family only his or her spouse, ancestors, and lineal descendants and substitute "50%" for "10%" each place it appears. Tax software 2011 Example. Tax software 2011 Ken Larch is a tailor. Tax software 2011 He bought two industrial sewing machines from his father. Tax software 2011 He placed both machines in service in the same year he bought them. Tax software 2011 They do not qualify as section 179 property because Ken and his father are related persons. Tax software 2011 He cannot claim a section 179 deduction for the cost of these machines. Tax software 2011 What Property Does Not Qualify? Certain property does not qualify for the section 179 deduction. Tax software 2011 This includes the following. Tax software 2011 Land and Improvements Land and land improvements do not qualify as section 179 property. Tax software 2011 Land improvements include swimming pools, paved parking areas, wharves, docks, bridges, and fences. Tax software 2011 Excepted Property Even if the requirements explained earlier under What Property Qualifies are met, you cannot elect the section 179 deduction for the following property. Tax software 2011 Certain property you lease to others (if you are a noncorporate lessor). Tax software 2011 Certain property used predominantly to furnish lodging or in connection with the furnishing of lodging. Tax software 2011 Air conditioning or heating units. Tax software 2011 Property used predominantly outside the United States, except property described in section 168(g)(4) of the Internal Revenue Code. Tax software 2011 Property used by certain tax-exempt organizations, except property used in connection with the production of income subject to the tax on unrelated trade or business income. Tax software 2011 Property used by governmental units or foreign persons or entities, except property used under a lease with a term of less than 6 months. Tax software 2011 Leased property. Tax software 2011   Generally, you cannot claim a section 179 deduction based on the cost of property you lease to someone else. Tax software 2011 This rule does not apply to corporations. Tax software 2011 However, you can claim a section 179 deduction for the cost of the following property. Tax software 2011 Property you manufacture or produce and lease to others. Tax software 2011 Property you purchase and lease to others if both the following tests are met. Tax software 2011 The term of the lease (including options to renew) is less than 50% of the property's class life. Tax software 2011 For the first 12 months after the property is transferred to the lessee, the total business deductions you are allowed on the property (other than rents and reimbursed amounts) are more than 15% of the rental income from the property. Tax software 2011 Property used for lodging. Tax software 2011   Generally, you cannot claim a section 179 deduction for property used predominantly to furnish lodging or in connection with the furnishing of lodging. Tax software 2011 However, this does not apply to the following types of property. Tax software 2011 Nonlodging commercial facilities that are available to those not using the lodging facilities on the same basis as they are available to those using the lodging facilities. Tax software 2011 Property used by a hotel or motel in connection with the trade or business of furnishing lodging where the predominant portion of the accommodations is used by transients. Tax software 2011 Any certified historic structure to the extent its basis is due to qualified rehabilitation expenditures. Tax software 2011 Any energy property. Tax software 2011 Energy property. Tax software 2011   Energy property is property that meets the following requirements. Tax software 2011 It is one of the following types of property. Tax software 2011 Equipment that uses solar energy to generate electricity, to heat or cool a structure, to provide hot water for use in a structure, or to provide solar process heat, except for equipment used to generate energy to heat a swimming pool. Tax software 2011 Equipment placed in service after December 31, 2005, and before January 1, 2017, that uses solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight. Tax software 2011 Equipment used to produce, distribute, or use energy derived from a geothermal deposit. Tax software 2011 For electricity generated by geothermal power, this includes equipment up to (but not including) the electrical transmission stage. Tax software 2011 Qualified fuel cell property or qualified microturbine property placed in service after December 31, 2005, and before January 1, 2017. Tax software 2011 The construction, reconstruction, or erection of the property must be completed by you. Tax software 2011 For property you acquire, the original use of the property must begin with you. Tax software 2011 The property must meet the performance and quality standards, if any, prescribed by Income Tax Regulations in effect at the time you get the property. Tax software 2011   For periods before February 14, 2008, energy property does not include any property that is public utility property as defined by section 46(f)(5) of the Internal Revenue Code (as in effect on November 4, 1990). Tax software 2011 How Much Can You Deduct? Your section 179 deduction is generally the cost of the qualifying property. Tax software 2011 However, the total amount you can elect to deduct under section 179 is subject to a dollar limit and a business income limit. Tax software 2011 These limits apply to each taxpayer, not to each business. Tax software 2011 However, see Married Individuals under Dollar Limits , later. Tax software 2011 For a passenger automobile, the total section 179 deduction and depreciation deduction are limited. Tax software 2011 See Do the Passenger Automobile Limits Apply in chapter 5 . Tax software 2011 If you deduct only part of the cost of qualifying property as a section 179 deduction, you can generally depreciate the cost you do not deduct. Tax software 2011 Trade-in of other property. Tax software 2011   If you buy qualifying property with cash and a trade-in, its cost for purposes of the section 179 deduction includes only the cash you paid. Tax software 2011 Example. Tax software 2011 Silver Leaf, a retail bakery, traded two ovens having a total adjusted basis of $680 for a new oven costing $1,320. Tax software 2011 They received an $800 trade-in allowance for the old ovens and paid $520 in cash for the new oven. Tax software 2011 The bakery also traded a used van with an adjusted basis of $4,500 for a new van costing $9,000. Tax software 2011 They received a $4,800 trade-in allowance on the used van and paid $4,200 in cash for the new van. Tax software 2011 Only the portion of the new property's basis paid by cash qualifies for the section 179 deduction. Tax software 2011 Therefore, Silver Leaf's qualifying costs for the section 179 deduction are $4,720 ($520 + $4,200). Tax software 2011 Dollar Limits The total amount you can elect to deduct under section 179 for most property placed in service in 2013 generally cannot be more than $500,000. Tax software 2011 If you acquire and place in service more than one item of qualifying property during the year, you can allocate the section 179 deduction among the items in any way, as long as the total deduction is not more than $500,000. Tax software 2011 You do not have to claim the full $500,000. Tax software 2011 Qualified real property (described earlier) that you elected to treat as section 179 real property is limited to $250,000 of the maximum deduction of $500,000 for 2013. Tax software 2011 The amount you can elect to deduct is not affected if you place qualifying property in service in a short tax year or if you place qualifying property in service for only a part of a 12-month tax year. Tax software 2011 After you apply the dollar limit to determine a tentative deduction, you must apply the business income limit (described later) to determine your actual section 179 deduction. Tax software 2011 Example. Tax software 2011 In 2013, you bought and placed in service $500,000 in machinery and a $25,000 circular saw for your business. Tax software 2011 You elect to deduct $475,000 for the machinery and the entire $25,000 for the saw, a total of $500,000. Tax software 2011 This is the maximum amount you can deduct. Tax software 2011 Your $25,000 deduction for the saw completely recovered its cost. Tax software 2011 Your basis for depreciation is zero. Tax software 2011 The basis for depreciation of your machinery is $25,000. Tax software 2011 You figure this by subtracting your $475,000 section 179 deduction for the machinery from the $500,000 cost of the machinery. Tax software 2011 Situations affecting dollar limit. Tax software 2011   Under certain circumstances, the general dollar limits on the section 179 deduction may be reduced or increased or there may be additional dollar limits. Tax software 2011 The general dollar limit is affected by any of the following situations. Tax software 2011 The cost of your section 179 property placed in service exceeds $2,000,000. Tax software 2011 Your business is an enterprise zone business. Tax software 2011 You placed in service a sport utility or certain other vehicles. Tax software 2011 You are married filing a joint or separate return. Tax software 2011 Costs exceeding $2,000,000 If the cost of your qualifying section 179 property placed in service in a year is more than $2,000,000, you generally must reduce the dollar limit (but not below zero) by the amount of cost over $2,000,000. Tax software 2011 If the cost of your section 179 property placed in service during 2013 is $2,500,000 or more, you cannot take a section 179 deduction. Tax software 2011 Example. Tax software 2011 In 2013, Jane Ash placed in service machinery costing $2,100,000. Tax software 2011 This cost is $100,000 more than $2,000,000, so she must reduce her dollar limit to $400,000 ($500,000 − $100,000). Tax software 2011 Enterprise Zone Businesses An increased section 179 deduction is available to enterprise zone businesses for qualified zone property placed in service during the tax year, in an empowerment zone. Tax software 2011 For more information including the definitions of “enterprise zone business” and “qualified zone property,” see sections 1397A, 1397C, and 1397D of the Internal Revenue Code. Tax software 2011 The dollar limit on the section 179 deduction is increased by the smaller of: $35,000, or The cost of section 179 property that is also qualified zone property placed in service before January 1, 2014 (including such property placed in service by your spouse, even if you are filing a separate return). Tax software 2011 Note. Tax software 2011   You take into account only 50% (instead of 100%) of the cost of qualified zone property placed in service in a year when figuring the reduced dollar limit for costs exceeding $2,000,000 (explained earlier). Tax software 2011 Sport Utility and Certain Other Vehicles You cannot elect to expense more than $25,000 of the cost of any heavy sport utility vehicle (SUV) and certain other vehicles placed in service during the tax year. Tax software 2011 This rule applies to any 4-wheeled vehicle primarily designed or used to carry passengers over public streets, roads, or highways, that is rated at more than 6,000 pounds gross vehicle weight and not more than 14,000 pounds gross vehicle weight. Tax software 2011 However, the $25,000 limit does not apply to any vehicle: Designed to seat more than nine passengers behind the driver's seat, Equipped with a cargo area (either open or enclosed by a cap) of at least six feet in interior length that is not readily accessible from the passenger compartment, or That has an integral enclosure fully enclosing the driver compartment and load carrying device, does not have seating rearward of the driver's seat, and has no body section protruding more than 30 inches ahead of the leading edge of the windshield. Tax software 2011 Married Individuals If you are married, how you figure your section 179 deduction depends on whether you file jointly or separately. Tax software 2011 If you file a joint return, you and your spouse are treated as one taxpayer in determining any reduction to the dollar limit, regardless of which of you purchased the property or placed it in service. Tax software 2011 If you and your spouse file separate returns, you are treated as one taxpayer for the dollar limit, including the reduction for costs over $2,000,000. Tax software 2011 You must allocate the dollar limit (after any reduction) between you equally, unless you both elect a different allocation. Tax software 2011 If the percentages elected by each of you do not total 100%, 50% will be allocated to each of you. Tax software 2011 Example. Tax software 2011 Jack Elm is married. Tax software 2011 He and his wife file separate returns. Tax software 2011 Jack bought and placed in service $2,000,000 of qualified farm machinery in 2013. Tax software 2011 His wife has her own business, and she bought and placed in service $30,000 of qualified business equipment. Tax software 2011 Their combined dollar limit is $470,000. Tax software 2011 This is because they must figure the limit as if they were one taxpayer. Tax software 2011 They reduce the $500,000 dollar limit by the $30,000 excess of their costs over $2,000,000. Tax software 2011 They elect to allocate the $470,000 dollar limit as follows. Tax software 2011 $446,500 ($470,000 x 95%) to Mr. Tax software 2011 Elm's machinery. Tax software 2011 $23,500 ($470,000 x 5%) to Mrs. Tax software 2011 Elm's equipment. Tax software 2011 If they did not make an election to allocate their costs in this way, they would have to allocate $235,000 ($470,000 × 50%) to each of them. Tax software 2011 Joint return after filing separate returns. Tax software 2011   If you and your spouse elect to amend your separate returns by filing a joint return after the due date for filing your return, the dollar limit on the joint return is the lesser of the following amounts. Tax software 2011 The dollar limit (after reduction for any cost of section 179 property over $2,000,000). Tax software 2011 The total cost of section 179 property you and your spouse elected to expense on your separate returns. Tax software 2011 Example. Tax software 2011 The facts are the same as in the previous example except that Jack elected to deduct $30,000 of the cost of section 179 property on his separate return and his wife elected to deduct $2,000. Tax software 2011 After the due date of their returns, they file a joint return. Tax software 2011 Their dollar limit for the section 179 deduction is $32,000. Tax software 2011 This is the lesser of the following amounts. Tax software 2011 $470,000—The dollar limit less the cost of section 179 property over $2,000,000. Tax software 2011 $32,000—The total they elected to expense on their separate returns. Tax software 2011 Business Income Limit The total cost you can deduct each year after you apply the dollar limit is limited to the taxable income from the active conduct of any trade or business during the year. Tax software 2011 Generally, you are considered to actively conduct a trade or business if you meaningfully participate in the management or operations of the trade or business. Tax software 2011 Any cost not deductible in one year under section 179 because of this limit can be carried to the next year. Tax software 2011 Special rules apply to a 2013 deduction of qualified section 179 real property that is disallowed because of the business income limit. Tax software 2011 See Special rules for qualified section 179 property under Carryover of disallowed deduction, later. Tax software 2011 Taxable income. Tax software 2011   In general, figure taxable income for this purpose by totaling the net income and losses from all trades and businesses you actively conducted during the year. Tax software 2011 Net income or loss from a trade or business includes the following items. Tax software 2011 Section 1231 gains (or losses). Tax software 2011 Interest from working capital of your trade or business. Tax software 2011 Wages, salaries, tips, or other pay earned as an employee. Tax software 2011 For information about section 1231 gains and losses, see chapter 3 in Publication 544. Tax software 2011   In addition, figure taxable income without regard to any of the following. Tax software 2011 The section 179 deduction. Tax software 2011 The self-employment tax deduction. Tax software 2011 Any net operating loss carryback or carryforward. Tax software 2011 Any unreimbursed employee business expenses. Tax software 2011 Two different taxable income limits. Tax software 2011   In addition to the business income limit for your section 179 deduction, you may have a taxable income limit for some other deduction. Tax software 2011 You may have to figure the limit for this other deduction taking into account the section 179 deduction. Tax software 2011 If so, complete the following steps. Tax software 2011 Step Action 1 Figure taxable income without the section 179 deduction or the other deduction. Tax software 2011 2 Figure a hypothetical section 179 deduction using the taxable income figured in Step 1. Tax software 2011 3 Subtract the hypothetical section 179 deduction figured in Step 2 from the taxable income figured in Step 1. Tax software 2011 4 Figure a hypothetical amount for the other deduction using the amount figured in Step 3 as taxable income. Tax software 2011 5 Subtract the hypothetical other deduction figured in Step 4 from the taxable income figured in Step 1. Tax software 2011 6 Figure your actual section 179 deduction using the taxable income figured in Step 5. Tax software 2011 7 Subtract your actual section 179 deduction figured in Step 6 from the taxable income figured in Step 1. Tax software 2011 8 Figure your actual other deduction using the taxable income figured in Step 7. Tax software 2011 Example. Tax software 2011 On February 1, 2013, the XYZ corporation purchased and placed in service qualifying section 179 property that cost $500,000. Tax software 2011 It elects to expense the entire $500,000 cost under section 179. Tax software 2011 In June, the corporation gave a charitable contribution of $10,000. Tax software 2011 A corporation's limit on charitable contributions is figured after subtracting any section 179 deduction. Tax software 2011 The business income limit for the section 179 deduction is figured after subtracting any allowable charitable contributions. Tax software 2011 XYZ's taxable income figured without the section 179 deduction or the deduction for charitable contributions is $520,000. Tax software 2011 XYZ figures its section 179 deduction and its deduction for charitable contributions as follows. Tax software 2011 Step 1– Taxable income figured without either deduction is $520,000. Tax software 2011 Step 2– Using $520,000 as taxable income, XYZ's hypothetical section 179 deduction is $500,000. Tax software 2011 Step 3– $20,000 ($520,000 − $500,000). Tax software 2011 Step 4– Using $20,000 (from Step 3) as taxable income, XYZ's hypothetical charitable contribution (limited to 10% of taxable income) is $2,000. Tax software 2011 Step 5– $518,000 ($520,000 − $2,000). Tax software 2011 Step 6– Using $518,000 (from Step 5) as taxable income, XYZ figures the actual section 179 deduction. Tax software 2011 Because the taxable income is at least $500,000, XYZ can take a $500,000 section 179 deduction. Tax software 2011 Step 7– $20,000 ($520,000 − $500,000). Tax software 2011 Step 8– Using $20,000 (from Step 7) as taxable income, XYZ's actual charitable contribution (limited to 10% of taxable income) is $2,000. Tax software 2011 Carryover of disallowed deduction. Tax software 2011   You can carry over for an unlimited number of years the cost of any section 179 property you elected to expense but were unable to because of the business income limit. Tax software 2011 This disallowed deduction amount is shown on line 13 of Form 4562. Tax software 2011 You use the amount you carry over to determine your section 179 deduction in the next year. Tax software 2011 Enter that amount on line 10 of your Form 4562 for the next year. Tax software 2011   If you place more than one property in service in a year, you can select the properties for which all or a part of the costs will be carried forward. Tax software 2011 Your selections must be shown in your books and records. Tax software 2011 For this purpose, treat section 179 costs allocated from a partnership or an S corporation as one item of section 179 property. Tax software 2011 If you do not make a selection, the total carryover will be allocated equally among the properties you elected to expense for the year. Tax software 2011   If costs from more than one year are carried forward to a subsequent year in which only part of the total carryover can be deducted, you must deduct the costs being carried forward from the earliest year first. Tax software 2011 Special rules for qualified section 179 real property. Tax software 2011   You can carry over to 2013 a 2012 deduction attributable to qualified section 179 real property that you elected to expense but were unable to take because of the business income limitation. Tax software 2011 Any such 2012 carryover amounts that are not deducted in 2013, plus any 2013 disallowed section 179 expense deductions attributable to qualified real property, are not carried over to 2014. Tax software 2011 Instead these amounts are treated as property placed in service on the first day of 2013 for purposes of computing depreciation (including the special depreciation allowance, if applicable). Tax software 2011 See section 179(f) of the Internal Revenue Code and Notice 2013-59 for more information. Tax software 2011 If there is a sale or other disposition of your property (including a transfer at death) before you can use the full amount of any outstanding carryover of your disallowed section 179 deduction, neither you nor the new owner can deduct any of the unused amount. Tax software 2011 Instead, you must add it back to the property's basis. Tax software 2011 Partnerships and Partners The section 179 deduction limits apply both to the partnership and to each partner. Tax software 2011 The partnership determines its section 179 deduction subject to the limits. Tax software 2011 It then allocates the deduction among its partners. Tax software 2011 Each partner adds the amount allocated from partnerships (shown on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Tax software 2011 ) to his or her nonpartnership section 179 costs and then applies the dollar limit to this total. Tax software 2011 To determine any reduction in the dollar limit for costs over $2,000,000, the partner does not include any of the cost of section 179 property placed in service by the partnership. Tax software 2011 After the dollar limit (reduced for any nonpartnership section 179 costs over $2,000,000) is applied, any remaining cost of the partnership and nonpartnership section 179 property is subject to the business income limit. Tax software 2011 Partnership's taxable income. Tax software 2011   For purposes of the business income limit, figure the partnership's taxable income by adding together the net income and losses from all trades or businesses actively conducted by the partnership during the year. Tax software 2011 See the Instructions for Form 1065 for information on how to figure partnership net income (or loss). Tax software 2011 However, figure taxable income without regard to credits, tax-exempt income, the section 179 deduction, and guaranteed payments under section 707(c) of the Internal Revenue Code. Tax software 2011 Partner's share of partnership's taxable income. Tax software 2011   For purposes of the business income limit, the taxable income of a partner engaged in the active conduct of one or more of a partnership's trades or businesses includes his or her allocable share of taxable income derived from the partnership's active conduct of any trade or business. Tax software 2011 Example. Tax software 2011 In 2013, Beech Partnership placed in service section 179 property with a total cost of $2,025,000. Tax software 2011 The partnership must reduce its dollar limit by $25,000 ($2,025,000 − $2,000,000). Tax software 2011 Its maximum section 179 deduction is $475,000 ($500,000 − $25,000), and it elects to expense that amount. Tax software 2011 The partnership's taxable income from the active conduct of all its trades or businesses for the year was $600,000, so it can deduct the full $475,000. Tax software 2011 It allocates $40,000 of its section 179 deduction and $50,000 of its taxable income to Dean, one of its partners. Tax software 2011 In addition to being a partner in Beech Partnership, Dean is also a partner in the Cedar Partnership, which allocated to him a $30,000 section 179 deduction and $35,000 of its taxable income from the active conduct of its business. Tax software 2011 He also conducts a business as a sole proprietor and, in 2013, placed in service in that business qualifying section 179 property costing $55,000. Tax software 2011 He had a net loss of $5,000 from that business for the year. Tax software 2011 Dean does not have to include section 179 partnership costs to figure any reduction in his dollar limit, so his total section 179 costs for the year are not more than $2,000,000 and his dollar limit is not reduced. Tax software 2011 His maximum section 179 deduction is $500,000. Tax software 2011 He elects to expense all of the $70,000 in section 179 deductions allocated from the partnerships ($40,000 from Beech Partnership plus $30,000 from Cedar Partnership), plus $55,000 of his sole proprietorship's section 179 costs, and notes that information in his books and records. Tax software 2011 However, his deduction is limited to his business taxable income of $80,000 ($50,000 from Beech Partnership, plus $35,000 from Cedar Partnership minus $5,000 loss from his sole proprietorship). Tax software 2011 He carries over $45,000 ($125,000 − $80,000) of the elected section 179 costs to 2014. Tax software 2011 He allocates the carryover amount to the cost of section 179 property placed in service in his sole proprietorship, and notes that allocation in his books and records. Tax software 2011 Different tax years. Tax software 2011   For purposes of the business income limit, if the partner's tax year and that of the partnership differ, the partner's share of the partnership's taxable income for a tax year is generally the partner's distributive share for the partnership tax year that ends with or within the partner's tax year. Tax software 2011 Example. Tax software 2011 John and James Oak are equal partners in Oak Partnership. Tax software 2011 Oak Partnership uses a tax year ending January 31. Tax software 2011 John and James both use a tax year ending December 31. Tax software 2011 For its tax year ending January 31, 2013, Oak Partnership's taxable income from the active conduct of its business is $80,000, of which $70,000 was earned during 2012. Tax software 2011 John and James each include $40,000 (each partner's entire share) of partnership taxable income in computing their business income limit for the 2013 tax year. Tax software 2011 Adjustment of partner's basis in partnership. Tax software 2011   A partner must reduce the basis of his or her partnership interest by the total amount of section 179 expenses allocated from the partnership even if the partner cannot currently deduct the total amount. Tax software 2011 If the partner disposes of his or her partnership interest, the partner's basis for determining gain or loss is increased by any outstanding carryover of disallowed section 179 expenses allocated from the partnership. Tax software 2011 Adjustment of partnership's basis in section 179 property. Tax software 2011   The basis of a partnership's section 179 property must be reduced by the section 179 deduction elected by the partnership. Tax software 2011 This reduction of basis must be made even if a partner cannot deduct all or part of the section 179 deduction allocated to that partner by the partnership because of the limits. Tax software 2011 S Corporations Generally, the rules that apply to a partnership and its partners also apply to an S corporation and its shareholders. Tax software 2011 The deduction limits apply to an S corporation and to each shareholder. Tax software 2011 The S corporation allocates its deduction to the shareholders who then take their section 179 deduction subject to the limits. Tax software 2011 Figuring taxable income for an S corporation. Tax software 2011   To figure taxable income (or loss) from the active conduct by an S corporation of any trade or business, you total the net income and losses from all trades or businesses actively conducted by the S corporation during the year. Tax software 2011   To figure the net income (or loss) from a trade or business actively conducted by an S corporation, you take into account the items from that trade or business that are passed through to the shareholders and used in determining each shareholder's tax liability. Tax software 2011 However, you do not take into account any credits, tax-exempt income, the section 179 deduction, and deductions for compensation paid to shareholder-employees. Tax software 2011 For purposes of determining the total amount of S corporation items, treat deductions and losses as negative income. Tax software 2011 In figuring the taxable income of an S corporation, disregard any limits on the amount of an S corporation item that must be taken into account when figuring a shareholder's taxable income. Tax software 2011 Other Corporations A corporation's taxable income from its active conduct of any trade or business is its taxable income figured with the following changes. Tax software 2011 It is figured before deducting the section 179 deduction, any net operating loss deduction, and special deductions (as reported on the corporation's income tax return). Tax software 2011 It is adjusted for items of income or deduction included in the amount figured in 1, above, not derived from a trade or business actively conducted by the corporation during the tax year. Tax software 2011 How Do You Elect the Deduction? You elect to take the section 179 deduction by completing Part I of Form 4562. Tax software 2011 If you elect the deduction for listed property (described in chapter 5), complete Part V of Form 4562 before completing Part I. Tax software 2011 For property placed in service in 2013, file Form 4562 with either of the following. Tax software 2011 Your original 2013 tax return, whether or not you file it timely. Tax software 2011 An amended return for 2013 filed within the time prescribed by law. Tax software 2011 An election made on an amended return must specify the item of section 179 property to which the election applies and the part of the cost of each such item to be taken into account. Tax software 2011 The amended return must also include any resulting adjustments to taxable income. Tax software 2011 You must keep records that show the specific identification of each piece of qualifying section 179 property. Tax software 2011 These records must show how you acquired the property, the person you acquired it from, and when you placed it in service. Tax software 2011 Election for certain qualified section 179 real property. Tax software 2011   You can elect to expense certain qualified real property that you placed in service as section 179 property for tax years beginning in 2013. Tax software 2011 If you elect to treat this property as section 179 property, you must elect the application of the special rules for qualified real property described in section 179(f) of the Internal Revenue Code. Tax software 2011   To make the election, attach a statement indicating you are “electing the application of section 179(f) of the Internal Revenue Code” with either of the following. Tax software 2011 Your original 2013 tax return, whether or not you file it timely. Tax software 2011 An amended return for 2013 filed within the time prescribed by law. Tax software 2011 The amended return must also include any adjustments to taxable income. Tax software 2011   The statement should indicate your election to expense certain qualified real property under section 179(f) on your return. Tax software 2011 It must specify one or more of the three types of qualified property (described under Qualified real property ) to which the election applies, the cost of each such type, and the portion of the cost of each such property to be taken into account. Tax software 2011 Also, report this on line 6 of Form 4562. Tax software 2011    The maximum section 179 expense deduction that can be taken for qualified section 179 real property is limited to $250,000. Tax software 2011 Revoking an election. Tax software 2011   An election (or any specification made in the election) to take a section 179 deduction for 2013 can be revoked without IRS approval by filing an amended return. Tax software 2011 The amended return must be filed within the time prescribed by law. Tax software 2011 The amended return must also include any resulting adjustments to taxable income. Tax software 2011 Once made, the revocation is irrevocable. Tax software 2011 When Must You Recapture the Deduction? You may have to recapture the section 179 deduction if, in any year during the property's recovery period, the percentage of business use drops to 50% or less. Tax software 2011 In the year the business use drops to 50% or less, you include the recapture amount as ordinary income in Part IV of Form 4797. Tax software 2011 You also increase the basis of the property by the recapture amount. Tax software 2011 Recovery periods for property are discussed under Which Recovery Period Applies in chapter 4 . Tax software 2011 If you sell, exchange, or otherwise dispose of the property, do not figure the recapture amount under the rules explained in this discussion. Tax software 2011 Instead, use the rules for recapturing depreciation explained in chapter 3 of Publication 544 under Section 1245 Property. Tax software 2011 For qualified real property (described earlier), see Notice 2013-59 for determining the portion of the gain that is attributable to section 1245 property upon the sale or other disposition of qualified real property. Tax software 2011 If the property is listed property (described in chapter 5 ), do not figure the recapture amount under the rules explained in this discussion when the percentage of business use drops to 50% or less. Tax software 2011 Instead, use the rules for recapturing excess depreciation in chapter 5 under What Is the Business-Use Requirement. Tax software 2011 Figuring the recapture amount. Tax software 2011   To figure the amount to recapture, take the following steps. Tax software 2011 Figure the depreciation that would have been allowable on the section 179 deduction you claimed. Tax software 2011 Begin with the year you placed the property in service and include the year of recapture. Tax software 2011 Subtract the depreciation figured in (1) from the section 179 deduction you claimed. Tax software 2011 The result is the amount you must recapture. Tax software 2011 Example. Tax software 2011 In January 2011, Paul Lamb, a calendar year taxpayer, bought and placed in service section 179 property costing $10,000. Tax software 2011 The property is not listed property. Tax software 2011 The property is 3-year property. Tax software 2011 He elected a $5,000 section 179 deduction for the property and also elected not to claim a special depreciation allowance. Tax software 2011 He used the property only for business in 2011 and 2012. Tax software 2011 In 2013, he used the property 40% for business and 60% for personal use. Tax software 2011 He figures his recapture amount as follows. Tax software 2011 Section 179 deduction claimed (2011) $5,000. Tax software 2011 00 Minus: Allowable depreciation using Table A-1 (instead of section 179 deduction):   2011 $1,666. Tax software 2011 50   2012 2,222. Tax software 2011 50   2013 ($740. Tax software 2011 50 × 40% (business)) 296. Tax software 2011 20 4,185. Tax software 2011 20 2013 — Recapture amount $ 814. Tax software 2011 80 Paul must include $814. Tax software 2011 80 in income for 2013. Tax software 2011 If any qualified zone property placed in service during the year ceases to be used in an empowerment zone by an enterprise zone business in a later year, the benefit of the increased section 179 deduction must be reported as other income on your return. Tax software 2011 Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Information for the Tax Exempt Bond Community

Update: Effect of Sequestration on Certain State & Local Government Filers of Form 8038-CP
Pursuant to the requirements of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, certain automatic reductions will take place as of October 1, 2013. These required reductions include a reduction to refundable credits under section 6431 of the Internal Revenue Code applicable to certain qualified bonds.

Published Volume Cap Limit for Tribal Economic Development Bonds
IRS announces the Published Volume Cap Limit for applications for allocations of national bond volume limitation authority to issuers of tribal economic development bonds for the period beginning February 1, 2014.

Extra Time Granted for Tax-Exempt Bond Issuers Affected by Severe Storms and Tornados in Oklahoma
Government entity issuers of tax-exempt bonds affected by the severe storms and tornados occurring in parts of Oklahoma may qualify for additional time to file certain returns related to tax-exempt bonds, qualified tax credit bonds, and specified tax credit bonds.

New Voluntary Closing Agreement Program Request Form
The Internal Revenue Service released the new Form 14429, Tax Exempt Bonds Voluntary Closing Agreement Program Request, which must be submitted with a Tax Exempt Bonds Voluntary Closing Agreement Program submission request.

IRS Report on Avoiding Troubled Tax-Advantaged Bonds
This report produced by the TEB Compliance Practice Research Team seeks to provide aid to issuers of tax-advantaged municipal bonds. It identifies some considerations for issuers of such bonds and is TEB’s initial step toward producing public resource products that assist issuers in avoiding troubled transactions.

Sale of Assets Financed with Tax-Exempt Bonds by State and Local Governments and 501(c)(3) Organizations
Often, in their need to raise funds, state and local governments and 501(c)(3) organizations may sell property financed with tax-exempt bonds. These sales could cause the bond issue to become taxable. This article provides basic information concerning remedial actions needed, if necessary, to preserve the tax-exempt status of the bond issue.

TEGE ACT 11th Report
The eleventh report of recommendations of the Advisory Committee on Tax Exempt and Government Entities (ACT).

ARRA and HIRE Act Bond Guidance
Guidance on bond provisions of the ARRA and HIRE Act.

TEB Post-Issuance Compliance
Provides basic post-issuance information for issuers of tax-advantaged bonds.

TEB Voluntary Compliance
Provides information about post-issuance and voluntary compliance.

TEB Financial Restructuring Compliance
Provides information for issuers or conduit borrowers with defaulted or distressed obligations.

TEB Archives
Past articles and information on Tax Exempt Bonds topics.

Contact TEB
If you need to contact Tax Exempt Bonds this page will provide you with contact information.

TEB Published Guidance
Information and guidance for the Tax Exempt Bond Community.

TEB FAQs
Frequently Asked Questions about Tax Exempt Bond topics.

Page Last Reviewed or Updated: 26-Mar-2014

The Tax Software 2011

Tax software 2011 2. Tax software 2011   Fuel Tax Credits and Refunds Table of Contents Gasoline and Aviation Gasoline Undyed Diesel Fuel and Undyed Kerosene (Other Than Kerosene Used in Aviation)Sales by Registered Ultimate Vendors Diesel-Water Fuel Emulsion Kerosene for Use in AviationSales by Registered Ultimate Vendors Other Fuels (Including Alternative Fuels) Refunds of Second TaxOptional reporting. Tax software 2011 Providing information. Tax software 2011 Definitions of Nontaxable UsesCustom application of fertilizer and pesticide. Tax software 2011 Fuel used between airfield and farm. Tax software 2011 Fuel not used for farming. Tax software 2011 Vehicles not considered highway vehicles. Tax software 2011 Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit, and Alternative Fuel Mixture CreditHow to Claim the Credit Filing Claims Claiming A Refund Claiming a Credit on Form 4136 Including the Credit or Refund in Income Federal excise taxes are imposed on certain fuels as discussed in chapter 1. Tax software 2011 This chapter lists the nontaxable uses of each fuel and defines the nontaxable uses. Tax software 2011 Information on the refund of second tax is included. Tax software 2011 This chapter also explains credits and refunds for the biodiesel or renewable diesel mixture credits, and the alternative fuel mixture and alternative fuel credits. Tax software 2011 Information on how to make a claim for credit or refund is included in this chapter and in the instructions for: Form 720, Form 4136, and Form 8849. Tax software 2011 Exported taxable fuel. Tax software 2011   The claim rates for exported taxable fuel are listed on Schedule C (Form 720), Schedule 1 (Form 8849), and Form 4136. Tax software 2011 Taxpayers making a claim for exported taxable fuel must include with their records proof of exportation. Tax software 2011 Proof of exportation includes: A copy of the export bill of lading issued by the delivering carrier, A certificate by the agent or representative of the export carrier showing actual exportation of the fuel, A certificate of lading signed by a customs officer of the foreign country to which the fuel is exported, or A statement of the foreign consignee showing receipt of the fuel. Tax software 2011 Gasoline and Aviation Gasoline Ultimate Purchasers. Tax software 2011   The following are the uses of gasoline (defined earlier) for which a credit or refund may be allowable to an ultimate purchaser. Tax software 2011 On a farm for farming purposes (credit only). Tax software 2011 Off-highway business use. Tax software 2011 Export. Tax software 2011 In a boat engaged in commercial fishing. Tax software 2011 In certain intercity and local buses. Tax software 2011 In a school bus. Tax software 2011 Exclusive use by a qualified blood collector organization. Tax software 2011 In a highway vehicle owned by the United States that is not used on a highway. Tax software 2011 Exclusive use by a nonprofit educational organization (see Sales by registered ultimate vendors and Credit Card Purchases, later). Tax software 2011 Exclusive use by a state, political subdivision of a state, or the District of Columbia (see Sales by registered ultimate vendors and Credit Card Purchases, later). Tax software 2011 In an aircraft or vehicle owned by an aircraft museum. Tax software 2011   The following are the uses of aviation gasoline for which a credit or refund may be allowable to an ultimate purchaser. Tax software 2011 On a farm for farming purposes (credit only). Tax software 2011 Export. Tax software 2011 In foreign trade. Tax software 2011 Certain helicopter and fixed-wing air ambulance uses. Tax software 2011 In commercial aviation (other than foreign trade). Tax software 2011 Exclusive use by a qualified blood collector organization. Tax software 2011 Exclusive use by a nonprofit education organization (see Sales by registered ultimate vendors and Credit card purchases, later). Tax software 2011 Exclusive use by a state, political subdivision of a state, or the District of Columbia (see Sales by registered ultimate vendors and Credit and purchases, later). Tax software 2011 In an aircraft owned by an aircraft museum. Tax software 2011 In military aircraft. Tax software 2011 Claims by persons who paid the tax to the government. Tax software 2011   Except for sales to nonprofit educational organizations and states and local governments, a credit or refund is allowable to the person that paid the tax to the government if the gasoline was sold to the ultimate purchaser (including an exporter) by either that person or by a retailer and the fuel was exported; used or sold for use as supplies for vessels or aircraft, including military aircraft, commercial fishing, and foreign trade; sold to a qualified blood collector organization; or used or sold for use in the production of Other Fuels. Tax software 2011 See Filing Claims, later. Tax software 2011 Sales by registered ultimate vendors. Tax software 2011   This is an ultimate vendor that sells gasoline or aviation gasoline to any of the following and that is purchased without the use of a credit card. Tax software 2011 A state or local government for its exclusive use (including essential government use by an Indian tribal government). Tax software 2011 A nonprofit educational organization for its exclusive use. Tax software 2011   The registered ultimate vendor may make the claim if the ultimate purchaser did not use a credit card and waives its right to the credit or refund by providing the registered ultimate vendor with a certificate. Tax software 2011 A sample certificate is included as Model Certificate M in the Appendix. Tax software 2011 The registered ultimate vendor must have the certificate at the time the credit or refund is claimed. Tax software 2011   The ultimate vendor must be registered by the IRS. Tax software 2011 See Registration Requirements, earlier. Tax software 2011 Credit card purchases. Tax software 2011   If gasoline and aviation gasoline are purchased with a credit card issued to a state or local government for its exclusive use (including essential government use by an Indian tribal government), or a nonprofit educational organization for its exclusive use, the person who extended credit to the ultimate purchaser (the credit card issuer) is treated as the person that paid the tax and makes the claim if the credit card issuer: Is registered by the IRS, Has established that the amount of tax has not been collected from the person who purchased the gasoline or has obtained written consent from the ultimate purchaser to the allowance of the credit or refund, and Has repaid or agreed to repay the amount of the tax to the ultimate vendor, has obtained the written consent of the ultimate vendor to the allowance of the credit or refund, or has made arrangements that provide the ultimate vendor with reimbursement of the tax. Tax software 2011   If the requirements above are not met by the credit card issuer, the credit card issuer must collect the tax from the ultimate purchaser and only the ultimate purchaser may make the claim. Tax software 2011 How to make the claim. Tax software 2011   If the claim is made by the credit card issuer, see Schedule C  (Form 720) or Schedule 8 (Form 8849). Tax software 2011 Undyed Diesel Fuel and Undyed Kerosene (Other Than Kerosene Used in Aviation) For conditions to an allowance of a credit or refund on exported dyed diesel fuel and dyed kerosene, see Exported taxable fuel, earlier. Tax software 2011 Ultimate purchasers. Tax software 2011   The following are nontaxable uses of diesel fuel and kerosene (defined earlier) for which a credit or refund may be allowable to an ultimate purchaser. Tax software 2011 On a farm for farming purposes. Tax software 2011 Off-highway business use. Tax software 2011 Export. Tax software 2011 In a qualified local bus. Tax software 2011 In a school bus. Tax software 2011 Other than as a fuel in a propulsion engine of a diesel-powered highway vehicle (such as home heating oil). Tax software 2011 Exclusive use by a qualified blood collector organization. Tax software 2011 In a highway vehicle owned by the United States that is not used on a highway. Tax software 2011 Exclusive use by a nonprofit educational organization (see Sales by Registered Ultimate Vendors and Credit Card Purchases, later). Tax software 2011 Exclusive use by a state, political subdivision of a state, or the District of Columbia (see Sales by Registered Ultimate Vendors and Credit Card Purchases, later). Tax software 2011 In a vehicle owned by an aircraft museum. Tax software 2011 As a fuel in a propulsion engine of a diesel-powered train. Tax software 2011 Sales by Registered Ultimate Vendors The following are the sales for which a credit or refund may be allowable to the registered ultimate vendor only. Tax software 2011 Undyed diesel fuel or undyed kerosene sold for the exclusive use by a state or local government (if credit card rules (defined later) do not apply), Undyed kerosene sold from a blocked pump (defined below), or Undyed diesel fuel or undyed kerosene used in certain intercity and local buses, only if the ultimate purchaser waives its right to the credit or refund by providing the registered ultimate vendor with a waiver. Tax software 2011 Registered ultimate vendor (state use). Tax software 2011   This is a person that sells undyed diesel fuel or undyed kerosene to a state or local government for its exclusive use (including essential government use by an Indian tribal government). Tax software 2011 The diesel fuel or kerosene must be purchased by the state without the use of a credit card, issued to the state by the credit card issuer, in order for the ultimate vendor to make the claim. Tax software 2011 The ultimate vendor must be registered by the IRS. Tax software 2011 See Registration Requirements, earlier. Tax software 2011 Registered ultimate vendor (blocked pump). Tax software 2011   This is an ultimate vendor that sells undyed kerosene from a blocked pump. Tax software 2011   A credit or refund may be allowable to a registered ultimate vendor (blocked pump) if the vendor sold to a buyer undyed kerosene from a blocked pump for use other than as a fuel in a diesel-powered highway vehicle and the vendor had no reason to believe the kerosene would not be used in that manner. Tax software 2011 Blocked pump. Tax software 2011   A blocked pump is a fuel pump that meets all the following requirements. Tax software 2011 It is used to make retail sales of undyed kerosene for use by the buyer in any nontaxable use. Tax software 2011 It is at a fixed location. Tax software 2011 It is identified with a legible and conspicuous notice stating, “UNDYED UNTAXED KEROSENE, NONTAXABLE USE ONLY. Tax software 2011 ” It meets either of the following conditions. Tax software 2011 It cannot reasonably be used to dispense fuel directly into the fuel supply tank of a diesel-powered highway vehicle or train. Tax software 2011 It is locked by the vendor after each sale and unlocked by the vendor only in response to a buyer's request for undyed kerosene for use other than as a fuel in a diesel-powered highway vehicle or train. Tax software 2011 Registered ultimate vendor (certain intercity and local buses). Tax software 2011   This is an ultimate vendor that sells undyed diesel fuel or undyed kerosene to the ultimate purchaser for use in certain intercity and local buses. Tax software 2011   The registered ultimate vendor may make the claim if the ultimate purchaser waives its right to the credit or refund by providing the registered ultimate vendor with a waiver. Tax software 2011 A sample waiver is included as Model Waiver N in the Appendix. Tax software 2011 The registered ultimate vendor must have the waiver at the time the credit or payment is claimed. Tax software 2011 Credit Card Purchases. Tax software 2011   If undyed diesel fuel or kerosene is purchased with a credit card issued to a state, the person who extended credit to the state (the credit card issuer) is treated as the person that paid the tax and makes the claim if the credit card issuer: Is registered by the IRS, Has established that the amount of tax has not been collected from the person who purchased the diesel fuel or kerosene, or has obtained written consent from the ultimate purchaser to the allowance of the credit or refund, and Has repaid or agreed to repay the amount of the tax to the ultimate vendor, has obtained the written consent of the ultimate vendor to the allowance of the credit or refund, or has made arrangements that provide the ultimate vendor with reimbursement of the tax. Tax software 2011   If the requirements above are not met by the credit card issuer, the credit card issuer must collect the tax from the ultimate purchaser and only the ultimate purchaser may make the claim. Tax software 2011 Diesel-Water Fuel Emulsion A claim for credit or refund may be made for the nontaxable use of a diesel-water fuel emulsion and for undyed diesel fuel used to produce a diesel-water fuel emulsion. Tax software 2011 The claim rate for nontaxable use of a diesel-water fuel emulsion taxed at $. Tax software 2011 198 per gallon is $. Tax software 2011 197 (if exported, the claim rate is $. Tax software 2011 198). Tax software 2011 The following are the nontaxable uses for a diesel-water fuel emulsion for which a credit or refund may be allowable to an ultimate purchaser. Tax software 2011 On a farm for farming purposes. Tax software 2011 Off-highway business use. Tax software 2011 Export. Tax software 2011 In a qualified local bus. Tax software 2011 In a school bus. Tax software 2011 Other than as fuel in the propulsion engine of a train or diesel-powered highway vehicle (but not off-highway use). Tax software 2011 Exclusive use by a qualified blood collector organization. Tax software 2011 In a highway vehicle owned by the United States that is not used on a highway. Tax software 2011 Exclusive use by a nonprofit educational organization. Tax software 2011 Exclusive use by a state, political subdivision of a state, or the District of Columbia. Tax software 2011 In an aircraft or vehicle owned by an aircraft museum. Tax software 2011 Blender claims. Tax software 2011   The claim rate for undyed diesel fuel taxed at $. Tax software 2011 244 and used to produce a diesel-water fuel emulsion is $. Tax software 2011 046 per gallon of diesel fuel so used. Tax software 2011 The blender must be registered by the IRS in order to make the claim. Tax software 2011 The blender must attach a statement to the claim certifying that: The diesel-water fuel emulsion contains at least 14% water, The emulsion additive is registered by a United States manufacturer with the EPA under section 211 of the Clean Air Act as in effect on March 31, 2003, Undyed diesel fuel taxed at $. Tax software 2011 244 was used to produce the diesel-water fuel emulsion, and The diesel-water fuel emulsion was used or sold for use in the blender's trade or business. Tax software 2011 Kerosene for Use in Aviation Ultimate purchasers. Tax software 2011   Ultimate purchasers of kerosene used in certain aviation uses may make a claim if the rate of tax on their use is less than the rate of tax that was charged on the kerosene. Tax software 2011   The ultimate purchaser of the kerosene used in commercial aviation (other than foreign trade) and noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia) is eligible to make a claim if the ultimate purchaser certifies that the right to make the claim has not been waived. Tax software 2011 Generally, the ultimate purchaser is the aircraft operator. Tax software 2011   The following are the nontaxable uses of kerosene used in noncommercial aviation for which a credit or refund may be allowable to the ultimate purchaser. Tax software 2011 On a farm for farming purposes. Tax software 2011 Certain helicopter and fixed-wing aircraft uses. Tax software 2011 Exclusive use by a qualified blood collector organization. Tax software 2011 Exclusive use by a nonprofit educational organization. Tax software 2011 In an aircraft owned by an aircraft museum. Tax software 2011 In military aircraft. Tax software 2011 Kerosene for use partly in commercial aviation and partly in nonexempt, noncommercial aviation. Tax software 2011   If the fuel is used partly for use in commercial aviation and partly for use in nonexempt, noncommercial aviation, the operator may identify, either at the time of purchase or after the kerosene has been used, the amount that will be (or has been) used in commercial aviation. Tax software 2011 At the same time, the operator would either make the claim or waive the right to make the claim for credit or refund of the kerosene for use in commercial and nonexempt, noncommercial aviation. Tax software 2011   If the operator does not identify the amount of kerosene that will be (or has been) used in commercial aviation, the operator may provide a certificate to the ultimate vendor similar to Model Certificate Q in the Appendix. Tax software 2011 For kerosene purchased with the certificate, used in commercial aviation, and taxed at $. Tax software 2011 244 per gallon, use of the certificate will be treated as a waiver of the right to claim a credit or refund for the $. Tax software 2011 025 per gallon part of the tax. Tax software 2011 The ultimate vendor may make this claim. Tax software 2011 The operator may make a claim for the $. Tax software 2011 175 tax per gallon of the kerosene, but cannot waive the right to make the claim for the $. Tax software 2011 175 tax per gallon. Tax software 2011 Sales by Registered Ultimate Vendors Kerosene for use in commercial aviation or noncommercial aviation. Tax software 2011   The registered ultimate vendor of kerosene for use in commercial aviation (other than foreign trade) or noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia) may make this claim if the ultimate purchaser waives its right to the credit or payment by providing the registered ultimate vendor with a waiver. Tax software 2011 A sample waiver is included as Model Waiver L in the Appendix. Tax software 2011 The registered ultimate vendor must have the waiver at the time the credit or payment is claimed. Tax software 2011   Noncommercial aviation means any use of an aircraft not described as commercial aviation. Tax software 2011 For the definition of commercial aviation, see Commercial aviation on page 11. Tax software 2011 Kerosene for use in nonexempt, noncommercial aviation. Tax software 2011   Only the registered ultimate vendor may claim a credit or payment for sales of kerosene for use in nonexempt, noncommercial aviation. Tax software 2011 The ultimate vendor must be registered by the IRS (activity letter UA) and have the required certificate from the ultimate purchaser. Tax software 2011 A sample certificate is included as Model Certificate Q in the Appendix. Tax software 2011 The registered ultimate vendor must have the certificate at the time the credit or payment is claimed. Tax software 2011 Kerosene for use in aviation by a state or local government. Tax software 2011   Only the registered ultimate vendor may claim a credit or payment for sales of kerosene for use in aviation to a state or local government for its exclusive use (including essential government use by an Indian tribal government). Tax software 2011 The kerosene for use in aviation must be purchased by the state without the use of a credit card in order for the ultimate vendor to make the claim. Tax software 2011 The ultimate vendor must be registered by the IRS (activity letter UV) and have the required certificate from the ultimate purchaser. Tax software 2011 A sample certificate is included as Model Certificate P in the Appendix. Tax software 2011 The registered ultimate vendor must have the certificate at the time the credit or payment is claimed. Tax software 2011 Credit card purchases. Tax software 2011   If taxed kerosene for use in aviation is purchased with a credit card issued to a state, the person who extended credit to the state (the credit card issuer) is treated as the person that paid the tax and makes the claim if the credit card issuer: Is registered by the IRS, Has established that the amount of tax has not been collected from the person who purchased the kerosene, or has obtained written consent from the ultimate purchaser to the allowance of the credit or refund, and Has repaid or agreed to repay the amount of the tax to the ultimate vendor, has obtained the written consent of the ultimate vendor to the allowance of the credit or refund, or has made arrangements that provide the ultimate vendor with reimbursement of the tax. Tax software 2011   If the requirements above are not met by the credit card issuer, the credit card issuer must collect the tax from the ultimate purchaser and only the ultimate purchaser may make the claim. Tax software 2011 Other Fuels (Including Alternative Fuels) Credit or refund for nontaxable use of taxed Other Fuels may be allowable to an ultimate purchaser. Tax software 2011 While tax is generally imposed on delivery, Other Fuels are taxed prior to delivery in the case of certain bulk sales described in chapter 1. Tax software 2011 The following are the nontaxable uses of Other Fuels for which a credit or refund may be allowable to the ultimate purchaser. Tax software 2011 On a farm for farming purposes. Tax software 2011 Off-highway business use. Tax software 2011 In a boat engaged in commercial fishing. Tax software 2011 In certain intercity and local buses. Tax software 2011 In a school bus. Tax software 2011 In a qualified local bus. Tax software 2011 Exclusive use by a qualified blood collector organization. Tax software 2011 Exclusive use by a nonprofit educational organization. Tax software 2011 Exclusive use by a state, political subdivision of a state, or the District of Columbia. Tax software 2011 In an aircraft or vehicle owned by an aircraft museum. Tax software 2011 Use in any boat operated by the United States for its exclusive use or any vessel of war of any foreign nation. Tax software 2011 See Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit, and Alternative Fuel Mixture Credit, later. Tax software 2011 Refunds of Second Tax The tax on dyed diesel fuel for inland waterways fuel use applies at the rate listed on Form 720. Tax software 2011 This is in addition to all other taxes imposed on the sale or use of the fuel. Tax software 2011 The section 4081(e) refund (discussed below) cannot be claimed. Tax software 2011 If the tax is paid and reported to the government on more than one taxable event for a taxable fuel under section 4081, the person paying the “second tax” may claim a refund (without interest) of that tax if certain conditions and reporting requirements are met. Tax software 2011 No credit against any tax is allowed for this tax. Tax software 2011 For information about taxable events, see the discussions under Gasoline, Diesel Fuel and Kerosene and Kerosene for Use in Aviation in chapter 1. Tax software 2011 Conditions to allowance of refund. Tax software 2011   A claim for refund of the tax is allowed only if all the following conditions are met. Tax software 2011 A tax on the fuel was paid to the government and not credited or refunded (the “first tax”). Tax software 2011 After the first tax was imposed, another tax was imposed on the same fuel and was paid to the government (the “second tax”). Tax software 2011 The person that paid the second tax filed a timely claim for refund containing the information required (see Refund claim, later). Tax software 2011 The person that paid the first tax has met the reporting requirements, discussed next. Tax software 2011 Reporting requirements. Tax software 2011   Generally, the person that paid the first tax must file a “First Taxpayer's Report” with its Form 720 for the quarter to which the report relates. Tax software 2011 A model first taxpayer's report is shown in the Appendix as Model Certificate B. Tax software 2011 The report must contain all information needed to complete the model. Tax software 2011   By the due date for filing the Form 720, you must also send a separate copy of the report to the following address. Tax software 2011 Department of the Treasury Internal Revenue Service  Cincinnati, OH 45999-0555 Write “EXCISE – FIRST TAXPAYER'S REPORT” across the top of that copy. Tax software 2011 Optional reporting. Tax software 2011   A first taxpayer's report is not required for the tax imposed on: Removal at a terminal rack, Nonbulk entries into the United States, and Removals or sales by blenders. Tax software 2011 However, if the person liable for the tax expects that another tax will be imposed on that fuel, that person should (but is not required to) file a first taxpayer's report. Tax software 2011 Providing information. Tax software 2011   The first taxpayer must give a copy of the report to the buyer of the fuel within the bulk transfer/terminal system or to the owner of the fuel immediately before the first tax was imposed, if the first taxpayer is not the owner at that time. Tax software 2011 If an optional report is filed, a copy should (but is not required to) be given to the buyer or owner. Tax software 2011   A person that receives a copy of the first taxpayer's report and later sells the fuel within the bulk transfer/terminal system must give the copy and a “Statement of Subsequent Seller” to the buyer. Tax software 2011 If the later sale is outside the bulk transfer/terminal system and that person expects that another tax will be imposed, that person should (but is not required to) give the copy and the statement to the buyer. Tax software 2011 A model statement of subsequent seller is shown in the Appendix as Model Certificate A. Tax software 2011 The statement must contain all information necessary to complete the model. Tax software 2011   If the first taxpayer's report relates to fuel sold to more than one buyer, copies of that report must be made when the fuel is divided. Tax software 2011 Each buyer must be given a copy of the report. Tax software 2011 Refund claim. Tax software 2011   You must have filed Form 720 and paid the second tax before you file for a refund of that tax. Tax software 2011 You must make your claim for refund on Form 8849. Tax software 2011 Complete Schedule 5 (Form 8849) and attach it to your Form 8849. Tax software 2011 Do not include this claim with a claim under another tax provision. Tax software 2011 You must not have included the second tax in the price of the fuel and must not have collected it from the purchaser. Tax software 2011 You must submit the following information with your claim. Tax software 2011 A copy of the first taxpayer's report (discussed earlier). Tax software 2011 A copy of the statement of subsequent seller if the fuel was bought from someone other than the first taxpayer. Tax software 2011 Definitions of Nontaxable Uses This section provides definitions of the terms used in Table 2-1 for nontaxable uses. Tax software 2011 If applicable, the type of use number from Table 2-1 is indicated in each heading. Tax software 2011 Type of use table. Tax software 2011   The first column of the table is the number you enter on Form 4136, Form 8849, or Schedule C (Form 720) for that type of use. Tax software 2011 For type of use 2, the mobile machinery parenthetical applies only to Form 8849 and Form 720. Tax software 2011 Table 2-1. Tax software 2011 Type of Use Table No. Tax software 2011 Type of Use 1 On a farm for farming purposes 2 Off-highway business use (for business use other than in a highway vehicle registered or required to be registered for highway use) (other than use in mobile machinery) 3 Export 4 In a boat engaged in commercial fishing 5 In certain intercity and local buses 6 In a qualified local bus 7 In a bus transporting students and employees of schools (school buses) 8 For diesel fuel and kerosene (other than kerosene used in aviation) used other than as a fuel in the propulsion engine of a train or diesel-powered highway vehicle (but not off-highway business use) 9 In foreign trade 10 Certain helicopter and fixed-wing aircraft uses 11 Exclusive use by a qualified blood collector organization 12 In a highway vehicle owned by the United States that is not used on a highway 13 Exclusive use by a nonprofit educational organization 14 Exclusive use by a state, political subdivision of a state, or the District of Columbia 15 In an aircraft or vehicle owned by an aircraft museum 16 In military aircraft On a farm for farming purposes (No. Tax software 2011 1). Tax software 2011   On a farm for farming purposes means fuel used in carrying on a trade or business of farming, on a farm in the United States, and for farming purposes. Tax software 2011 Farm. Tax software 2011   A farm includes livestock, dairy, fish, poultry, fruit, fur-bearing animals, and truck farms; orchards; plantations; ranches; nurseries; ranges; and feed yards for fattening cattle. Tax software 2011 It also includes structures such as greenhouses used primarily for the raising of agricultural or horticultural commodities. Tax software 2011 A fish farm is an area where fish are grown or raised — not merely caught or harvested. Tax software 2011 Farming purposes. Tax software 2011   As an owner, tenant, or operator, you use fuel on a farm for farming purposes if you use it in any of the following ways. Tax software 2011 To cultivate the soil or to raise or harvest any agricultural or horticultural commodity. Tax software 2011 To raise, shear, feed, care for, train, or manage livestock, bees, poultry, fur-bearing animals, or wildlife. Tax software 2011 To operate, manage, conserve, improve, or maintain your farm and its tools and equipment. Tax software 2011 To handle, dry, pack, grade, or store any raw agricultural or horticultural commodity. Tax software 2011 For this use to qualify, you must have produced more than half the commodity so treated during the tax year. Tax software 2011 Commodity means a single raw product. Tax software 2011 For example, apples and peaches are two separate commodities. Tax software 2011 To plant, cultivate, care for, or cut trees or to prepare (other than sawing logs into lumber, chipping, or other milling) trees for market, but only if the planting, etc. Tax software 2011 , is incidental to your farming operations. Tax software 2011 Your tree operations will be incidental only if they are minor in nature when compared to the total farming operations. Tax software 2011   If any other person, such as a neighbor or custom operator, performs a service for you on your farm for any of the purposes listed in (1) or (2), you are considered to be the ultimate purchaser that used the fuel on a farm for farming purposes. Tax software 2011 However, see Custom application of fertilizer and pesticide, next. Tax software 2011   If doubt exists whether the owner, the tenant, or the operator of the farm bought the fuel, determine who bore the cost of the fuel. Tax software 2011 For example, if the owner of a farm and the tenant equally share the cost of gasoline that is used on a farm for farming purposes, each can claim a credit for the tax on one-half the fuel used. Tax software 2011 Custom application of fertilizer and pesticide. Tax software 2011   Fuel used on a farm for farming purposes includes fuel used in the application of fertilizer, pesticides, or other substances, including aerial applications. Tax software 2011 Generally, the applicator is treated as having used the fuel on a farm for farming purposes. Tax software 2011 For aviation gasoline, the aerial applicator makes the claim as the ultimate purchaser. Tax software 2011 For kerosene used in aviation, the ultimate purchaser may make the claim or waive their right to make the claim to the registered ultimate vendor. Tax software 2011 Fuel used between airfield and farm. Tax software 2011   Fuel used by an aerial applicator for the direct flight between the airfield and one or more farms is treated as a farming purpose. Tax software 2011 Fuel not used for farming. Tax software 2011   Fuel is not used on a farm for farming purposes if it is used in any of the following ways. Tax software 2011 Off the farm, such as on the highway or in noncommercial aviation, other than fuel used between the airfield and farm described above, even if the fuel is used in transporting livestock, feed, crops, or equipment. Tax software 2011 For personal use, such as mowing the lawn. Tax software 2011 In processing, packaging, freezing, or canning operations. Tax software 2011 In processing crude gum into gum spirits of turpentine or gum resin or in processing maple sap into maple syrup or maple sugar. Tax software 2011 Off-highway business use (No. Tax software 2011 2). Tax software 2011   Off-highway business use means fuel used in a trade or business or in an income-producing activity other than as a fuel in a highway vehicle registered or required to be registered for use on public highways. Tax software 2011 The terms “highway vehicle,” “public highway,” and “registered” are defined below. Tax software 2011 Do not consider any use in a boat as an off-highway business use. Tax software 2011   Off-highway business use includes fuels used in any of the following ways. Tax software 2011 In stationary machines such as generators, compressors, power saws, and similar equipment. Tax software 2011 For cleaning purposes. Tax software 2011 In forklift trucks, bulldozers, and earthmovers. Tax software 2011   Generally, this use does not include nonbusiness use of fuel, such as use by minibikes, snowmobiles, power lawn mowers, chain saws, and other yard equipment. Tax software 2011 Example. Tax software 2011 Caroline owns a landscaping business. Tax software 2011 She uses power lawn mowers and chain saws in her business. Tax software 2011 The gasoline used in the power lawn mowers and chain saws qualifies as fuel used in an off-highway business use. Tax software 2011 The gasoline used in her personal lawn mower at home does not qualify. Tax software 2011 Highway vehicle. Tax software 2011   A highway vehicle is any self-propelled vehicle designed to carry a load over public highways, whether or not it is also designed to perform other functions. Tax software 2011 Examples of vehicles designed to carry a load over public highways are passenger automobiles, motorcycles, buses, and highway-type trucks and truck tractors. Tax software 2011 A vehicle is a highway vehicle even though the vehicle's design allows it to perform a highway transportation function for only one of the following. Tax software 2011 A particular type of load, such as passengers, furnishings, and personal effects (as in a house, office, or utility trailer). Tax software 2011 A special kind of cargo, goods, supplies, or materials. Tax software 2011 Some off-highway task unrelated to highway transportation, except as discussed next. Tax software 2011 Vehicles not considered highway vehicles. Tax software 2011   Generally, the following kinds of vehicles are not considered highway vehicles for purposes of the credit or refund of fuel taxes. Tax software 2011 Specially designed mobile machinery for nontransportation functions. Tax software 2011 A self-propelled vehicle is not a highway vehicle if all the following apply. Tax software 2011 The chassis has permanently mounted to it machinery or equipment used to perform certain operations (construction, manufacturing, drilling, mining, timbering, processing, farming, or similar operations) if the operation of the machinery or equipment is unrelated to transportation on or off the public highways. Tax software 2011 The chassis has been specially designed to serve only as a mobile carriage and mount (and power source, if applicable) for the machinery or equipment, whether or not the machinery or equipment is in operation. Tax software 2011 The chassis could not, because of its special design and without substantial structural modification, be used as part of a vehicle designed to carry any other load. Tax software 2011 The vehicle must have traveled less than 7,500 miles on public highways during the taxable year. Tax software 2011 Vehicles specially designed for off-highway transportation. Tax software 2011 A vehicle is not treated as a highway vehicle if the vehicle is specially designed for the primary function of transporting a particular type of load other than over the public highway and because of this special design, the vehicle's capability to transport a load over a public highway is substantially limited or impaired. Tax software 2011 To make this determination, you can take into account the vehicle's size, whether the vehicle is subject to licensing, safety, or other requirements, and whether the vehicle can transport a load at a sustained speed of at least 25 miles per hour. Tax software 2011 It does not matter that the vehicle can carry heavier loads off highway than it is allowed to carry over the highway. Tax software 2011 Nontransportation trailers and semitrailers. Tax software 2011 A trailer or semi-trailer is not treated as a highway vehicle if it is specially designed to function only as an enclosed stationary shelter for carrying on a nontransportation function at an off-highway site. Tax software 2011 For example, a trailer that is capable only of functioning as an office for an off-highway construction operation is not a highway vehicle. Tax software 2011 Public highway. Tax software 2011   A public highway includes any road in the United States that is not a private roadway. Tax software 2011 This includes federal, state, county, and city roads and streets. Tax software 2011 Registered. Tax software 2011   A vehicle is considered registered when it is registered or required to be registered for highway use under the law of any state, the District of Columbia, or any foreign country in which it is operated or situated. Tax software 2011 Any highway vehicle operated under a dealer's tag, license, or permit is considered registered. Tax software 2011 A highway vehicle is not considered registered solely because a special permit allows the vehicle to be operated at particular times and under specified conditions. Tax software 2011 Dual use of propulsion motor. Tax software 2011   Off-highway business use does not include any fuel used in the propulsion motor of a registered highway vehicle even though that motor also operates special equipment by means of a power take-off or power transfer. Tax software 2011 It does not matter if the special equipment is mounted on the vehicle. Tax software 2011 Example. Tax software 2011 The motor of a registered concrete-mixer truck operates both the engine and the mixing unit by means of a power take-off. Tax software 2011 The fuel used in the motor to run the mixer is not off-highway business use. Tax software 2011 Use in separate motor. Tax software 2011   Off-highway business use includes fuel used in a separate motor to operate special equipment, such as a refrigeration unit, pump, generator, or mixing unit. Tax software 2011 If you draw fuel from the same tank that supplies fuel to the propulsion motor, you must figure the quantity used in the separate motor operating the special equipment. Tax software 2011 You may make a reasonable estimate based on your operating experience and supported by your records. Tax software 2011   You can use devices that measure the miles the vehicle has traveled (such as hubometers) to figure the gallons of fuel used to propel the vehicle. Tax software 2011 Add to this amount the fuel consumed while idling or warming up the motor before propelling the vehicle. Tax software 2011 The difference between your total fuel used and the fuel used to propel the vehicle is the fuel used in the separate motor. Tax software 2011 Example. Tax software 2011 Hazel owns a refrigerated truck. Tax software 2011 It has a separate motor for the refrigeration unit. Tax software 2011 The same tank supplies both motors. Tax software 2011 Using the truck's hubometer, Hazel figures that 90% of the fuel was used to propel the truck. Tax software 2011 Therefore, 10% of the fuel is used in an off-highway business use. Tax software 2011 Fuel lost or destroyed. Tax software 2011   You cannot treat fuel lost or destroyed through spillage, fire, or other casualty as fuel used in an off-highway business use. Tax software 2011 Export (No. Tax software 2011 3). Tax software 2011   Export means fuel transported from the United States with the intention that the fuel remain in a foreign country or possession of the United States. Tax software 2011 Fuel is not exported if it is in the fuel supply tank of a vehicle or aircraft. Tax software 2011 In a boat engaged in commercial fishing (No. Tax software 2011 4). Tax software 2011   In a boat engaged in commercial fishing means fuel used in taking, catching, processing, or transporting fish, shellfish, or other aquatic life for commercial purposes, such as selling or processing the catch, on a specific trip basis. Tax software 2011 They include boats used in both fresh and salt water fishing. Tax software 2011 They do not include boats used for both sport fishing and commercial fishing on the same trip. Tax software 2011 In certain intercity and local buses (No. Tax software 2011 5). Tax software 2011   In certain intercity and local buses means fuel used in a bus engaged in furnishing (for compensation) passenger land transportation available to the general public. Tax software 2011 The bus must be engaged in one of the following activities. Tax software 2011 Scheduled transportation along regular routes. Tax software 2011 Nonscheduled operations if the seating capacity of the bus is at least 20 adults, not including the driver. Tax software 2011 Vans and similar vehicles used for van-pooling or taxi service do not qualify. Tax software 2011 Available to the general public. Tax software 2011   This means you offer service to more than a limited number of persons or organizations. Tax software 2011 If a bus operator normally provides charter operations through travel agencies but has buses available for chartering by the general public, this service is available to the general public. Tax software 2011 A bus does not qualify when its operator uses it to provide exclusive services to only one person, group, or organization. Tax software 2011 Also, intercity bus transportation does not include transporting students and employees of schools or intercity transportation in a qualified local bus. Tax software 2011 In a qualified local bus (No. Tax software 2011 6). Tax software 2011   In a qualified local bus means fuel used in a bus meeting all the following requirements. Tax software 2011 It is engaged in furnishing (for compensation) intracity passenger land transportation available to the general public. Tax software 2011 It operates along scheduled, regular routes. Tax software 2011 It has a seating capacity of at least 20 adults (excluding the driver). Tax software 2011 It is under contract with (or is receiving more than a nominal subsidy from) any state or local government to furnish the transportation. Tax software 2011 Intracity passenger land transportation. Tax software 2011   This is the land transportation of passengers between points located within the same metropolitan area. Tax software 2011 It includes transportation along routes that cross state, city, or county boundaries if the routes remain within the metropolitan area. Tax software 2011 Under contract. Tax software 2011   A bus is under contract with a state or local government only if the contract imposes a bona fide obligation on the bus operator to furnish the transportation. Tax software 2011 More than a nominal subsidy. Tax software 2011   A subsidy is more than nominal if it is reasonably expected to exceed an amount equal to 3 cents multiplied by the number of gallons of fuel used in buses on subsidized routes. Tax software 2011 A company that operates its buses along subsidized and unsubsidized intracity routes may consider its buses qualified local buses only when the buses are used on the subsidized intracity routes. Tax software 2011 In a school bus (No. Tax software 2011 7). Tax software 2011   In a school bus means fuel used in a bus engaged in the transportation of students or employees of schools. Tax software 2011 A school is an educational organization with a regular faculty and curriculum and a regularly enrolled body of students who attend the place where the educational activities occur. Tax software 2011 For diesel fuel and kerosene (other than kerosene used in aviation) used other than as a fuel (No. Tax software 2011 8). Tax software 2011   Diesel fuel and kerosene (other than kerosene used in aviation) used other than as a fuel in the propulsion engine of a diesel-powered highway vehicle or diesel-powered train (not including off-highway business use) means undyed diesel fuel and undyed kerosene used: For home heating, lighting, and cooking; In boats; In stationary machines, such as generators and compressors; For cleaning purposes; or In minibikes and snowmobiles. Tax software 2011 In foreign trade (No. Tax software 2011 9). Tax software 2011   In foreign trade means fuel used in civil aircraft employed in foreign trade or trade between the United States and any of its possessions. Tax software 2011 The term trade includes the transportation of persons or property for hire and the making of the necessary preparations for such transportation. Tax software 2011 In the case of aircraft registered in a foreign country, the country must allow reciprocal benefits for aircraft registered in the United States. Tax software 2011 Certain helicopter and fixed-wing aircraft uses (No. Tax software 2011 10). Tax software 2011   Includes: Certain helicopter uses. Tax software 2011   Certain helicopter uses means fuel used by a helicopter for any of the following purposes. Tax software 2011 Transporting individuals, equipment, or supplies in the exploration for, or the development or removal of, hard minerals, oil, or gas. Tax software 2011 Planting, cultivating, cutting, transporting, or caring for trees (including logging operations). Tax software 2011 Providing emergency medical transportation. Tax software 2011   During a use described in items (1) and (2), the helicopter must not take off from, or land at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise use services provided pursuant to section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code. Tax software 2011 For item (1), treat each flight segment as a separate flight. Tax software 2011 Fixed-wing aircraft uses. Tax software 2011   Fixed-wing aircraft uses means fuel used by a fixed-wing aircraft for any of the following purposes. Tax software 2011 Planting, cultivating, cutting, transporting, or caring for trees (including logging operations). Tax software 2011 Providing emergency medical transportation. Tax software 2011 The aircraft must be equipped for and exclusively dedicated on that flight to acute care emergency medical services. Tax software 2011 During a use described in item (1), the aircraft must not take off from, or land at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise use services provided pursuant to section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code. Tax software 2011 Exclusive use by a qualified blood collector organization (No. Tax software 2011 11). Tax software 2011   Exclusive use by a qualified blood collector organization means fuel used by the qualified blood collector organization for its exclusive use in the collection, storage, or transportation of blood. Tax software 2011 Qualified blood collector organization. Tax software 2011   A qualified blood collector organization is one that is: Described in section 501(c)(3) and exempt from tax under section 501(a), Primarily engaged in the activity of collecting human blood, Registered by the IRS, and Registered by the Food and Drug Administration to collect blood. Tax software 2011 In a highway vehicle owned by the United States that is not used on a highway (No. Tax software 2011 12). Tax software 2011   In a highway vehicle owned by the United States that is not used on a highway means fuel used in a vehicle that was not used on public highways during the period covered by the claim. Tax software 2011 This use applies whether or not the vehicle is registered or required to be registered for highway use. Tax software 2011 Exclusive use by a nonprofit educational organization (No. Tax software 2011 13). Tax software 2011   Exclusive use by a nonprofit educational organization means fuel used by an organization exempt from income tax under section 501(a) that meets both of the following requirements. Tax software 2011 It has a regular faculty and curriculum. Tax software 2011 It has a regularly enrolled body of students who attend the place where the instruction normally occurs. Tax software 2011   A nonprofit educational organization also includes a school operated by a church or other organization described in section 501(c)(3) if the school meets the above requirements. Tax software 2011 Exclusive use by a state, political subdivision of a state, or the District of Columbia (No. Tax software 2011 14). Tax software 2011   Exclusive use by a state, political subdivision of a state, or the District of Columbia means fuel purchased by the state or local government for its exclusive use. Tax software 2011 A state or local government is any state, any political subdivision thereof, or the District of Columbia. Tax software 2011 An Indian tribal government is treated as a state only if the fuel is used in an activity that involves the exercise of an essential tribal government function. Tax software 2011 Gasoline, diesel fuel, and kerosene used by the American Red Cross is considered to be the use of these fuels by a state. Tax software 2011 In an aircraft or vehicle owned by an aircraft museum (No. Tax software 2011 15). Tax software 2011   In an aircraft or vehicle owned by an aircraft museum means fuel used in an aircraft or vehicle that is owned by an organization that meets all the following requirements. Tax software 2011 It is exempt from income tax as an organization described in section 501(c)(3). Tax software 2011 It is operated as a museum under a state (or District of Columbia) charter. Tax software 2011 It is operated exclusively for acquiring, exhibiting, and caring for aircraft of the type used for combat or transport in  World War II. Tax software 2011   The aircraft or vehicle (such as a ground servicing vehicle for aircraft) must be used exclusively for the purposes described in item (3). Tax software 2011 In military aircraft (No. Tax software 2011 16). Tax software 2011   In a military aircraft means fuel used in an aircraft owned by the United States or any foreign nation and constituting a part of its armed forces. Tax software 2011 In commercial aviation (other than foreign trade). Tax software 2011   See Commercial aviation, earlier, for the definition. Tax software 2011 Use in a train. Tax software 2011   Use in a train means fuel used in the propulsion engine of equipment or machinery that rides on rails. Tax software 2011 This includes use in a locomotive, work train, switching engine, and track maintenance machine. Tax software 2011 Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit, and Alternative Fuel Mixture Credit For alternative fuel mixtures produced after December 31, 2011, see How to Claim the Credit below. Tax software 2011 The section 6426 credit for biodiesel and alternative fuel consists of the biodiesel or renewable diesel mixture credit, alternative fuel credit, and alternative fuel mixture credit. Tax software 2011 Biodiesel or renewable diesel mixture credit claimant. Tax software 2011   Claimant produced a biodiesel mixture by mixing biodiesel with diesel fuel. Tax software 2011 Claimant produced a renewable diesel mixture by mixing renewable diesel with liquid fuel (other than renewable diesel). Tax software 2011   The person that produced and sold or used the mixture in their trade or business is the only person eligible to make this claim. Tax software 2011 The credit is based on the gallons of biodiesel or renewable diesel in the mixture. Tax software 2011 Renewable diesel does not include any fuel derived from coprocessing biomass (as defined in section 45K(c)(3)) with a feedstock that is not biomass. Tax software 2011 Claim requirements. Tax software 2011   See the Instructions for Form 720 for the biodiesel or renewable diesel mixture claim requirements. Tax software 2011 Alternative fuel credit claimant. Tax software 2011   For the alternative fuel credit, the registered alternative fueler who (1) sold an alternative fuel at retail delivered it into the fuel supply tank of a motor vehicle or motorboat, (2) sold an alternative fuel, delivered it in bulk taxable use in a motor vehicle or motorboat, and received required statement from the buyer, (3) used an alternative fuel (not sold at retail or in bulk as previously described) motor vehicle or motorboat, or (4) sold an alternative fuel used as a fuel in aviation is the only person eligible to make this claim. Tax software 2011 Carbon capture requirement. Tax software 2011   A credit for Fischer-Tropsch process liquid fuel derived from coal (including peat) can be claimed only if the fuel is derived from coal produced at a gasification facility that separates and sequesters at least 75% of the facility's total carbon dioxide emissions. Tax software 2011 Alternative fuel credit. Tax software 2011   The registered alternative fueler is the person eligible to make the claim. Tax software 2011 An alternative fueler is the person liable for tax on alternative fuel under the rules for taxable events for Other Fuels (discussed in chapter 1) or would be liable but for an exemption for nontaxable uses. Tax software 2011 An alternative fueler includes a person who sells for use or uses an alternative fuel in aviation. Tax software 2011 Alternative fuel mixture credit claimant. Tax software 2011   For the alternative fuel mixture credit, the registered alternative fueler that produced and sold or used the mixture as a fuel in their trade or business is the only person eligible to make this claim. Tax software 2011 The credit is based on the gallons of alternative fuel in the mixture. Tax software 2011 An alternative fuel mixture is a mixture of alternative fuel and section 4081 taxable fuel (gasoline, diesel fuel, or kerosene). Tax software 2011 Registration. Tax software 2011   You must be registered by the IRS to be eligible to claim the section 6426 fuel credit. Tax software 2011 See Registration Requirements in chapter 1. Tax software 2011 Credits for fuel provide incentive for United States production. Tax software 2011   The section 6426 fuel credit may not be claimed for alternative fuel that is produced outside the United States for use as a fuel outside the United States. Tax software 2011 The United States includes any possession of the United States. Tax software 2011 Credit for fuels derived from paper or pulp production. Tax software 2011   Credit for alternative fuels and alternative fuel mixtures for any fuel derived from the production of paper or pulp are not available for fuel sold or used on or after December 31, 2009. Tax software 2011 How to Claim the Credit Any biodiesel or renewable diesel mixture credit must first be claimed on Schedule C to reduce your taxable fuel liability reported on Form 720. Tax software 2011 Any excess credit may be claimed on Schedule C (Form 720), Schedule 3 (Form 8849), Form 4136, or Form 8864, Biodiesel and Renewable Diesel Fuels Credit. Tax software 2011 See Notice 2005-4 and the Instructions for Form 720 for more information. Tax software 2011 Also see Notice 2013-26 on page 984 of I. Tax software 2011 R. Tax software 2011 B. Tax software 2011 2013-18 at www. Tax software 2011 irs. Tax software 2011 gov/pub/irs-irbs/irb13-18. Tax software 2011 pdf; and see chapter 2, later. Tax software 2011 Coordination with income tax credit. Tax software 2011   Only one credit may be taken for any amount of biodiesel or renewable diesel. Tax software 2011 If any amount is claimed (or will be claimed) for any amount of biodiesel or renewable diesel on Form 720, Form 8849, or Form 4136, then a claim cannot be made on Form 8864 for that amount of biodiesel or renewable diesel. Tax software 2011   Any alternative fuel credit must first be claimed on Schedule C (Form 720) to reduce your section 4041 taxable fuel liability for alternative fuel and CNG reported on Form 720. Tax software 2011 Any excess credit may claimed on Schedule C (Form 720), Schedule 3 (Form 8849), or Form 4136. Tax software 2011   For alternative fuel mixtures produced after December 31, 2011, the alternative fuel mixture credit can be claimed on Schedule C (Form 720), not on Form 4136 or Schedule 3 (Form 8849), and only to the extent of your section 4081 taxable fuel liability for gasoline, diesel fuel and kerosene reported on Form 720. Tax software 2011   Calculate the limitation for alternative fuel mixtures separately and enter on Schedule C (Form 720), line 14, only the gallons of mixtures that do not exceed your section 4081 taxable fuel liability. Tax software 2011 Filing Claims This section tells you how to make a claim for a credit or refund of excise taxes on fuels. Tax software 2011 This section also covers recordkeeping requirements and when to include the credit or refund in your income. Tax software 2011 Generally, you will provide all the information needed to claim a credit or refund when you properly complete Form 8849, Form 4136, Schedule C (Form 720), Form 6478, or Form 8864. Tax software 2011 In some cases, you will have to attach additional information. Tax software 2011 You need to keep records that support your claim for a credit or refund. Tax software 2011 Keep at your principal place of business all records needed to enable the IRS to verify that you are the person entitled to claim a credit or refund and the amount you claimed. Tax software 2011 Ultimate purchaser. Tax software 2011   Ultimate purchasers may make claims for the nontaxable use of fuels on Form 4136, Schedule 1 (Form 8849), and Schedule C (Form 720) if reporting excise tax liability on that return. Tax software 2011 If you are an ultimate purchaser, you must keep the following records. Tax software 2011 The number of gallons purchased and used during the period covered by your claim. Tax software 2011 The dates of the purchases. Tax software 2011 The names and addresses of suppliers and amounts purchased from each in the period covered by your claim. Tax software 2011 The nontaxable use for which you used the fuel. Tax software 2011 The number of gallons used for each nontaxable use. Tax software 2011 It is important that your records show separately the number of gallons used for each nontaxable use that qualifies as a claim. Tax software 2011 If the fuel is exported, you must have proof of exportation. Tax software 2011   For more information about keeping records, see Publication 583, Starting a Business and Keeping Records, or chapter 1 of Publication 17, Your Federal Income Tax for Individuals. Tax software 2011 Exceptions. Tax software 2011    Generally, the ultimate purchaser may not claim a credit or refund for undyed diesel fuel, undyed kerosene, or kerosene for use in aviation sold for the exclusive use of a state or local government. Tax software 2011 However, see Claims by credit card issuers, later, for an exception. Tax software 2011 The ultimate purchaser may not claim a credit or refund as follows. Tax software 2011 The ultimate purchaser of gasoline or aviation gasoline used by a state or local government for its exclusive use or by a nonprofit educational organization for its exclusive use may waive its right to make a claim by providing a certificate that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Certificate M. Tax software 2011 A new certificate is required each year or when any information in the current certificate expires. Tax software 2011 The ultimate purchaser of kerosene for use in commercial aviation or noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia) may waive its right to make a claim by providing a waiver that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Waiver L. Tax software 2011 A new waiver is required each year or when any information in the current waiver expires. Tax software 2011 The ultimate purchaser of undyed diesel fuel or undyed kerosene used in certain intercity and local buses may waive its right to make a claim by providing a waiver that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Waiver N. Tax software 2011 A new waiver is required each year or when any information in the current waiver expires. Tax software 2011 The ultimate purchaser of kerosene for use in nonexempt, noncommercial aviation must provide a certificate that is signed under penalties of perjury by a person authorized to bind the ultimate purchaser and is in the same format as the Model Certificate Q. Tax software 2011 A new certificate is required each year or when any information in the current certificate expires. Tax software 2011 Registered ultimate vendor. Tax software 2011   Registered ultimate vendors may make claims for certain sales of fuels on Form 4136, Schedule 2 (Form 8849), and Schedule C (Form 720) if reporting excise tax liability on that return. Tax software 2011 If you are a registered ultimate vendor, you must keep certain information pertaining to the sale of the fuel. Tax software 2011   To make a claim, you must have sold the fuel at a tax-excluded price, repaid the tax to the buyer, or obtained the buyer's written consent to the allowance of the claim. Tax software 2011 You are required to have a valid certificate or waiver in your possession in order to make the claim. Tax software 2011   In addition, you must have a registration number that has not been revoked or suspended. Tax software 2011 See Form 637. Tax software 2011 State use. Tax software 2011   To make a claim as an ultimate vendor (state), you must have a UV registration number and the fuel cannot be purchased with a credit card as explained below. Tax software 2011 If you sell undyed diesel fuel, undyed kerosene, or kerosene for use in aviation for use by a state or local government, you must keep the following information. Tax software 2011 The name and taxpayer identification number of each person (government unit) that bought the fuel. Tax software 2011 The number of gallons sold to each person. Tax software 2011 An unexpired certificate from the buyer. Tax software 2011 See Model Certificate P in the Appendix. Tax software 2011 The certificate expires on the earlier of 1 year after the date of the certificate or the date a new certificate is given to the registered ultimate vendor. Tax software 2011 Nonprofit educational organization and state use. Tax software 2011   To make a claim as an ultimate vendor (nonprofit educational organization or state), you must have a UV registration number and the fuel cannot be purchased with a credit card as explained later. Tax software 2011 If you sell gasoline or aviation gasoline to a nonprofit educational organization for its exclusive use or to a state or local government for its exclusive use, you must keep the following information. Tax software 2011 The name and taxpayer identification number of each person (nonprofit educational organization or government unit) that bought the fuel. Tax software 2011 The number of gallons sold to each person. Tax software 2011 An unexpired certificate from the buyer. Tax software 2011 See Model Certificate M in the Appendix. Tax software 2011  The certificate expires on the earlier of 1 year after the date of the certificate or the date a new certificate is given to the registered ultimate vendor. Tax software 2011 Blocked pump. Tax software 2011   To make a claim as an ultimate vendor (blocked pump), you must have a UP registration number. Tax software 2011 If you sell undyed kerosene (other than kerosene for use in aviation) from a pump that qualifies as a blocked pump because it is locked by you after each sale and is unlocked by you at the request of the buyer, you must keep the following information for each sale of more than 5 gallons. Tax software 2011 The date of each sale. Tax software 2011 The name and address of the buyer. Tax software 2011 The number of gallons sold to that buyer. Tax software 2011 Certain intercity and local bus use. Tax software 2011   To make a claim as an ultimate vendor of undyed diesel fuel or undyed kerosene used in certain intercity and local buses, you must have a UB registration number. Tax software 2011 You must keep the following information. Tax software 2011 The date of each sale. Tax software 2011 The name and address of the buyer. Tax software 2011 The number of gallons sold to the buyer. Tax software 2011 A copy of the waiver signed by the buyer at the time the credit or payment is claimed. Tax software 2011 See Model Waiver N in the Appendix. Tax software 2011 Kerosene for use in commercial aviation or noncommercial aviation. Tax software 2011   To make a claim as an ultimate vendor of kerosene for use in commercial aviation (other than foreign trade) or noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia), you must have a UA registration number. Tax software 2011 See Kerosene for use in aviation, earlier, for a list of nontaxable uses. Tax software 2011 You must keep the following information. Tax software 2011 The date of each sale. Tax software 2011 The name and address of the buyer. Tax software 2011 The number of gallons sold to the buyer. Tax software 2011 A copy of the waiver signed by the buyer at the time the credit or payment is claimed. Tax software 2011 See Model Waiver L in the Appendix. Tax software 2011 Kerosene for use in nonexempt, noncommercial aviation. Tax software 2011   To make a claim as an ultimate vendor of kerosene for use in nonexempt, noncommercial aviation, you must have a UA registration number. Tax software 2011 You must keep the following information. Tax software 2011 The date of each sale. Tax software 2011 The name and address of the buyer. Tax software 2011 The number of gallons sold to the buyer. Tax software 2011 A copy of the certificate signed by the buyer at the time the credit or payment is claimed. Tax software 2011 See Model Certificate Q in the Appendix. Tax software 2011 Claims by credit card issuers. Tax software 2011   For sales of gasoline, aviation gasoline, diesel fuel, kerosene, or kerosene for use in aviation that are purchased by an exempt user with the use of a credit card, the registered credit card issuer is the only person who can make the claim. Tax software 2011 An exempt user for this purpose is: For gasoline or aviation gasoline, a state or local government (including essential government use by an Indian tribal government) or a nonprofit educational organization; or For diesel fuel, kerosene, or kerosene for use in aviation, a state or local government (including essential government use by an Indian tribal government). Tax software 2011   If gasoline is purchased without the use of a credit card, then the registered ultimate vendor of the gasoline may make the claim for refund or credit. Tax software 2011 However, if the gasoline is purchased with a credit card issued to a state, but the credit card issuer is not registered by the IRS or does not meet the conditions described, the credit card issuer must collect the tax and the state may make the claim. Tax software 2011   If diesel fuel, kerosene, or kerosene for use in aviation is purchased without the use of a credit card, the registered ultimate vendor may make the claim for refund or credit. Tax software 2011 A state is not allowed to make a claim for these fuels. Tax software 2011 However, if the diesel fuel or kerosene is purchased with a credit card issued to a state, but the credit card issuer is not registered by the IRS or does not meet the conditions described, the credit card issuer must collect the tax and the state may make the claim. Tax software 2011   The claim from the credit card issuer must contain the following information as it applies to the fuel covered in the claim. Tax software 2011 The total number of gallons. Tax software 2011 Its registration number. Tax software 2011 A statement that it has not collected the amount of tax from the ultimate purchaser or has obtained the written consent of the ultimate purchaser to make the claim. Tax software 2011 A statement that it has repaid or agreed to repay the amount of tax to the ultimate vendor, has obtained the written consent of the ultimate vendor to make the claim, or has otherwise made arrangements which directly or indirectly provide the ultimate vendor with reimbursement of the tax. Tax software 2011 Has in its possession an unexpired certificate similar to Model Certificate R in the Appendix and has no reason to believe any of the information in the certificate is false. Tax software 2011 Taxpayer identification number. Tax software 2011   To file a claim, you must have a taxpayer identification number. Tax software 2011 Your taxpayer identification number can be an: Employer identification number (EIN), Social security number (SSN), or Individual taxpayer identification number (ITIN), if you are an alien individual and do not have and are not eligible to get an SSN. Tax software 2011   If you normally file only a U. Tax software 2011 S. Tax software 2011 individual income tax return (such as Form 1040 or 1040NR), use your SSN or ITIN. Tax software 2011 You get an SSN by filing Form SS-5, Application for a Social Security Card, with the Social Security Administration. Tax software 2011 To get an ITIN, file Form W-7, Application for IRS Individual Taxpayer Identification Number, with the IRS. Tax software 2011   If you operate a business, use your EIN. Tax software 2011 If you do not have an EIN, you may apply for one online. Tax software 2011 Go to the IRS website at irs. Tax software 2011 gov/businesses/small and click on the “Employer ID Numbers (EINs)” link. Tax software 2011 You may also apply for an EIN by calling 1-800-829-4933, or you can fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. Tax software 2011 Claiming A Refund Generally, you may claim a refund of excise taxes on Form 8849. Tax software 2011 Complete and attach to Form 8849 the appropriate Form 8849 schedules. Tax software 2011 The instructions for Form 8849 and the separate instructions for each schedule explain the requirements for making a claim for refund. Tax software 2011 If you file Form 720, you can use the Schedule C (Form 720) for your refund claims for the quarter. Tax software 2011 See the Instructions for Form 720. Tax software 2011 Do not claim a refund on Form 8849 for any amount for which you have filed or will file a claim on Schedule C (Form 720) or Form 4136. Tax software 2011 The alternative fuel mixture credit must be claimed on Schedule C (Form 720) against your section 4081 taxable fuel liability for gasoline, diesel, and kerosene and any excess is not allowed. Tax software 2011 The alternative fuel credit must first be claimed on Schedule C (Form 720) against your section 4041 taxable fuel liability for alternative fuel and CNG. Tax software 2011 To the extent the alternative fuel credit exceeds this taxable fuel liability, a payment is allowed and may be claimed as a credit on Schedule C (Form 720), or as an income tax credit on Forms 4136, 6478, or 8864, as applicable. Tax software 2011 Only one claim may be made for any particular amount of alternative fuel. Tax software 2011 Claiming a Credit on Form 4136 For alternative fuel mixtures produced after December 31, 2011, the alternative fuel mixture credit cannot be claimed on Form 4136. Tax software 2011 See Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit and Alternative Fuel Mixture Credit in chapter 2, earlier. Tax software 2011 A credit may be claimed for certain uses and sales of fuels on Form 4136 when you file your income tax return at the end of the year. Tax software 2011 If you meet certain requirements (discussed earlier), you may be able to make a claim during the year. Tax software 2011 Credit only. Tax software 2011   You can claim the following taxes only as a credit on Form 4136. Tax software 2011 Tax on fuels used for nontaxable uses if the total for your tax year is less than $750. Tax software 2011 Tax on fuel you did not include in any claim for refund previously filed for any quarter of your tax year. Tax software 2011 Tax on fuel you used in mobile machinery (off-highway business use) that traveled less than 7,500 miles on public highways. Tax software 2011 Do not claim a credit for any amount for which you have filed a refund claim on Form 8849 or credit on Schedule C (Form 720). Tax software 2011 When to file. Tax software 2011   You can claim a fuel tax credit on your income tax return for the year you used the fuel (or sold the fuel in the case of a registered ultimate vendor claim). Tax software 2011 You may be able to make a fuel tax claim on an amended income tax return for the year you used the fuel. Tax software 2011 Generally, you must file an amended return by the later of 3 years from the date you filed your original return or within 2 years from the date you paid the income tax. Tax software 2011 How to claim a credit. Tax software 2011   How you claim a credit depends on whether you are an individual, partnership, corporation, S corporation, or farmers' cooperative association. Tax software 2011 Individuals. Tax software 2011   You claim the credit on the “Credits from” line of Form 1040. Tax software 2011 Also check box b on that line. Tax software 2011 If you would not otherwise have to file an income tax return, you must do so to get a fuel tax credit. Tax software 2011 Partnerships. Tax software 2011   Partnerships (other than electing large partnerships) claim the credit by including a statement on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Tax software 2011 , showing each partner's share of the number of gallons of each fuel sold or used for a non