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Turbotax Deluxe Federal E File State 2010 Old Version

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Turbotax Deluxe Federal E File State 2010 Old Version

Turbotax deluxe federal e file state 2010 old version 4. Turbotax deluxe federal e file state 2010 old version   Deductions Table of Contents Standard DeductionStandard Deduction for Dependents Itemized DeductionsMedical and Dental Expenses Most taxpayers have a choice of taking a standard deduction or itemizing their deductions. Turbotax deluxe federal e file state 2010 old version You benefit from the standard deduction if your standard deduction is more than the total of your allowable itemized deductions. Turbotax deluxe federal e file state 2010 old version If you have a choice, you should use the method that gives you the lower tax. Turbotax deluxe federal e file state 2010 old version Standard Deduction The standard deduction amount depends on your filing status, whether you are 65 or older or blind, and whether an exemption can be claimed for you by another taxpayer. Turbotax deluxe federal e file state 2010 old version Generally, the standard deduction amounts are adjusted each year for inflation. Turbotax deluxe federal e file state 2010 old version In most cases, you can use Worksheet 4-1 to figure your standard deduction amount. Turbotax deluxe federal e file state 2010 old version Persons not eligible for the standard deduction. Turbotax deluxe federal e file state 2010 old version   Your standard deduction is zero and you should itemize any deductions you have if: You are married and filing a separate return, and your spouse itemizes deductions, You are filing a tax return for a short tax year because of a change in your annual accounting period, or You are a nonresident or dual-status alien during the year. Turbotax deluxe federal e file state 2010 old version You are considered a dual-status alien if you were both a nonresident alien and a resident alien during the year. Turbotax deluxe federal e file state 2010 old version   If you are a nonresident alien who is married to a U. Turbotax deluxe federal e file state 2010 old version S. Turbotax deluxe federal e file state 2010 old version citizen or resident alien at the end of the year, you can choose to be treated as a U. Turbotax deluxe federal e file state 2010 old version S. Turbotax deluxe federal e file state 2010 old version resident. Turbotax deluxe federal e file state 2010 old version See Publication 519, U. Turbotax deluxe federal e file state 2010 old version S. Turbotax deluxe federal e file state 2010 old version Tax Guide for Aliens. Turbotax deluxe federal e file state 2010 old version If you make this choice, you can take the standard deduction. Turbotax deluxe federal e file state 2010 old version Decedent's final return. Turbotax deluxe federal e file state 2010 old version   The amount of the standard deduction for a decedent's final tax return is the same as it would have been had the decedent continued to live. Turbotax deluxe federal e file state 2010 old version However, if the decedent was not 65 or older at the time of death, the higher standard deduction for age cannot be claimed. Turbotax deluxe federal e file state 2010 old version Higher standard deduction for age (65 or older). Turbotax deluxe federal e file state 2010 old version   If you do not itemize deductions, you are entitled to a higher standard deduction if you are age 65 or older at the end of the year. Turbotax deluxe federal e file state 2010 old version You are considered age 65 on the day before your 65th birthday. Turbotax deluxe federal e file state 2010 old version Therefore, you can take a higher standard deduction for 2013 if you were born before January 2, 1949. Turbotax deluxe federal e file state 2010 old version Higher standard deduction for blindness. Turbotax deluxe federal e file state 2010 old version   If you are blind on the last day of the year and you do not itemize deductions, you are entitled to a higher standard deduction. Turbotax deluxe federal e file state 2010 old version You qualify for this benefit if you are totally or partly blind. Turbotax deluxe federal e file state 2010 old version Not totally blind. Turbotax deluxe federal e file state 2010 old version   If you are not totally blind, you must get a certified statement from an eye doctor (ophthalmologist or optometrist) that: You cannot see better than 20/200 in the better eye with glasses or contact lenses, or Your field of vision is not more than 20 degrees. Turbotax deluxe federal e file state 2010 old version   If your eye condition will never improve beyond these limits, the statement should include this fact. Turbotax deluxe federal e file state 2010 old version You must keep the statement in your records. Turbotax deluxe federal e file state 2010 old version   If your vision can be corrected beyond these limits only by contact lenses that you can wear only briefly because of pain, infection, or ulcers, you can take the higher standard deduction for blindness if you otherwise qualify. Turbotax deluxe federal e file state 2010 old version Spouse 65 or older or blind. Turbotax deluxe federal e file state 2010 old version   You can take the higher standard deduction if your spouse is age 65 or older or blind and: You file a joint return, or You file a separate return and can claim an exemption for your spouse because your spouse had no gross income and an exemption for your spouse could not be claimed by another taxpayer. Turbotax deluxe federal e file state 2010 old version    You cannot claim the higher standard deduction for an individual other than yourself and your spouse. Turbotax deluxe federal e file state 2010 old version Example. Turbotax deluxe federal e file state 2010 old version This example illustrates how to determine your standard deduction using Worksheet 4-1. Turbotax deluxe federal e file state 2010 old version Bill and Lisa are filing a joint return for 2013. Turbotax deluxe federal e file state 2010 old version Both are over age 65. Turbotax deluxe federal e file state 2010 old version Neither is blind, and neither can be claimed as a dependent. Turbotax deluxe federal e file state 2010 old version They do not itemize deductions, so they use Worksheet 4-1. Turbotax deluxe federal e file state 2010 old version Because they are married filing jointly, they enter $12,200 on line 1. Turbotax deluxe federal e file state 2010 old version They check the “No” box on line 2, so they also enter $12,200 on line 4. Turbotax deluxe federal e file state 2010 old version Because they are both over age 65, they enter $2,400 ($1,200 × 2) on line 5. Turbotax deluxe federal e file state 2010 old version They enter $14,600 ($12,200 + $2,400) on line 6, so their standard deduction is $14,600. Turbotax deluxe federal e file state 2010 old version Standard Deduction for Dependents The standard deduction for an individual for whom an exemption can be claimed on another person's tax return is generally limited to the greater of: $1,000, or The individual's earned income for the year plus $350 (but not more than the regular standard deduction amount, generally $6,100). Turbotax deluxe federal e file state 2010 old version However, the standard deduction may be higher if the individual is 65 or older or blind. Turbotax deluxe federal e file state 2010 old version If an exemption for you (or your spouse if you are filing jointly) can be claimed on someone else's return, use Worksheet 4-1, if applicable, to determine your standard deduction. Turbotax deluxe federal e file state 2010 old version Worksheet 4-1. Turbotax deluxe federal e file state 2010 old version 2013 Standard Deduction Worksheet Caution. Turbotax deluxe federal e file state 2010 old version If you are married filing separately and your spouse itemizes deductions, or if you are a dual-status alien, do not complete this worksheet. Turbotax deluxe federal e file state 2010 old version If you were born before January 2, 1949, and/or blind, check the correct number of boxes below. Turbotax deluxe federal e file state 2010 old version Put the total number of boxes checked in box c and go to line 1. Turbotax deluxe federal e file state 2010 old version a. Turbotax deluxe federal e file state 2010 old version You   Born before  January 2, 1949     Blind b. Turbotax deluxe federal e file state 2010 old version Your spouse, if claiming  spouse's exemption   Born before January 2, 1949     Blind c. Turbotax deluxe federal e file state 2010 old version Total boxes checked             1. Turbotax deluxe federal e file state 2010 old version Enter the amount shown below for your filing status. Turbotax deluxe federal e file state 2010 old version               Single or married filing separately — $6,100 Married filing jointly or Qualifying widow(er) — $12,200 Head of household — $8,950   1. Turbotax deluxe federal e file state 2010 old version           2. Turbotax deluxe federal e file state 2010 old version Can you (or your spouse if filing jointly) be claimed as a dependent on someone else's return?  No. Turbotax deluxe federal e file state 2010 old version Skip line 3; enter the amount from line 1 on line 4. Turbotax deluxe federal e file state 2010 old version   Yes. Turbotax deluxe federal e file state 2010 old version Go to line 3. Turbotax deluxe federal e file state 2010 old version         3. Turbotax deluxe federal e file state 2010 old version Is your earned income* more than $650?               Yes. Turbotax deluxe federal e file state 2010 old version Add $350 to your earned income. Turbotax deluxe federal e file state 2010 old version Enter the total   3. Turbotax deluxe federal e file state 2010 old version         No. Turbotax deluxe federal e file state 2010 old version Enter $1,000 4. Turbotax deluxe federal e file state 2010 old version Enter the smaller of line 1 or line 3 4. Turbotax deluxe federal e file state 2010 old version   5. Turbotax deluxe federal e file state 2010 old version If born before January 2, 1949, or blind, multiply the number in box c by $1,200 ($1,500 if single or head of household). Turbotax deluxe federal e file state 2010 old version Enter the result here. Turbotax deluxe federal e file state 2010 old version Otherwise, enter -0- 5. Turbotax deluxe federal e file state 2010 old version   6. Turbotax deluxe federal e file state 2010 old version Add lines 4 and 5. Turbotax deluxe federal e file state 2010 old version This is your standard deduction for 2013. Turbotax deluxe federal e file state 2010 old version 6. Turbotax deluxe federal e file state 2010 old version   * Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. Turbotax deluxe federal e file state 2010 old version It also includes any amount received as a scholarship that you must include in your income. Turbotax deluxe federal e file state 2010 old version Generally, your earned income is the total of the amount(s) you reported on Form 1040, lines 7, 12, and 18, minus the amount, if any, on line 27 (or the amount you reported on Form 1040A, line 7). Turbotax deluxe federal e file state 2010 old version Itemized Deductions Some individuals should itemize their deductions because it will save them money. Turbotax deluxe federal e file state 2010 old version Others should itemize because they do not qualify for the standard deduction. Turbotax deluxe federal e file state 2010 old version See the discussion under Standard Deduction , earlier, to decide if it would be to your advantage to itemize deductions. Turbotax deluxe federal e file state 2010 old version You may be subject to a limit on some of your itemized deductions if your adjusted gross income is more than $150,000. Turbotax deluxe federal e file state 2010 old version For more information, see Overall limitation, later. Turbotax deluxe federal e file state 2010 old version Medical and dental expenses, some taxes, certain interest expenses, charitable contributions, casualty and theft losses, and certain other miscellaneous expenses may be itemized as deductions on Schedule A (Form 1040). Turbotax deluxe federal e file state 2010 old version You may benefit from itemizing your deductions on Schedule A (Form 1040) if you: Cannot take the standard deduction, Had uninsured medical or dental expenses that are more than 10% of your adjusted gross income (or more than 7. Turbotax deluxe federal e file state 2010 old version 5% of your adjusted gross income if either you or your spouse is age 65 or older), Paid interest on your home, Paid real estate or personal property taxes, Paid mortgage insurance premiums, Paid state and local income or general sales taxes, Had large unreimbursed employee business expenses or other miscellaneous deductions, Had large uninsured casualty or theft losses, Made large contributions to qualified charities (see Publication 526, Charitable Contributions), or Have total itemized deductions that are more than the standard deduction that applies to you. Turbotax deluxe federal e file state 2010 old version See the Schedule A (Form 1040) instructions for more information. Turbotax deluxe federal e file state 2010 old version Overall limitation. Turbotax deluxe federal e file state 2010 old version   You may not be able to deduct all of your itemized deductions if your adjusted gross income is more than: $150,000, if married filing separately, $250,000, if single, $275,000, if head of household, or $300,000, if married filing jointly or qualifying widow(er). Turbotax deluxe federal e file state 2010 old version  If your adjusted gross income exceeds the applicable amount, you will use the Itemized Deductions Worksheet in the Instructions for Schedule A (Form 1040) to figure your total itemized deductions. Turbotax deluxe federal e file state 2010 old version Medical and Dental Expenses You can deduct certain medical and dental expenses you paid for yourself, your spouse, and your dependent(s) if you itemize your deductions on Schedule A (Form 1040). Turbotax deluxe federal e file state 2010 old version Table 4-1 shows some common items that you can or cannot include in figuring your medical expense deduction. Turbotax deluxe federal e file state 2010 old version For more information, see the following discussions of selected items, which are presented in alphabetical order. Turbotax deluxe federal e file state 2010 old version A more extensive list of items and further details can be found in Publication 502, Medical and Dental Expenses. Turbotax deluxe federal e file state 2010 old version Table 4-1. Turbotax deluxe federal e file state 2010 old version Medical and Dental Expenses Checklist You can include: You cannot include: Bandages Capital expenses for equipment or improvements to your home needed for medical care (see Publication 502) Certain weight-loss expenses for obesity Diagnostic devices Expenses of an organ donor Eye surgery—to promote the correct function of the eye Guide dogs or other animals aiding the blind, deaf, and disabled Hospital services fees (lab work, therapy, nursing services, surgery, etc. Turbotax deluxe federal e file state 2010 old version ) Lead-based paint removal (see Publication 502) Long-term care contracts, qualified (see Publication 502) Meals and lodging provided by a hospital during medical treatment Medical and hospital insurance premiums Medical services fees (from doctors, dentists, surgeons, specialists, and other medical practitioners) Medicare Part D premiums Oxygen equipment and oxygen Part of life-care fee paid to retirement home designated for medical care Prescription medicines (prescribed by a doctor) and insulin Psychiatric and psychological treatment Social security tax, Medicare tax, FUTA, and state employment tax for worker providing medical care (see Publication 502) Special items (artificial limbs, false teeth, eyeglasses, contact lenses, hearing aids, crutches, wheelchair, etc. Turbotax deluxe federal e file state 2010 old version ) Special education for mentally or physically disabled persons (see Publication 502) Stop-smoking programs Transportation for needed medical care Treatment at a drug or alcohol center (includes meals and lodging provided by the center) Wages for nursing services (see Publication 502) Contributions to Archer MSAs (see Publication 969) Bottled water Diaper service Expenses for your general health (even if following your doctor's advice) such as: —Health club dues —Household help (even if recommended by a doctor) —Social activities, such as dancing or swimming lessons —Trip for general health improvement Flexible spending account reimbursements for medical expenses (if contributions were on a pretax basis) (see Publication 502) Funeral, burial, or cremation expenses Health savings account payments for medical expenses (see Publication 502) Illegal operation or treatment Life insurance or income protection policies, or policies providing payment for loss of life, limb, sight, etc. Turbotax deluxe federal e file state 2010 old version Medical insurance included in a car insurance policy covering all persons injured in or by your car Medicine you buy without a prescription Nursing care for a healthy baby Prescription drugs you brought in (or ordered shipped) from another country, in most cases (see Publication 502) Surgery for purely cosmetic reasons (see Publication 502) Toothpaste, toiletries, cosmetics, etc. Turbotax deluxe federal e file state 2010 old version Teeth whitening Weight-loss expenses not for the treatment of obesity or other disease You can deduct only the amount of your medical and dental expenses that is more than 10% of your adjusted gross income (or that is more than 7. Turbotax deluxe federal e file state 2010 old version 5% of your adjusted gross income if you or your spouse is age 65 or older). Turbotax deluxe federal e file state 2010 old version What to include. Turbotax deluxe federal e file state 2010 old version   Generally, you can include only the medical and dental expenses you paid this year, regardless of when the services were provided. Turbotax deluxe federal e file state 2010 old version If you pay medical expenses by check, the day you mail or deliver the check generally is the date of payment. Turbotax deluxe federal e file state 2010 old version If you use a pay-by-phone or online account to pay your medical expenses, the date reported on the statement of the financial institution showing when payment was made is the date of payment. Turbotax deluxe federal e file state 2010 old version You can include medical expenses you charge to your credit card in the year the charge is made. Turbotax deluxe federal e file state 2010 old version It does not matter when you actually pay the amount charged. Turbotax deluxe federal e file state 2010 old version Home Improvements You can include in medical expenses amounts you pay for home improvements if their main purpose is medical care for you, your spouse, or your dependent. Turbotax deluxe federal e file state 2010 old version Only reasonable costs to accommodate a home to your disabled condition (or that of your spouse or your dependent(s) who live with you) are considered medical care. Turbotax deluxe federal e file state 2010 old version Additional costs for personal motives, such as for architectural or aesthetic reasons, are not medical expenses. Turbotax deluxe federal e file state 2010 old version Publication 502 contains additional information and examples, including a capital expense worksheet, to assist you in figuring the amount of the capital expense that you can include in your medical expenses. Turbotax deluxe federal e file state 2010 old version Also, see Publication 502 for information about deductible operating and upkeep expenses related to such capital expense items, and for information about improvements, for medical reasons, to property rented by a person with disabilities. Turbotax deluxe federal e file state 2010 old version Household Help You cannot include in medical expenses the cost of household help, even if such help is recommended by a doctor. Turbotax deluxe federal e file state 2010 old version This is a personal expense that is not deductible. Turbotax deluxe federal e file state 2010 old version However, you may be able to include certain expenses paid to a person providing nursing-type services. Turbotax deluxe federal e file state 2010 old version For more information, see Nursing Services , later. Turbotax deluxe federal e file state 2010 old version Also, certain maintenance or personal care services provided for qualified long-term care can be included in medical expenses. Turbotax deluxe federal e file state 2010 old version For more information, see Qualified long-term care services under Long-Term Care, later. Turbotax deluxe federal e file state 2010 old version Hospital Services You can include in medical expenses amounts you pay for the cost of inpatient care at a hospital or similar institution if a principal reason for being there is to receive medical care. Turbotax deluxe federal e file state 2010 old version This includes amounts paid for meals and lodging. Turbotax deluxe federal e file state 2010 old version Also, see Meals and Lodging , later. Turbotax deluxe federal e file state 2010 old version Long-Term Care You can include in medical expenses amounts paid for qualified long-term care services and premiums paid for qualified long-term care insurance contracts. Turbotax deluxe federal e file state 2010 old version Qualified long-term care services. Turbotax deluxe federal e file state 2010 old version   Qualified long-term care services are necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, rehabilitative services, and maintenance and personal care services (defined later) that are: Required by a chronically ill individual, and Provided under a plan of care prescribed by a licensed health care practitioner. Turbotax deluxe federal e file state 2010 old version Chronically ill individual. Turbotax deluxe federal e file state 2010 old version    An individual is chronically ill if, within the previous 12 months, a licensed health care practitioner has certified that the individual meets either of the following descriptions. Turbotax deluxe federal e file state 2010 old version He or she is unable to perform at least two activities of daily living without substantial assistance from another individual for at least 90 days, due to a loss of functional capacity. Turbotax deluxe federal e file state 2010 old version Activities of daily living are eating, toileting, transferring, bathing, dressing, and continence. Turbotax deluxe federal e file state 2010 old version He or she requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment. Turbotax deluxe federal e file state 2010 old version Maintenance and personal care services. Turbotax deluxe federal e file state 2010 old version    Maintenance or personal care services is care which has as its primary purpose the providing of a chronically ill individual with needed assistance with his or her disabilities (including protection from threats to health and safety due to severe cognitive impairment). Turbotax deluxe federal e file state 2010 old version Qualified long-term care insurance contracts. Turbotax deluxe federal e file state 2010 old version   A qualified long-term care insurance contract is an insurance contract that provides only coverage of qualified long-term care services. Turbotax deluxe federal e file state 2010 old version The contract must: Be guaranteed renewable, Not provide for a cash surrender value or other money that can be paid, assigned, pledged, or borrowed, Provide that refunds, other than refunds on the death of the insured or complete surrender or cancellation of the contract, and dividends under the contract must be used only to reduce future premiums or increase future benefits, and Generally not pay or reimburse expenses incurred for services or items that would be reimbursed under Medicare, except where Medicare is a secondary payer, or the contract makes per diem or other periodic payments without regard to expenses. Turbotax deluxe federal e file state 2010 old version   The amount of qualified long-term care premiums you can include is limited. Turbotax deluxe federal e file state 2010 old version You can include the following as medical expenses on Schedule A (Form 1040). Turbotax deluxe federal e file state 2010 old version Qualified long-term care premiums up to the following amounts. Turbotax deluxe federal e file state 2010 old version Age 40 or under – $360. Turbotax deluxe federal e file state 2010 old version Age 41 to 50 – $680. Turbotax deluxe federal e file state 2010 old version Age 51 to 60 – $1,360. Turbotax deluxe federal e file state 2010 old version Age 61 to 70 – $3,640. Turbotax deluxe federal e file state 2010 old version Age 71 or over – $4,550. Turbotax deluxe federal e file state 2010 old version Unreimbursed expenses for qualified long-term care services. Turbotax deluxe federal e file state 2010 old version Note. Turbotax deluxe federal e file state 2010 old version The limit on premiums is for each person. Turbotax deluxe federal e file state 2010 old version Meals and Lodging You can include in medical expenses the cost of meals and lodging at a hospital or similar institution if your main reason for being there is to receive medical care. Turbotax deluxe federal e file state 2010 old version You may be able to include in medical expenses the cost of lodging (but not meals) not provided in a hospital or similar institution. Turbotax deluxe federal e file state 2010 old version You can include the cost of such lodging while away from home if all of the following requirements are met. Turbotax deluxe federal e file state 2010 old version The lodging is primarily for, and essential to, medical care. Turbotax deluxe federal e file state 2010 old version The medical care is provided by a doctor in a licensed hospital or in a medical care facility related to, or the equivalent of, a licensed hospital. Turbotax deluxe federal e file state 2010 old version The lodging is not lavish or extravagant under the circumstances. Turbotax deluxe federal e file state 2010 old version There is no significant element of personal pleasure, recreation, or vacation in the travel away from home. Turbotax deluxe federal e file state 2010 old version The amount you include in medical expenses for lodging cannot be more than $50 per night for each person. Turbotax deluxe federal e file state 2010 old version You can include lodging for a person traveling with the person receiving the medical care. Turbotax deluxe federal e file state 2010 old version For example, if a parent is traveling with a sick child, up to $100 per night can be included as a medical expense for lodging. Turbotax deluxe federal e file state 2010 old version (Meals are not included. Turbotax deluxe federal e file state 2010 old version ) Nursing home. Turbotax deluxe federal e file state 2010 old version   You can include in medical expenses the cost of medical care in a nursing home or a home for the aged for yourself, your spouse, or your dependent(s). Turbotax deluxe federal e file state 2010 old version This includes the cost of meals and lodging in the home if a main reason for being there is to get medical care. Turbotax deluxe federal e file state 2010 old version   Do not include the cost of meals and lodging if the reason for being in the home is personal. Turbotax deluxe federal e file state 2010 old version However, you can include in medical expenses the part of the cost that is for medical or nursing care. Turbotax deluxe federal e file state 2010 old version Medical Insurance Premiums You can include in medical expenses insurance premiums you pay for policies that cover medical care. Turbotax deluxe federal e file state 2010 old version Policies can provide payment for: Hospitalization, surgical fees, X-rays, Prescription drugs and insulin, Dental care, Replacement of lost or damaged contact lenses, and Qualified long-term care insurance contracts (subject to the additional limits included in the discussion on qualified long-term care insurance contracts under Long-Term Care , earlier). Turbotax deluxe federal e file state 2010 old version If you have a policy that provides payments for other than medical care, you can include the premiums for the medical care part of the policy if the charge for the medical part is reasonable. Turbotax deluxe federal e file state 2010 old version The cost of the medical portion must be separately stated in the insurance contract or given to you in a separate statement. Turbotax deluxe federal e file state 2010 old version Medicare Part A. Turbotax deluxe federal e file state 2010 old version   If you are covered under social security (or if you are a government employee who paid Medicare tax), you are enrolled in Medicare Part A. Turbotax deluxe federal e file state 2010 old version The payroll tax paid for Medicare Part A is not a medical expense. Turbotax deluxe federal e file state 2010 old version If you are not covered under social security (or were not a government employee who paid Medicare tax), you can enroll voluntarily in Medicare Part A. Turbotax deluxe federal e file state 2010 old version In this situation you can include the premiums you paid for Medicare Part A as a medical expense. Turbotax deluxe federal e file state 2010 old version Medicare Part B. Turbotax deluxe federal e file state 2010 old version   Medicare Part B is a supplemental medical insurance. Turbotax deluxe federal e file state 2010 old version Premiums you pay for Medicare Part B are a medical expense. Turbotax deluxe federal e file state 2010 old version If you applied for it at age 65 or after you became disabled, you can include in medical expenses the monthly premiums you paid. Turbotax deluxe federal e file state 2010 old version If you were over age 65 or disabled when you first enrolled, check with your local Social Security Administration office, or go to their website at www. Turbotax deluxe federal e file state 2010 old version SSA. Turbotax deluxe federal e file state 2010 old version gov, to find out your premium. Turbotax deluxe federal e file state 2010 old version Medicare Part D. Turbotax deluxe federal e file state 2010 old version   Medicare Part D is a voluntary prescription drug insurance program for persons with Medicare Part A or Part B. Turbotax deluxe federal e file state 2010 old version You can include as a medical expense premiums you pay for Medicare Part D. Turbotax deluxe federal e file state 2010 old version Prepaid insurance premiums. Turbotax deluxe federal e file state 2010 old version   Insurance premiums you pay before you are age 65 for medical care for yourself, your spouse, or your dependents after you reach age 65 are medical care expenses in the year paid if they are: Payable in equal yearly installments, or more often, and Payable for at least 10 years, or until you reach age 65 (but not for less than 5 years). Turbotax deluxe federal e file state 2010 old version Medicines You can include in medical expenses amounts you pay for prescribed medicines and drugs. Turbotax deluxe federal e file state 2010 old version A prescribed drug is one that requires a prescription by a doctor for its use by an individual. Turbotax deluxe federal e file state 2010 old version You can also include amounts you pay for insulin. Turbotax deluxe federal e file state 2010 old version Except for insulin, you cannot include in medical expenses amounts you pay for a drug that is not prescribed. Turbotax deluxe federal e file state 2010 old version Imported medicines and drugs. Turbotax deluxe federal e file state 2010 old version   If you import medicines or drugs from other countries, see Medicines and Drugs From Other Countries, under What Expenses Are Not Includible, in Publication 502. Turbotax deluxe federal e file state 2010 old version Nursing Services You can include in medical expenses wages and other amounts you pay for nursing services. Turbotax deluxe federal e file state 2010 old version The services need not be performed by a nurse as long as the services are of a kind generally performed by a nurse. Turbotax deluxe federal e file state 2010 old version This includes services connected with caring for the patient's condition, such as giving medication or changing dressings, as well as bathing and grooming the patient. Turbotax deluxe federal e file state 2010 old version These services can be provided in your home or another care facility. Turbotax deluxe federal e file state 2010 old version Generally, only the amount spent for nursing services is a medical expense. Turbotax deluxe federal e file state 2010 old version If the attendant also provides personal and household services, amounts paid to the attendant must be divided between the time spent performing household and personal services and the time spent for nursing services. Turbotax deluxe federal e file state 2010 old version However, certain maintenance or personal care services provided for qualified long-term care can be included in medical expenses. Turbotax deluxe federal e file state 2010 old version See Maintenance and personal care services under Qualified long-term care services, earlier. Turbotax deluxe federal e file state 2010 old version Additionally, certain expenses for household services or for the care of a qualifying individual incurred to allow you to work may qualify for the child and dependent care credit. Turbotax deluxe federal e file state 2010 old version See Child and Dependent Care Credit , later, and Publication 503, Child and Dependent Care Expenses. Turbotax deluxe federal e file state 2010 old version You can also include in medical expenses part of the amount you pay for that attendant's meals. Turbotax deluxe federal e file state 2010 old version Divide the food expense among the household members to find the cost of the attendant's food. Turbotax deluxe federal e file state 2010 old version Then divide that cost in the same manner as in the preceding paragraph. Turbotax deluxe federal e file state 2010 old version If you had to pay additional amounts for household upkeep because of the attendant, you can include the extra amounts with your medical expenses. Turbotax deluxe federal e file state 2010 old version This includes extra rent or utilities you pay because you moved to a larger apartment to provide space for the attendant. Turbotax deluxe federal e file state 2010 old version Employment taxes. Turbotax deluxe federal e file state 2010 old version   You can include as a medical expense social security tax, FUTA, Medicare tax, and state employment taxes you pay for a nurse, attendant, or other person who provides medical care. Turbotax deluxe federal e file state 2010 old version If the attendant also provides personal and household services, you can include as a medical expense only the amount of employment taxes paid for medical services as explained earlier under Nursing Services. Turbotax deluxe federal e file state 2010 old version For information on employment tax responsibilities of household employers, see Publication 926, Household Employer's Tax Guide. Turbotax deluxe federal e file state 2010 old version Transportation You can include in medical expenses amounts paid for transportation primarily for, and essential to, medical care. Turbotax deluxe federal e file state 2010 old version Car expenses. Turbotax deluxe federal e file state 2010 old version    You can include out-of-pocket expenses, such as the cost of gas and oil, when you use a car for medical reasons. Turbotax deluxe federal e file state 2010 old version You cannot include depreciation, insurance, general repair, or maintenance expenses. Turbotax deluxe federal e file state 2010 old version   If you do not want to use your actual expenses for 2013, you can use the standard medical mileage rate of 24 cents a mile. Turbotax deluxe federal e file state 2010 old version   You can also include parking fees and tolls. Turbotax deluxe federal e file state 2010 old version You can add these fees and tolls to your medical expenses whether you use actual expenses or use the standard mileage rate. Turbotax deluxe federal e file state 2010 old version You can also include:    Bus, taxi, train, or plane fares or ambulance service, and Transportation expenses of a nurse or other person who can give injections, medications, or other treatment required by a patient who is traveling to get medical care and is unable to travel alone. Turbotax deluxe federal e file state 2010 old version Do not include transportation expenses if, for purely personal reasons, you choose to travel to another city for an operation or other medical care prescribed by your doctor. Turbotax deluxe federal e file state 2010 old version Prev  Up  Next   Home   More Online Publications

Publication 15-A (2014), Employer's Supplemental Tax Guide

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The Turbotax Deluxe Federal E File State 2010 Old Version

Turbotax deluxe federal e file state 2010 old version 14. Turbotax deluxe federal e file state 2010 old version   Sale of Property Table of Contents Reminder Introduction Useful Items - You may want to see: Sales and TradesWhat Is a Sale or Trade? How To Figure Gain or Loss Nontaxable Trades Transfers Between Spouses Related Party Transactions Capital Gains and LossesCapital or Ordinary Gain or Loss Capital Assets and Noncapital Assets Holding Period Nonbusiness Bad Debts Wash Sales Rollover of Gain From Publicly Traded Securities Reminder Foreign income. Turbotax deluxe federal e file state 2010 old version  If you are a U. Turbotax deluxe federal e file state 2010 old version S. Turbotax deluxe federal e file state 2010 old version citizen who sells property located outside the United States, you must report all gains and losses from the sale of that property on your tax return unless it is exempt by U. Turbotax deluxe federal e file state 2010 old version S. Turbotax deluxe federal e file state 2010 old version law. Turbotax deluxe federal e file state 2010 old version This is true whether you reside inside or outside the United States and whether or not you receive a Form 1099 from the payer. Turbotax deluxe federal e file state 2010 old version Introduction This chapter discusses the tax consequences of selling or trading investment property. Turbotax deluxe federal e file state 2010 old version It explains the following. Turbotax deluxe federal e file state 2010 old version What a sale or trade is. Turbotax deluxe federal e file state 2010 old version Figuring gain or loss. Turbotax deluxe federal e file state 2010 old version Nontaxable trades. Turbotax deluxe federal e file state 2010 old version Related party transactions. Turbotax deluxe federal e file state 2010 old version Capital gains or losses. Turbotax deluxe federal e file state 2010 old version Capital assets and noncapital assets. Turbotax deluxe federal e file state 2010 old version Holding period. Turbotax deluxe federal e file state 2010 old version Rollover of gain from publicly traded securities. Turbotax deluxe federal e file state 2010 old version Other property transactions. Turbotax deluxe federal e file state 2010 old version   Certain transfers of property are not discussed here. Turbotax deluxe federal e file state 2010 old version They are discussed in other IRS publications. Turbotax deluxe federal e file state 2010 old version These include the following. Turbotax deluxe federal e file state 2010 old version Sales of a main home, covered in chapter 15. Turbotax deluxe federal e file state 2010 old version Installment sales, covered in Publication 537, Installment Sales. Turbotax deluxe federal e file state 2010 old version Transactions involving business property, covered in Publication 544, Sales and Other Dispositions of Assets. Turbotax deluxe federal e file state 2010 old version Dispositions of an interest in a passive activity, covered in Publication 925, Passive Activity and At-Risk Rules. Turbotax deluxe federal e file state 2010 old version    Publication 550, Investment Income and Expenses (Including Capital Gains and Losses), provides a more detailed discussion about sales and trades of investment property. Turbotax deluxe federal e file state 2010 old version Publication 550 includes information about the rules covering nonbusiness bad debts, straddles, section 1256 contracts, puts and calls, commodity futures, short sales, and wash sales. Turbotax deluxe federal e file state 2010 old version It also discusses investment-related expenses. Turbotax deluxe federal e file state 2010 old version Useful Items - You may want to see: Publication 550 Investment Income and Expenses Form (and Instructions) Schedule D (Form 1040) Capital Gains and Losses 8949 Sales and Other Dispositions of Capital Assets 8824 Like-Kind Exchanges Sales and Trades If you sold property such as stocks, bonds, or certain commodities through a broker during the year, you should receive, for each sale, a Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, or substitute statement, from the broker. Turbotax deluxe federal e file state 2010 old version Generally, you should receive the statement by February 15 of the next year. Turbotax deluxe federal e file state 2010 old version It will show the gross proceeds from the sale. Turbotax deluxe federal e file state 2010 old version If you sold a covered security in 2013, your 1099-B (or substitute statement) will show your basis. Turbotax deluxe federal e file state 2010 old version Generally, a covered security is a security you acquired after 2010, with certain exceptions. Turbotax deluxe federal e file state 2010 old version See the Instructions for Form 8949. Turbotax deluxe federal e file state 2010 old version The IRS will also get a copy of Form 1099-B from the broker. Turbotax deluxe federal e file state 2010 old version Use Form 1099-B (or substitute statement received from your broker) to complete Form 8949. Turbotax deluxe federal e file state 2010 old version What Is a Sale or Trade? This section explains what is a sale or trade. Turbotax deluxe federal e file state 2010 old version It also explains certain transactions and events that are treated as sales or trades. Turbotax deluxe federal e file state 2010 old version A sale is generally a transfer of property for money or a mortgage, note, or other promise to pay money. Turbotax deluxe federal e file state 2010 old version A trade is a transfer of property for other property or services and may be taxed in the same way as a sale. Turbotax deluxe federal e file state 2010 old version Sale and purchase. Turbotax deluxe federal e file state 2010 old version   Ordinarily, a transaction is not a trade when you voluntarily sell property for cash and immediately buy similar property to replace it. Turbotax deluxe federal e file state 2010 old version The sale and purchase are two separate transactions. Turbotax deluxe federal e file state 2010 old version But see Like-kind exchanges under Nontaxable Trades, later. Turbotax deluxe federal e file state 2010 old version Redemption of stock. Turbotax deluxe federal e file state 2010 old version   A redemption of stock is treated as a sale or trade and is subject to the capital gain or loss provisions unless the redemption is a dividend or other distribution on stock. Turbotax deluxe federal e file state 2010 old version Dividend versus sale or trade. Turbotax deluxe federal e file state 2010 old version   Whether a redemption is treated as a sale, trade, dividend, or other distribution depends on the circumstances in each case. Turbotax deluxe federal e file state 2010 old version Both direct and indirect ownership of stock will be considered. Turbotax deluxe federal e file state 2010 old version The redemption is treated as a sale or trade of stock if: The redemption is not essentially equivalent to a dividend (see chapter 8), There is a substantially disproportionate redemption of stock, There is a complete redemption of all the stock of the corporation owned by the shareholder, or The redemption is a distribution in partial liquidation of a corporation. Turbotax deluxe federal e file state 2010 old version Redemption or retirement of bonds. Turbotax deluxe federal e file state 2010 old version   A redemption or retirement of bonds or notes at their maturity is generally treated as a sale or trade. Turbotax deluxe federal e file state 2010 old version   In addition, a significant modification of a bond is treated as a trade of the original bond for a new bond. Turbotax deluxe federal e file state 2010 old version For details, see Regulations section 1. Turbotax deluxe federal e file state 2010 old version 1001-3. Turbotax deluxe federal e file state 2010 old version Surrender of stock. Turbotax deluxe federal e file state 2010 old version   A surrender of stock by a dominant shareholder who retains ownership of more than half of the corporation's voting shares is treated as a contribution to capital rather than as an immediate loss deductible from taxable income. Turbotax deluxe federal e file state 2010 old version The surrendering shareholder must reallocate his or her basis in the surrendered shares to the shares he or she retains. Turbotax deluxe federal e file state 2010 old version Worthless securities. Turbotax deluxe federal e file state 2010 old version    Stocks, stock rights, and bonds (other than those held for sale by a securities dealer) that became completely worthless during the tax year are treated as though they were sold on the last day of the tax year. Turbotax deluxe federal e file state 2010 old version This affects whether your capital loss is long term or short term. Turbotax deluxe federal e file state 2010 old version See Holding Period , later. Turbotax deluxe federal e file state 2010 old version   Worthless securities also include securities that you abandon after March 12, 2008. Turbotax deluxe federal e file state 2010 old version To abandon a security, you must permanently surrender and relinquish all rights in the security and receive no consideration in exchange for it. Turbotax deluxe federal e file state 2010 old version All the facts and circumstances determine whether the transaction is properly characterized as an abandonment or other type of transaction, such as an actual sale or exchange, contribution to capital, dividend, or gift. Turbotax deluxe federal e file state 2010 old version    If you are a cash basis taxpayer and make payments on a negotiable promissory note that you issued for stock that became worthless, you can deduct these payments as losses in the years you actually make the payments. Turbotax deluxe federal e file state 2010 old version Do not deduct them in the year the stock became worthless. Turbotax deluxe federal e file state 2010 old version How to report loss. Turbotax deluxe federal e file state 2010 old version    Report worthless securities in Part I or Part II, whichever applies, of Form 8949. Turbotax deluxe federal e file state 2010 old version In column (a), enter “Worthless. Turbotax deluxe federal e file state 2010 old version ”    Report your worthless securities transactions on Form 8949 with the correct box checked for these transactions. Turbotax deluxe federal e file state 2010 old version See Form 8949 and the Instructions for Form 8949. Turbotax deluxe federal e file state 2010 old version For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. Turbotax deluxe federal e file state 2010 old version See also Schedule D (Form 1040), Form 8949, and their separate instructions. Turbotax deluxe federal e file state 2010 old version Filing a claim for refund. Turbotax deluxe federal e file state 2010 old version   If you do not claim a loss for a worthless security on your original return for the year it becomes worthless, you can file a claim for a credit or refund due to the loss. Turbotax deluxe federal e file state 2010 old version You must use Form 1040X, Amended U. Turbotax deluxe federal e file state 2010 old version S. Turbotax deluxe federal e file state 2010 old version Individual Income Tax Return, to amend your return for the year the security became worthless. Turbotax deluxe federal e file state 2010 old version You must file it within 7 years from the date your original return for that year had to be filed, or 2 years from the date you paid the tax, whichever is later. Turbotax deluxe federal e file state 2010 old version For more information about filing a claim, see Amended Returns and Claims for Refund in chapter 1. Turbotax deluxe federal e file state 2010 old version How To Figure Gain or Loss You figure gain or loss on a sale or trade of property by comparing the amount you realize with the adjusted basis of the property. Turbotax deluxe federal e file state 2010 old version Gain. Turbotax deluxe federal e file state 2010 old version   If the amount you realize from a sale or trade is more than the adjusted basis of the property you transfer, the difference is a gain. Turbotax deluxe federal e file state 2010 old version Loss. Turbotax deluxe federal e file state 2010 old version   If the adjusted basis of the property you transfer is more than the amount you realize, the difference is a loss. Turbotax deluxe federal e file state 2010 old version Adjusted basis. Turbotax deluxe federal e file state 2010 old version   The adjusted basis of property is your original cost or other original basis properly adjusted (increased or decreased) for certain items. Turbotax deluxe federal e file state 2010 old version See chapter 13 for more information about determining the adjusted basis of property. Turbotax deluxe federal e file state 2010 old version Amount realized. Turbotax deluxe federal e file state 2010 old version   The amount you realize from a sale or trade of property is everything you receive for the property minus your expenses of sale (such as redemption fees, sales commissions, sales charges, or exit fees). Turbotax deluxe federal e file state 2010 old version Amount realized includes the money you receive plus the fair market value of any property or services you receive. Turbotax deluxe federal e file state 2010 old version If you received a note or other debt instrument for the property, see How To Figure Gain or Loss in chapter 4 of Publication 550 to figure the amount realized. Turbotax deluxe federal e file state 2010 old version If you finance the buyer's purchase of your property and the debt instrument does not provide for adequate stated interest, the unstated interest that you must report as ordinary income will reduce the amount realized from the sale. Turbotax deluxe federal e file state 2010 old version For more information, see Publication 537. Turbotax deluxe federal e file state 2010 old version Fair market value. Turbotax deluxe federal e file state 2010 old version   Fair market value is the price at which the property would change hands between a buyer and a seller, neither being forced to buy or sell and both having reasonable knowledge of all the relevant facts. Turbotax deluxe federal e file state 2010 old version Example. Turbotax deluxe federal e file state 2010 old version You trade A Company stock with an adjusted basis of $7,000 for B Company stock with a fair market value of $10,000, which is your amount realized. Turbotax deluxe federal e file state 2010 old version Your gain is $3,000 ($10,000 − $7,000). Turbotax deluxe federal e file state 2010 old version Debt paid off. Turbotax deluxe federal e file state 2010 old version    A debt against the property, or against you, that is paid off as a part of the transaction, or that is assumed by the buyer, must be included in the amount realized. Turbotax deluxe federal e file state 2010 old version This is true even if neither you nor the buyer is personally liable for the debt. Turbotax deluxe federal e file state 2010 old version For example, if you sell or trade property that is subject to a nonrecourse loan, the amount you realize generally includes the full amount of the note assumed by the buyer even if the amount of the note is more than the fair market value of the property. Turbotax deluxe federal e file state 2010 old version Example. Turbotax deluxe federal e file state 2010 old version You sell stock that you had pledged as security for a bank loan of $8,000. Turbotax deluxe federal e file state 2010 old version Your basis in the stock is $6,000. Turbotax deluxe federal e file state 2010 old version The buyer pays off your bank loan and pays you $20,000 in cash. Turbotax deluxe federal e file state 2010 old version The amount realized is $28,000 ($20,000 + $8,000). Turbotax deluxe federal e file state 2010 old version Your gain is $22,000 ($28,000 − $6,000). Turbotax deluxe federal e file state 2010 old version Payment of cash. Turbotax deluxe federal e file state 2010 old version   If you trade property and cash for other property, the amount you realize is the fair market value of the property you receive. Turbotax deluxe federal e file state 2010 old version Determine your gain or loss by subtracting the cash you pay plus the adjusted basis of the property you trade in from the amount you realize. Turbotax deluxe federal e file state 2010 old version If the result is a positive number, it is a gain. Turbotax deluxe federal e file state 2010 old version If the result is a negative number, it is a loss. Turbotax deluxe federal e file state 2010 old version No gain or loss. Turbotax deluxe federal e file state 2010 old version   You may have to use a basis for figuring gain that is different from the basis used for figuring loss. Turbotax deluxe federal e file state 2010 old version In this case, you may have neither a gain nor a loss. Turbotax deluxe federal e file state 2010 old version See Basis Other Than Cost in chapter 13. Turbotax deluxe federal e file state 2010 old version Nontaxable Trades This section discusses trades that generally do not result in a taxable gain or deductible loss. Turbotax deluxe federal e file state 2010 old version For more information on nontaxable trades, see chapter 1 of Publication 544. Turbotax deluxe federal e file state 2010 old version Like-kind exchanges. Turbotax deluxe federal e file state 2010 old version   If you trade business or investment property for other business or investment property of a like kind, you do not pay tax on any gain or deduct any loss until you sell or dispose of the property you receive. Turbotax deluxe federal e file state 2010 old version To be nontaxable, a trade must meet all six of the following conditions. Turbotax deluxe federal e file state 2010 old version The property must be business or investment property. Turbotax deluxe federal e file state 2010 old version You must hold both the property you trade and the property you receive for productive use in your trade or business or for investment. Turbotax deluxe federal e file state 2010 old version Neither property may be property used for personal purposes, such as your home or family car. Turbotax deluxe federal e file state 2010 old version The property must not be held primarily for sale. Turbotax deluxe federal e file state 2010 old version The property you trade and the property you receive must not be property you sell to customers, such as merchandise. Turbotax deluxe federal e file state 2010 old version The property must not be stocks, bonds, notes, choses in action, certificates of trust or beneficial interest, or other securities or evidences of indebtedness or interest, including partnership interests. Turbotax deluxe federal e file state 2010 old version However, see Special rules for mutual ditch, reservoir, or irrigation company stock, in chapter 4 of Publication 550 for an exception. Turbotax deluxe federal e file state 2010 old version Also, you can have a nontaxable trade of corporate stocks under a different rule, as discussed later. Turbotax deluxe federal e file state 2010 old version There must be a trade of like property. Turbotax deluxe federal e file state 2010 old version The trade of real estate for real estate, or personal property for similar personal property, is a trade of like property. Turbotax deluxe federal e file state 2010 old version The trade of an apartment house for a store building, or a panel truck for a pickup truck, is a trade of like property. Turbotax deluxe federal e file state 2010 old version The trade of a piece of machinery for a store building is not a trade of like property. Turbotax deluxe federal e file state 2010 old version Real property located in the United States and real property located outside the United States are not like property. Turbotax deluxe federal e file state 2010 old version Also, personal property used predominantly within the United States and personal property used predominantly outside the United States are not like property. Turbotax deluxe federal e file state 2010 old version The property to be received must be identified in writing within 45 days after the date you transfer the property given up in the trade. Turbotax deluxe federal e file state 2010 old version The property to be received must be received by the earlier of: The 180th day after the date on which you transfer the property given up in the trade, or The due date, including extensions, for your tax return for the year in which the transfer of the property given up occurs. Turbotax deluxe federal e file state 2010 old version    If you trade property with a related party in a like-kind exchange, a special rule may apply. Turbotax deluxe federal e file state 2010 old version See Related Party Transactions , later in this chapter. Turbotax deluxe federal e file state 2010 old version Also, see chapter 1 of Publication 544 for more information on exchanges of business property and special rules for exchanges using qualified intermediaries or involving multiple properties. Turbotax deluxe federal e file state 2010 old version Partly nontaxable exchange. Turbotax deluxe federal e file state 2010 old version   If you receive money or unlike property in addition to like property, and the above six conditions are met, you have a partly nontaxable trade. Turbotax deluxe federal e file state 2010 old version You are taxed on any gain you realize, but only up to the amount of the money and the fair market value of the unlike property you receive. Turbotax deluxe federal e file state 2010 old version You cannot deduct a loss. Turbotax deluxe federal e file state 2010 old version Like property and unlike property transferred. Turbotax deluxe federal e file state 2010 old version   If you give up unlike property in addition to the like property, you must recognize gain or loss on the unlike property you give up. Turbotax deluxe federal e file state 2010 old version The gain or loss is the difference between the adjusted basis of the unlike property and its fair market value. Turbotax deluxe federal e file state 2010 old version Like property and money transferred. Turbotax deluxe federal e file state 2010 old version   If all of the above conditions (1) – (6) are met, you have a nontaxable trade even if you pay money in addition to the like property. Turbotax deluxe federal e file state 2010 old version Basis of property received. Turbotax deluxe federal e file state 2010 old version   To figure the basis of the property received, see Nontaxable Exchanges in chapter 13. Turbotax deluxe federal e file state 2010 old version How to report. Turbotax deluxe federal e file state 2010 old version   You must report the trade of like property on Form 8824. Turbotax deluxe federal e file state 2010 old version If you figure a recognized gain or loss on Form 8824, report it on Schedule D (Form 1040), or on Form 4797, Sales of Business Property, whichever applies. Turbotax deluxe federal e file state 2010 old version See the instructions for Line 22 in the Instructions for Form 8824. Turbotax deluxe federal e file state 2010 old version   For information on using Form 4797, see chapter 4 of Publication 544. Turbotax deluxe federal e file state 2010 old version Corporate stocks. Turbotax deluxe federal e file state 2010 old version   The following trades of corporate stocks generally do not result in a taxable gain or a deductible loss. Turbotax deluxe federal e file state 2010 old version Corporate reorganizations. Turbotax deluxe federal e file state 2010 old version   In some instances, a company will give you common stock for preferred stock, preferred stock for common stock, or stock in one corporation for stock in another corporation. Turbotax deluxe federal e file state 2010 old version If this is a result of a merger, recapitalization, transfer to a controlled corporation, bankruptcy, corporate division, corporate acquisition, or other corporate reorganization, you do not recognize gain or loss. Turbotax deluxe federal e file state 2010 old version Stock for stock of the same corporation. Turbotax deluxe federal e file state 2010 old version   You can exchange common stock for common stock or preferred stock for preferred stock in the same corporation without having a recognized gain or loss. Turbotax deluxe federal e file state 2010 old version This is true for a trade between two stockholders as well as a trade between a stockholder and the corporation. Turbotax deluxe federal e file state 2010 old version Convertible stocks and bonds. Turbotax deluxe federal e file state 2010 old version   You generally will not have a recognized gain or loss if you convert bonds into stock or preferred stock into common stock of the same corporation according to a conversion privilege in the terms of the bond or the preferred stock certificate. Turbotax deluxe federal e file state 2010 old version Property for stock of a controlled corporation. Turbotax deluxe federal e file state 2010 old version   If you transfer property to a corporation solely in exchange for stock in that corporation, and immediately after the trade you are in control of the corporation, you ordinarily will not recognize a gain or loss. Turbotax deluxe federal e file state 2010 old version This rule applies both to individuals and to groups who transfer property to a corporation. Turbotax deluxe federal e file state 2010 old version It does not apply if the corporation is an investment company. Turbotax deluxe federal e file state 2010 old version   For this purpose, to be in control of a corporation, you or your group of transferors must own, immediately after the exchange, at least 80% of the total combined voting power of all classes of stock entitled to vote and at least 80% of the outstanding shares of each class of nonvoting stock of the corporation. Turbotax deluxe federal e file state 2010 old version   If this provision applies to you, you may have to attach to your return a complete statement of all facts pertinent to the exchange. Turbotax deluxe federal e file state 2010 old version For details, see Regulations section 1. Turbotax deluxe federal e file state 2010 old version 351-3. Turbotax deluxe federal e file state 2010 old version Additional information. Turbotax deluxe federal e file state 2010 old version   For more information on trades of stock, see Nontaxable Trades in chapter 4 of Publication 550. Turbotax deluxe federal e file state 2010 old version Insurance policies and annuities. Turbotax deluxe federal e file state 2010 old version   You will not have a recognized gain or loss if the insured or annuitant is the same under both contracts and you trade: A life insurance contract for another life insurance contract or for an endowment or annuity contract or for a qualified long-term care insurance contract, An endowment contract for another endowment contract that provides for regular payments beginning at a date no later than the beginning date under the old contract or for an annuity contract or for a qualified long-term insurance contract, An annuity contract for annuity contract or for a qualified long-term care insurance contract, or A qualified long-term care insurance contract for a qualified long-term care insurance contract. Turbotax deluxe federal e file state 2010 old version   You also may not have to recognize gain or loss on an exchange of a portion of an annuity contract for another annuity contract. Turbotax deluxe federal e file state 2010 old version For transfers completed before October 24, 2011, see Revenue Ruling 2003-76 in Internal Revenue Bulletin 2003-33 and Revenue Procedure 2008-24 in Internal Revenue Bulletin 2008-13. Turbotax deluxe federal e file state 2010 old version Revenue Ruling 2003-76 is available at www. Turbotax deluxe federal e file state 2010 old version irs. Turbotax deluxe federal e file state 2010 old version gov/irb/2003-33_IRB/ar11. Turbotax deluxe federal e file state 2010 old version html. Turbotax deluxe federal e file state 2010 old version Revenue Procedure 2008-24 is available at www. Turbotax deluxe federal e file state 2010 old version irs. Turbotax deluxe federal e file state 2010 old version gov/irb/2008-13_IRB/ar13. Turbotax deluxe federal e file state 2010 old version html. Turbotax deluxe federal e file state 2010 old version For transfers completed on or after October 24, 2011, see Revenue Ruling 2003-76, above, and Revenue Procedure 2011-38, in Internal Revenue Bulletin 2011-30. Turbotax deluxe federal e file state 2010 old version Revenue Procedure 2011-38 is available at www. Turbotax deluxe federal e file state 2010 old version irs. Turbotax deluxe federal e file state 2010 old version gov/irb/2011-30_IRB/ar09. Turbotax deluxe federal e file state 2010 old version html. Turbotax deluxe federal e file state 2010 old version   For tax years beginning after December 31, 2010, amounts received as an annuity for a period of 10 years or more, or for the lives of one or more individuals, under any portion of an annuity, endowment, or life insurance contract, are treated as a separate contract and are considered partial annuities. Turbotax deluxe federal e file state 2010 old version A portion of an annuity, endowment, or life insurance contract may be annuitized, provided that the annuitization period is for 10 years or more or for the lives of one or more individuals. Turbotax deluxe federal e file state 2010 old version The investment in the contract is allocated between the part of the contract from which amounts are received as an annuity and the part of the contract from which amounts are not received as an annuity. Turbotax deluxe federal e file state 2010 old version   Exchanges of contracts not included in this list, such as an annuity contract for an endowment contract, or an annuity or endowment contract for a life insurance contract, are taxable. Turbotax deluxe federal e file state 2010 old version Demutualization of life insurance companies. Turbotax deluxe federal e file state 2010 old version   If you received stock in exchange for your equity interest as a policyholder or an annuitant, you generally will not have a recognized gain or loss. Turbotax deluxe federal e file state 2010 old version See Demutualization of Life Insurance Companies in Publication 550. Turbotax deluxe federal e file state 2010 old version U. Turbotax deluxe federal e file state 2010 old version S. Turbotax deluxe federal e file state 2010 old version Treasury notes or bonds. Turbotax deluxe federal e file state 2010 old version   You can trade certain issues of U. Turbotax deluxe federal e file state 2010 old version S. Turbotax deluxe federal e file state 2010 old version Treasury obligations for other issues designated by the Secretary of the Treasury, with no gain or loss recognized on the trade. Turbotax deluxe federal e file state 2010 old version See Savings bonds traded in chapter 1 of Publication 550 for more information. Turbotax deluxe federal e file state 2010 old version Transfers Between Spouses Generally, no gain or loss is recognized on a transfer of property from an individual to (or in trust for the benefit of) a spouse, or if incident to a divorce, a former spouse. Turbotax deluxe federal e file state 2010 old version This nonrecognition rule does not apply in the following situations. Turbotax deluxe federal e file state 2010 old version The recipient spouse or former spouse is a nonresident alien. Turbotax deluxe federal e file state 2010 old version Property is transferred in trust and liability exceeds basis. Turbotax deluxe federal e file state 2010 old version Gain must be recognized to the extent the amount of the liabilities assumed by the trust, plus any liabilities on the property, exceed the adjusted basis of the property. Turbotax deluxe federal e file state 2010 old version For other situations, see Transfers Between Spouses in chapter 4 of Publication 550. Turbotax deluxe federal e file state 2010 old version Any transfer of property to a spouse or former spouse on which gain or loss is not recognized is treated by the recipient as a gift and is not considered a sale or exchange. Turbotax deluxe federal e file state 2010 old version The recipient's basis in the property will be the same as the adjusted basis of the giver immediately before the transfer. Turbotax deluxe federal e file state 2010 old version This carryover basis rule applies whether the adjusted basis of the transferred property is less than, equal to, or greater than either its fair market value at the time of transfer or any consideration paid by the recipient. Turbotax deluxe federal e file state 2010 old version This rule applies for purposes of determining loss as well as gain. Turbotax deluxe federal e file state 2010 old version Any gain recognized on a transfer in trust increases the basis. Turbotax deluxe federal e file state 2010 old version A transfer of property is incident to a divorce if the transfer occurs within 1 year after the date on which the marriage ends, or if the transfer is related to the ending of the marriage. Turbotax deluxe federal e file state 2010 old version Related Party Transactions Special rules apply to the sale or trade of property between related parties. Turbotax deluxe federal e file state 2010 old version Gain on sale or trade of depreciable property. Turbotax deluxe federal e file state 2010 old version   Your gain from the sale or trade of property to a related party may be ordinary income, rather than capital gain, if the property can be depreciated by the party receiving it. Turbotax deluxe federal e file state 2010 old version See chapter 3 of Publication 544 for more information. Turbotax deluxe federal e file state 2010 old version Like-kind exchanges. Turbotax deluxe federal e file state 2010 old version   Generally, if you trade business or investment property for other business or investment property of a like kind, no gain or loss is recognized. Turbotax deluxe federal e file state 2010 old version See Like-kind exchanges , earlier, under Nontaxable Trades. Turbotax deluxe federal e file state 2010 old version   This rule also applies to trades of property between related parties, defined next under Losses on sales or trades of property. Turbotax deluxe federal e file state 2010 old version However, if either you or the related party disposes of the like property within 2 years after the trade, you both must report any gain or loss not recognized on the original trade on your return filed for the year in which the later disposition occurs. Turbotax deluxe federal e file state 2010 old version See Related Party Transactions in chapter 4 of Publication 550 for exceptions. Turbotax deluxe federal e file state 2010 old version Losses on sales or trades of property. Turbotax deluxe federal e file state 2010 old version   You cannot deduct a loss on the sale or trade of property, other than a distribution in complete liquidation of a corporation, if the transaction is directly or indirectly between you and the following related parties. Turbotax deluxe federal e file state 2010 old version Members of your family. Turbotax deluxe federal e file state 2010 old version This includes only your brothers and sisters, half-brothers and half-sisters, spouse, ancestors (parents, grandparents, etc. Turbotax deluxe federal e file state 2010 old version ), and lineal descendants (children, grandchildren, etc. Turbotax deluxe federal e file state 2010 old version ). Turbotax deluxe federal e file state 2010 old version A partnership in which you directly or indirectly own more than 50% of the capital interest or the profits interest. Turbotax deluxe federal e file state 2010 old version A corporation in which you directly or indirectly own more than 50% in value of the outstanding stock. Turbotax deluxe federal e file state 2010 old version (See Constructive ownership of stock , later. Turbotax deluxe federal e file state 2010 old version ) A tax-exempt charitable or educational organization directly or indirectly controlled, in any manner or by any method, by you or by a member of your family, whether or not this control is legally enforceable. Turbotax deluxe federal e file state 2010 old version   In addition, a loss on the sale or trade of property is not deductible if the transaction is directly or indirectly between the following related parties. Turbotax deluxe federal e file state 2010 old version A grantor and fiduciary, or the fiduciary and beneficiary, of any trust. Turbotax deluxe federal e file state 2010 old version Fiduciaries of two different trusts, or the fiduciary and beneficiary of two different trusts, if the same person is the grantor of both trusts. Turbotax deluxe federal e file state 2010 old version A trust fiduciary and a corporation of which more than 50% in value of the outstanding stock is directly or indirectly owned by or for the trust, or by or for the grantor of the trust. Turbotax deluxe federal e file state 2010 old version A corporation and a partnership if the same persons own more than 50% in value of the outstanding stock of the corporation and more than 50% of the capital interest, or the profits interest, in the partnership. Turbotax deluxe federal e file state 2010 old version Two S corporations if the same persons own more than 50% in value of the outstanding stock of each corporation. Turbotax deluxe federal e file state 2010 old version Two corporations, one of which is an S corporation, if the same persons own more than 50% in value of the outstanding stock of each corporation. Turbotax deluxe federal e file state 2010 old version An executor and a beneficiary of an estate (except in the case of a sale or trade to satisfy a pecuniary bequest). Turbotax deluxe federal e file state 2010 old version Two corporations that are members of the same controlled group. Turbotax deluxe federal e file state 2010 old version (Under certain conditions, however, these losses are not disallowed but must be deferred. Turbotax deluxe federal e file state 2010 old version ) Two partnerships if the same persons own, directly or indirectly, more than 50% of the capital interests or the profit interests in both partnerships. Turbotax deluxe federal e file state 2010 old version Multiple property sales or trades. Turbotax deluxe federal e file state 2010 old version   If you sell or trade to a related party a number of blocks of stock or pieces of property in a lump sum, you must figure the gain or loss separately for each block of stock or piece of property. Turbotax deluxe federal e file state 2010 old version The gain on each item may be taxable. Turbotax deluxe federal e file state 2010 old version However, you cannot deduct the loss on any item. Turbotax deluxe federal e file state 2010 old version Also, you cannot reduce gains from the sales of any of these items by losses on the sales of any of the other items. Turbotax deluxe federal e file state 2010 old version Indirect transactions. Turbotax deluxe federal e file state 2010 old version   You cannot deduct your loss on the sale of stock through your broker if, under a prearranged plan, a related party buys the same stock you had owned. Turbotax deluxe federal e file state 2010 old version This does not apply to a trade between related parties through an exchange that is purely coincidental and is not prearranged. Turbotax deluxe federal e file state 2010 old version Constructive ownership of stock. Turbotax deluxe federal e file state 2010 old version   In determining whether a person directly or indirectly owns any of the outstanding stock of a corporation, the following rules apply. Turbotax deluxe federal e file state 2010 old version Rule 1. Turbotax deluxe federal e file state 2010 old version   Stock directly or indirectly owned by or for a corporation, partnership, estate, or trust is considered owned proportionately by or for its shareholders, partners, or beneficiaries. Turbotax deluxe federal e file state 2010 old version Rule 2. Turbotax deluxe federal e file state 2010 old version   An individual is considered to own the stock directly or indirectly owned by or for his or her family. Turbotax deluxe federal e file state 2010 old version Family includes only brothers and sisters, half-brothers and half-sisters, spouse, ancestors, and lineal descendants. Turbotax deluxe federal e file state 2010 old version Rule 3. Turbotax deluxe federal e file state 2010 old version   An individual owning, other than by applying rule 2, any stock in a corporation is considered to own the stock directly or indirectly owned by or for his or her partner. Turbotax deluxe federal e file state 2010 old version Rule 4. Turbotax deluxe federal e file state 2010 old version   When applying rule 1, 2, or 3, stock constructively owned by a person under rule 1 is treated as actually owned by that person. Turbotax deluxe federal e file state 2010 old version But stock constructively owned by an individual under rule 2 or rule 3 is not treated as owned by that individual for again applying either rule 2 or rule 3 to make another person the constructive owner of the stock. Turbotax deluxe federal e file state 2010 old version Property received from a related party. Turbotax deluxe federal e file state 2010 old version    If you sell or trade at a gain property you acquired from a related party, you recognize the gain only to the extent it is more than the loss previously disallowed to the related party. Turbotax deluxe federal e file state 2010 old version This rule applies only if you are the original transferee and you acquired the property by purchase or exchange. Turbotax deluxe federal e file state 2010 old version This rule does not apply if the related party's loss was disallowed because of the wash sale rules described in chapter 4 of Publication 550 under Wash Sales. Turbotax deluxe federal e file state 2010 old version   If you sell or trade at a loss property you acquired from a related party, you cannot recognize the loss that was not allowed to the related party. Turbotax deluxe federal e file state 2010 old version Example 1. Turbotax deluxe federal e file state 2010 old version Your brother sells you stock for $7,600. Turbotax deluxe federal e file state 2010 old version His cost basis is $10,000. Turbotax deluxe federal e file state 2010 old version Your brother cannot deduct the loss of $2,400. Turbotax deluxe federal e file state 2010 old version Later, you sell the same stock to an unrelated party for $10,500, realizing a gain of $2,900. Turbotax deluxe federal e file state 2010 old version Your reportable gain is $500 (the $2,900 gain minus the $2,400 loss not allowed to your brother). Turbotax deluxe federal e file state 2010 old version Example 2. Turbotax deluxe federal e file state 2010 old version If, in Example 1, you sold the stock for $6,900 instead of $10,500, your recognized loss is only $700 (your $7,600 basis minus $6,900). Turbotax deluxe federal e file state 2010 old version You cannot deduct the loss that was not allowed to your brother. Turbotax deluxe federal e file state 2010 old version Capital Gains and Losses This section discusses the tax treatment of gains and losses from different types of investment transactions. Turbotax deluxe federal e file state 2010 old version Character of gain or loss. Turbotax deluxe federal e file state 2010 old version   You need to classify your gains and losses as either ordinary or capital gains or losses. Turbotax deluxe federal e file state 2010 old version You then need to classify your capital gains and losses as either short term or long term. Turbotax deluxe federal e file state 2010 old version If you have long-term gains and losses, you must identify your 28% rate gains and losses. Turbotax deluxe federal e file state 2010 old version If you have a net capital gain, you must also identify any unrecaptured section 1250 gain. Turbotax deluxe federal e file state 2010 old version   The correct classification and identification helps you figure the limit on capital losses and the correct tax on capital gains. Turbotax deluxe federal e file state 2010 old version Reporting capital gains and losses is explained in chapter 16. Turbotax deluxe federal e file state 2010 old version Capital or Ordinary Gain or Loss If you have a taxable gain or a deductible loss from a transaction, it may be either a capital gain or loss or an ordinary gain or loss, depending on the circumstances. Turbotax deluxe federal e file state 2010 old version Generally, a sale or trade of a capital asset (defined next) results in a capital gain or loss. Turbotax deluxe federal e file state 2010 old version A sale or trade of a noncapital asset generally results in ordinary gain or loss. Turbotax deluxe federal e file state 2010 old version Depending on the circumstances, a gain or loss on a sale or trade of property used in a trade or business may be treated as either capital or ordinary, as explained in Publication 544. Turbotax deluxe federal e file state 2010 old version In some situations, part of your gain or loss may be a capital gain or loss and part may be an ordinary gain or loss. Turbotax deluxe federal e file state 2010 old version Capital Assets and Noncapital Assets For the most part, everything you own and use for personal purposes, pleasure, or investment is a capital asset. Turbotax deluxe federal e file state 2010 old version Some examples are: Stocks or bonds held in your personal account, A house owned and used by you and your family, Household furnishings, A car used for pleasure or commuting, Coin or stamp collections, Gems and jewelry, and Gold, silver, or any other metal. Turbotax deluxe federal e file state 2010 old version Any property you own is a capital asset, except the following noncapital assets. Turbotax deluxe federal e file state 2010 old version Property held mainly for sale to customers or property that will physically become a part of the merchandise for sale to customers. Turbotax deluxe federal e file state 2010 old version For an exception, see Capital Asset Treatment for Self-Created Musical Works , later. Turbotax deluxe federal e file state 2010 old version Depreciable property used in your trade or business, even if fully depreciated. Turbotax deluxe federal e file state 2010 old version Real property used in your trade or business. Turbotax deluxe federal e file state 2010 old version A copyright, a literary, musical, or artistic composition, a letter or memorandum, or similar property that is: Created by your personal efforts, Prepared or produced for you (in the case of a letter, memorandum, or similar property), or Acquired under circumstances (for example, by gift) entitling you to the basis of the person who created the property or for whom it was prepared or produced. Turbotax deluxe federal e file state 2010 old version For an exception to this rule, see Capital Asset Treatment for Self-Created Musical Works , later. Turbotax deluxe federal e file state 2010 old version Accounts or notes receivable acquired in the ordinary course of a trade or business for services rendered or from the sale of property described in (1). Turbotax deluxe federal e file state 2010 old version U. Turbotax deluxe federal e file state 2010 old version S. Turbotax deluxe federal e file state 2010 old version Government publications that you received from the government free or for less than the normal sales price, or that you acquired under circumstances entitling you to the basis of someone who received the publications free or for less than the normal sales price. Turbotax deluxe federal e file state 2010 old version Certain commodities derivative financial instruments held by commodities derivatives dealers. Turbotax deluxe federal e file state 2010 old version Hedging transactions, but only if the transaction is clearly identified as a hedging transaction before the close of the day on which it was acquired, originated, or entered into. Turbotax deluxe federal e file state 2010 old version Supplies of a type you regularly use or consume in the ordinary course of your trade or business. Turbotax deluxe federal e file state 2010 old version Investment Property Investment property is a capital asset. Turbotax deluxe federal e file state 2010 old version Any gain or loss from its sale or trade is generally a capital gain or loss. Turbotax deluxe federal e file state 2010 old version Gold, silver, stamps, coins, gems, etc. Turbotax deluxe federal e file state 2010 old version   These are capital assets except when they are held for sale by a dealer. Turbotax deluxe federal e file state 2010 old version Any gain or loss you have from their sale or trade generally is a capital gain or loss. Turbotax deluxe federal e file state 2010 old version Stocks, stock rights, and bonds. Turbotax deluxe federal e file state 2010 old version   All of these (including stock received as a dividend) are capital assets except when held for sale by a securities dealer. Turbotax deluxe federal e file state 2010 old version However, if you own small business stock, see Losses on Section 1244 (Small Business) Stock , later, and Losses on Small Business Investment Company Stock, in chapter 4 of Publication 550. Turbotax deluxe federal e file state 2010 old version Personal Use Property Property held for personal use only, rather than for investment, is a capital asset, and you must report a gain from its sale as a capital gain. Turbotax deluxe federal e file state 2010 old version However, you cannot deduct a loss from selling personal use property. Turbotax deluxe federal e file state 2010 old version Capital Asset Treatment for Self-Created Musical Works You can elect to treat musical compositions and copyrights in musical works as capital assets when you sell or exchange them if: Your personal efforts created the property, or You acquired the property under circumstances (for example, by gift) entitling you to the basis of the person who created the property or for whom it was prepared or produced. Turbotax deluxe federal e file state 2010 old version You must make a separate election for each musical composition (or copyright in a musical work) sold or exchanged during the tax year. Turbotax deluxe federal e file state 2010 old version You must make the election on or before the due date (including extensions) of the income tax return for the tax year of the sale or exchange. Turbotax deluxe federal e file state 2010 old version You must make the election on Form 8949 by treating the sale or exchange as the sale or exchange of a capital asset, according to Form 8949, Schedule D (Form 1040), and their separate instructions. Turbotax deluxe federal e file state 2010 old version For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. Turbotax deluxe federal e file state 2010 old version See also Schedule D (Form 1040), Form 8949, and their separate instructions. Turbotax deluxe federal e file state 2010 old version You can revoke the election if you have IRS approval. Turbotax deluxe federal e file state 2010 old version To get IRS approval, you must submit a request for a letter ruling under the appropriate IRS revenue procedure. Turbotax deluxe federal e file state 2010 old version See, for example, Rev. Turbotax deluxe federal e file state 2010 old version Proc. Turbotax deluxe federal e file state 2010 old version 2013-1, corrected by Announcement 2013–9, and amplified and modified by Rev. Turbotax deluxe federal e file state 2010 old version Proc. Turbotax deluxe federal e file state 2010 old version 2013–32, available at www. Turbotax deluxe federal e file state 2010 old version irs. Turbotax deluxe federal e file state 2010 old version gov/irb/2013-01_IRB/ar06. Turbotax deluxe federal e file state 2010 old version html. Turbotax deluxe federal e file state 2010 old version Alternatively, you are granted an automatic 6-month extension from the due date of your income tax return (excluding extensions) to revoke the election, provided you timely file your income tax return, and within this 6-month extension period, you file Form 1040X that treats the sale or exchange as the sale or exchange of property that is not a capital asset. Turbotax deluxe federal e file state 2010 old version Discounted Debt Instruments Treat your gain or loss on the sale, redemption, or retirement of a bond or other debt instrument originally issued at a discount or bought at a discount as capital gain or loss, except as explained in the following discussions. Turbotax deluxe federal e file state 2010 old version Short-term government obligations. Turbotax deluxe federal e file state 2010 old version   Treat gains on short-term federal, state, or local government obligations (other than tax-exempt obligations) as ordinary income up to your ratable share of the acquisition discount. Turbotax deluxe federal e file state 2010 old version This treatment applies to obligations with a fixed maturity date not more than 1 year from the date of issue. Turbotax deluxe federal e file state 2010 old version Acquisition discount is the stated redemption price at maturity minus your basis in the obligation. Turbotax deluxe federal e file state 2010 old version   However, do not treat these gains as income to the extent you previously included the discount in income. Turbotax deluxe federal e file state 2010 old version See Discount on Short-Term Obligations in chapter 1 of Publication 550. Turbotax deluxe federal e file state 2010 old version Short-term nongovernment obligations. Turbotax deluxe federal e file state 2010 old version   Treat gains on short-term nongovernment obligations as ordinary income up to your ratable share of original issue discount (OID). Turbotax deluxe federal e file state 2010 old version This treatment applies to obligations with a fixed maturity date of not more than 1 year from the date of issue. Turbotax deluxe federal e file state 2010 old version   However, to the extent you previously included the discount in income, you do not have to include it in income again. Turbotax deluxe federal e file state 2010 old version See Discount on Short-Term Obligations in chapter 1 of Publication 550. Turbotax deluxe federal e file state 2010 old version Tax-exempt state and local government bonds. Turbotax deluxe federal e file state 2010 old version   If these bonds were originally issued at a discount before September 4, 1982, or you acquired them before March 2, 1984, treat your part of OID as tax-exempt interest. Turbotax deluxe federal e file state 2010 old version To figure your gain or loss on the sale or trade of these bonds, reduce the amount realized by your part of OID. Turbotax deluxe federal e file state 2010 old version   If the bonds were issued after September 3, 1982, and acquired after March 1, 1984, increase the adjusted basis by your part of OID to figure gain or loss. Turbotax deluxe federal e file state 2010 old version For more information on the basis of these bonds, see Discounted Debt Instruments in chapter 4 of Publication 550. Turbotax deluxe federal e file state 2010 old version   Any gain from market discount is usually taxable on disposition or redemption of tax-exempt bonds. Turbotax deluxe federal e file state 2010 old version If you bought the bonds before May 1, 1993, the gain from market discount is capital gain. Turbotax deluxe federal e file state 2010 old version If you bought the bonds after April 30, 1993, the gain is ordinary income. Turbotax deluxe federal e file state 2010 old version   You figure the market discount by subtracting the price you paid for the bond from the sum of the original issue price of the bond and the amount of accumulated OID from the date of issue that represented interest to any earlier holders. Turbotax deluxe federal e file state 2010 old version For more information, see Market Discount Bonds in chapter 1 of Publication 550. Turbotax deluxe federal e file state 2010 old version    A loss on the sale or other disposition of a tax-exempt state or local government bond is deductible as a capital loss. Turbotax deluxe federal e file state 2010 old version Redeemed before maturity. Turbotax deluxe federal e file state 2010 old version   If a state or local bond issued before June 9, 1980, is redeemed before it matures, the OID is not taxable to you. Turbotax deluxe federal e file state 2010 old version   If a state or local bond issued after June 8, 1980, is redeemed before it matures, the part of OID earned while you hold the bond is not taxable to you. Turbotax deluxe federal e file state 2010 old version However, you must report the unearned part of OID as a capital gain. Turbotax deluxe federal e file state 2010 old version Example. Turbotax deluxe federal e file state 2010 old version On July 2, 2002, the date of issue, you bought a 20-year, 6% municipal bond for $800. Turbotax deluxe federal e file state 2010 old version The face amount of the bond was $1,000. Turbotax deluxe federal e file state 2010 old version The $200 discount was OID. Turbotax deluxe federal e file state 2010 old version At the time the bond was issued, the issuer had no intention of redeeming it before it matured. Turbotax deluxe federal e file state 2010 old version The bond was callable at its face amount beginning 10 years after the issue date. Turbotax deluxe federal e file state 2010 old version The issuer redeemed the bond at the end of 11 years (July 2, 2013) for its face amount of $1,000 plus accrued annual interest of $60. Turbotax deluxe federal e file state 2010 old version The OID earned during the time you held the bond, $73, is not taxable. Turbotax deluxe federal e file state 2010 old version The $60 accrued annual interest also is not taxable. Turbotax deluxe federal e file state 2010 old version However, you must report the unearned part of OID ($127) as a capital gain. Turbotax deluxe federal e file state 2010 old version Long-term debt instruments issued after 1954 and before May 28, 1969 (or before July 2, 1982, if a government instrument). Turbotax deluxe federal e file state 2010 old version   If you sell, trade, or redeem for a gain one of these debt instruments, the part of your gain that is not more than your ratable share of the OID at the time of the sale or redemption is ordinary income. Turbotax deluxe federal e file state 2010 old version The rest of the gain is capital gain. Turbotax deluxe federal e file state 2010 old version If, however, there was an intention to call the debt instrument before maturity, all of your gain that is not more than the entire OID is treated as ordinary income at the time of the sale. Turbotax deluxe federal e file state 2010 old version This treatment of taxable gain also applies to corporate instruments issued after May 27, 1969, under a written commitment that was binding on May 27, 1969, and at all times thereafter. Turbotax deluxe federal e file state 2010 old version Long-term debt instruments issued after May 27, 1969 (or after July 1, 1982, if a government instrument). Turbotax deluxe federal e file state 2010 old version   If you hold one of these debt instruments, you must include a part of OID in your gross income each year you own the instrument. Turbotax deluxe federal e file state 2010 old version Your basis in that debt instrument is increased by the amount of OID that you have included in your gross income. Turbotax deluxe federal e file state 2010 old version See Original Issue Discount (OID) in chapter 7 for information about OID that you must report on your tax return. Turbotax deluxe federal e file state 2010 old version   If you sell or trade the debt instrument before maturity, your gain is a capital gain. Turbotax deluxe federal e file state 2010 old version However, if at the time the instrument was originally issued there was an intention to call it before its maturity, your gain generally is ordinary income to the extent of the entire OID reduced by any amounts of OID previously includible in your income. Turbotax deluxe federal e file state 2010 old version In this case, the rest of the gain is capital gain. Turbotax deluxe federal e file state 2010 old version Market discount bonds. Turbotax deluxe federal e file state 2010 old version   If the debt instrument has market discount and you chose to include the discount in income as it accrued, increase your basis in the debt instrument by the accrued discount to figure capital gain or loss on its disposition. Turbotax deluxe federal e file state 2010 old version If you did not choose to include the discount in income as it accrued, you must report gain as ordinary interest income up to the instrument's accrued market discount. Turbotax deluxe federal e file state 2010 old version The rest of the gain is capital gain. Turbotax deluxe federal e file state 2010 old version See Market Discount Bonds in chapter 1 of Publication 550. Turbotax deluxe federal e file state 2010 old version   A different rule applies to market discount bonds issued before July 19, 1984, and purchased by you before May 1, 1993. Turbotax deluxe federal e file state 2010 old version See Market discount bonds under Discounted Debt Instruments in chapter 4 of Publication 550. Turbotax deluxe federal e file state 2010 old version Retirement of debt instrument. Turbotax deluxe federal e file state 2010 old version   Any amount you receive on the retirement of a debt instrument is treated in the same way as if you had sold or traded that instrument. Turbotax deluxe federal e file state 2010 old version Notes of individuals. Turbotax deluxe federal e file state 2010 old version   If you hold an obligation of an individual issued with OID after March 1, 1984, you generally must include the OID in your income currently, and your gain or loss on its sale or retirement is generally capital gain or loss. Turbotax deluxe federal e file state 2010 old version An exception to this treatment applies if the obligation is a loan between individuals and all the following requirements are met. Turbotax deluxe federal e file state 2010 old version The lender is not in the business of lending money. Turbotax deluxe federal e file state 2010 old version The amount of the loan, plus the amount of any outstanding prior loans, is $10,000 or less. Turbotax deluxe federal e file state 2010 old version Avoiding federal tax is not one of the principal purposes of the loan. Turbotax deluxe federal e file state 2010 old version   If the exception applies, or the obligation was issued before March 2, 1984, you do not include the OID in your income currently. Turbotax deluxe federal e file state 2010 old version When you sell or redeem the obligation, the part of your gain that is not more than your accrued share of OID at that time is ordinary income. Turbotax deluxe federal e file state 2010 old version The rest of the gain, if any, is capital gain. Turbotax deluxe federal e file state 2010 old version Any loss on the sale or redemption is capital loss. Turbotax deluxe federal e file state 2010 old version Deposit in Insolvent or Bankrupt Financial Institution If you lose money you have on deposit in a bank, credit union, or other financial institution that becomes insolvent or bankrupt, you may be able to deduct your loss in one of three ways. Turbotax deluxe federal e file state 2010 old version Ordinary loss. Turbotax deluxe federal e file state 2010 old version Casualty loss. Turbotax deluxe federal e file state 2010 old version Nonbusiness bad debt (short-term capital loss). Turbotax deluxe federal e file state 2010 old version  For more information, see Deposit in Insolvent or Bankrupt Financial Institution, in chapter 4 of Publication 550. Turbotax deluxe federal e file state 2010 old version Sale of Annuity The part of any gain on the sale of an annuity contract before its maturity date that is based on interest accumulated on the contract is ordinary income. Turbotax deluxe federal e file state 2010 old version Losses on Section 1244 (Small Business) Stock You can deduct as an ordinary loss, rather than as a capital loss, your loss on the sale, trade, or worthlessness of section 1244 stock. Turbotax deluxe federal e file state 2010 old version Report the loss on Form 4797, line 10. Turbotax deluxe federal e file state 2010 old version Any gain on section 1244 stock is a capital gain if the stock is a capital asset in your hands. Turbotax deluxe federal e file state 2010 old version Report the gain on Form 8949. Turbotax deluxe federal e file state 2010 old version See Losses on Section 1244 (Small Business) Stock in chapter 4 of Publication 550. Turbotax deluxe federal e file state 2010 old version For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. Turbotax deluxe federal e file state 2010 old version See also Schedule D (Form 1040), Form 8949, and their separate instructions. Turbotax deluxe federal e file state 2010 old version Holding Period If you sold or traded investment property, you must determine your holding period for the property. Turbotax deluxe federal e file state 2010 old version Your holding period determines whether any capital gain or loss was a short-term or long-term capital gain or loss. Turbotax deluxe federal e file state 2010 old version Long-term or short-term. Turbotax deluxe federal e file state 2010 old version   If you hold investment property more than 1 year, any capital gain or loss is a long-term capital gain or loss. Turbotax deluxe federal e file state 2010 old version If you hold the property 1 year or less, any capital gain or loss is a short-term capital gain or loss. Turbotax deluxe federal e file state 2010 old version   To determine how long you held the investment property, begin counting on the date after the day you acquired the property. Turbotax deluxe federal e file state 2010 old version The day you disposed of the property is part of your holding period. Turbotax deluxe federal e file state 2010 old version Example. Turbotax deluxe federal e file state 2010 old version If you bought investment property on February 6, 2012, and sold it on February 6, 2013, your holding period is not more than 1 year and you have a short-term capital gain or loss. Turbotax deluxe federal e file state 2010 old version If you sold it on February 7, 2013, your holding period is more than 1 year and you will have a long-term capital gain or loss. Turbotax deluxe federal e file state 2010 old version Securities traded on established market. Turbotax deluxe federal e file state 2010 old version   For securities traded on an established securities market, your holding period begins the day after the trade date you bought the securities, and ends on the trade date you sold them. Turbotax deluxe federal e file state 2010 old version    Do not confuse the trade date with the settlement date, which is the date by which the stock must be delivered and payment must be made. Turbotax deluxe federal e file state 2010 old version Example. Turbotax deluxe federal e file state 2010 old version You are a cash method, calendar year taxpayer. Turbotax deluxe federal e file state 2010 old version You sold stock at a gain on December 30, 2013. Turbotax deluxe federal e file state 2010 old version According to the rules of the stock exchange, the sale was closed by delivery of the stock 4 trading days after the sale, on January 6, 2014. Turbotax deluxe federal e file state 2010 old version You received payment of the sales price on that same day. Turbotax deluxe federal e file state 2010 old version Report your gain on your 2013 return, even though you received the payment in 2014. Turbotax deluxe federal e file state 2010 old version The gain is long term or short term depending on whether you held the stock more than 1 year. Turbotax deluxe federal e file state 2010 old version Your holding period ended on December 30. Turbotax deluxe federal e file state 2010 old version If you had sold the stock at a loss, you would also report it on your 2013 return. Turbotax deluxe federal e file state 2010 old version U. Turbotax deluxe federal e file state 2010 old version S. Turbotax deluxe federal e file state 2010 old version Treasury notes and bonds. Turbotax deluxe federal e file state 2010 old version   The holding period of U. Turbotax deluxe federal e file state 2010 old version S. Turbotax deluxe federal e file state 2010 old version Treasury notes and bonds sold at auction on the basis of yield starts the day after the Secretary of the Treasury, through news releases, gives notification of acceptance to successful bidders. Turbotax deluxe federal e file state 2010 old version The holding period of U. Turbotax deluxe federal e file state 2010 old version S. Turbotax deluxe federal e file state 2010 old version Treasury notes and bonds sold through an offering on a subscription basis at a specified yield starts the day after the subscription is submitted. Turbotax deluxe federal e file state 2010 old version Automatic investment service. Turbotax deluxe federal e file state 2010 old version   In determining your holding period for shares bought by the bank or other agent, full shares are considered bought first and any fractional shares are considered bought last. Turbotax deluxe federal e file state 2010 old version Your holding period starts on the day after the bank's purchase date. Turbotax deluxe federal e file state 2010 old version If a share was bought over more than one purchase date, your holding period for that share is a split holding period. Turbotax deluxe federal e file state 2010 old version A part of the share is considered to have been bought on each date that stock was bought by the bank with the proceeds of available funds. Turbotax deluxe federal e file state 2010 old version Nontaxable trades. Turbotax deluxe federal e file state 2010 old version   If you acquire investment property in a trade for other investment property and your basis for the new property is determined, in whole or in part, by your basis in the old property, your holding period for the new property begins on the day following the date you acquired the old property. Turbotax deluxe federal e file state 2010 old version Property received as a gift. Turbotax deluxe federal e file state 2010 old version   If you receive a gift of property and your basis is determined by the donor's adjusted basis, your holding period is considered to have started on the same day the donor's holding period started. Turbotax deluxe federal e file state 2010 old version   If your basis is determined by the fair market value of the property, your holding period starts on the day after the date of the gift. Turbotax deluxe federal e file state 2010 old version Inherited property. Turbotax deluxe federal e file state 2010 old version   Generally, if you inherited investment property, your capital gain or loss on any later disposition of that property is long-term capital gain or loss. Turbotax deluxe federal e file state 2010 old version This is true regardless of how long you actually held the property. Turbotax deluxe federal e file state 2010 old version However, if you inherited property from someone who died in 2010, see the information below. Turbotax deluxe federal e file state 2010 old version Inherited property from someone who died in 2010. Turbotax deluxe federal e file state 2010 old version   If you inherit investment property from a decedent who died in 2010, and the executor of the decedent's estate made the election to file Form 8939, refer to the information provided by the executor or see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, to determine your holding period. Turbotax deluxe federal e file state 2010 old version Real property bought. Turbotax deluxe federal e file state 2010 old version   To figure how long you have held real property bought under an unconditional contract, begin counting on the day after you received title to it or on the day after you took possession of it and assumed the burdens and privileges of ownership, whichever happened first. Turbotax deluxe federal e file state 2010 old version However, taking delivery or possession of real property under an option agreement is not enough to start the holding period. Turbotax deluxe federal e file state 2010 old version The holding period cannot start until there is an actual contract of sale. Turbotax deluxe federal e file state 2010 old version The holding period of the seller cannot end before that time. Turbotax deluxe federal e file state 2010 old version Real property repossessed. Turbotax deluxe federal e file state 2010 old version   If you sell real property but keep a security interest in it, and then later repossess the property under the terms of the sales contract, your holding period for a later sale includes the period you held the property before the original sale and the period after the repossession. Turbotax deluxe federal e file state 2010 old version Your holding period does not include the time between the original sale and the repossession. Turbotax deluxe federal e file state 2010 old version That is, it does not include the period during which the first buyer held the property. Turbotax deluxe federal e file state 2010 old version Stock dividends. Turbotax deluxe federal e file state 2010 old version   The holding period for stock you received as a taxable stock dividend begins on the date of distribution. Turbotax deluxe federal e file state 2010 old version   The holding period for new stock you received as a nontaxable stock dividend begins on the same day as the holding period of the old stock. Turbotax deluxe federal e file state 2010 old version This rule also applies to stock acquired in a “spin-off,” which is a distribution of stock or securities in a controlled corporation. Turbotax deluxe federal e file state 2010 old version Nontaxable stock rights. Turbotax deluxe federal e file state 2010 old version   Your holding period for nontaxable stock rights begins on the same day as the holding period of the underlying stock. Turbotax deluxe federal e file state 2010 old version The holding period for stock acquired through the exercise of stock rights begins on the date the right was exercised. Turbotax deluxe federal e file state 2010 old version Nonbusiness Bad Debts If someone owes you money that you cannot collect, you have a bad debt. Turbotax deluxe federal e file state 2010 old version You may be able to deduct the amount owed to you when you figure your tax for the year the debt becomes worthless. Turbotax deluxe federal e file state 2010 old version Generally, nonbusiness bad debts are bad debts that did not come from operating your trade or business, and are deductible as short-term capital losses. Turbotax deluxe federal e file state 2010 old version To be deductible, nonbusiness bad debts must be totally worthless. Turbotax deluxe federal e file state 2010 old version You cannot deduct a partly worthless nonbusiness debt. Turbotax deluxe federal e file state 2010 old version Genuine debt required. Turbotax deluxe federal e file state 2010 old version   A debt must be genuine for you to deduct a loss. Turbotax deluxe federal e file state 2010 old version A debt is genuine if it arises from a debtor-creditor relationship based on a valid and enforceable obligation to repay a fixed or determinable sum of money. Turbotax deluxe federal e file state 2010 old version Basis in bad debt required. Turbotax deluxe federal e file state 2010 old version    To deduct a bad debt, you must have a basis in it—that is, you must have already included the amount in your income or loaned out your cash. Turbotax deluxe federal e file state 2010 old version For example, you cannot claim a bad debt deduction for court-ordered child support not paid to you by your former spouse. Turbotax deluxe federal e file state 2010 old version If you are a cash method taxpayer (as most individuals are), you generally cannot take a bad debt deduction for unpaid salaries, wages, rents, fees, interest, dividends, and similar items. Turbotax deluxe federal e file state 2010 old version When deductible. Turbotax deluxe federal e file state 2010 old version   You can take a bad debt deduction only in the year the debt becomes worthless. Turbotax deluxe federal e file state 2010 old version You do not have to wait until a debt is due to determine whether it is worthless. Turbotax deluxe federal e file state 2010 old version A debt becomes worthless when there is no longer any chance that the amount owed will be paid. Turbotax deluxe federal e file state 2010 old version   It is not necessary to go to court if you can show that a judgment from the court would be uncollectible. Turbotax deluxe federal e file state 2010 old version You must only show that you have taken reasonable steps to collect the debt. Turbotax deluxe federal e file state 2010 old version Bankruptcy of your debtor is generally good evidence of the worthlessness of at least a part of an unsecured and unpreferred debt. Turbotax deluxe federal e file state 2010 old version How to report bad debts. Turbotax deluxe federal e file state 2010 old version    Deduct nonbusiness bad debts as short-term capital losses on Form 8949. Turbotax deluxe federal e file state 2010 old version    Make sure you report your bad debt(s) (and any other short-term transactions for which you did not receive a Form 1099-B) on Form 8949, Part I, with box C checked. Turbotax deluxe federal e file state 2010 old version    For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. Turbotax deluxe federal e file state 2010 old version See also Schedule D (Form 1040), Form 8949, and their separate instructions. Turbotax deluxe federal e file state 2010 old version   For each bad debt, attach a statement to your return that contains: A description of the debt, including the amount, and the date it became due, The name of the debtor, and any business or family relationship between you and the debtor, The efforts you made to collect the debt, and Why you decided the debt was worthless. Turbotax deluxe federal e file state 2010 old version For example, you could show that the borrower has declared bankruptcy, or that legal action to collect would probably not result in payment of any part of the debt. Turbotax deluxe federal e file state 2010 old version Filing a claim for refund. Turbotax deluxe federal e file state 2010 old version    If you do not deduct a bad debt on your original return for the year it becomes worthless, you can file a claim for a credit or refund due to the bad debt. Turbotax deluxe federal e file state 2010 old version To do this, use Form 1040X to amend your return for the year the debt became worthless. Turbotax deluxe federal e file state 2010 old version You must file it within 7 years from the date your original return for that year had to be filed, or 2 years from the date you paid the tax, whichever is later. Turbotax deluxe federal e file state 2010 old version For more information about filing a claim, see Amended Returns and Claims for Refund in chapter 1. Turbotax deluxe federal e file state 2010 old version Additional information. Turbotax deluxe federal e file state 2010 old version   For more information, see Nonbusiness Bad Debts in Publication 550. Turbotax deluxe federal e file state 2010 old version For information on business bad debts, see chapter 10 of Publication 535, Business Expenses. Turbotax deluxe federal e file state 2010 old version Wash Sales You cannot deduct losses from sales or trades of stock or securities in a wash sale. Turbotax deluxe federal e file state 2010 old version A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you: Buy substantially identical stock or securities, Acquire substantially identical stock or securities in a fully taxable trade, Acquire a contract or option to buy substantially identical stock or securities, or Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA. Turbotax deluxe federal e file state 2010 old version If your loss was disallowed because of the wash sale rules, add the disallowed loss to the cost of the new stock or securities (except in (4) above). Turbotax deluxe federal e file state 2010 old version The result is your basis in the new stock or securities. Turbotax deluxe federal e file state 2010 old version This adjustment postpones the loss deduction until the disposition of the new stock or securities. Turbotax deluxe federal e file state 2010 old version Your holding period for the new stock or securities includes the holding period of the stock or securities sold. Turbotax deluxe federal e file state 2010 old version For more information, see Wash Sales, in chapter 4 of Publication 550. Turbotax deluxe federal e file state 2010 old version Rollover of Gain From Publicly Traded Securities You may qualify for a tax-free rollover of certain gains from the sale of publicly traded securities. Turbotax deluxe federal e file state 2010 old version This means that if you buy certain replacement property and make the choice described in this section, you postpone part or all of your gain. Turbotax deluxe federal e file state 2010 old version You postpone the gain by adjusting the basis of the replacement property as described in Basis of replacement property , later. Turbotax deluxe federal e file state 2010 old version This postpones your gain until the year you dispose of the replacement property. Turbotax deluxe federal e file state 2010 old version You qualify to make this choice if you meet all the following tests. Turbotax deluxe federal e file state 2010 old version You sell publicly traded securities at a gain. Turbotax deluxe federal e file state 2010 old version Publicly traded securities are securities traded on an established securities market. Turbotax deluxe federal e file state 2010 old version Your gain from the sale is a capital gain. Turbotax deluxe federal e file state 2010 old version During the 60-day period beginning on the date of the sale, you buy replacement property. Turbotax deluxe federal e file state 2010 old version This replacement property must be either common stock of, or a partnership interest in a specialized small business investment company (SSBIC). Turbotax deluxe federal e file state 2010 old version This is any partnership or corporation licensed by the Small Business Administration under section 301(d) of the Small Business Investment Act of 1958, as in effect on May 13, 1993. Turbotax deluxe federal e file state 2010 old version Amount of gain recognized. Turbotax deluxe federal e file state 2010 old version   If you make the choice described in this section, you must recognize gain only up to the following amount. Turbotax deluxe federal e file state 2010 old version The amount realized on the sale, minus The cost of any common stock or partnership interest in an SSBIC that you bought during the 60-day period beginning on the date of sale (and did not previously take into account on an earlier sale of publicly traded securities). Turbotax deluxe federal e file state 2010 old version  If this amount is less than the amount of your gain, you can postpone the rest of your gain, subject to the limit described next. Turbotax deluxe federal e file state 2010 old version If this amount is equal to or more than the amount of your gain, you must recognize the full amount of your gain. Turbotax deluxe federal e file state 2010 old version Limit on gain postponed. Turbotax deluxe federal e file state 2010 old version   The amount of gain you can postpone each year is limited to the smaller of: $50,000 ($25,000 if you are married and file a separate return), or $500,000 ($250,000 if you are married and file a separate return), minus the amount of gain you postponed for all earlier years. Turbotax deluxe federal e file state 2010 old version Basis of replacement property. Turbotax deluxe federal e file state 2010 old version   You must subtract the amount of postponed gain from the basis of your replacement property. Turbotax deluxe federal e file state 2010 old version How to report and postpone gain. Turbotax deluxe federal e file state 2010 old version    See How to report and postpone gain under Rollover of Gain From Publicly Traded Securities in chapter 4 of Publication 550 for details. Turbotax deluxe federal e file state 2010 old version Prev  Up  Next   Home   More Online Publications