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Turbotax premier federal e file state 2012 for pc download Publication 530 - Main Content Table of Contents What You Can and Cannot DeductHardest Hit Fund and Emergency Homeowners' Loan Programs Real Estate Taxes Sales Taxes Home Mortgage Interest Mortgage Insurance Premiums Mortgage Interest CreditFiguring the Credit BasisFiguring Your Basis Adjusted Basis Keeping Records How To Get Tax HelpLow Income Taxpayer Clinics What You Can and Cannot Deduct To deduct expenses of owning a home, you must file Form 1040, U. Turbotax premier federal e file state 2012 for pc download S. Turbotax premier federal e file state 2012 for pc download Individual Income Tax Return, and itemize your deductions on Schedule A (Form 1040). Turbotax premier federal e file state 2012 for pc download If you itemize, you cannot take the standard deduction. Turbotax premier federal e file state 2012 for pc download This section explains what expenses you can deduct as a homeowner. Turbotax premier federal e file state 2012 for pc download It also points out expenses that you cannot deduct. Turbotax premier federal e file state 2012 for pc download There are four primary discussions: real estate taxes, sales taxes, home mortgage interest, and mortgage insurance premiums. Turbotax premier federal e file state 2012 for pc download Generally, your real estate taxes, home mortgage interest, and mortgage insurance premiums are included in your house payment. Turbotax premier federal e file state 2012 for pc download Your house payment. Turbotax premier federal e file state 2012 for pc download   If you took out a mortgage (loan) to finance the purchase of your home, you probably have to make monthly house payments. Turbotax premier federal e file state 2012 for pc download Your house payment may include several costs of owning a home. Turbotax premier federal e file state 2012 for pc download The only costs you can deduct are real estate taxes actually paid to the taxing authority, interest that qualifies as home mortgage interest, and mortgage insurance premiums. Turbotax premier federal e file state 2012 for pc download These are discussed in more detail later. Turbotax premier federal e file state 2012 for pc download   Some nondeductible expenses that may be included in your house payment include: Fire or homeowner's insurance premiums, and The amount applied to reduce the principal of the mortgage. Turbotax premier federal e file state 2012 for pc download Minister's or military housing allowance. Turbotax premier federal e file state 2012 for pc download   If you are a minister or a member of the uniformed services and receive a housing allowance that is not taxable, you still can deduct your real estate taxes and your home mortgage interest. Turbotax premier federal e file state 2012 for pc download You do not have to reduce your deductions by your nontaxable allowance. Turbotax premier federal e file state 2012 for pc download For more information see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers, and Publication 3, Armed Forces' Tax Guide. Turbotax premier federal e file state 2012 for pc download Nondeductible payments. Turbotax premier federal e file state 2012 for pc download   You cannot deduct any of the following items. Turbotax premier federal e file state 2012 for pc download Insurance (other than mortgage insurance premiums), including fire and comprehensive coverage, and title insurance. Turbotax premier federal e file state 2012 for pc download Wages you pay for domestic help. Turbotax premier federal e file state 2012 for pc download Depreciation. Turbotax premier federal e file state 2012 for pc download The cost of utilities, such as gas, electricity, or water. Turbotax premier federal e file state 2012 for pc download Most settlement costs. Turbotax premier federal e file state 2012 for pc download See Settlement or closing costs under Cost as Basis, later, for more information. Turbotax premier federal e file state 2012 for pc download Forfeited deposits, down payments, or earnest money. Turbotax premier federal e file state 2012 for pc download Hardest Hit Fund and Emergency Homeowners' Loan Programs You can use a special method to compute your deduction for mortgage interest and real estate taxes on your main home if you meet the following two conditions. Turbotax premier federal e file state 2012 for pc download You received assistance under: A State Housing Finance Agency (State HFA) Hardest Hit Fund program in which program payments could be used to pay mortgage interest, or An Emergency Homeowners' Loan Program administered by the Department of Housing and Urban Development (HUD) or a state. Turbotax premier federal e file state 2012 for pc download You meet the rules to deduct all of the mortgage interest on your loan and all of the real estate taxes on your main home. Turbotax premier federal e file state 2012 for pc download If you meet these tests, then you can deduct all of the payments you actually made during the year to your mortgage servicer, the State HFA, or HUD on the home mortgage (including the amount shown on box 3 of Form 1098-MA, Mortgage Assistance Payments), but not more than the sum of the amounts shown on Form 1098, Mortgage Interest Statement, in box 1 (mortgage interest received), box 4 (mortgage insurance premiums) and box 5 (real property taxes). Turbotax premier federal e file state 2012 for pc download However, you are not required to use this special method to compute your deduction for mortgage interest and real estate taxes on your main home. Turbotax premier federal e file state 2012 for pc download Real Estate Taxes Most state and local governments charge an annual tax on the value of real property. Turbotax premier federal e file state 2012 for pc download This is called a real estate tax. Turbotax premier federal e file state 2012 for pc download You can deduct the tax if it is assessed uniformly at a like rate on all real property throughout the community. Turbotax premier federal e file state 2012 for pc download The proceeds must be for general community or governmental purposes and not be a payment for a special privilege granted or service rendered to you. Turbotax premier federal e file state 2012 for pc download Deductible Real Estate Taxes You can deduct real estate taxes imposed on you. Turbotax premier federal e file state 2012 for pc download You must have paid them either at settlement or closing, or to a taxing authority (either directly or through an escrow account) during the year. Turbotax premier federal e file state 2012 for pc download If you own a cooperative apartment, see Special Rules for Cooperatives , later. Turbotax premier federal e file state 2012 for pc download Where to deduct real estate taxes. Turbotax premier federal e file state 2012 for pc download   Enter the amount of your deductible real estate taxes on Schedule A (Form 1040), line 6. Turbotax premier federal e file state 2012 for pc download Real estate taxes paid at settlement or closing. Turbotax premier federal e file state 2012 for pc download   Real estate taxes are generally divided so that you and the seller each pay taxes for the part of the property tax year you owned the home. Turbotax premier federal e file state 2012 for pc download Your share of these taxes is fully deductible if you itemize your deductions. Turbotax premier federal e file state 2012 for pc download Division of real estate taxes. Turbotax premier federal e file state 2012 for pc download   For federal income tax purposes, the seller is treated as paying the property taxes up to, but not including, the date of sale. Turbotax premier federal e file state 2012 for pc download You (the buyer) are treated as paying the taxes beginning with the date of sale. Turbotax premier federal e file state 2012 for pc download This applies regardless of the lien dates under local law. Turbotax premier federal e file state 2012 for pc download Generally, this information is included on the settlement statement you get at closing. Turbotax premier federal e file state 2012 for pc download   You and the seller each are considered to have paid your own share of the taxes, even if one or the other paid the entire amount. Turbotax premier federal e file state 2012 for pc download You each can deduct your own share, if you itemize deductions, for the year the property is sold. Turbotax premier federal e file state 2012 for pc download Example. Turbotax premier federal e file state 2012 for pc download You bought your home on September 1. Turbotax premier federal e file state 2012 for pc download The property tax year (the period to which the tax relates) in your area is the calendar year. Turbotax premier federal e file state 2012 for pc download The tax for the year was $730 and was due and paid by the seller on August 15. Turbotax premier federal e file state 2012 for pc download You owned your new home during the property tax year for 122 days (September 1 to December 31, including your date of purchase). Turbotax premier federal e file state 2012 for pc download You figure your deduction for real estate taxes on your home as follows. Turbotax premier federal e file state 2012 for pc download 1. Turbotax premier federal e file state 2012 for pc download Enter the total real estate taxes for the real property tax year $730 2. Turbotax premier federal e file state 2012 for pc download Enter the number of days in the property tax year that you owned the property 122 3. Turbotax premier federal e file state 2012 for pc download Divide line 2 by 365 . Turbotax premier federal e file state 2012 for pc download 3342 4. Turbotax premier federal e file state 2012 for pc download Multiply line 1 by line 3. Turbotax premier federal e file state 2012 for pc download This is your deduction. Turbotax premier federal e file state 2012 for pc download Enter it on Schedule A (Form 1040), line 6 $244   You can deduct $244 on your return for the year if you itemize your deductions. Turbotax premier federal e file state 2012 for pc download You are considered to have paid this amount and can deduct it on your return even if, under the contract, you did not have to reimburse the seller. Turbotax premier federal e file state 2012 for pc download Delinquent taxes. Turbotax premier federal e file state 2012 for pc download   Delinquent taxes are unpaid taxes that were imposed on the seller for an earlier tax year. Turbotax premier federal e file state 2012 for pc download If you agree to pay delinquent taxes when you buy your home, you cannot deduct them. Turbotax premier federal e file state 2012 for pc download You treat them as part of the cost of your home. Turbotax premier federal e file state 2012 for pc download See Real estate taxes , later, under Basis. Turbotax premier federal e file state 2012 for pc download Escrow accounts. Turbotax premier federal e file state 2012 for pc download   Many monthly house payments include an amount placed in escrow (put in the care of a third party) for real estate taxes. Turbotax premier federal e file state 2012 for pc download You may not be able to deduct the total you pay into the escrow account. Turbotax premier federal e file state 2012 for pc download You can deduct only the real estate taxes that the lender actually paid from escrow to the taxing authority. Turbotax premier federal e file state 2012 for pc download Your real estate tax bill will show this amount. Turbotax premier federal e file state 2012 for pc download Refund or rebate of real estate taxes. Turbotax premier federal e file state 2012 for pc download   If you receive a refund or rebate of real estate taxes this year for amounts you paid this year, you must reduce your real estate tax deduction by the amount refunded to you. Turbotax premier federal e file state 2012 for pc download If the refund or rebate was for real estate taxes paid for a prior year, you may have to include some or all of the refund in your income. Turbotax premier federal e file state 2012 for pc download For more information, see Recoveries in Publication 525, Taxable and Nontaxable Income. Turbotax premier federal e file state 2012 for pc download Items You Cannot Deduct as Real Estate Taxes The following items are not deductible as real estate taxes. Turbotax premier federal e file state 2012 for pc download Charges for services. Turbotax premier federal e file state 2012 for pc download   An itemized charge for services to specific property or people is not a tax, even if the charge is paid to the taxing authority. Turbotax premier federal e file state 2012 for pc download You cannot deduct the charge as a real estate tax if it is: A unit fee for the delivery of a service (such as a $5 fee charged for every 1,000 gallons of water you use), A periodic charge for a residential service (such as a $20 per month or $240 annual fee charged for trash collection), or A flat fee charged for a single service provided by your local government (such as a $30 charge for mowing your lawn because it had grown higher than permitted under a local ordinance). Turbotax premier federal e file state 2012 for pc download    You must look at your real estate tax bill to decide if any nondeductible itemized charges, such as those listed above, are included in the bill. Turbotax premier federal e file state 2012 for pc download If your taxing authority (or lender) does not furnish you a copy of your real estate tax bill, ask for it. Turbotax premier federal e file state 2012 for pc download Contact the taxing authority if you need additional information about a specific charge on your real estate tax bill. Turbotax premier federal e file state 2012 for pc download Assessments for local benefits. Turbotax premier federal e file state 2012 for pc download   You cannot deduct amounts you pay for local benefits that tend to increase the value of your property. Turbotax premier federal e file state 2012 for pc download Local benefits include the construction of streets, sidewalks, or water and sewer systems. Turbotax premier federal e file state 2012 for pc download You must add these amounts to the basis of your property. Turbotax premier federal e file state 2012 for pc download   You can, however, deduct assessments (or taxes) for local benefits if they are for maintenance, repair, or interest charges related to those benefits. Turbotax premier federal e file state 2012 for pc download An example is a charge to repair an existing sidewalk and any interest included in that charge. Turbotax premier federal e file state 2012 for pc download   If only a part of the assessment is for maintenance, repair, or interest charges, you must be able to show the amount of that part to claim the deduction. Turbotax premier federal e file state 2012 for pc download If you cannot show what part of the assessment is for maintenance, repair, or interest charges, you cannot deduct any of it. Turbotax premier federal e file state 2012 for pc download   An assessment for a local benefit may be listed as an item in your real estate tax bill. Turbotax premier federal e file state 2012 for pc download If so, use the rules in this section to find how much of it, if any, you can deduct. Turbotax premier federal e file state 2012 for pc download Transfer taxes (or stamp taxes). Turbotax premier federal e file state 2012 for pc download   You cannot deduct transfer taxes and similar taxes and charges on the sale of a personal home. Turbotax premier federal e file state 2012 for pc download If you are the buyer and you pay them, include them in the cost basis of the property. Turbotax premier federal e file state 2012 for pc download If you are the seller and you pay them, they are expenses of the sale and reduce the amount realized on the sale. Turbotax premier federal e file state 2012 for pc download Homeowners association assessments. Turbotax premier federal e file state 2012 for pc download   You cannot deduct these assessments because the homeowners association, rather than a state or local government, imposes them. Turbotax premier federal e file state 2012 for pc download Special Rules for Cooperatives If you own a cooperative apartment, some special rules apply to you, though you generally receive the same tax treatment as other homeowners. Turbotax premier federal e file state 2012 for pc download As an owner of a cooperative apartment, you own shares of stock in a corporation that owns or leases housing facilities. Turbotax premier federal e file state 2012 for pc download You can deduct your share of the corporation's deductible real estate taxes if the cooperative housing corporation meets the following conditions: The corporation has only one class of stock outstanding, Each stockholder, solely because of ownership of the stock, can live in a house, apartment, or house trailer owned or leased by the corporation, No stockholder can receive any distribution out of capital, except on a partial or complete liquidation of the corporation, and At least one of the following: At least 80% of the corporation's gross income for the tax year was paid by the tenant-stockholders. Turbotax premier federal e file state 2012 for pc download For this purpose, gross income means all income received during the entire tax year, including any received before the corporation changed to cooperative ownership. Turbotax premier federal e file state 2012 for pc download At least 80% of the total square footage of the corporation's property must be available for use by the tenant-stockholders during the entire tax year. Turbotax premier federal e file state 2012 for pc download At least 90% of the expenditures paid or incurred by the corporation were used for the acquisition, construction, management, maintenance, or care of the property for the benefit of the tenant-shareholders during the entire tax year. Turbotax premier federal e file state 2012 for pc download Tenant-stockholders. Turbotax premier federal e file state 2012 for pc download   A tenant-stockholder can be any entity (such as a corporation, trust, estate, partnership, or association) as well as an individual. Turbotax premier federal e file state 2012 for pc download The tenant-stockholder does not have to live in any of the cooperative's dwelling units. Turbotax premier federal e file state 2012 for pc download The units that the tenant-stockholder has the right to occupy can be rented to others. Turbotax premier federal e file state 2012 for pc download Deductible taxes. Turbotax premier federal e file state 2012 for pc download   You figure your share of real estate taxes in the following way. Turbotax premier federal e file state 2012 for pc download Divide the number of your shares of stock by the total number of shares outstanding, including any shares held by the corporation. Turbotax premier federal e file state 2012 for pc download Multiply the corporation's deductible real estate taxes by the number you figured in (1). Turbotax premier federal e file state 2012 for pc download This is your share of the real estate taxes. Turbotax premier federal e file state 2012 for pc download   Generally, the corporation will tell you your share of its real estate tax. Turbotax premier federal e file state 2012 for pc download This is the amount you can deduct if it reasonably reflects the cost of real estate taxes for your dwelling unit. Turbotax premier federal e file state 2012 for pc download Refund of real estate taxes. Turbotax premier federal e file state 2012 for pc download   If the corporation receives a refund of real estate taxes it paid in an earlier year, it must reduce the amount of real estate taxes paid this year when it allocates the tax expense to you. Turbotax premier federal e file state 2012 for pc download Your deduction for real estate taxes the corporation paid this year is reduced by your share of the refund the corporation received. Turbotax premier federal e file state 2012 for pc download Sales Taxes Generally, you can elect to deduct state and local general sales taxes instead of state and local income taxes as an itemized deduction on Schedule A (Form 1040). Turbotax premier federal e file state 2012 for pc download Deductible sales taxes may include sales taxes paid on your home (including mobile and prefabricated), or home building materials if the tax rate was the same as the general sales tax rate. Turbotax premier federal e file state 2012 for pc download For information on figuring your deduction, see the Instructions for Schedule A (Form 1040). Turbotax premier federal e file state 2012 for pc download If you elect to deduct the sales taxes paid on your home, or home building materials, you cannot include them as part of your cost basis in the home. Turbotax premier federal e file state 2012 for pc download Home Mortgage Interest This section of the publication gives you basic information about home mortgage interest, including information on interest paid at settlement, points, and Form 1098, Mortgage Interest Statement. Turbotax premier federal e file state 2012 for pc download Most home buyers take out a mortgage (loan) to buy their home. Turbotax premier federal e file state 2012 for pc download They then make monthly payments to either the mortgage holder or someone collecting the payments for the mortgage holder. Turbotax premier federal e file state 2012 for pc download Usually, you can deduct the entire part of your payment that is for mortgage interest, if you itemize your deductions on Schedule A (Form 1040). Turbotax premier federal e file state 2012 for pc download However, your deduction may be limited if: Your total mortgage balance is more than $1 million ($500,000 if married filing separately), or You took out a mortgage for reasons other than to buy, build, or improve your home. Turbotax premier federal e file state 2012 for pc download If either of these situations applies to you, see Publication 936 for more information. Turbotax premier federal e file state 2012 for pc download Also see Publication 936 if you later refinance your mortgage or buy a second home. Turbotax premier federal e file state 2012 for pc download Refund of home mortgage interest. Turbotax premier federal e file state 2012 for pc download   If you receive a refund of home mortgage interest that you deducted in an earlier year and that reduced your tax, you generally must include the refund in income in the year you receive it. Turbotax premier federal e file state 2012 for pc download For more information, see Recoveries in Publication 525. Turbotax premier federal e file state 2012 for pc download The amount of the refund will usually be shown on the mortgage interest statement you receive from your mortgage lender. Turbotax premier federal e file state 2012 for pc download See Mortgage Interest Statement , later. Turbotax premier federal e file state 2012 for pc download Deductible Mortgage Interest To be deductible, the interest you pay must be on a loan secured by your main home or a second home. Turbotax premier federal e file state 2012 for pc download The loan can be a first or second mortgage, a home improvement loan, or a home equity loan. Turbotax premier federal e file state 2012 for pc download Prepaid interest. Turbotax premier federal e file state 2012 for pc download   If you pay interest in advance for a period that goes beyond the end of the tax year, you must spread this interest over the tax years to which it applies. Turbotax premier federal e file state 2012 for pc download Generally, you can deduct in each year only the interest that qualifies as home mortgage interest for that year. Turbotax premier federal e file state 2012 for pc download An exception (discussed later) applies to points. Turbotax premier federal e file state 2012 for pc download Late payment charge on mortgage payment. Turbotax premier federal e file state 2012 for pc download   You can deduct as home mortgage interest a late payment charge if it was not for a specific service in connection with your mortgage loan. Turbotax premier federal e file state 2012 for pc download Mortgage prepayment penalty. Turbotax premier federal e file state 2012 for pc download   If you pay off your home mortgage early, you may have to pay a penalty. Turbotax premier federal e file state 2012 for pc download You can deduct that penalty as home mortgage interest provided the penalty is not for a specific service performed or cost incurred in connection with your mortgage loan. Turbotax premier federal e file state 2012 for pc download Ground rent. Turbotax premier federal e file state 2012 for pc download   In some states (such as Maryland), you may buy your home subject to a ground rent. Turbotax premier federal e file state 2012 for pc download A ground rent is an obligation you assume to pay a fixed amount per year on the property. Turbotax premier federal e file state 2012 for pc download Under this arrangement, you are leasing (rather than buying) the land on which your home is located. Turbotax premier federal e file state 2012 for pc download Redeemable ground rents. Turbotax premier federal e file state 2012 for pc download   If you make annual or periodic rental payments on a redeemable ground rent, you can deduct the payments as mortgage interest. Turbotax premier federal e file state 2012 for pc download The ground rent is a redeemable ground rent only if all of the following are true. Turbotax premier federal e file state 2012 for pc download Your lease, including renewal periods, is for more than 15 years. Turbotax premier federal e file state 2012 for pc download You can freely assign the lease. Turbotax premier federal e file state 2012 for pc download You have a present or future right (under state or local law) to end the lease and buy the lessor's entire interest in the land by paying a specified amount. Turbotax premier federal e file state 2012 for pc download The lessor's interest in the land is primarily a security interest to protect the rental payments to which he or she is entitled. Turbotax premier federal e file state 2012 for pc download   Payments made to end the lease and buy the lessor's entire interest in the land are not redeemable ground rents. Turbotax premier federal e file state 2012 for pc download You cannot deduct them. Turbotax premier federal e file state 2012 for pc download Nonredeemable ground rents. Turbotax premier federal e file state 2012 for pc download   Payments on a nonredeemable ground rent are not mortgage interest. Turbotax premier federal e file state 2012 for pc download You can deduct them as rent only if they are a business expense or if they are for rental property. Turbotax premier federal e file state 2012 for pc download Cooperative apartment. Turbotax premier federal e file state 2012 for pc download   You can usually treat the interest on a loan you took out to buy stock in a cooperative housing corporation as home mortgage interest if you own a cooperative apartment, and the cooperative housing corporation meets the conditions described earlier under Special Rules for Cooperatives . Turbotax premier federal e file state 2012 for pc download In addition, you can treat as home mortgage interest your share of the corporation's deductible mortgage interest. Turbotax premier federal e file state 2012 for pc download Figure your share of mortgage interest the same way that is shown for figuring your share of real estate taxes in the Example under Division of real estate taxes, earlier. Turbotax premier federal e file state 2012 for pc download For more information on cooperatives, see Special Rule for Tenant-Stockholders in Cooperative Housing Corporations in Publication 936. Turbotax premier federal e file state 2012 for pc download Refund of cooperative's mortgage interest. Turbotax premier federal e file state 2012 for pc download   You must reduce your mortgage interest deduction by your share of any cash portion of a patronage dividend that the cooperative receives. Turbotax premier federal e file state 2012 for pc download The patronage dividend is a partial refund to the cooperative housing corporation of mortgage interest it paid in a prior year. Turbotax premier federal e file state 2012 for pc download   If you receive a Form 1098 from the cooperative housing corporation, the form should show only the amount you can deduct. Turbotax premier federal e file state 2012 for pc download Mortgage Interest Paid at Settlement One item that normally appears on a settlement or closing statement is home mortgage interest. Turbotax premier federal e file state 2012 for pc download You can deduct the interest that you pay at settlement if you itemize your deductions on Schedule A (Form 1040). Turbotax premier federal e file state 2012 for pc download This amount should be included in the mortgage interest statement provided by your lender. Turbotax premier federal e file state 2012 for pc download See the discussion under Mortgage Interest Statement , later. Turbotax premier federal e file state 2012 for pc download Also, if you pay interest in advance, see Prepaid interest , earlier, and Points , next. Turbotax premier federal e file state 2012 for pc download Points The term “points” is used to describe certain charges paid, or treated as paid, by a borrower to obtain a home mortgage. Turbotax premier federal e file state 2012 for pc download Points also may be called loan origination fees, maximum loan charges, loan discount, or discount points. Turbotax premier federal e file state 2012 for pc download A borrower is treated as paying any points that a home seller pays for the borrower's mortgage. Turbotax premier federal e file state 2012 for pc download See Points paid by the seller , later. Turbotax premier federal e file state 2012 for pc download General rule. Turbotax premier federal e file state 2012 for pc download   You cannot deduct the full amount of points in the year paid. Turbotax premier federal e file state 2012 for pc download They are prepaid interest, so you generally must deduct them over the life (term) of the mortgage. Turbotax premier federal e file state 2012 for pc download Exception. Turbotax premier federal e file state 2012 for pc download   You can deduct the full amount of points in the year paid if you meet all the following tests. Turbotax premier federal e file state 2012 for pc download Your loan is secured by your main home. Turbotax premier federal e file state 2012 for pc download (Generally, your main home is the one you live in most of the time. Turbotax premier federal e file state 2012 for pc download ) Paying points is an established business practice in the area where the loan was made. Turbotax premier federal e file state 2012 for pc download The points paid were not more than the points generally charged in that area. Turbotax premier federal e file state 2012 for pc download You use the cash method of accounting. Turbotax premier federal e file state 2012 for pc download This means you report income in the year you receive it and deduct expenses in the year you pay them. Turbotax premier federal e file state 2012 for pc download Most individuals use this method. Turbotax premier federal e file state 2012 for pc download The points were not paid in place of amounts that ordinarily are stated separately on the settlement statement, such as appraisal fees, inspection fees, title fees, attorney fees, and property taxes. Turbotax premier federal e file state 2012 for pc download The funds you provided at or before closing, plus any points the seller paid, were at least as much as the points charged. Turbotax premier federal e file state 2012 for pc download The funds you provided are not required to have been applied to the points. Turbotax premier federal e file state 2012 for pc download They can include a down payment, an escrow deposit, earnest money, and other funds you paid at or before closing for any purpose. Turbotax premier federal e file state 2012 for pc download You cannot have borrowed these funds. Turbotax premier federal e file state 2012 for pc download You use your loan to buy or build your main home. Turbotax premier federal e file state 2012 for pc download The points were computed as a percentage of the principal amount of the mortgage. Turbotax premier federal e file state 2012 for pc download The amount is clearly shown on the settlement statement (such as the Uniform Settlement Statement, Form HUD-1) as points charged for the mortgage. Turbotax premier federal e file state 2012 for pc download The points may be shown as paid from either your funds or the seller's. Turbotax premier federal e file state 2012 for pc download Note. Turbotax premier federal e file state 2012 for pc download If you meet all of the tests listed above and you itemize your deductions in the year you get the loan, you can either deduct the full amount of points in the year paid or deduct them over the life of the loan, beginning in the year you get the loan. Turbotax premier federal e file state 2012 for pc download If you do not itemize your deductions in the year you get the loan, you can spread the points over the life of the loan and deduct the appropriate amount in each future year, if any, when you do itemize your deductions. Turbotax premier federal e file state 2012 for pc download Home improvement loan. Turbotax premier federal e file state 2012 for pc download   You can also fully deduct in the year paid points paid on a loan to improve your main home, if you meet the first six tests listed earlier. Turbotax premier federal e file state 2012 for pc download Refinanced loan. Turbotax premier federal e file state 2012 for pc download   If you use part of the refinanced mortgage proceeds to improve your main home and you meet the first six tests listed earlier, you can fully deduct the part of the points related to the improvement in the year you paid them with your own funds. Turbotax premier federal e file state 2012 for pc download You can deduct the rest of the points over the life of the loan. Turbotax premier federal e file state 2012 for pc download Points not fully deductible in year paid. Turbotax premier federal e file state 2012 for pc download    If you do not qualify under the exception to deduct the full amount of points in the year paid (or choose not to do so), see Points in Publication 936 for the rules on when and how much you can deduct. Turbotax premier federal e file state 2012 for pc download Figure A. Turbotax premier federal e file state 2012 for pc download   You can use Figure A, next, as a quick guide to see whether your points are fully deductible in the year paid. Turbotax premier federal e file state 2012 for pc download    Please click here for the text description of the image. Turbotax premier federal e file state 2012 for pc download Figure A. Turbotax premier federal e file state 2012 for pc download Are my points fully deductible this year? Amounts charged for services. Turbotax premier federal e file state 2012 for pc download   Amounts charged by the lender for specific services connected to the loan are not interest. Turbotax premier federal e file state 2012 for pc download Examples of these charges are: Appraisal fees, Notary fees, and Preparation costs for the mortgage note or deed of trust. Turbotax premier federal e file state 2012 for pc download You cannot deduct these amounts as points either in the year paid or over the life of the mortgage. Turbotax premier federal e file state 2012 for pc download For information about the tax treatment of these amounts and other settlement fees and closing costs, see Basis , later. Turbotax premier federal e file state 2012 for pc download Points paid by the seller. Turbotax premier federal e file state 2012 for pc download   The term “points” includes loan placement fees that the seller pays to the lender to arrange financing for the buyer. Turbotax premier federal e file state 2012 for pc download Treatment by seller. Turbotax premier federal e file state 2012 for pc download   The seller cannot deduct these fees as interest. Turbotax premier federal e file state 2012 for pc download However, they are a selling expense that reduces the seller's amount realized. Turbotax premier federal e file state 2012 for pc download See Publication 523 for more information. Turbotax premier federal e file state 2012 for pc download Treatment by buyer. Turbotax premier federal e file state 2012 for pc download   The buyer treats seller-paid points as if he or she had paid them. Turbotax premier federal e file state 2012 for pc download If all the tests listed earlier under Exception are met, the buyer can deduct the points in the year paid. Turbotax premier federal e file state 2012 for pc download If any of those tests are not met, the buyer must deduct the points over the life of the loan. Turbotax premier federal e file state 2012 for pc download   The buyer must also reduce the basis of the home by the amount of the seller-paid points. Turbotax premier federal e file state 2012 for pc download For more information about the basis of your home, see Basis , later. Turbotax premier federal e file state 2012 for pc download Funds provided are less than points. Turbotax premier federal e file state 2012 for pc download   If you meet all the tests listed earlier under Exception except that the funds you provided were less than the points charged to you (test 6), you can deduct the points in the year paid up to the amount of funds you provided. Turbotax premier federal e file state 2012 for pc download In addition, you can deduct any points paid by the seller. Turbotax premier federal e file state 2012 for pc download Example 1. Turbotax premier federal e file state 2012 for pc download When you took out a $100,000 mortgage loan to buy your home in December, you were charged one point ($1,000). Turbotax premier federal e file state 2012 for pc download You meet all the tests for deducting points in the year paid (see Exception , earlier), except the only funds you provided were a $750 down payment. Turbotax premier federal e file state 2012 for pc download Of the $1,000 you were charged for points, you can deduct $750 in the year paid. Turbotax premier federal e file state 2012 for pc download You spread the remaining $250 over the life of the mortgage. Turbotax premier federal e file state 2012 for pc download Example 2. Turbotax premier federal e file state 2012 for pc download The facts are the same as in Example 1 , except that the person who sold you your home also paid one point ($1,000) to help you get your mortgage. Turbotax premier federal e file state 2012 for pc download In the year paid, you can deduct $1,750 ($750 of the amount you were charged plus the $1,000 paid by the seller). Turbotax premier federal e file state 2012 for pc download You spread the remaining $250 over the life of the mortgage. Turbotax premier federal e file state 2012 for pc download You must reduce the basis of your home by the $1,000 paid by the seller. Turbotax premier federal e file state 2012 for pc download Excess points. Turbotax premier federal e file state 2012 for pc download   If you meet all the tests under Exception , earlier, except that the points paid were more than are generally charged in your area (test 3), you can deduct in the year paid only the points that are generally charged. Turbotax premier federal e file state 2012 for pc download You must spread any additional points over the life of the mortgage. Turbotax premier federal e file state 2012 for pc download Mortgage ending early. Turbotax premier federal e file state 2012 for pc download   If you spread your deduction for points over the life of the mortgage, you can deduct any remaining balance in the year the mortgage ends. Turbotax premier federal e file state 2012 for pc download A mortgage may end early due to a prepayment, refinancing, foreclosure, or similar event. Turbotax premier federal e file state 2012 for pc download Example. Turbotax premier federal e file state 2012 for pc download Dan paid $3,000 in points in 2006 that he had to spread out over the 15-year life of the mortgage. Turbotax premier federal e file state 2012 for pc download He had deducted $1,400 of these points through 2012. Turbotax premier federal e file state 2012 for pc download Dan prepaid his mortgage in full in 2013. Turbotax premier federal e file state 2012 for pc download He can deduct the remaining $1,600 of points in 2013. Turbotax premier federal e file state 2012 for pc download Exception. Turbotax premier federal e file state 2012 for pc download   If you refinance the mortgage with the same lender, you cannot deduct any remaining points for the year. Turbotax premier federal e file state 2012 for pc download Instead, deduct them over the term of the new loan. Turbotax premier federal e file state 2012 for pc download Form 1098. Turbotax premier federal e file state 2012 for pc download   The mortgage interest statement you receive should show not only the total interest paid during the year, but also your deductible points paid during the year. Turbotax premier federal e file state 2012 for pc download See Mortgage Interest Statement , later. Turbotax premier federal e file state 2012 for pc download Where To Deduct Home Mortgage Interest Enter on Schedule A (Form 1040), line 10, the home mortgage interest and points reported to you on Form 1098 (discussed next). Turbotax premier federal e file state 2012 for pc download If you did not receive a Form 1098, enter your deductible interest on line 11, and any deductible points on line 12. Turbotax premier federal e file state 2012 for pc download See Table 1 below for a summary of where to deduct home mortgage interest and real estate taxes. Turbotax premier federal e file state 2012 for pc download If you paid home mortgage interest to the person from whom you bought your home, show that person's name, address, and social security number (SSN) or employer identification number (EIN) on the dotted lines next to line 11. Turbotax premier federal e file state 2012 for pc download The seller must give you this number and you must give the seller your SSN. Turbotax premier federal e file state 2012 for pc download Form W-9, Request for Taxpayer Identification Number and Certification, can be used for this purpose. Turbotax premier federal e file state 2012 for pc download Failure to meet either of these requirements may result in a $50 penalty for each failure. Turbotax premier federal e file state 2012 for pc download Table 1. Turbotax premier federal e file state 2012 for pc download Where To Deduct Interest and Taxes Paid on Your Home See the text for information on what expenses are eligible. Turbotax premier federal e file state 2012 for pc download IF you are eligible to deduct . Turbotax premier federal e file state 2012 for pc download . Turbotax premier federal e file state 2012 for pc download . Turbotax premier federal e file state 2012 for pc download THEN report the amount  on Schedule A (Form 1040) . Turbotax premier federal e file state 2012 for pc download . Turbotax premier federal e file state 2012 for pc download . Turbotax premier federal e file state 2012 for pc download real estate taxes line 6. Turbotax premier federal e file state 2012 for pc download home mortgage interest and points reported on Form 1098 line 10. Turbotax premier federal e file state 2012 for pc download home mortgage interest not reported on  Form 1098 line 11. Turbotax premier federal e file state 2012 for pc download points not reported on Form 1098 line 12. Turbotax premier federal e file state 2012 for pc download qualified mortgage insurance premiums line 13. Turbotax premier federal e file state 2012 for pc download Mortgage Interest Statement If you paid $600 or more of mortgage interest (including certain points and mortgage insurance premiums) during the year on any one mortgage to a mortgage holder in the course of that holder's trade or business, you should receive a Form 1098 or similar statement from the mortgage holder. Turbotax premier federal e file state 2012 for pc download The statement will show the total interest paid on your mortgage during the year. Turbotax premier federal e file state 2012 for pc download If you bought a main home during the year, it also will show the deductible points you paid and any points you can deduct that were paid by the person who sold you your home. Turbotax premier federal e file state 2012 for pc download See Points , earlier. Turbotax premier federal e file state 2012 for pc download The interest you paid at settlement should be included on the statement. Turbotax premier federal e file state 2012 for pc download If it is not, add the interest from the settlement sheet that qualifies as home mortgage interest to the total shown on Form 1098 or similar statement. Turbotax premier federal e file state 2012 for pc download Put the total on Schedule A (Form 1040), line 10, and attach a statement to your return explaining the difference. Turbotax premier federal e file state 2012 for pc download Write “See attached” to the right of line 10. Turbotax premier federal e file state 2012 for pc download A mortgage holder can be a financial institution, a governmental unit, or a cooperative housing corporation. Turbotax premier federal e file state 2012 for pc download If a statement comes from a cooperative housing corporation, it generally will show your share of interest. Turbotax premier federal e file state 2012 for pc download Your mortgage interest statement for 2013 should be provided or sent to you by January 31, 2014. Turbotax premier federal e file state 2012 for pc download If it is mailed, you should allow adequate time to receive it before contacting the mortgage holder. Turbotax premier federal e file state 2012 for pc download A copy of this form will be sent to the IRS also. Turbotax premier federal e file state 2012 for pc download Example. Turbotax premier federal e file state 2012 for pc download You bought a new home on May 3. Turbotax premier federal e file state 2012 for pc download You paid no points on the purchase. Turbotax premier federal e file state 2012 for pc download During the year, you made mortgage payments which included $4,480 deductible interest on your new home. Turbotax premier federal e file state 2012 for pc download The settlement sheet for the purchase of the home included interest of $620 for 29 days in May. Turbotax premier federal e file state 2012 for pc download The mortgage statement you receive from the lender includes total interest of $5,100 ($4,480 + $620). Turbotax premier federal e file state 2012 for pc download You can deduct the $5,100 if you itemize your deductions. Turbotax premier federal e file state 2012 for pc download Refund of overpaid interest. Turbotax premier federal e file state 2012 for pc download   If you receive a refund of mortgage interest you overpaid in a prior year, you generally will receive a Form 1098 showing the refund in box 3. Turbotax premier federal e file state 2012 for pc download Generally, you must include the refund in income in the year you receive it. Turbotax premier federal e file state 2012 for pc download See Refund of home mortgage interest , earlier, under Home Mortgage Interest. Turbotax premier federal e file state 2012 for pc download More than one borrower. Turbotax premier federal e file state 2012 for pc download   If you and at least one other person (other than your spouse if you file a joint return) were liable for and paid interest on a mortgage that was for your home, and the other person received a Form 1098 showing the interest that was paid during the year, attach a statement to your return explaining this. Turbotax premier federal e file state 2012 for pc download Show how much of the interest each of you paid, and give the name and address of the person who received the form. Turbotax premier federal e file state 2012 for pc download Deduct your share of the interest on Schedule A (Form 1040), line 11, and write “See attached” to the right of that line. Turbotax premier federal e file state 2012 for pc download Mortgage Insurance Premiums You may be able to take an itemized deduction on Schedule A (Form 1040), line 13, for premiums you pay or accrue during 2013 for qualified mortgage insurance in connection with home acquisition debt on your qualified home. Turbotax premier federal e file state 2012 for pc download Mortgage insurance premiums you paid or accrued on any mortgage insurance contract issued before January 1, 2007, are not deductible as an itemized deduction. Turbotax premier federal e file state 2012 for pc download Qualified Mortgage Insurance Qualified mortgage insurance is mortgage insurance provided by the Veterans Administration, the Federal Housing Administration, or the Rural Housing Administration, and private mortgage insurance (as defined in section 2 of the Homeowners Protection Act of 1998 as in effect on December 20, 2006). Turbotax premier federal e file state 2012 for pc download Prepaid mortgage insurance premiums. Turbotax premier federal e file state 2012 for pc download   If you paid premiums that are allocable to periods after 2013, you must allocate them over the shorter of: The stated term of the mortgage, or 84 months, beginning with the month the insurance was obtained. Turbotax premier federal e file state 2012 for pc download The premiums are treated as paid in the year to which they were allocated. Turbotax premier federal e file state 2012 for pc download If the mortgage is satisfied before its term, no deduction is allowed for the unamortized balance. Turbotax premier federal e file state 2012 for pc download See Publication 936 for details. Turbotax premier federal e file state 2012 for pc download Exception for certain mortgage insurance. Turbotax premier federal e file state 2012 for pc download   The allocation rules, explained above, do not apply to qualified mortgage insurance provided by the Department of Veterans Affairs or Rural Housing Service. Turbotax premier federal e file state 2012 for pc download Home Acquisition Debt Home acquisition debt is a mortgage you took out after October 13, 1987, to buy, build, or substantially improve a qualified home. Turbotax premier federal e file state 2012 for pc download It also must be secured by that home. Turbotax premier federal e file state 2012 for pc download If the amount of your mortgage is more than the cost of the home plus the cost of any substantial improvements, only the debt that is not more than the cost of the home plus improvements qualifies as home acquisition debt. Turbotax premier federal e file state 2012 for pc download Home acquisition debt limit. Turbotax premier federal e file state 2012 for pc download   The total amount you can treat as home acquisition debt at any time on your home cannot be more than $1 million ($500,000 if married filing separately). Turbotax premier federal e file state 2012 for pc download Discharges of qualified principal residence indebtedness. Turbotax premier federal e file state 2012 for pc download   You can exclude from gross income any discharges of qualified principal residence indebtedness made after 2006 and before 2014. Turbotax premier federal e file state 2012 for pc download You must reduce the basis of your principal residence (but not below zero) by the amount you exclude. Turbotax premier federal e file state 2012 for pc download Principal residence. Turbotax premier federal e file state 2012 for pc download   Your principal residence is the home where you ordinarily live most of the time. Turbotax premier federal e file state 2012 for pc download You can have only one principal residence at any one time. Turbotax premier federal e file state 2012 for pc download Qualified principal residence indebtedness. Turbotax premier federal e file state 2012 for pc download   This is a mortgage that you took out to buy, build, or substantially improve your principal residence and that is secured by that residence. Turbotax premier federal e file state 2012 for pc download If the amount of your original mortgage is more than the cost of your principal residence plus the cost of substantial improvements, qualified principal residence indebtedness cannot be more than the cost of your principal residence plus improvements. Turbotax premier federal e file state 2012 for pc download   Any debt secured by your principal residence that you use to refinance qualified principal residence indebtedness is qualified principal residence indebtedness up to the amount of your old mortgage principal just before the refinancing. Turbotax premier federal e file state 2012 for pc download Additional debt incurred to substantially improve your principal residence is also qualified principal residence indebtedness. Turbotax premier federal e file state 2012 for pc download Amount you can exclude. Turbotax premier federal e file state 2012 for pc download   You can only exclude debt discharged after 2006 and before 2014. Turbotax premier federal e file state 2012 for pc download The most you can exclude is $2 million ($1 million if married filing separately). Turbotax premier federal e file state 2012 for pc download You cannot exclude any amount that was discharged because of services performed for the lender or on account of any other factor not directly related either to a decline in the value of your residence or to your financial condition. Turbotax premier federal e file state 2012 for pc download Ordering rule. Turbotax premier federal e file state 2012 for pc download   If only a part of a loan is qualified principal residence indebtedness, you can exclude only the amount of the discharge that is more than the amount of the loan (immediately before the discharge) that is not qualified principal residence indebtedness. Turbotax premier federal e file state 2012 for pc download Qualified Home This means your main home or your second home. Turbotax premier federal e file state 2012 for pc download A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities. Turbotax premier federal e file state 2012 for pc download Main home. Turbotax premier federal e file state 2012 for pc download   You can have only one main home at any one time. Turbotax premier federal e file state 2012 for pc download This is the home where you ordinarily live most of the time. Turbotax premier federal e file state 2012 for pc download Second home and other special situations. Turbotax premier federal e file state 2012 for pc download   If you have a second home, use part of your home for other than residential living (such as a home office), rent out part of your home, or are having your home constructed, see Qualified Home in Publication 936. Turbotax premier federal e file state 2012 for pc download Limit on Deduction If your adjusted gross income (AGI) on Form 1040, line 38, is more than $100,000 ($50,000 if your filing status is married filing separately), the amount of your mortgage insurance premiums that are deductible is reduced and may be eliminated. Turbotax premier federal e file state 2012 for pc download See Line 13 in the instructions for Schedule A (Form 1040) and complete the Mortgage Insurance Premiums Deduction Worksheet to figure the amount you can deduct. Turbotax premier federal e file state 2012 for pc download If your AGI is more than $109,000 ($54,500 if married filing separately), you cannot deduct your mortgage insurance premiums. Turbotax premier federal e file state 2012 for pc download Form 1098. Turbotax premier federal e file state 2012 for pc download   The amount of mortgage insurance premiums you paid during 2013 should be reported in box 4. Turbotax premier federal e file state 2012 for pc download See Form 1098, Mortgage Interest Statement in Publication 936. Turbotax premier federal e file state 2012 for pc download Mortgage Interest Credit The mortgage interest credit is intended to help lower-income individuals afford home ownership. Turbotax premier federal e file state 2012 for pc download If you qualify, you can claim the credit on Form 8396 each year for part of the home mortgage interest you pay. Turbotax premier federal e file state 2012 for pc download Who qualifies. Turbotax premier federal e file state 2012 for pc download   You may be eligible for the credit if you were issued a qualified Mortgage Credit Certificate (MCC) from your state or local government. Turbotax premier federal e file state 2012 for pc download Generally, an MCC is issued only in connection with a new mortgage for the purchase of your main home. Turbotax premier federal e file state 2012 for pc download The MCC will show the certificate credit rate you will use to figure your credit. Turbotax premier federal e file state 2012 for pc download It also will show the certified indebtedness amount. Turbotax premier federal e file state 2012 for pc download Only the interest on that amount qualifies for the credit. Turbotax premier federal e file state 2012 for pc download See Figuring the Credit , later. Turbotax premier federal e file state 2012 for pc download You must contact the appropriate government agency about getting an MCC before you get a mortgage and buy your home. Turbotax premier federal e file state 2012 for pc download Contact your state or local housing finance agency for information about the availability of MCCs in your area. Turbotax premier federal e file state 2012 for pc download How to claim the credit. Turbotax premier federal e file state 2012 for pc download   To claim the credit, complete Form 8396 and attach it to your Form 1040 or Form 1040NR, U. Turbotax premier federal e file state 2012 for pc download S. Turbotax premier federal e file state 2012 for pc download Nonresident Alien Income Tax Return. Turbotax premier federal e file state 2012 for pc download Include the credit in your total for Form 1040, line 53, or Form 1040NR, line 50; be sure to check box c and write “Form 8396” on that line. Turbotax premier federal e file state 2012 for pc download Reducing your home mortgage interest deduction. Turbotax premier federal e file state 2012 for pc download   If you itemize your deductions on Schedule A (Form 1040), you must reduce your home mortgage interest deduction by the amount of the mortgage interest credit shown on Form 8396, line 3. Turbotax premier federal e file state 2012 for pc download You must do this even if part of that amount is to be carried forward to 2014. Turbotax premier federal e file state 2012 for pc download Selling your home. Turbotax premier federal e file state 2012 for pc download   If you purchase a home after 1990 using an MCC, and you sell that home within 9 years, you may have to recapture (repay) all or part of the benefit you received from the MCC program. Turbotax premier federal e file state 2012 for pc download For additional information, see Recapturing (Paying Back) a Federal Mortgage Subsidy, in Publication 523. Turbotax premier federal e file state 2012 for pc download Figuring the Credit Figure your credit on Form 8396. Turbotax premier federal e file state 2012 for pc download Mortgage not more than certified indebtedness. Turbotax premier federal e file state 2012 for pc download   If your mortgage loan amount is equal to (or smaller than) the certified indebtedness amount shown on your MCC, enter on Form 8396, line 1, all the interest you paid on your mortgage during the year. Turbotax premier federal e file state 2012 for pc download Mortgage more than certified indebtedness. Turbotax premier federal e file state 2012 for pc download   If your mortgage loan amount is larger than the certified indebtedness amount shown on your MCC, you can figure the credit on only part of the interest you paid. Turbotax premier federal e file state 2012 for pc download To find the amount to enter on line 1, multiply the total interest you paid during the year on your mortgage by the following fraction. Turbotax premier federal e file state 2012 for pc download Certified indebtedness amount on your MCC Original amount of your mortgage   The fraction will not change as long as you are entitled to take the mortgage interest credit. Turbotax premier federal e file state 2012 for pc download Example. Turbotax premier federal e file state 2012 for pc download Emily bought a home this year. Turbotax premier federal e file state 2012 for pc download Her mortgage loan is $125,000. Turbotax premier federal e file state 2012 for pc download The certified indebtedness amount on her MCC is $100,000. Turbotax premier federal e file state 2012 for pc download She paid $7,500 interest this year. Turbotax premier federal e file state 2012 for pc download Emily figures the interest to enter on Form 8396, line 1, as follows:   $100,000 = 80% (. Turbotax premier federal e file state 2012 for pc download 80)       $125,000       $7,500 x . Turbotax premier federal e file state 2012 for pc download 80 = $6,000   Emily enters $6,000 on Form 8396, line 1. Turbotax premier federal e file state 2012 for pc download In each later year, she will figure her credit using only 80% of the interest she pays for that year. Turbotax premier federal e file state 2012 for pc download Limits Two limits may apply to your credit. Turbotax premier federal e file state 2012 for pc download A limit based on the credit rate, and A limit based on your tax. Turbotax premier federal e file state 2012 for pc download Limit based on credit rate. Turbotax premier federal e file state 2012 for pc download   If the certificate credit rate is higher than 20%, the credit you are allowed cannot be more than $2,000. Turbotax premier federal e file state 2012 for pc download Limit based on tax. Turbotax premier federal e file state 2012 for pc download   After applying the limit based on the credit rate, your credit generally cannot be more than your tax liability. Turbotax premier federal e file state 2012 for pc download See the Credit Limit Worksheet in the Form 8396 instructions to calculate the limit based on tax. Turbotax premier federal e file state 2012 for pc download Dividing the Credit If two or more persons (other than a married couple filing a joint return) hold an interest in the home to which the MCC relates, the credit must be divided based on the interest held by each person. Turbotax premier federal e file state 2012 for pc download Example. Turbotax premier federal e file state 2012 for pc download John and his brother, George, were issued an MCC. Turbotax premier federal e file state 2012 for pc download They used it to get a mortgage on their main home. Turbotax premier federal e file state 2012 for pc download John has a 60% ownership interest in the home, and George has a 40% ownership interest in the home. Turbotax premier federal e file state 2012 for pc download John paid $5,400 mortgage interest this year and George paid $3,600. Turbotax premier federal e file state 2012 for pc download The MCC shows a credit rate of 25% and a certified indebtedness amount of $130,000. Turbotax premier federal e file state 2012 for pc download The loan amount (mortgage) on their home is $120,000. Turbotax premier federal e file state 2012 for pc download The credit is limited to $2,000 because the credit rate is more than 20%. Turbotax premier federal e file state 2012 for pc download John figures the credit by multiplying the mortgage interest he paid this year ($5,400) by the certificate credit rate (25%) for a total of $1,350. Turbotax premier federal e file state 2012 for pc download His credit is limited to $1,200 ($2,000 × 60%). Turbotax premier federal e file state 2012 for pc download George figures the credit by multiplying the mortgage interest he paid this year ($3,600) by the certificate credit rate (25%) for a total of $900. Turbotax premier federal e file state 2012 for pc download His credit is limited to $800 ($2,000 × 40%). Turbotax premier federal e file state 2012 for pc download Carryforward If your allowable credit is reduced because of the limit based on your tax, you can carry forward the unused portion of the credit to the next 3 years or until used, whichever comes first. Turbotax premier federal e file state 2012 for pc download Example. Turbotax premier federal e file state 2012 for pc download You receive a mortgage credit certificate from State X. Turbotax premier federal e file state 2012 for pc download This year, your regular tax liability is $1,100, you owe no alternative minimum tax, and your mortgage interest credit is $1,700. Turbotax premier federal e file state 2012 for pc download You claim no other credits. Turbotax premier federal e file state 2012 for pc download Your unused mortgage interest credit for this year is $600 ($1,700 − $1,100). Turbotax premier federal e file state 2012 for pc download You can carry forward this amount to the next 3 years or until used, whichever comes first. Turbotax premier federal e file state 2012 for pc download Credit rate more than 20%. Turbotax premier federal e file state 2012 for pc download   If you are subject to the $2,000 limit because your certificate credit rate is more than 20%, you cannot carry forward any amount more than $2,000 (or your share of the $2,000 if you must divide the credit). Turbotax premier federal e file state 2012 for pc download Example. Turbotax premier federal e file state 2012 for pc download In the earlier example under Dividing the Credit , John and George used the entire $2,000 credit. Turbotax premier federal e file state 2012 for pc download The excess   John $1,350 − $1,200 = $150     George $900 − $800 = $100   $150 for John ($1,350 − $1,200) and $100 for George ($900 − $800) cannot be carried forward to future years, despite the respective tax liabilities for John and George. Turbotax premier federal e file state 2012 for pc download Refinancing If you refinance your original mortgage loan on which you had been given an MCC, you must get a new MCC to be able to claim the credit on the new loan. Turbotax premier federal e file state 2012 for pc download The amount of credit you can claim on the new loan may change. Turbotax premier federal e file state 2012 for pc download Table 2 below summarizes how to figure your credit if you refinance your original mortgage loan. Turbotax premier federal e file state 2012 for pc download Table 2. Turbotax premier federal e file state 2012 for pc download Effect of Refinancing on Your Credit IF you get a new (reissued) MCC and the amount of your new mortgage is . Turbotax premier federal e file state 2012 for pc download . Turbotax premier federal e file state 2012 for pc download . Turbotax premier federal e file state 2012 for pc download THEN the interest you claim on Form 8396, line 1, is* . Turbotax premier federal e file state 2012 for pc download . Turbotax premier federal e file state 2012 for pc download . Turbotax premier federal e file state 2012 for pc download smaller than or equal to the certified indebtedness amount on the new MCC all the interest paid during the year on your new mortgage. Turbotax premier federal e file state 2012 for pc download larger than the certified indebtedness amount on the new MCC interest paid during the year on your new mortgage multiplied by the following fraction. Turbotax premier federal e file state 2012 for pc download         certified indebtedness  amount on your new MCC       original amount of your  mortgage   *The credit using the new MCC cannot be more than the credit using the old MCC. Turbotax premier federal e file state 2012 for pc download  See New MCC cannot increase your credit above. Turbotax premier federal e file state 2012 for pc download An issuer may reissue an MCC after you refinance your mortgage. Turbotax premier federal e file state 2012 for pc download If you did not get a new MCC, you may want to contact the state or local housing finance agency that issued your original MCC for information about whether you can get a reissued MCC. Turbotax premier federal e file state 2012 for pc download Year of refinancing. Turbotax premier federal e file state 2012 for pc download   In the year of refinancing, add the applicable amount of interest paid on the old mortgage and the applicable amount of interest paid on the new mortgage, and enter the total on Form 8396, line 1. Turbotax premier federal e file state 2012 for pc download   If your new MCC has a credit rate different from the rate on the old MCC, you must attach a statement to Form 8396. Turbotax premier federal e file state 2012 for pc download The statement must show the calculation for lines 1, 2, and 3 for the part of the year when the old MCC was in effect. Turbotax premier federal e file state 2012 for pc download It must show a separate calculation for the part of the year when the new MCC was in effect. Turbotax premier federal e file state 2012 for pc download Combine the amounts from both calculations for line 3, enter the total on line 3 of the form, and write “See attached” on the dotted line next to line 2. Turbotax premier federal e file state 2012 for pc download New MCC cannot increase your credit. Turbotax premier federal e file state 2012 for pc download   The credit that you claim with your new MCC cannot be more than the credit that you could have claimed with your old MCC. Turbotax premier federal e file state 2012 for pc download   In most cases, the agency that issues your new MCC will make sure that it does not increase your credit. Turbotax premier federal e file state 2012 for pc download However, if either your old loan or your new loan has a variable (adjustable) interest rate, you will need to check this yourself. Turbotax premier federal e file state 2012 for pc download In that case, you will need to know the amount of the credit you could have claimed using the old MCC. Turbotax premier federal e file state 2012 for pc download   There are two methods for figuring the credit you could have claimed. Turbotax premier federal e file state 2012 for pc download Under one method, you figure the actual credit that would have been allowed. Turbotax premier federal e file state 2012 for pc download This means you use the credit rate on the old MCC and the interest you would have paid on the old loan. Turbotax premier federal e file state 2012 for pc download   If your old loan was a variable rate mortgage, you can use another method to determine the credit that you could have claimed. Turbotax premier federal e file state 2012 for pc download Under this method, you figure the credit using a payment schedule of a hypothetical self-amortizing mortgage with level payments projected to the final maturity date of the old mortgage. Turbotax premier federal e file state 2012 for pc download The interest rate of the hypothetical mortgage is the annual percentage rate (APR) of the new mortgage for purposes of the Federal Truth in Lending Act. Turbotax premier federal e file state 2012 for pc download The principal of the hypothetical mortgage is the remaining outstanding balance of the certified mortgage indebtedness shown on the old MCC. Turbotax premier federal e file state 2012 for pc download    You must choose one method and use it consistently beginning with the first tax year for which you claim the credit based on the new MCC. Turbotax premier federal e file state 2012 for pc download    As part of your tax records, you should keep your old MCC and the schedule of payments for your old mortgage. Turbotax premier federal e file state 2012 for pc download Basis Basis is your starting point for figuring a gain or loss if you later sell your home, or for figuring depreciation if you later use part of your home for business purposes or for rent. Turbotax premier federal e file state 2012 for pc download While you own your home, you may add certain items to your basis. Turbotax premier federal e file state 2012 for pc download You may subtract certain other items from your basis. Turbotax premier federal e file state 2012 for pc download These items are called adjustments to basis and are explained later under Adjusted Basis . Turbotax premier federal e file state 2012 for pc download It is important that you understand these terms when you first acquire your home because you must keep track of your basis and adjusted basis during the period you own your home. Turbotax premier federal e file state 2012 for pc download You also must keep records of the events that affect basis or adjusted basis. Turbotax premier federal e file state 2012 for pc download See Keeping Records , below. Turbotax premier federal e file state 2012 for pc download Figuring Your Basis How you figure your basis depends on how you acquire your home. Turbotax premier federal e file state 2012 for pc download If you buy or build your home, your cost is your basis. Turbotax premier federal e file state 2012 for pc download If you receive your home as a gift, your basis is usually the same as the adjusted basis of the person who gave you the property. Turbotax premier federal e file state 2012 for pc download If you inherit your home from a decedent, different rules apply depending on the date of the decedent's death. Turbotax premier federal e file state 2012 for pc download Each of these topics is discussed later. Turbotax premier federal e file state 2012 for pc download Property transferred from a spouse. Turbotax premier federal e file state 2012 for pc download   If your home is transferred to you from your spouse, or from your former spouse as a result of a divorce, your basis is the same as your spouse's (or former spouse's) adjusted basis just before the transfer. Turbotax premier federal e file state 2012 for pc download Publication 504, Divorced or Separated Individuals, fully discusses transfers between spouses. Turbotax premier federal e file state 2012 for pc download Cost as Basis The cost of your home, whether you purchased it or constructed it, is the amount you paid for it, including any debt you assumed. Turbotax premier federal e file state 2012 for pc download The cost of your home includes most settlement or closing costs you paid when you bought the home. Turbotax premier federal e file state 2012 for pc download If you built your home, your cost includes most closing costs paid when you bought the land or settled on your mortgage. Turbotax premier federal e file state 2012 for pc download See Settlement or closing costs , later. Turbotax premier federal e file state 2012 for pc download If you elect to deduct the sales taxes on the purchase or construction of your home as an itemized deduction on Schedule A (Form 1040), you cannot include the sales taxes as part of your cost basis in the home. Turbotax premier federal e file state 2012 for pc download Purchase. Turbotax premier federal e file state 2012 for pc download   The basis of a home you bought is the amount you paid for it. Turbotax premier federal e file state 2012 for pc download This usually includes your down payment and any debt you assumed. Turbotax premier federal e file state 2012 for pc download The basis of a cooperative apartment is the amount you paid for your shares in the corporation that owns or controls the property. Turbotax premier federal e file state 2012 for pc download This amount includes any purchase commissions or other costs of acquiring the shares. Turbotax premier federal e file state 2012 for pc download Construction. Turbotax premier federal e file state 2012 for pc download   If you contracted to have your home built on land that you own, your basis in the home is your basis in the land plus the amount you paid to have the home built. Turbotax premier federal e file state 2012 for pc download This includes the cost of labor and materials, the amount you paid the contractor, any architect's fees, building permit charges, utility meter and connection charges, and legal fees that are directly connected with building your home. Turbotax premier federal e file state 2012 for pc download If you built all or part of your home yourself, your basis is the total amount it cost you to build it. Turbotax premier federal e file state 2012 for pc download You cannot include in basis the value of your own labor or any other labor for which you did not pay. Turbotax premier federal e file state 2012 for pc download Real estate taxes. Turbotax premier federal e file state 2012 for pc download   Real estate taxes are usually divided so that you and the seller each pay taxes for the part of the property tax year that each owned the home. Turbotax premier federal e file state 2012 for pc download See the earlier discussion of Real estate taxes paid at settlement or closing , under Real Estate Taxes, earlier, to figure the real estate taxes you paid or are considered to have paid. Turbotax premier federal e file state 2012 for pc download   If you pay any part of the seller's share of the real estate taxes (the taxes up to the date of sale), and the seller did not reimburse you, add those taxes to your basis in the home. Turbotax premier federal e file state 2012 for pc download You cannot deduct them as taxes paid. Turbotax premier federal e file state 2012 for pc download   If the seller paid any of your share of the real estate taxes (the taxes beginning with the date of sale), you can still deduct those taxes. Turbotax premier federal e file state 2012 for pc download Do not include those taxes in your basis. Turbotax premier federal e file state 2012 for pc download If you did not reimburse the seller, you must reduce your basis by the amount of those taxes. Turbotax premier federal e file state 2012 for pc download Example 1. Turbotax premier federal e file state 2012 for pc download You bought your home on September 1. Turbotax premier federal e file state 2012 for pc download The property tax year in your area is the calendar year, and the tax is due on August 15. Turbotax premier federal e file state 2012 for pc download The real estate taxes on the home you bought were $1,275 for the year and had been paid by the seller on August 15. Turbotax premier federal e file state 2012 for pc download You did not reimburse the seller for your share of the real estate taxes from September 1 through December 31. Turbotax premier federal e file state 2012 for pc download You must reduce the basis of your home by the $426 [(122 ÷ 365) × $1,275] the seller paid for you. Turbotax premier federal e file state 2012 for pc download You can deduct your $426 share of real estate taxes on your return for the year you purchased your home. Turbotax premier federal e file state 2012 for pc download Example 2. Turbotax premier federal e file state 2012 for pc download You bought your home on May 3, 2013. Turbotax premier federal e file state 2012 for pc download The property tax year in your area is the calendar year. Turbotax premier federal e file state 2012 for pc download The taxes for the previous year are assessed on January 2 and are due on May 31 and November 30. Turbotax premier federal e file state 2012 for pc download Under state law, the taxes become a lien on May 31. Turbotax premier federal e file state 2012 for pc download You agreed to pay all taxes due after the date of sale. Turbotax premier federal e file state 2012 for pc download The taxes due in 2013 for 2012 were $1,375. Turbotax premier federal e file state 2012 for pc download The taxes due in 2014 for 2013 will be $1,425. Turbotax premier federal e file state 2012 for pc download You cannot deduct any of the taxes paid in 2013 because they relate to the 2012 property tax year and you did not own the home until 2013. Turbotax premier federal e file state 2012 for pc download Instead, you add the $1,375 to the cost (basis) of your home. Turbotax premier federal e file state 2012 for pc download You owned the home in 2013 for 243 days (May 3 to December 31), so you can take a tax deduction on your 2014 return of $949 [(243 ÷ 365) × $1,425] paid in 2014 for 2013. Turbotax premier federal e file state 2012 for pc download You add the remaining $476 ($1,425 − $949) of taxes paid in 2014 to the cost (basis) of your home. Turbotax premier federal e file state 2012 for pc download Settlement or closing costs. Turbotax premier federal e file state 2012 for pc download   If you bought your home, you probably paid settlement or closing costs in addition to the contract price. Turbotax premier federal e file state 2012 for pc download These costs are divided between you and the seller according to the sales contract, local custom, or understanding of the parties. Turbotax premier federal e file state 2012 for pc download If you built your home, you probably paid these costs when you bought the land or settled on your mortgage. Turbotax premier federal e file state 2012 for pc download   The only settlement or closing costs you can deduct are home mortgage interest and certain real estate taxes. Turbotax premier federal e file state 2012 for pc download You deduct them in the year you buy your home if you itemize your deductions. Turbotax premier federal e file state 2012 for pc download You can add certain other settlement or closing costs to the basis of your home. Turbotax premier federal e file state 2012 for pc download Items added to basis. Turbotax premier federal e file state 2012 for pc download   You can include in your basis the settlement fees and closing costs you paid for buying your home. Turbotax premier federal e file state 2012 for pc download A fee is for buying the home if you would have had to pay it even if you paid cash for the home. Turbotax premier federal e file state 2012 for pc download   The following are some of the settlement fees and closing costs that you can include in the original basis of your home. Turbotax premier federal e file state 2012 for pc download Abstract fees (abstract of title fees). Turbotax premier federal e file state 2012 for pc download Charges for installing utility services. Turbotax premier federal e file state 2012 for pc download Legal fees (including fees for the title search and preparation of the sales contract and deed). Turbotax premier federal e file state 2012 for pc download Recording fees. Turbotax premier federal e file state 2012 for pc download Surveys. Turbotax premier federal e file state 2012 for pc download Transfer or stamp taxes. Turbotax premier federal e file state 2012 for pc download Owner's title insurance. Turbotax premier federal e file state 2012 for pc download Any amount the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, cost for improvements or repairs, and sales commissions. Turbotax premier federal e file state 2012 for pc download   If the seller actually paid for any item for which you are liable and for which you can take a deduction (such as your share of the real estate taxes for the year of sale), you must reduce your basis by that amount unless you are charged for it in the settlement. Turbotax premier federal e file state 2012 for pc download Items not added to basis and not deductible. Turbotax premier federal e file state 2012 for pc download   Here are some settlement and closing costs that you cannot deduct or add to your basis. Turbotax premier federal e file state 2012 for pc download Fire insurance premiums. Turbotax premier federal e file state 2012 for pc download Charges for using utilities or other services related to occupancy of the home before closing. Turbotax premier federal e file state 2012 for pc download Rent for occupying the home before closing. Turbotax premier federal e file state 2012 for pc download Charges connected with getting or refinancing a mortgage loan, such as: Loan assumption fees, Cost of a credit report, and Fee for an appraisal required by a lender. Turbotax premier federal e file state 2012 for pc download Points paid by seller. Turbotax premier federal e file state 2012 for pc download   If you bought your home after April 3, 1994, you must reduce your basis by any points paid for your mortgage by the person who sold you your home. Turbotax premier federal e file state 2012 for pc download   If you bought your home after 1990 but before April 4, 1994, you must reduce your basis by seller-paid points only if you deducted them. Turbotax premier federal e file state 2012 for pc download See Points , earlier, for the rules on deducting points. Turbotax premier federal e file state 2012 for pc download Gift To figure the basis of property you receive as a gift, you must know its adjusted basis (defined later) to the donor just before it was given to you, its fair market value (FMV) at the time it was given to you, and any gift tax paid on it. Turbotax premier federal e file state 2012 for pc download Fair market value. Turbotax premier federal e file state 2012 for pc download   Fair market value (FMV) is the price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and who both have a reasonable knowledge of all the necessary facts. Turbotax premier federal e file state 2012 for pc download Donor's adjusted basis is more than FMV. Turbotax premier federal e file state 2012 for pc download   If someone gave you your home and the donor's adjusted basis, when it was given to you, was more than the FMV, your basis at the time of receipt is the same as the donor's adjusted basis. Turbotax premier federal e file state 2012 for pc download Disposition basis. Turbotax premier federal e file state 2012 for pc download   If the donor's adjusted basis at the time of the gift is more than the FMV, your basis (plus or minus any required adjustments, see Adjusted Basis , later) when you dispose of the property will depend on whether you have a gain or a loss. Turbotax premier federal e file state 2012 for pc download Your basis for figuring a gain is the same as the donor's adjusted basis. Turbotax premier federal e file state 2012 for pc download Your basis for figuring a loss is the FMV when you received the gift. Turbotax premier federal e file state 2012 for pc download If you use the donor's adjusted basis to figure a gain and it results in a loss, then you must use the FMV (at the time of the gift) to refigure the loss. Turbotax premier federal e file state 2012 for pc download However, if using the FMV results in a gain, then you neither have a gain nor a loss. Turbotax premier federal e file state 2012 for pc download Example 1. Turbotax premier federal e file state 2012 for pc download Andrew received a house as a gift from Ishmael (the donor). Turbotax premier federal e file state 2012 for pc download At the time of the gift, the home had an FMV of $80,000. Turbotax premier federal e file state 2012 for pc download Ishmael's adjusted basis was $100,000. Turbotax premier federal e file state 2012 for pc download After he received the house, no events occurred to increase or decrease the basis. Turbotax premier federal e file state 2012 for pc download If Andrew sells the house for $120,000, he will have a $20,000 gain because he must use the donor's adjusted basis ($100,000) at the time of the gift as his basis to figure the gain. Turbotax premier federal e file state 2012 for pc download Example 2. Turbotax premier federal e file state 2012 for pc download Same facts as Example 1 , except this time Andrew sells the house for $70,000. Turbotax premier federal e file state 2012 for pc download He will have a loss of $10,000 because he must use the FMV ($80,000) at the time of the gift as his basis to figure the loss. Turbotax premier federal e file state 2012 for pc download Example 3. Turbotax premier federal e file state 2012 for pc download Same facts as Example 1 , except this time Andrew sells the house for $90,000. Turbotax premier federal e file state 2012 for pc download Initially, he figures the gain using Ishmael's adjusted basis ($100,000), which results in a loss of $10,000. Turbotax premier federal e file state 2012 for pc download Since it is a loss, Andrew must now recalculate the loss using the FMV ($80,000), which results in a gain of $10,000. Turbotax premier federal e file state 2012 for pc download So in this situation, Andrew will neither have a gain nor a loss. Turbotax premier federal e file state 2012 for pc download Donor's adjusted basis equal to or less than the FMV. Turbotax premier federal e file state 2012 for pc download   If someone gave you your home after 1976 and the donor's adjusted basis, when it was given to you, was equal to or less than the FMV, your basis at the time of receipt is the same as the donor's adjusted basis, plus the part of any federal gift tax paid that is due to the net increase in value of the home. Turbotax premier federal e file state 2012 for pc download Part of federal gift tax due to net increase in value. Turbotax premier federal e file state 2012 for pc download   Figure the part of the federal gift tax paid that is due to the net increase in value of the home by multiplying the total federal gift tax paid by a fraction. Turbotax premier federal e file state 2012 for pc download The numerator (top part) of the fraction is the net increase in the value of the home, and the denominator (bottom part) is the value of the home for gift tax purposes after reduction for any annual exclusion and marital or charitable deduction that applies to the gift. Turbotax premier federal e file state 2012 for pc download The net increase in the value of the home is its FMV minus the adjusted basis of the donor. Turbotax premier federal e file state 2012 for pc download Publication 551 gives more information, including examples, on figuring your basis when you receive property as a gift. Turbotax premier federal e file state 2012 for pc download Inheritance Your basis in a home you inherited is generally the fair market value of the home on the date of the decedent's death or on the alternative valuation date if the personal representative for the estate chooses to use alternative valuation. Turbotax premier federal e file state 2012 for pc download If an estate tax return was filed, your basis is generally the value of the home listed on the estate tax return. Turbotax premier federal e file state 2012 for pc download If an estate tax return was not filed, your basis is the appraised value of the home at the decedent's date of death for state inheritance or transmission taxes. Turbotax premier federal e file state 2012 for pc download Publication 551 and Publication 559, Survivors, Executors, and Administrators, have more information on the basis of inherited property. Turbotax premier federal e file state 2012 for pc download If you inherited your home from someone who died in 2010, and the executor of the decedent's estate made the election to file Form 8939, Allocation of Increase in Basis for Property Acquired From a Decedent, refer to the information provided by the executor or see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010. Turbotax premier federal e file state 2012 for pc download Adjusted Basis While you own your home, various events may take place that can change the original basis of your home. Turbotax premier federal e file state 2012 for pc download These events can increase or decrease your original basis. Turbotax premier federal e file state 2012 for pc download The result is called adjusted basis. Turbotax premier federal e file state 2012 for pc download See Table 3, on this page, for a list of some of the items that can adjust your basis. Turbotax premier federal e file state 2012 for pc download Table 3. Turbotax premier federal e file state 2012 for pc download Adjusted Basis This table lists examples of some items that generally will increase or decrease your basis in your home. Turbotax premier federal e file state 2012 for pc download It is not intended to be all-inclusive. Turbotax premier federal e file state 2012 for pc download Increases to Basis Decreases to Basis Improvements: Putting an addition on your home Replacing an entire roof Paving your driveway Installing central air conditioning Rewiring your home Assessments for local improvements (see Assessments for local benefits , under What You Can and Cannot Deduct, earlier) Amounts spent to restore damaged property Insurance or other reimbursement for casualty losses Deductible casualty loss not covered by insurance Payments received for easement or right-of-way granted Depreciation allowed or allowable if home is used for business or rental purposes Value of subsidy for energy conservation measure excluded from income Improvements. Turbotax premier federal e file state 2012 for pc download   An improvement materially adds to the value of your home, considerably prolongs its useful life, or adapts it to new uses. Turbotax premier federal e file state 2012 for pc download You must add the cost of any improvements to the basis of your home. Turbotax premier federal e file state 2012 for pc download You cannot deduct these costs. Turbotax premier federal e file state 2012 for pc download   Improvements include putting a recreation room in your unfinished basement, adding another bathroom or bedroom, putting up a fence, putting in new plumbing or wiring, installing a new roof, and paving your driveway. Turbotax premier federal e file state 2012 for pc download Amount added to basis. Turbotax premier federal e file state 2012 for pc download   The amount you add to your basis for improvements is your actual cost. Turbotax premier federal e file state 2012 for pc download This includes all costs for material and labor, except your own labor, and all expenses related to the improvement. Turbotax premier federal e file state 2012 for pc download For example, if you had your lot surveyed to put up a fence, the cost of the survey is a part of the cost of the fence. Turbotax premier federal e file state 2012 for pc download   You also must add to your basis state and local assessments for improvements such as streets and sidewalks if they increase the value of the property. Turbotax premier federal e file state 2012 for pc download These assessments are discussed earlier under Real Estate Taxes . Turbotax premier federal e file state 2012 for pc download Improvements no longer part of home. Turbotax premier federal e file state 2012 for pc download    Your home's adjusted basis does not include the cost of any improvements that are replaced and are no longer part of the home. Turbotax premier federal e file state 2012 for pc download Example. Turbotax premier federal e file state 2012 for pc download You put wall-to-wall carpeting in your home 15 years ago. Turbotax premier federal e file state 2012 for pc download Later, you replaced that carpeting with new wall-to-wall carpeting. Turbotax premier federal e file state 2012 for pc download The cost of the old carpeting you replaced is no longer part of your home's adjusted basis. Turbotax premier federal e file state 2012 for pc download Repairs versus improvements. Turbotax premier federal e file state 2012 for pc download   A repair keeps your home in an ordinary, efficient operating condition. Turbotax premier federal e file state 2012 for pc download It does not add to the value of your home or prolong its life. Turbotax premier federal e file state 2012 for pc download Repairs include repainting your home inside or outside, fixing your gutters or floors, fixing leaks or plastering, and replacing broken window panes. Turbotax premier federal e file state 2012 for pc download You cannot deduct repair costs and generally cannot add them to the basis of your home. Turbotax premier federal e file state 2012 for pc download   However, repairs that are done as part of an extensive remodeling or restoration of your home are considered improvements. Turbotax premier federal e file state 2012 for pc download You add them to the basis of your home. Turbotax premier federal e file state 2012 for pc download Records to keep. Turbotax premier federal e file state 2012 for pc download   You can use Table 4 (at the end of the publication) as a guide to help you keep track of improvements to your home. Turbotax premier federal e file state 2012 for pc download Also see Keeping Records , below. Turbotax premier federal e file state 2012 for pc download Energy conservation subsidy. Turbotax premier federal e file state 2012 for pc download   If a public utility gives you (directly or indirectly) a subsidy for the purchase or installation of an energy conservation measure for your home, do not include the value of that subsidy in your income. Turbotax premier federal e file state 2012 for pc download You must reduce the basis of your home by that value. Turbotax premier federal e file state 2012 for pc download   An energy conservation measure is an installation or modification primarily designed to reduce consumption of electricity or natural gas or to improve the management of energy demand. Turbotax premier federal e file state 2012 for pc download Keeping Records Keeping full and accurate records is vital to properly report your income and expenses, to support your deductions and credits, and to know the basis or adjusted basis of your home. Turbotax premier federal e file state 2012 for pc download These records include your purchase contract and settlement papers if you bought the property, or other objective evidence if you acquired it by gift, inheritance, or similar means. Turbotax premier federal e file state 2012 for pc download You should keep any receipts, canceled checks, and similar evidence for improvements or other additions to the basis. Turbotax premier federal e file state 2012 for pc download In addition, you should keep track of any decreases to the basis such as those listed in Table 3, earlier. Turbotax premier federal e file state 2012 for pc download How to keep records. Turbotax premier federal e file state 2012 for pc download   How you keep records is up to you, but they must be clear and accurate and must be available to the IRS. Turbotax premier federal e file state 2012 for pc download How long to keep records. Turbotax premier federal e file state 2012 for pc download   You must keep your records for as long as they are important for meeting any provision of the federal tax law. Turbotax premier federal e file state 2012 for pc download   Keep records that support an item of income, a deduction, or a credit appearing on a return until the period of limitations for the return runs out. Turbotax premier federal e file state 2012 for pc download (A period of limitations is the period of time after which no legal action can be brought. Turbotax premier federal e file state 2012 for pc download ) For assessment of tax you owe, this is generally 3 years from the date you filed the return. Turbotax premier federal e file state 2012 for pc download For filing a claim for credit or refund, this is generally 3 years from the date you filed the original return, or 2 years from the date you paid the tax, whichever is later. Turbotax premier federal e file state 2012 for pc download Returns filed before the due date are treated as filed on the due date. Turbotax premier federal e file state 2012 for pc download   You may need to keep records relating to the basis of property (discussed earlier) for longer than the period of limitations. Turbotax premier federal e file state 2012 for pc download Keep those records as long as they are important in figuring the basis of the original or replacement property. Turbotax premier federal e file state 2012 for pc download Generally, this means for as long as you own the property and, after you dispose of it, for the period of limitations that applies to you. Turbotax premier federal e file state 2012 for pc download Table 4. Turbotax premier federal e file state 2012 for pc download Record of Home Improvements Keep this for your records. Turbotax premier federal e file state 2012 for pc download Also, keep receipts or other proof of improvements. Turbotax premier federal e file state 2012 for pc download Remove from this record any improvements that are no longer part of your main home. Turbotax premier federal e file state 2012 for pc download For example, if you put wall-to-wall carpeting in your home and later replace it with new wall-to-wall carpeting, remove the cost of the first carpeting. Turbotax premier federal e file state 2012 for pc download (a) Type of Improvement (b) Date (c) Amount   (a) Type of Improvement (b) Date (c) Amount Additions:       Heating & Air  Conditioning:     Bedroom       Heating system     Bathroom       Central air conditioning     Deck       Furnace     Garage       Duct work     Porch       Central humidifier     Patio       Filtration system     Storage shed       Other     Fireplace       Electrical:     Other           Lawn & Grounds:       Lighting fixtures           Wiring upgrades     Landscaping       Other     Driveway       Plumbing:     Walkway           Fences       Water heater     Retaining wall       Soft water system     Sprinkler system       Filtration system     Swimming pool       Other     Exterior lighting       Insulation:     Other           Communications:       Attic           Walls     Satellite dish       Floors     Intercom       Pipes and duct work     Security system       Other     Other             Miscellaneous:       Interior  Improvements:     Storm windows and doors       Built-in appliances     Roof       Kitchen modernization     Central vacuum       Bathroom modernization     Other       Flooring             Wall-to-wall carpeting             Other     How To
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About the API

We make the content you see in our directory of federal agencies available in both English and Spanish via a REST API. The API programmatically returns all of the information contained in the directory, or you can query the API to return just a subset of the available information.

If you are using the Federal Agency Directory API and have feedback or want to tell us about your product, please e-mail us.

Changes to the API

On December 28, 2012, we launched version 2.0 of the API and made the following changes:

  • Launched new methods to return directory records in a hierarchical fashion.
  • Results can now be returned using XML and JSONP, as well as straight JSON.
  • The Interface method was removed.

About the Data

The data in the Federal Agency Directory API is based on the English and Spanish federal agency directories. We gather this data from the agency information listed in the U.S. Government Manual, and independent research by our staff.

There is no schedule for data updates; we update data continually, and as needed. Early versions of the API may have incomplete and inconsistent data. We are working to continually develop the data in our directory records.

If you have suggestions about what types of data you would like to see in the Federal Agency Directory API, please e-mail us.

About the Spanish Data

GobiernoUSA.gov and the North American Academy of the Spanish Language (ANLE, per its Spanish acronym) worked together to review federal agencies Spanish translations to ensure language accuracy and consistency throughout the government. ANLE, the highest authority on Spanish language in the United States, and GobiernoUSA.gov have the joined mission of improving and standardizing the use of Spanish language in government communications.

This collaboration, possible through a signed agreement between the two institutions, resulted in a list of official Spanish language translations of federal agencies, available through this API.

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Accessing the API

Our Federal Agency Directory API is accessible via HTTP GET requests and does not require a login or API key to use.

The base URL for the API is http://www.usa.gov/api/USAGovAPI/contacts.{format}/. Append the API call you’d like to make to this URL.

Currently, three output formats are available:

  1. JSON (such as http://www.usa.gov/api/USAGovAPI/contacts.json/contacts)
  2. XML (such as http://www.usa.gov/api/USAGovAPI/contacts.xml/contacts)
  3. JSONP (such as http://www.usa.gov/api/USAGovAPI/contacts.jsonp/contacts?callback=callmemaybe). When requesting JSONP, you should include a callback parameter with the name of the callback function you would like called.

For the purposes of this documentation, only JSON sample calls and results will be shown.

API Result Formats

The Federal Agency Directory API returns results in json, with an optional callback parameter to enable jsonp support.

Interactive Documentation for the API

If you're interested in trying out the Federal Agency Directory API, we have an interactive test page. On this page, you can try different parameters and see the results.

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API Data Model

The following fields are associated with directory records. Please note that not every record has data in every field, and the API will only return completed fields.

  • Id - A unique identifier for each directory record
  • Name – The name of the agency.
  • Description – A brief description of the agency.
  • Language – Whether the record is in English or Spanish.
  • Subdivision – Used for mailing items to the agency.
  • Street1 – A first line of address information (such as the street address) for the agency’s main office.
  • Street2 – A second line of address information for the agency’s main office.
  • City – The city of the agency’s main office.
  • StateTer – The state of the agency’s main office.
  • Zip – The postal zip code of the agency’s main office.
  • Email – The e-mail address for the agency’s main office.
  • Phone – The phone number of the agency’s main office (may contain more than one).
  • TTY – The TTY number of the agency’s main office (may contain more than one).
  • Tollfree – The toll-free number to contact the agency (may contain more than one).
  • SMS – Any services offered via text messaging by the agency.
  • Synonym – Alternative names used commonly to refer to the agency (may contain more than one).
  • URI – The URL to access the agency’s complete directory record via the API.
  • Source_Url – The USA.gov or GobiernoUSA.gov URL that contains the record.

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URLs

The directory API returns several types of URLs that can be used to link to the agency.

  • Web_Url – Main URLs for the agency (may contain more than one).
  • Contact_Url – URLs for the public to contact the agency (may contain more than one).
  • In_Person_Url – URLs for the public to find out how to interact with the agney in person (may contain more than one).
  • Form_Url – URLs for the agency to find forms from the agency (may contain more than one).

For each of these URLs, the following sub-data elements are returned:

  • Url – The URL to the web page.
  • Description – A description of the URL.
  • Language – Whether the web page located at the URL is in English (en) or Spanish (es).

Agency Relationships

Additionally, the directory API returns information on the hierarchical relationship between federal agencies.

  • Parent – The parent of the agency. such as the Department of the Treasury for the Internal Revenue Service.
  • Child – Any children departments or agencies for the agency. such as the Census Bureau for the Department of Commerce (may contain more than one of these).
  • Alt_Language – The record for the agency in Spanish, if the record is in English, and vice versa.

For each of these relationships, the following sub-data elements are returned for the related agency:

  • Id – A unique identifier for each directory record
  • Name – The name of the agency.
  • URI – The URL to access the agency’s complete directory record via the API.
  • For Alt_Language only, Language – Whether the alternate language record is in English (en) or Spanish (es).

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API Methods

As of version 2.0, the methods of the Federal Agency Directory API are broken down into two categories. The first category simply returns a list of agency records. The second category returns a hierarchical structure of the agency records, making it easy to form a tree. The tree can show that the Food and Drug Administration is part of the Department of Health and Human Services. This is just one example.

API Methods That Return A List of Agency Records

Contacts

Contacts is a general purpose call that, by default, will return all of the agency directory records. However, you can pass parameters into contacts that allow you to filter the records returned by the API in powerful ways.

Parameters

query_filter – Return only agency directory records that meet the criteria you enter into this parameter. In general, the filter takes the form of {field_name}::{value}[|{field_name}::{value}]*. Additionally, for names, you can perform substring searches by surrounding {value} with asterixis.

For example, if you want to return all agencies that have the word “commission” in their title, you can use a query_filter of name::*commission*. Likewise, if you want to find all commissions who have their main address in Virginia, you can use a query_filter of: name::*commission*|state::VA

See the data model above for a list of field names that you can query on.

result_filter – Return only the fields listed here (separated by |) as opposed to every field in each directory record. For example, use a result_filter of name|phone to return only names and phone numbers.

See the data model above for a list of field names that you can specify be returned.

sort – Allows you to specify the sort order of the returned agency directory records. For example, use a sort of name to sort the results by the agency’s name. You can also cause the sort to go in descending order by prepending the field name with a -, such as -name.

See the data model above for a list of field names that you can sort the results on.

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/contacts/tree/independent

The independent method will return every agency record that has no parent and no child, such as the National Railroad Passenger Corporation.

/contacts/tree

The tree method returns every agency record, and, optionally, includes sub-agencies as part of their parent agency’s record.

Paramaters

include_descendants - Set to true if you want the API to return the descendents directly as part of their parent agency’s record.

/contacts/tree/dependent

The dependent method returns every agency record that has sub-agencies, and, optionally, includes sub-agencies as part of their parent agency’s record.

Parameters

include_descendants - Set to true if you want the API to return the descendents directly as part of their parent agency’s record.

/contact/{identifier}/tree/sibling

The sibling method will return all of the agency records that are siblings to the agency represented by the id specified in the REST URL. It will also return the record for the id specified as well.  

The only difference between the result format of the sibling method and the more generic contacts method is that the siblings method does not return the child and parent data elements as part of it’s results.

For example, if you request the sibling agencies for the U.S. Botanic Garden (id 49108), the API will return records for both the U.S. Botanic Garden and the U.S. Capitol Visitor Center, as both of these agencies are part of the Architect of the Capitol.

If you desired the results in JSON format, the API call for this query would look like the following:
http://www.usa.gov/api/USAGovAPI/contacts.json/contact/49108/tree/sibling

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Sample Results For These Methods

For API methods that return a list of directory records, the API will return an array of objects, such as:

The API will return an array of objects, such as:

{
   "Contact":[
      {
         "Id":"52663",
         "URI":"http://www.usa.gov/api/USAGovAPI/contacts.json/contact/52663",
         "Language":"en",
         "Name":"U.S. Access Board",
         "Source_Url":"http://www.usa.gov/directory/federal/us-access-board.shtml",
         "Street1":"1331 F Street, NW",
         "Street2":"Suite 1000",
         "City":"Washington",
         "StateTer":"DC",
         "Zip":"20004-1111",
         "Synonym":[
            "Access Board"
         ],
         "Phone":[
            "202-272-0080"
         ],
         "Tollfree":[
            "800-872-2253"
         ],
         "TTY":[
            "202-272-0082",
            "800-993-2822"
         ],
         "Email":"info@access-board.gov",
         "Contact_Url":[
            {
               "Url":"http://www.access-board.gov/contact.htm",
               "Description":"Contact the U.S. Access Board ",
               "Language":"en"
            },
            {
               "Url":"http://www.access-board.gov/contact.htm#email",
               "Description":"E-mail Directory",
               "Language":"en"
            },
            {
               "Url":"http://www.access-board.gov/contact.htm#Phone",
               "Description":"Phone Directory",
               "Language":"en"
            },
            {
               "Url":"http://www.access-board.gov/enforcement/filing.htm",
               "Description":"File an Accessibility Complaint",
               "Language":"en"
            }
         ],
         "Web_Url":[
            {
               "Url":"http://www.access-board.gov/",
               "Description":"U.S. Access Board ",
               "Language":"en"
            }
         ],
         "In_Person_Url":[
            {
               "Url":"http://www.access-board.gov/contact.htm#Location",
               "Description":"Map and Directions",
               "Language":"en"
            }
         ],
         "Description":"The Access Board is an independent federal agency devoted to accessibility for people with disabilities. The Board develops and maintains design criteria for the built environment, transit vehicles, telecommunications equipment, and for electronic and information technology. ",
         "Alt_Language":[
            {
               "Id":"50175",
               "URI":"http://www.usa.gov/api/USAGovAPI/contacts.json/contact/50175",
               "Name":"Consejo de Acceso de Estados Unidos",
               "Language":"es"
            }
         ]
      },
      {
         "Id":"61787",
         "URI":"http://www.usa.gov/api/USAGovAPI/contacts.json/contact/61787",
         "Language":"en",
         "Name":"Medicaid and CHIP Payment and Access Commission",
         "Source_Url":"http://www.usa.gov/directory/federal/medicaid-chip-payment-access-commission.shtml",
         "Street1":"1800 M Street, NW",
         "Street2":"Suite 350N",
         "City":"Washington",
         "StateTer":"DC",
         "Zip":"20036",
         "Phone":[
            "202-273-2460"
         ],
         "Email":"webmaster@macpac.gov",
         "Web_Url":[
            {
               "Url":"http://www.macpac.gov",
               "Description":"Medicaid and CHIP Payment and Access Commission ",
               "Language":"en"
            }
         ]
      }
   ]
}

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If you set include_descendents to true in the tree or descendants methods, parent agencies will include an array called "Contact" with their child agency records, such as in this snippet:

{
   "Contact":[
      {
         "Id":"49015",
         "URI":"http://www.usa.gov/api/USAGovAPI/contacts.json/contact/49015",
         "Language":"en",
         "Name":"U.S. Department of Agriculture (USDA)",
         "Source_Url":"http://www.usa.gov/directory/federal/department-of-agriculture.shtml",
         "Street1":"1400 Independence Ave., S.W.",
         "City":"Washington",
         "StateTer":"DC",
         "Zip":"20250",
         "Synonym":[
            "Agriculture Department",
            "Department of Agriculture"
         ],
         "Phone":[
            "202-720-2791"
         ],
         "Contact_Url":[
            {
               "Url":"http://usda.gov/wps/portal/usda/usdahome?navid=CONTACT_US",
               "Description":"Contact the U.S. Department of Agriculture (USDA) ",
               "Language":"en"
            },
            {
               "Url":"http://www.fns.usda.gov/cnd/Contacts/StateDirectory.htm",
               "Description":"Child Nutrition Programs",
               "Language":"en"
            },
            {
               "Url":"http://www.fns.usda.gov/snap/contact_info/default.htm",
               "Description":"Food Stamps",
               "Language":"en"
            },
            {
               "Url":"http://www.fsis.usda.gov/Food_Safety_Education/USDA_Meat_&_Poultry_Hotline/index.asp",
               "Description":"Meat and Poultry Hotline",
               "Language":"en"
            },
            {
               "Url":"http://offices.sc.egov.usda.gov/employeeDirectory/app",
               "Description":"Employee Directory",
               "Language":"en"
            }
         ],
         "Web_Url":[
            {
               "Url":"http://www.usda.gov/wps/portal/usda/usdahome",
               "Description":"U.S. Department of Agriculture (USDA) ",
               "Language":"en"
            }
         ],
         "In_Person_Url":[
            {
               "Url":"http://www.rurdev.usda.gov/recd_map.html",
               "Description":"Rural Development Office Locator",
               "Language":"en"
            },
            {
               "Url":"http://apps.ams.usda.gov/FarmersMarkets/",
               "Description":"Farmers Markets Near You",
               "Language":"en"
            },
            {
               "Url":"http://offices.sc.egov.usda.gov/locator/app",
               "Description":"Find a Service Center Near You",
               "Language":"en"
            }
         ],
         "Description":"The Department of Agriculture provides leadership on food, agriculture, natural resources, and related issues.",
         "Alt_Language":[
            {
               "Id":"50072",
               "URI":"http://www.usa.gov/api/USAGovAPI/contacts.json/contact/50072",
               "Name":"Departamento de Agricultura",
               "Language":"es"
            }
         ],
         "Contact":[
            {
               "Id":"48012",
               "URI":"http://www.usa.gov/api/USAGovAPI/contacts.json/contact/48012",
               "Language":"en",
               "Name":"Center for Nutrition Policy and Promotion (CNPP)",
               "Source_Url":"http://www.usa.gov/directory/federal/center-for-nutrition-policy-and-promotion.shtml",
               "Street1":"3101 Park Center Dr., 10th Floor",
               "City":"Alexandria",
               "StateTer":"VA",
               "Zip":"22302-1594",
               "Phone":[
                  "703-305-7600"
               ],
               "Contact_Url":[
                  {
                     "Url":"http://www.cnpp.usda.gov/contacts.htm",
                     "Description":"Contact the Center for Nutrition Policy and Promotion (CNPP) ",
                     "Language":"en"
                  }
               ],
               "Web_Url":[
                  {
                     "Url":"http://www.cnpp.usda.gov/",
                     "Description":"Center for Nutrition Policy and Promotion (CNPP) ",
                     "Language":"en"
                  },
                  {
                     "Url":"http://www.choosemyplate.gov/",
                     "Description":"",
                     "Language":"en"
                  }
               ],
               "Description":"The USDA Center for Nutrition Policy and Promotion (CNPP) works to improve the health and well-being of Americans by developing and promoting dietary guidance that links scientific research to the nutrition needs of consumers."
            }
         ]
      }
   ]
}

For a complete list of fields returned in the json, see the data model description above. Please note that any field that contains more than one item in it (such as synonyms), is returned as an array and noted in the data model description.

We encourage you to try out the interactive documentation to learn more.

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API Methods That Return Agency Records in a Tree Form

These methods return agency records in a hierarchical data structure. In this way, you do not have to manually recreate the hierarchy yourself using the contacts method.

/contact/{identifier}/tree/parent

The parent method returns the record of the parent agency specified in the REST URL and will continue up the agency hierarchy until the root agency is returned. Additionally, the record for the id specified will also be returned.

For example, if you request the parent tree for the Administration for Native Americans (agency id 49064) , the API will return a tree structure whose head is the U.S.  Department of Health and Human Services, with a child record for the Administration for Children and Families, which will then have a child record for the Administration of Native Americans.

With JSON-formatted results, this call would be made with this URL:  http://www.usa.gov/api/USAGovAPI/contacts.json/contact/49064/tree/parent

Likewise, if you request the parent tree for the Administration for Children and Families (agency id 47994), the API will return a tree structure whose head is the U.S. Department of Health and Human Services, with a child record for the Administration for Children and Families.  However, the structure will end at that point instead of continuing down the agency hierarchy.

With JSON-formatted results, this call would be made with this URL:  http://www.usa.gov/api/USAGovAPI/contacts.json/contact/47994/tree/parent

/contact/{identifier}/tree/descendant

The descendant method will return a tree with the agency specified in the REST URL at it’s head. It will include all of the agency's sub-agencies as children. The tree will then continue in this fashion until the agencies with no children are returned.

For example, if you request the descendant tree of the Administration for Children and Families (agency id 47994), the API will return a tree structure with the record for the Administration for Children and Families at it’s head. There would then be child record for the Administration of Native Americans, since that agency is a subagency of the Administration for Children and Families.

With JSON-formatted results, this call would be made with this URL: http://www.usa.gov/api/USAGovAPI/contacts.json/contact/47994/tree/descendant

Likewise, if you request the descendant tree of the U.S. Department of Health and Human Services (agency id 49021), the API will return a tree structure with the U.S. Department of Health and Human Services record at it’s head, and have 15 child records for each of the sub-agencies.  The tree will continue in this manner until the entire U.S. Department of Health and Human Services hierarchy of agencies is exposed.

With JSON-formatted results, this call would be made with this URL: http://www.usa.gov/api/USAGovAPI/contacts.json/contact/49021/tree/descendant

/contact/{identifier}/tree/branch

The branch method returns a tree that is the combination of the trees returned by the parent method and the descendant method for the id specified in the REST URL. With this one method, the API will return every parent and every descendant of a particular agency.

/contact/{identifier}

The contact/{identifier} method will return the single directory record represented by the id specified in the REST URL. There are no children records returned when using this method.

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Sample Results For These Methods

For API methods that return a tree of directory records, the API will return an array of objects, such as:

{
  "Id": "49021",
  "URI": "http://www.usa.gov/api/USAGovAPI/contacts.json/contact/49021",
  "Language": "en",
  "Name": "U.S. Department of Health and Human Services (HHS)",
  "Source_Url": "http://www.usa.gov/directory/federal/department-of-health-and-human-services.shtml",
  "Street1": "200 Independence Avenue, S.W.",
  "City": "Washington",
  "StateTer": "DC",
  "Zip": "20201",
  "Synonym": [
    "Health and Human Services Department",
    "Department of Health and Human Services"
  ],
  "Contact_Url": [
    {
      "Url": "http://www.hhs.gov/contactus.html",
      "Description": "Contact the U.S. Department of Health and Human Services (HHS) ",
      "Language": "en"
    },
    {
      "Url": "http://www.acf.hhs.gov/acf_contact_us.html#state",
      "Description": "Child Support",
      "Language": "en"
    },
    {
      "Url": "http://www.acf.hhs.gov/programs/ofa/help",
      "Description": "Temporary Assistance for Needy Families (Welfare)",
      "Language": "en"
    },
    {
      "Url": "http://www.medicare.gov/ContactUs.asp",
      "Description": "Medicare",
      "Language": "en"
    },
    {
      "Url": "http://www.acf.hhs.gov/programs/ocs/liheap/about/contact_us.html",
      "Description": "Low Income Home Energy Assistance Program (LIHEAP)",
      "Language": "en"
    },
    {
      "Url": "https://cfo.gov/cfo-members/",
      "Description": "Employee Directory",
      "Language": "en"
    }
  ],
  "Web_Url": [
    {
      "Url": "http://www.hhs.gov/",
      "Description": "U.S. Department of Health and Human Services (HHS) ",
      "Language": "en"
    }
  ],
  "In_Person_Url": [
    {
      "Url": "http://eclkc.ohs.acf.hhs.gov/hslc/HeadStartOffices",
      "Description": "Head Start Program Locator",
      "Language": "en"
    }
  ],
  "Description": "The Department of Health and Human Services protects the health of all Americans and provides essential human services.",
  "Alt_Language": [
    {
      "Id": "50081",
      "URI": "http://www.usa.gov/api/USAGovAPI/contacts.json/contact/50081",
      "Name": "Departamento de Salud y Servicios Sociales – HHS",
      "Language": "es"
    }
  ],
  "Contact": [
    {
      "Id": "47994",
      "URI": "http://www.usa.gov/api/USAGovAPI/contacts.json/contact/47994",
      "Language": "en",
      "Name": "Administration for Children and Families (ACF)",
      "Source_Url": "http://www.usa.gov/directory/federal/administration-for-children--families.shtml",
      "Street1": "370 L'nfant Promenade, SW",
      "City": "Washington",
      "StateTer": "DC",
      "Zip": "20447",
      "Tollfree": [
        "1-888-289-8442 (Fraud Alert Hotline)"
      ],
      "Contact_Url": [
        {
          "Url": "http://www.acf.hhs.gov/programs/ana/about",
          "Description": "Contact the Administration for Children and Families (ACF) ",
          "Language": "en"
        },
        {
          "Url": "https://cfo.gov/cfo-members/",
          "Description": "Employee Directory",
          "Language": "en"
        },
        {
          "Url": "http://www.acf.hhs.gov/acf_contact_us.html#state",
          "Description": "Child Support",
          "Language": "en"
        },
        {
          "Url": "http://www.acf.hhs.gov/programs/ofa/help",
          "Description": "Temporary Assistance for Needy Families (Welfare)",
          "Language": "en"
        },
        {
          "Url": "http://www.childwelfare.gov/pubs/reslist/rl_dsp.cfm?rs_id=5&rate_chno=11-11172",
          "Description": "Report Child Abuse and Neglect",
          "Language": "en"
        },
        {
          "Url": "http://www.acf.hhs.gov/programs/ocs/liheap/about/contact_us.html",
          "Description": "Low Income Home Energy Assistance Program (LIHEAP)",
          "Language": "en"
        }
      ],
      "Web_Url": [
        {
          "Url": "http://www.acf.hhs.gov/",
          "Description": "Administration for Children and Families (ACF) ",
          "Language": "en"
        }
      ],
      "In_Person_Url": [
        {
          "Url": "http://eclkc.ohs.acf.hhs.gov/hslc/HeadStartOffices",
          "Description": "Head Start Program Locator",
          "Language": "en"
        },
        {
          "Url": "http://www.acf.hhs.gov/programs/cse/extinf.html",
          "Description": "Child Support Enforcement in Your State",
          "Language": "en"
        }
      ],
      "Description": "The ACF funds state, territory, local, and tribal organizations to provide family assistance (welfare), child support, child care, Head Start, child welfare, and other programs relating to children and families.",
      "Alt_Language": [
        {
          "Id": "50101",
          "URI": "http://www.usa.gov/api/USAGovAPI/contacts.json/contact/50101",
          "Name": "Administración de Asuntos de Niños y Familias",
          "Language": "es"
        }
      ],
      "Contact": [
        {
          "Id": "49064",
          "URI": "http://www.usa.gov/api/USAGovAPI/contacts.json/contact/49064",
          "Language": "en",
          "Name": "Administration for Native Americans",
          "Source_Url": "http://www.usa.gov/directory/federal/administration-for-native-americans.shtml",
          "Street1": "2nd Floor, West Aerospace Center",
          "Street2": "370 L'Enfant Promenade, SW",
          "City": "Washington",
          "StateTer": "DC",
          "Zip": "20447-0002",
          "Tollfree": [
            "877-922-9262"
          ],
          "Email": "anacomments@acf.hhs.gov",
          "Contact_Url": [
            {
              "Url": "http://www.acf.hhs.gov/programs/ana/about",
              "Description": "Contact the Administration for Native Americans ",
              "Language": "en"
            }
          ],
          "Web_Url": [
            {
              "Url": "http://www.acf.hhs.gov/programs/ana/",
              "Description": "Administration for Native Americans ",
              "Language": "en"
            }
          ],
          "Description": "The Administration for Native Americans promotes self-sufficiency and cultural preservation for Native Americans by providing social and economic development opportunities through financial assistance, training, and technical assistance.",
          "Alt_Language": [
            {
              "Id": "50125",
              "URI": "http://www.usa.gov/api/USAGovAPI/contacts.json/contact/50125",
              "Name": "Oficina de Asuntos Nativo Americanos",
              "Language": "es"
            }
          ]
        }
      ]
    }
  ]
}

Terms of Service

By using this data, you agree to the Terms of Service.

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The Turbotax Premier Federal E File State 2012 For Pc Download

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Turbotax premier federal e file state 2012 for pc download Topics - This chapter discusses: Sales and exchanges Ordinary or capital gain or loss Useful Items - You may want to see: Publication 334 Tax Guide for Small Business 523 Selling Your Home 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 908 Bankruptcy Tax Guide Form (and Instructions) 982 Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) Sch D (Form 1040) Capital Gains and Losses Sch F (Form 1040) Profit or Loss From Farming 1099-A Acquisition or Abandonment of Secured Property 1099-C Cancellation of Debt 4797 Sales of Business Property 8949 Sales and Other Dispositions of Capital Assets See chapter 16 for information about getting publications and forms. Turbotax premier federal e file state 2012 for pc download Sales and Exchanges If you sell, exchange, or otherwise dispose of your property, you usually have a gain or a loss. Turbotax premier federal e file state 2012 for pc download This section explains certain rules for determining whether any gain you have is taxable, and whether any loss you have is deductible. Turbotax premier federal e file state 2012 for pc download A sale is a transfer of property for money or a mortgage, note, or other promise to pay money. Turbotax premier federal e file state 2012 for pc download An exchange is a transfer of property for other property or services. Turbotax premier federal e file state 2012 for pc download Determining Gain or Loss You usually realize a gain or loss when you sell or exchange property. Turbotax premier federal e file state 2012 for pc download If the amount you realize from a sale or exchange of property is more than its adjusted basis, you will have a gain. Turbotax premier federal e file state 2012 for pc download If the adjusted basis of the property is more than the amount you realize, you will have a loss. Turbotax premier federal e file state 2012 for pc download Basis and adjusted basis. Turbotax premier federal e file state 2012 for pc download   The basis of property you buy is usually its cost. Turbotax premier federal e file state 2012 for pc download The adjusted basis of property is basis plus certain additions and minus certain deductions. Turbotax premier federal e file state 2012 for pc download See chapter 6 for more information about basis and adjusted basis. Turbotax premier federal e file state 2012 for pc download Amount realized. Turbotax premier federal e file state 2012 for pc download   The amount you realize from a sale or exchange is the total of all money you receive plus the fair market value (FMV) (defined in chapter 6) of all property or services you receive. Turbotax premier federal e file state 2012 for pc download The amount you realize also includes any of your liabilities assumed by the buyer and any liabilities to which the property you transferred is subject, such as real estate taxes or a mortgage. Turbotax premier federal e file state 2012 for pc download   If the liabilities relate to an exchange of multiple properties, see Multiple Property Exchanges in chapter 1 of Publication 544. Turbotax premier federal e file state 2012 for pc download Amount recognized. Turbotax premier federal e file state 2012 for pc download   Your gain or loss realized from a sale or exchange of certain property is usually a recognized gain or loss for tax purposes. Turbotax premier federal e file state 2012 for pc download A recognized gain is a gain you must include in gross income and report on your income tax return. Turbotax premier federal e file state 2012 for pc download A recognized loss is a loss you deduct from gross income. Turbotax premier federal e file state 2012 for pc download However, your gain or loss realized from the exchange of certain property may not be recognized for tax purposes. Turbotax premier federal e file state 2012 for pc download See Like-Kind Exchanges next. Turbotax premier federal e file state 2012 for pc download Also, a loss from the disposition of property held for personal use is not deductible. Turbotax premier federal e file state 2012 for pc download Like-Kind Exchanges Certain exchanges of property are not taxable. Turbotax premier federal e file state 2012 for pc download This means any gain from the exchange is not recognized, and any loss cannot be deducted. Turbotax premier federal e file state 2012 for pc download Your gain or loss will not be recognized until you sell or otherwise dispose of the property you receive. Turbotax premier federal e file state 2012 for pc download The exchange of property for the same kind of property is the most common type of nontaxable exchange. Turbotax premier federal e file state 2012 for pc download To qualify for treatment as a like-kind exchange, the property traded and the property received must be both of the following. Turbotax premier federal e file state 2012 for pc download Qualifying property. Turbotax premier federal e file state 2012 for pc download Like-kind property. Turbotax premier federal e file state 2012 for pc download These two requirements are discussed later. Turbotax premier federal e file state 2012 for pc download Multiple-party transactions. Turbotax premier federal e file state 2012 for pc download   The like-kind exchange rules also apply to property exchanges that involve three and four-party transactions. Turbotax premier federal e file state 2012 for pc download Any part of these multiple-party transactions can qualify as a like-kind exchange if it meets all the requirements described in this section. Turbotax premier federal e file state 2012 for pc download Receipt of title from third party. Turbotax premier federal e file state 2012 for pc download   If you receive property in a like-kind exchange and the other party who transfers the property to you does not give you the title, but a third party does, you can still treat this transaction as a like-kind exchange if it meets all the requirements. Turbotax premier federal e file state 2012 for pc download Basis of property received. Turbotax premier federal e file state 2012 for pc download   If you receive property in a like-kind exchange, the basis of the property will be the same as the basis of the property you gave up. Turbotax premier federal e file state 2012 for pc download See chapter 6 for more information. Turbotax premier federal e file state 2012 for pc download Money paid. Turbotax premier federal e file state 2012 for pc download   If, in addition to giving up like-kind property, you pay money in a like-kind exchange, you still have no recognized gain or loss. Turbotax premier federal e file state 2012 for pc download The basis of the property received is the basis of the property given up, increased by the money paid. Turbotax premier federal e file state 2012 for pc download Example. Turbotax premier federal e file state 2012 for pc download You traded an old tractor with an adjusted basis of $15,000 for a new one. Turbotax premier federal e file state 2012 for pc download The new tractor costs $300,000. Turbotax premier federal e file state 2012 for pc download You were allowed $80,000 for the old tractor and paid $220,000 cash. Turbotax premier federal e file state 2012 for pc download You have no recognized gain or loss on the transaction regardless of the adjusted basis of your old tractor and the basis of the new tractor is $235,000, the adjusted basis of the old tractor plus the cash paid ($15,000 + $220,000). Turbotax premier federal e file state 2012 for pc download If you had sold the old tractor to a third party for $80,000 and bought a new one, you would have a recognized gain or loss on the sale of your old tractor equal to the difference between the amount realized and the adjusted basis of the old tractor. Turbotax premier federal e file state 2012 for pc download In this case, the taxable gain would be $65,000 ($80,000 − $15,000) and the basis of the new tractor would be $300,000. Turbotax premier federal e file state 2012 for pc download Reporting the exchange. Turbotax premier federal e file state 2012 for pc download   Report the exchange of like-kind property, even though no gain or loss is recognized, on Form 8824, Like-Kind Exchanges. Turbotax premier federal e file state 2012 for pc download The Instructions for Form 8824 explain how to report the details of the exchange. Turbotax premier federal e file state 2012 for pc download   If you have any recognized gain because you received money or unlike property, report it on Schedule D (Form 1040) or Form 4797, whichever applies. Turbotax premier federal e file state 2012 for pc download You may also have to report the recognized gain as ordinary income because of depreciation recapture on Form 4797. Turbotax premier federal e file state 2012 for pc download See chapter 9 for more information. Turbotax premier federal e file state 2012 for pc download Qualifying property. Turbotax premier federal e file state 2012 for pc download   In a like-kind exchange, both the property you give up and the property you receive must be held by you for investment or for productive use in your trade or business. Turbotax premier federal e file state 2012 for pc download Machinery, buildings, land, trucks, breeding livestock, rental houses, and certain mutual ditch, reservoir, or irrigation company stock are examples of property that may qualify. Turbotax premier federal e file state 2012 for pc download Nonqualifying property. Turbotax premier federal e file state 2012 for pc download   The rules for like-kind exchanges do not apply to exchanges of the following property. Turbotax premier federal e file state 2012 for pc download Property you use for personal purposes, such as your home and family car. Turbotax premier federal e file state 2012 for pc download Stock in trade or other property held primarily for sale, such as crops and produce. Turbotax premier federal e file state 2012 for pc download Stocks, bonds, or notes. Turbotax premier federal e file state 2012 for pc download However, see Qualifying property above. Turbotax premier federal e file state 2012 for pc download Other securities or evidences of indebtedness, such as accounts receivable. Turbotax premier federal e file state 2012 for pc download Partnership interests. Turbotax premier federal e file state 2012 for pc download However, you may have a nontaxable exchange under other rules. Turbotax premier federal e file state 2012 for pc download See Other Nontaxable Exchanges in chapter 1 of Publication 544. Turbotax premier federal e file state 2012 for pc download Like-kind property. Turbotax premier federal e file state 2012 for pc download   To qualify as a nontaxable exchange, the properties exchanged must be of like kind. Turbotax premier federal e file state 2012 for pc download Like-kind properties are properties of the same nature or character, even if they differ in grade or quality. Turbotax premier federal e file state 2012 for pc download Generally, real property exchanged for real property qualifies as an exchange of like-kind property. Turbotax premier federal e file state 2012 for pc download For example, an exchange of city property for farm property or improved property for unimproved property is a like-kind exchange. Turbotax premier federal e file state 2012 for pc download   An exchange of a tractor for a new tractor is an exchange of like-kind property, and so is an exchange of timber land for crop acreage. Turbotax premier federal e file state 2012 for pc download An exchange of a tractor for acreage, however, is not an exchange of like-kind property. Turbotax premier federal e file state 2012 for pc download The exchange of livestock of one sex for livestock of the other sex is not a like-kind exchange. Turbotax premier federal e file state 2012 for pc download For example, the exchange of a bull for a cow is not a like-kind exchange. Turbotax premier federal e file state 2012 for pc download An exchange of the assets of a business for the assets of a similar business cannot be treated as an exchange of one property for another property. Turbotax premier federal e file state 2012 for pc download    Note. Turbotax premier federal e file state 2012 for pc download Whether you engaged in a like-kind exchange depends on an analysis of each asset involved in the exchange. Turbotax premier federal e file state 2012 for pc download Personal property. Turbotax premier federal e file state 2012 for pc download   Depreciable tangible personal property can be either like kind or like class to qualify for nontaxable exchange treatment. Turbotax premier federal e file state 2012 for pc download Like-class properties are depreciable tangible personal properties within the same General Asset Class or Product Class. Turbotax premier federal e file state 2012 for pc download Property classified in any General Asset Class may not be classified within a Product Class. Turbotax premier federal e file state 2012 for pc download Assets that are not in the same class will qualify as like-kind property if they are of the same nature or character. Turbotax premier federal e file state 2012 for pc download General Asset Classes. Turbotax premier federal e file state 2012 for pc download   General Asset Classes describe the types of property frequently used in many businesses. Turbotax premier federal e file state 2012 for pc download They include, but are not limited to, the following property. Turbotax premier federal e file state 2012 for pc download Office furniture, fixtures, and equipment (asset class 00. Turbotax premier federal e file state 2012 for pc download 11). Turbotax premier federal e file state 2012 for pc download Information systems, such as computers and peripheral equipment (asset class 00. Turbotax premier federal e file state 2012 for pc download 12). Turbotax premier federal e file state 2012 for pc download Data handling equipment except computers (asset class 00. Turbotax premier federal e file state 2012 for pc download 13). Turbotax premier federal e file state 2012 for pc download Automobiles and taxis (asset class 00. Turbotax premier federal e file state 2012 for pc download 22). Turbotax premier federal e file state 2012 for pc download Light general purpose trucks (asset class 00. Turbotax premier federal e file state 2012 for pc download 241). Turbotax premier federal e file state 2012 for pc download Heavy general purpose trucks (asset class 00. Turbotax premier federal e file state 2012 for pc download 242). Turbotax premier federal e file state 2012 for pc download Tractor units for use over-the-road (asset class 00. Turbotax premier federal e file state 2012 for pc download 26). Turbotax premier federal e file state 2012 for pc download Trailers and trailer-mounted containers (asset class 00. Turbotax premier federal e file state 2012 for pc download 27). Turbotax premier federal e file state 2012 for pc download Industrial steam and electric generation and/or distribution systems (asset class 00. Turbotax premier federal e file state 2012 for pc download 4). Turbotax premier federal e file state 2012 for pc download Product Classes. Turbotax premier federal e file state 2012 for pc download   Product Classes include property listed in a 6-digit product class in sectors 31 through 33 of the North American Industry Classification System (NAICS) of the Executive Office of the President, Office of Management and Budget, United States, (NAICS Manual). Turbotax premier federal e file state 2012 for pc download The latest version of the manual can be accessed at www. Turbotax premier federal e file state 2012 for pc download census. Turbotax premier federal e file state 2012 for pc download gov/eos/www/naics/. Turbotax premier federal e file state 2012 for pc download Copies of the printed manual may be purchased from the National Technical Information Service (NTIS) at  www. Turbotax premier federal e file state 2012 for pc download ntis. Turbotax premier federal e file state 2012 for pc download gov/products/naics. Turbotax premier federal e file state 2012 for pc download aspx or by calling 1-800-553-NTIS (1-800-553-6847) or (703) 605-6000. Turbotax premier federal e file state 2012 for pc download A CD-ROM version with search and retrieval software is also available from NTIS. Turbotax premier federal e file state 2012 for pc download    NAICS class 333111, Farm Machinery and Equipment Manufacturing, includes most machinery and equipment used in a farming business. Turbotax premier federal e file state 2012 for pc download Partially nontaxable exchange. Turbotax premier federal e file state 2012 for pc download   If, in addition to like-kind property, you receive money or unlike property in an exchange on which you realize gain, you have a partially nontaxable exchange. Turbotax premier federal e file state 2012 for pc download You are taxed on the gain you realize, but only to the extent of the money and the FMV of the unlike property you receive. Turbotax premier federal e file state 2012 for pc download A loss is not deductible. Turbotax premier federal e file state 2012 for pc download Example 1. Turbotax premier federal e file state 2012 for pc download You trade farmland that cost $30,000 for $10,000 cash and other land to be used in farming with a FMV of $50,000. Turbotax premier federal e file state 2012 for pc download You have a realized gain of $30,000 ($50,000 FMV of new land + $10,000 cash − $30,000 basis of old farmland = $30,000 realized gain). Turbotax premier federal e file state 2012 for pc download However, only $10,000, the cash received, is recognized (included in income). Turbotax premier federal e file state 2012 for pc download Example 2. Turbotax premier federal e file state 2012 for pc download Assume the same facts as in Example 1, except that, instead of money, you received a tractor with a FMV of $10,000. Turbotax premier federal e file state 2012 for pc download Your recognized gain is still limited to $10,000, the value of the tractor (the unlike property). Turbotax premier federal e file state 2012 for pc download Example 3. Turbotax premier federal e file state 2012 for pc download Assume in Example 1 that the FMV of the land you received was only $15,000. Turbotax premier federal e file state 2012 for pc download Your $5,000 loss is not recognized. Turbotax premier federal e file state 2012 for pc download Unlike property given up. Turbotax premier federal e file state 2012 for pc download   If, in addition to like-kind property, you give up unlike property, you must recognize gain or loss on the unlike property you give up. Turbotax premier federal e file state 2012 for pc download The gain or loss is the difference between the FMV of the unlike property and the adjusted basis of the unlike property. Turbotax premier federal e file state 2012 for pc download Like-kind exchanges between related persons. Turbotax premier federal e file state 2012 for pc download   Special rules apply to like-kind exchanges between related persons. Turbotax premier federal e file state 2012 for pc download These rules affect both direct and indirect exchanges. Turbotax premier federal e file state 2012 for pc download Under these rules, if either person disposes of the property within 2 years after the exchange, the exchange is disqualified from nonrecognition treatment. Turbotax premier federal e file state 2012 for pc download The gain or loss on the original exchange must be recognized as of the date of the later disposition. Turbotax premier federal e file state 2012 for pc download The 2-year holding period begins on the date of the last transfer of property that was part of the like-kind exchange. Turbotax premier federal e file state 2012 for pc download Related persons. Turbotax premier federal e file state 2012 for pc download   Under these rules, related persons include, for example, you and a member of your family (spouse, brother, sister, parent, child, etc. Turbotax premier federal e file state 2012 for pc download ), you and a corporation in which you have more than 50% ownership, you and a partnership in which you directly or indirectly own more than a 50% interest of the capital or profits, and two partnerships in which you directly or indirectly own more than 50% of the capital interests or profits. Turbotax premier federal e file state 2012 for pc download   For the complete list of related persons, see Related persons in chapter 2 of Publication 544. Turbotax premier federal e file state 2012 for pc download Example. Turbotax premier federal e file state 2012 for pc download You used a grey pickup truck in your farming business. Turbotax premier federal e file state 2012 for pc download Your sister used a red pickup truck in her landscaping business. Turbotax premier federal e file state 2012 for pc download In December 2012, you exchanged your grey pickup truck, plus $200, for your sister's red pickup truck. Turbotax premier federal e file state 2012 for pc download At that time, the FMV of the grey pickup truck was $7,000 and its adjusted basis was $6,000. Turbotax premier federal e file state 2012 for pc download The FMV of the red pickup truck was $7,200 and its adjusted basis was $1,000. Turbotax premier federal e file state 2012 for pc download You realized a gain of $1,000 (the $7,200 FMV of the red pickup truck, minus the grey pickup truck's $6,000 adjusted basis, minus the $200 you paid). Turbotax premier federal e file state 2012 for pc download Your sister realized a gain of $6,200 (the $7,000 FMV of the grey pickup truck plus the $200 you paid, minus the $1,000 adjusted basis of the red pickup truck). Turbotax premier federal e file state 2012 for pc download However, because this was a like-kind exchange, you recognized no gain. Turbotax premier federal e file state 2012 for pc download Your basis in the red pickup truck was $6,200 (the $6,000 adjusted basis of the grey pickup truck plus the $200 you paid). Turbotax premier federal e file state 2012 for pc download She recognized gain only to the extent of the money she received, $200. Turbotax premier federal e file state 2012 for pc download Her basis in the grey pickup truck was $1,000 (the $1,000 adjusted basis of the red pickup truck minus the $200 received, plus the $200 gain recognized). Turbotax premier federal e file state 2012 for pc download In 2013, you sold the red pickup truck to a third party for $7,000. Turbotax premier federal e file state 2012 for pc download Because you sold it within 2 years after the exchange, the exchange is disqualified from nonrecognition treatment. Turbotax premier federal e file state 2012 for pc download On your tax return for 2013, you must report your $1,000 gain on the 2012 exchange. Turbotax premier federal e file state 2012 for pc download You also report a loss on the sale as $200 (the adjusted basis of the red pickup truck, $7,200 (its $6,200 basis plus the $1,000 gain recognized), minus the $7,000 realized from the sale). Turbotax premier federal e file state 2012 for pc download In addition, your sister must report on her tax return for 2013 the $6,000 balance of her gain on the 2012 exchange. Turbotax premier federal e file state 2012 for pc download Her adjusted basis in the grey pickup truck is increased to $7,000 (its $1,000 basis plus the $6,000 gain recognized). Turbotax premier federal e file state 2012 for pc download Exceptions to the rules for related persons. Turbotax premier federal e file state 2012 for pc download   The following property dispositions are excluded from these rules. Turbotax premier federal e file state 2012 for pc download Dispositions due to the death of either related person. Turbotax premier federal e file state 2012 for pc download Involuntary conversions. Turbotax premier federal e file state 2012 for pc download Dispositions where it is established to the satisfaction of the IRS that neither the exchange nor the disposition has, as a main purpose, the avoidance of federal income tax. Turbotax premier federal e file state 2012 for pc download Multiple property exchanges. Turbotax premier federal e file state 2012 for pc download   Under the like-kind exchange rules, you must generally make a property-by-property comparison to figure your recognized gain and the basis of the property you receive in the exchange. Turbotax premier federal e file state 2012 for pc download However, for exchanges of multiple properties, you do not make a property-by-property comparison if you do either of the following. Turbotax premier federal e file state 2012 for pc download Transfer and receive properties in two or more exchange groups. Turbotax premier federal e file state 2012 for pc download Transfer or receive more than one property within a single exchange group. Turbotax premier federal e file state 2012 for pc download   For more information, see Multiple Property Exchanges in chapter 1 of Publication 544. Turbotax premier federal e file state 2012 for pc download Deferred exchange. Turbotax premier federal e file state 2012 for pc download   A deferred exchange for like-kind property may qualify for nonrecognition of gain or loss. Turbotax premier federal e file state 2012 for pc download A deferred exchange is an exchange in which you transfer property you use in business or hold for investment and later receive like-kind property you will use in business or hold for investment. Turbotax premier federal e file state 2012 for pc download The property you receive is replacement property. Turbotax premier federal e file state 2012 for pc download The transaction must be an exchange of property for property rather than a transfer of property for money used to buy replacement property. Turbotax premier federal e file state 2012 for pc download In addition, the replacement property will not be treated as like-kind property unless certain identification and receipt requirements are met. Turbotax premier federal e file state 2012 for pc download   For more information see Deferred Exchanges in chapter 1 of Publication 544. Turbotax premier federal e file state 2012 for pc download Transfer to Spouse 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 a former spouse if incident to divorce. Turbotax premier federal e file state 2012 for pc download This rule does not apply if the recipient is a nonresident alien. Turbotax premier federal e file state 2012 for pc download Nor does this rule apply to a transfer in trust to the extent the liabilities assumed and the liabilities on the property are more than the property's adjusted basis. Turbotax premier federal e file state 2012 for pc download Any transfer of property to a spouse or former spouse on which gain or loss is not recognized is not considered a sale or exchange. Turbotax premier federal e file state 2012 for pc download The recipient's basis in the property will be the same as the adjusted basis of the giver immediately before the transfer. Turbotax premier federal e file state 2012 for pc download This carryover basis rule applies whether the adjusted basis of the transferred property is less than, equal to, or greater than either its FMV at the time of transfer or any consideration paid by the recipient. Turbotax premier federal e file state 2012 for pc download This rule applies for determining loss as well as gain. Turbotax premier federal e file state 2012 for pc download Any gain recognized on a transfer in trust increases the basis. Turbotax premier federal e file state 2012 for pc download For more information on transfers of property incident to divorce, see Property Settlements in Publication 504, Divorced or Separated Individuals. Turbotax premier federal e file state 2012 for pc download Ordinary or Capital Gain or Loss Generally, you will have a capital gain or loss if you sell or exchange a capital asset (defined below). Turbotax premier federal e file state 2012 for pc download You may also have a capital gain if your section 1231 transactions result in a net gain. Turbotax premier federal e file state 2012 for pc download See Section 1231 Gains and Losses in  chapter 9. Turbotax premier federal e file state 2012 for pc download To figure your net capital gain or loss, you must classify your gains and losses as either ordinary or capital (and your capital gains or losses as either short-term or long-term). Turbotax premier federal e file state 2012 for pc download Your net capital gains may be taxed at a lower tax rate than ordinary income. Turbotax premier federal e file state 2012 for pc download See Capital Gains Tax Rates , later. Turbotax premier federal e file state 2012 for pc download Your deduction for a net capital loss may be limited. Turbotax premier federal e file state 2012 for pc download See Treatment of Capital Losses , later. Turbotax premier federal e file state 2012 for pc download Capital Assets Almost everything you own and use for personal purposes or investment is a capital asset. Turbotax premier federal e file state 2012 for pc download The following items are examples of capital assets. Turbotax premier federal e file state 2012 for pc download A home owned and occupied by you and your family. Turbotax premier federal e file state 2012 for pc download Household furnishings. Turbotax premier federal e file state 2012 for pc download A car used for pleasure. Turbotax premier federal e file state 2012 for pc download If your car is used both for pleasure and for farm business, it is partly a capital asset and partly a noncapital asset, defined later. Turbotax premier federal e file state 2012 for pc download Stocks and bonds. Turbotax premier federal e file state 2012 for pc download However, there are special rules for gains on qualified small business stock. Turbotax premier federal e file state 2012 for pc download For more information on this subject, see Gains on Qualified Small Business Stock and Losses on Section 1244 (Small Business) Stock in chapter 4 of Publication 550. Turbotax premier federal e file state 2012 for pc download Personal-use property. Turbotax premier federal e file state 2012 for pc download   Gain from a sale or exchange of personal-use property is a capital gain and is taxable. Turbotax premier federal e file state 2012 for pc download Loss from the sale or exchange of personal-use property is not deductible. Turbotax premier federal e file state 2012 for pc download You can deduct a loss relating to personal-use property only if it results from a casualty or theft. Turbotax premier federal e file state 2012 for pc download For information on casualties and thefts, see chapter 11. Turbotax premier federal e file state 2012 for pc download Long and Short Term Where you report a capital gain or loss depends on how long you own the asset before you sell or exchange it. Turbotax premier federal e file state 2012 for pc download The time you own an asset before disposing of it is the holding period. Turbotax premier federal e file state 2012 for pc download If you hold a capital asset 1 year or less, the gain or loss resulting from its disposition is short term. Turbotax premier federal e file state 2012 for pc download Report it in Part I of Schedule D (Form 1040). Turbotax premier federal e file state 2012 for pc download If you hold a capital asset longer than 1 year, the gain or loss resulting from its disposition is long term. Turbotax premier federal e file state 2012 for pc download Report it in Part II of Schedule D (Form 1040). Turbotax premier federal e file state 2012 for pc download Holding period. Turbotax premier federal e file state 2012 for pc download   To figure if you held property longer than 1 year, start counting on the day after the day you acquired the property. Turbotax premier federal e file state 2012 for pc download The day you disposed of the property is part of your holding period. Turbotax premier federal e file state 2012 for pc download Example. Turbotax premier federal e file state 2012 for pc download If you bought an asset on June 19, 2012, you should start counting on June 20, 2012. Turbotax premier federal e file state 2012 for pc download If you sold the asset on June 19, 2013, your holding period is not longer than 1 year, but if you sold it on June 20, 2013, your holding period is longer than 1 year. Turbotax premier federal e file state 2012 for pc download Inherited property. Turbotax premier federal e file state 2012 for pc download   If you inherit property, you are considered to have held the property longer than 1 year, regardless of how long you actually held it. Turbotax premier federal e file state 2012 for pc download This rule does not apply to livestock used in a farm business. Turbotax premier federal e file state 2012 for pc download See Holding period under Livestock , later. Turbotax premier federal e file state 2012 for pc download Nonbusiness bad debt. Turbotax premier federal e file state 2012 for pc download   A nonbusiness bad debt is a short-term capital loss, deductible in the year the debt becomes worthless. Turbotax premier federal e file state 2012 for pc download See chapter 4 of Publication 550. Turbotax premier federal e file state 2012 for pc download Nontaxable exchange. Turbotax premier federal e file state 2012 for pc download   If you acquire an asset in exchange for another asset and your basis for the new asset is figured, in whole or in part, by using your basis in the old property, the holding period of the new property includes the holding period of the old property. Turbotax premier federal e file state 2012 for pc download That is, it begins on the same day as your holding period for the old property. Turbotax premier federal e file state 2012 for pc download Gift. Turbotax premier federal e file state 2012 for pc download   If you receive a gift of property and your basis in it is figured using the donor's basis, your holding period includes the donor's holding period. Turbotax premier federal e file state 2012 for pc download Real property. Turbotax premier federal e file state 2012 for pc download   To figure how long you held real property, start counting on the day after you received title to it or, if earlier, on the day after you took possession of it and assumed the burdens and privileges of ownership. Turbotax premier federal e file state 2012 for pc download   However, taking possession of real property under an option agreement is not enough to start the holding period. Turbotax premier federal e file state 2012 for pc download The holding period cannot start until there is an actual contract of sale. Turbotax premier federal e file state 2012 for pc download The holding period of the seller cannot end before that time. Turbotax premier federal e file state 2012 for pc download Figuring Net Gain or Loss The totals for short-term capital gains and losses and the totals for long-term capital gains and losses must be figured separately. Turbotax premier federal e file state 2012 for pc download Net short-term capital gain or loss. Turbotax premier federal e file state 2012 for pc download   Combine your short-term capital gains and losses. Turbotax premier federal e file state 2012 for pc download Do this by adding all of your short-term capital gains. Turbotax premier federal e file state 2012 for pc download Then add all of your short-term capital losses. Turbotax premier federal e file state 2012 for pc download Subtract the lesser total from the greater. Turbotax premier federal e file state 2012 for pc download The difference is your net short-term capital gain or loss. Turbotax premier federal e file state 2012 for pc download Net long-term capital gain or loss. Turbotax premier federal e file state 2012 for pc download   Follow the same steps to combine your long-term capital gains and losses. Turbotax premier federal e file state 2012 for pc download The result is your net long-term capital gain or loss. Turbotax premier federal e file state 2012 for pc download Net gain. Turbotax premier federal e file state 2012 for pc download   If the total of your capital gains is more than the total of your capital losses, the difference is taxable. Turbotax premier federal e file state 2012 for pc download However, part of your gain (but not more than your net capital gain) may be taxed at a lower rate than the rate of tax on your ordinary income. Turbotax premier federal e file state 2012 for pc download See Capital Gains Tax Rates , later. Turbotax premier federal e file state 2012 for pc download Net loss. Turbotax premier federal e file state 2012 for pc download   If the total of your capital losses is more than the total of your capital gains, the difference is deductible. Turbotax premier federal e file state 2012 for pc download But there are limits on how much loss you can deduct and when you can deduct it. Turbotax premier federal e file state 2012 for pc download See Treatment of Capital Losses next. Turbotax premier federal e file state 2012 for pc download Treatment of Capital Losses If your capital losses are more than your capital gains, you must claim the difference even if you do not have ordinary income to offset it. Turbotax premier federal e file state 2012 for pc download For taxpayers other than corporations, the yearly limit on the capital loss you can deduct is $3,000 ($1,500 if you are married and file a separate return). Turbotax premier federal e file state 2012 for pc download If your other income is low, you may not be able to use the full $3,000. Turbotax premier federal e file state 2012 for pc download The part of the $3,000 you cannot use becomes part of your capital loss carryover (discussed next). Turbotax premier federal e file state 2012 for pc download Capital loss carryover. Turbotax premier federal e file state 2012 for pc download   Generally, you have a capital loss carryover if either of the following situations applies to you. Turbotax premier federal e file state 2012 for pc download Your net loss on Schedule D (Form 1040), is more than the yearly limit. Turbotax premier federal e file state 2012 for pc download Your taxable income without your deduction for exemptions is less than zero. Turbotax premier federal e file state 2012 for pc download If either of these situations applies to you for 2013, see Capital Losses under Reporting Capital Gains and Losses in chapter 4 of Publication 550 to figure the amount you can carry over to 2014. Turbotax premier federal e file state 2012 for pc download    To figure your capital loss carryover from 2013 to 2014, you will need a copy of your 2013 Form 1040 and Schedule D (Form 1040). Turbotax premier federal e file state 2012 for pc download Capital Gains Tax Rates The tax rates that apply to a net capital gain are generally lower than the tax rates that apply to other income. Turbotax premier federal e file state 2012 for pc download These lower rates are called the maximum capital gains rates. Turbotax premier federal e file state 2012 for pc download The term “net capital gain” means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. Turbotax premier federal e file state 2012 for pc download See Schedule D (Form 1040) and the Instructions for Schedule D (Form 1040). Turbotax premier federal e file state 2012 for pc download Also see Publication 550. Turbotax premier federal e file state 2012 for pc download Noncapital Assets Noncapital assets include property such as inventory and depreciable property used in a trade or business. Turbotax premier federal e file state 2012 for pc download A list of properties that are not capital assets is provided in the Instructions for Schedule D (Form 1040). Turbotax premier federal e file state 2012 for pc download Property held for sale in the ordinary course of your farm business. Turbotax premier federal e file state 2012 for pc download   Property you hold mainly for sale to customers, such as livestock, poultry, livestock products, and crops, is a noncapital asset. Turbotax premier federal e file state 2012 for pc download Gain or loss from sales or other dispositions of this property is reported on Schedule F (Form 1040) (not on Schedule D (Form 1040) or Form 4797). Turbotax premier federal e file state 2012 for pc download The treatment of this property is discussed in chapter 3. Turbotax premier federal e file state 2012 for pc download Land and depreciable properties. Turbotax premier federal e file state 2012 for pc download   Land and depreciable property you use in farming are not capital assets. Turbotax premier federal e file state 2012 for pc download Noncapital assets also include livestock held for draft, breeding, dairy, or sporting purposes. Turbotax premier federal e file state 2012 for pc download However, your gains and losses from sales and exchanges of your farmland and depreciable properties must be considered together with certain other transactions to determine whether the gains and losses are treated as capital or ordinary gains and losses. Turbotax premier federal e file state 2012 for pc download The sales of these business assets are reported on Form 4797. Turbotax premier federal e file state 2012 for pc download See chapter 9 for more information. Turbotax premier federal e file state 2012 for pc download Hedging (Commodity Futures) Hedging transactions are transactions that you enter into in the normal course of business primarily to manage the risk of interest rate or price changes, or currency fluctuations, with respect to borrowings, ordinary property, or ordinary obligations. Turbotax premier federal e file state 2012 for pc download Ordinary property or obligations are those that cannot produce capital gain or loss if sold or exchanged. Turbotax premier federal e file state 2012 for pc download A commodity futures contract is a standardized, exchange-traded contract for the sale or purchase of a fixed amount of a commodity at a future date for a fixed price. Turbotax premier federal e file state 2012 for pc download The holder of an option on a futures contract has the right (but not the obligation) for a specified period of time to enter into a futures contract to buy or sell at a particular price. Turbotax premier federal e file state 2012 for pc download A forward contract is generally similar to a futures contract except that the terms are not standardized and the contract is not exchange traded. Turbotax premier federal e file state 2012 for pc download Businesses may enter into commodity futures contracts or forward contracts and may acquire options on commodity futures contracts as either of the following. Turbotax premier federal e file state 2012 for pc download Hedging transactions. Turbotax premier federal e file state 2012 for pc download Transactions that are not hedging transactions. Turbotax premier federal e file state 2012 for pc download Futures transactions with exchange-traded commodity futures contracts that are not hedging transactions, generally, result in capital gain or loss and are subject to the mark-to-market rules discussed in Publication 550. Turbotax premier federal e file state 2012 for pc download There is a limit on the amount of capital losses you can deduct each year. Turbotax premier federal e file state 2012 for pc download Hedging transactions are not subject to the mark-to-market rules. Turbotax premier federal e file state 2012 for pc download If, as a farmer-producer, to protect yourself from the risk of unfavorable price fluctuations, you enter into commodity forward contracts, futures contracts, or options on futures contracts and the contracts cover an amount of the commodity within your range of production, the transactions are generally considered hedging transactions. Turbotax premier federal e file state 2012 for pc download They can take place at any time you have the commodity under production, have it on hand for sale, or reasonably expect to have it on hand. Turbotax premier federal e file state 2012 for pc download The gain or loss on the termination of these hedges is generally ordinary gain or loss. Turbotax premier federal e file state 2012 for pc download Farmers who file their income tax returns on the cash method report any profit or loss on the hedging transaction on Schedule F, line 8. Turbotax premier federal e file state 2012 for pc download Gains or losses from hedging transactions that hedge supplies of a type regularly used or consumed in the ordinary course of your trade or business may be ordinary gains or losses. Turbotax premier federal e file state 2012 for pc download Examples include fuel and feed. Turbotax premier federal e file state 2012 for pc download If you have numerous transactions in the commodity futures market during the year, you must be able to show which transactions are hedging transactions. Turbotax premier federal e file state 2012 for pc download Clearly identify a hedging transaction on your books and records before the end of the day you entered into the transaction. Turbotax premier federal e file state 2012 for pc download It may be helpful to have separate brokerage accounts for your hedging and speculation transactions. Turbotax premier federal e file state 2012 for pc download Retain the identification of each hedging transaction with your books and records. Turbotax premier federal e file state 2012 for pc download Also, identify the item(s) or aggregate risk that is being hedged in your records. Turbotax premier federal e file state 2012 for pc download Although the identification of the hedging transaction must be made before the end of the day it was entered into, you have 35 days after entering into the transaction to identify the hedged item(s) or risk. Turbotax premier federal e file state 2012 for pc download For more information on the tax treatment of futures and options contracts, see Commodity Futures and Section 1256 Contracts Marked to Market in Publication 550. Turbotax premier federal e file state 2012 for pc download Accounting methods for hedging transactions. Turbotax premier federal e file state 2012 for pc download   The accounting method you use for a hedging transaction must clearly reflect income. Turbotax premier federal e file state 2012 for pc download This means that your accounting method must reasonably match the timing of income, deduction, gain, or loss from a hedging transaction with the timing of income, deduction, gain, or loss from the item or items being hedged. Turbotax premier federal e file state 2012 for pc download There are requirements and limits on the method you can use for certain hedging transactions. Turbotax premier federal e file state 2012 for pc download See Regulations section 1. Turbotax premier federal e file state 2012 for pc download 446-4(e) for those requirements and limits. Turbotax premier federal e file state 2012 for pc download   Hedging transactions must be accounted for under the rules stated above unless the transaction is subject to mark-to-market accounting under section 475 or you use an accounting method other than the following methods. Turbotax premier federal e file state 2012 for pc download Cash method. Turbotax premier federal e file state 2012 for pc download Farm-price method. Turbotax premier federal e file state 2012 for pc download Unit-livestock-price method. Turbotax premier federal e file state 2012 for pc download   Once you adopt a method, you must apply it consistently and must have IRS approval before changing it. Turbotax premier federal e file state 2012 for pc download   Your books and records must describe the accounting method used for each type of hedging transaction. Turbotax premier federal e file state 2012 for pc download They must also contain any additional identification necessary to verify the application of the accounting method you used for the transaction. Turbotax premier federal e file state 2012 for pc download You must make the additional identification no more than 35 days after entering into the hedging transaction. Turbotax premier federal e file state 2012 for pc download Example of a hedging transaction. Turbotax premier federal e file state 2012 for pc download   You file your income tax returns on the cash method. Turbotax premier federal e file state 2012 for pc download On July 2 you anticipate a yield of 50,000 bushels of corn this year. Turbotax premier federal e file state 2012 for pc download The December futures price is $5. Turbotax premier federal e file state 2012 for pc download 75 a bushel, but there are indications that by harvest time the price will drop. Turbotax premier federal e file state 2012 for pc download To protect yourself against a drop in the price, you enter into the following hedging transaction. Turbotax premier federal e file state 2012 for pc download You sell ten December futures contracts of 5,000 bushels each for a total of 50,000 bushels of corn at $5. Turbotax premier federal e file state 2012 for pc download 75 a bushel. Turbotax premier federal e file state 2012 for pc download   The price did not drop as anticipated but rose to $6 a bushel. Turbotax premier federal e file state 2012 for pc download In November, you sell your crop at a local elevator for $6 a bushel. Turbotax premier federal e file state 2012 for pc download You also close out your futures position by buying ten December contracts for $6 a bushel. Turbotax premier federal e file state 2012 for pc download You paid a broker's commission of $1,400 ($70 per contract) for the complete in and out position in the futures market. Turbotax premier federal e file state 2012 for pc download   The result is that the price of corn rose 25 cents a bushel and the actual selling price is $6 a bushel. Turbotax premier federal e file state 2012 for pc download Your loss on the hedge is 25 cents a bushel. Turbotax premier federal e file state 2012 for pc download In effect, the net selling price of your corn is $5. Turbotax premier federal e file state 2012 for pc download 75 a bushel. Turbotax premier federal e file state 2012 for pc download   Report the results of your futures transactions and your sale of corn separately on Schedule F. Turbotax premier federal e file state 2012 for pc download See the instructions for the 2013 Schedule F (Form 1040). Turbotax premier federal e file state 2012 for pc download   The loss on your futures transactions is $13,900, figured as follows. Turbotax premier federal e file state 2012 for pc download July 2 - Sold December corn futures (50,000 bu. Turbotax premier federal e file state 2012 for pc download @$5. Turbotax premier federal e file state 2012 for pc download 75) $287,500 November 6 - Bought December corn futures (50,000 bu. Turbotax premier federal e file state 2012 for pc download @$6 plus $1,400 broker's commission) 301,400 Futures loss ($13,900) This loss is reported as a negative figure on Schedule F, Part I, line 8, as other income. Turbotax premier federal e file state 2012 for pc download   The proceeds from your corn sale at the local elevator are $300,000 (50,000 bu. Turbotax premier federal e file state 2012 for pc download × $6). Turbotax premier federal e file state 2012 for pc download Report it on Schedule F, Part I, line 2, as income from sales of products you raised. Turbotax premier federal e file state 2012 for pc download   Assume you were right and the price went down 25 cents a bushel. Turbotax premier federal e file state 2012 for pc download In effect, you would still net $5. Turbotax premier federal e file state 2012 for pc download 75 a bushel, figured as follows. Turbotax premier federal e file state 2012 for pc download Sold cash corn, per bushel $5. Turbotax premier federal e file state 2012 for pc download 50 Gain on hedge, per bushel . Turbotax premier federal e file state 2012 for pc download 25 Net price, per bushel $5. Turbotax premier federal e file state 2012 for pc download 75       The gain on your futures transactions would have been $11,100, figured as follows. Turbotax premier federal e file state 2012 for pc download July 2 - Sold December corn futures (50,000 bu. Turbotax premier federal e file state 2012 for pc download @$5. Turbotax premier federal e file state 2012 for pc download 75) $287,500 November 6 - Bought December corn futures (50,000 bu. Turbotax premier federal e file state 2012 for pc download @$5. Turbotax premier federal e file state 2012 for pc download 50 plus $1,400 broker's commission) 276,400 Futures gain $11,100 The $11,100 is reported on Schedule F, Part I, line 8, as other income. Turbotax premier federal e file state 2012 for pc download   The proceeds from the sale of your corn at the local elevator, $275,000, are reported on Schedule F, Part I, line 2, as income from sales of products you raised. Turbotax premier federal e file state 2012 for pc download Livestock This part discusses the sale or exchange of livestock used in your farm business. Turbotax premier federal e file state 2012 for pc download Gain or loss from the sale or exchange of this livestock may qualify as a section 1231 gain or loss. Turbotax premier federal e file state 2012 for pc download However, any part of the gain that is ordinary income from the recapture of depreciation is not included as section 1231 gain. Turbotax premier federal e file state 2012 for pc download See chapter 9 for more information on section 1231 gains and losses and the recapture of depreciation under section 1245. Turbotax premier federal e file state 2012 for pc download The rules discussed here do not apply to the sale of livestock held primarily for sale to customers. Turbotax premier federal e file state 2012 for pc download The sale of this livestock is reported on Schedule F. Turbotax premier federal e file state 2012 for pc download See chapter 3. Turbotax premier federal e file state 2012 for pc download Also, special rules apply to sales or exchanges caused by weather-related conditions. Turbotax premier federal e file state 2012 for pc download See chapter 3. Turbotax premier federal e file state 2012 for pc download Holding period. Turbotax premier federal e file state 2012 for pc download   The sale or exchange of livestock used in your farm business (defined below) qualifies as a section 1231 transaction if you held the livestock for 12 months or more (24 months or more for horses and cattle). Turbotax premier federal e file state 2012 for pc download Livestock. Turbotax premier federal e file state 2012 for pc download   For section 1231 transactions, livestock includes cattle, hogs, horses, mules, donkeys, sheep, goats, fur-bearing animals, and other mammals. Turbotax premier federal e file state 2012 for pc download Also, for section 1231 transactions, livestock does not include chickens, turkeys, pigeons, geese, emus, ostriches, rheas, or other birds, fish, frogs, reptiles, etc. Turbotax premier federal e file state 2012 for pc download Livestock used in farm business. Turbotax premier federal e file state 2012 for pc download   If livestock is held primarily for draft, breeding, dairy, or sporting purposes, it is used in your farm business. Turbotax premier federal e file state 2012 for pc download The purpose for which an animal is held ordinarily is determined by a farmer's actual use of the animal. Turbotax premier federal e file state 2012 for pc download An animal is not held for draft, breeding, dairy, or sporting purposes merely because it is suitable for that purpose, or because it is held for sale to other persons for use by them for that purpose. Turbotax premier federal e file state 2012 for pc download However, a draft, breeding, or sporting purpose may be present if an animal is disposed of within a reasonable time after it is prevented from its intended use or made undesirable as a result of an accident, disease, drought, or unfitness of the animal. Turbotax premier federal e file state 2012 for pc download Example 1. Turbotax premier federal e file state 2012 for pc download You discover an animal that you intend to use for breeding purposes is sterile. Turbotax premier federal e file state 2012 for pc download You dispose of it within a reasonable time. Turbotax premier federal e file state 2012 for pc download This animal was held for breeding purposes. Turbotax premier federal e file state 2012 for pc download Example 2. Turbotax premier federal e file state 2012 for pc download You retire and sell your entire herd, including young animals that you would have used for breeding or dairy purposes had you remained in business. Turbotax premier federal e file state 2012 for pc download These young animals were held for breeding or dairy purposes. Turbotax premier federal e file state 2012 for pc download Also, if you sell young animals to reduce your breeding or dairy herd because of drought, these animals are treated as having been held for breeding or dairy purposes. Turbotax premier federal e file state 2012 for pc download See Sales Caused by Weather-Related Conditions in chapter 3. Turbotax premier federal e file state 2012 for pc download Example 3. Turbotax premier federal e file state 2012 for pc download You are in the business of raising hogs for slaughter. Turbotax premier federal e file state 2012 for pc download Customarily, before selling your sows, you obtain a single litter of pigs that you will raise for sale. Turbotax premier federal e file state 2012 for pc download You sell the brood sows after obtaining the litter. Turbotax premier federal e file state 2012 for pc download Even though you hold these brood sows for ultimate sale to customers in the ordinary course of your business, they are considered to be held for breeding purposes. Turbotax premier federal e file state 2012 for pc download Example 4. Turbotax premier federal e file state 2012 for pc download You are in the business of raising registered cattle for sale to others for use as breeding cattle. Turbotax premier federal e file state 2012 for pc download The business practice is to breed the cattle before sale to establish their fitness as registered breeding cattle. Turbotax premier federal e file state 2012 for pc download Your use of the young cattle for breeding purposes is ordinary and necessary for selling them as registered breeding cattle. Turbotax premier federal e file state 2012 for pc download Such use does not demonstrate that you are holding the cattle for breeding purposes. Turbotax premier federal e file state 2012 for pc download However, those cattle you held as additions or replacements to your own breeding herd to produce calves are considered to be held for breeding purposes, even though they may not actually have produced calves. Turbotax premier federal e file state 2012 for pc download The same applies to hog and sheep breeders. Turbotax premier federal e file state 2012 for pc download Example 5. Turbotax premier federal e file state 2012 for pc download You breed, raise, and train horses for racing purposes. Turbotax premier federal e file state 2012 for pc download Every year you cull horses from your racing stable. Turbotax premier federal e file state 2012 for pc download In 2013, you decided that to prevent your racing stable from getting too large to be effectively operated, you must cull six horses that had been raced at public tracks in 2012. Turbotax premier federal e file state 2012 for pc download These horses are all considered held for sporting purposes. Turbotax premier federal e file state 2012 for pc download Figuring gain or loss on the cash method. Turbotax premier federal e file state 2012 for pc download   Farmers or ranchers who use the cash method of accounting figure their gain or loss on the sale of livestock used in their farming business as follows. Turbotax premier federal e file state 2012 for pc download Raised livestock. Turbotax premier federal e file state 2012 for pc download   Gain on the sale of raised livestock is generally the gross sales price reduced by any expenses of the sale. Turbotax premier federal e file state 2012 for pc download Expenses of sale include sales commissions, freight or hauling from farm to commission company, and other similar expenses. Turbotax premier federal e file state 2012 for pc download The basis of the animal sold is zero if the costs of raising it were deducted during the years the animal was being raised. Turbotax premier federal e file state 2012 for pc download However, see Uniform Capitalization Rules in chapter 6. Turbotax premier federal e file state 2012 for pc download Purchased livestock. Turbotax premier federal e file state 2012 for pc download   The gross sales price minus your adjusted basis and any expenses of sale is the gain or loss. Turbotax premier federal e file state 2012 for pc download Example. Turbotax premier federal e file state 2012 for pc download A farmer sold a breeding cow on January 8, 2013, for $1,250. Turbotax premier federal e file state 2012 for pc download Expenses of the sale were $125. Turbotax premier federal e file state 2012 for pc download The cow was bought July 2, 2009, for $1,300. Turbotax premier federal e file state 2012 for pc download Depreciation (not less than the amount allowable) was $867. Turbotax premier federal e file state 2012 for pc download Gross sales price $1,250 Cost (basis) $1,300   Minus: Depreciation deduction 867   Unrecovered cost (adjusted basis) $ 433   Expense of sale 125 558 Gain realized $ 692 Converted Wetland and Highly Erodible Cropland Special rules apply to dispositions of land converted to farming use after March 1, 1986. Turbotax premier federal e file state 2012 for pc download Any gain realized on the disposition of converted wetland or highly erodible cropland is treated as ordinary income. Turbotax premier federal e file state 2012 for pc download Any loss on the disposition of such property is treated as a long-term capital loss. Turbotax premier federal e file state 2012 for pc download Converted wetland. Turbotax premier federal e file state 2012 for pc download   This is generally land that was drained or filled to make the production of agricultural commodities possible. Turbotax premier federal e file state 2012 for pc download It includes converted wetland held by the person who originally converted it or held by any other person who used the converted wetland at any time after conversion for farming. Turbotax premier federal e file state 2012 for pc download   A wetland (before conversion) is land that meets all the following conditions. Turbotax premier federal e file state 2012 for pc download It is mostly soil that, in its undrained condition, is saturated, flooded, or ponded long enough during a growing season to develop an oxygen-deficient state that supports the growth and regeneration of plants growing in water. Turbotax premier federal e file state 2012 for pc download It is saturated by surface or groundwater at a frequency and duration sufficient to support mostly plants that are adapted for life in saturated soil. Turbotax premier federal e file state 2012 for pc download It supports, under normal circumstances, mostly plants that grow in saturated soil. Turbotax premier federal e file state 2012 for pc download Highly erodible cropland. Turbotax premier federal e file state 2012 for pc download   This is cropland subject to erosion that you used at any time for farming purposes other than grazing animals. Turbotax premier federal e file state 2012 for pc download Generally, highly erodible cropland is land currently classified by the Department of Agriculture as Class IV, VI, VII, or VIII under its classification system. Turbotax premier federal e file state 2012 for pc download Highly erodible cropland also includes land that would have an excessive average annual erosion rate in relation to the soil loss tolerance level, as determined by the Department of Agriculture. Turbotax premier federal e file state 2012 for pc download Successor. Turbotax premier federal e file state 2012 for pc download   Converted wetland or highly erodible cropland is also land held by any person whose basis in the land is figured by reference to the adjusted basis of a person in whose hands the property was converted wetland or highly erodible cropland. Turbotax premier federal e file state 2012 for pc download Timber Standing timber you held as investment property is a capital asset. Turbotax premier federal e file state 2012 for pc download Gain or loss from its sale is capital gain or loss reported on Form 8949 and Schedule D (Form 1040), as applicable. Turbotax premier federal e file state 2012 for pc download If you held the timber primarily for sale to customers, it is not a capital asset. Turbotax premier federal e file state 2012 for pc download Gain or loss on its sale is ordinary business income or loss. Turbotax premier federal e file state 2012 for pc download It is reported on Schedule F, line 1 (purchased timber) or line 2 (raised timber). Turbotax premier federal e file state 2012 for pc download See the Instructions for Schedule F (Form 1040). Turbotax premier federal e file state 2012 for pc download Farmers who cut timber on their land and sell it as logs, firewood, or pulpwood usually have no cost or other basis for that timber. Turbotax premier federal e file state 2012 for pc download Amounts realized from these sales, and the expenses incurred in cutting, hauling, etc. Turbotax premier federal e file state 2012 for pc download , are ordinary farm income and expenses reported on Schedule F. Turbotax premier federal e file state 2012 for pc download Different rules apply if you owned the timber longer than 1 year and elect to treat timber cutting as a sale or exchange or you enter into a cutting contract, discussed below. Turbotax premier federal e file state 2012 for pc download Timber considered cut. Turbotax premier federal e file state 2012 for pc download   Timber is considered cut on the date when, in the ordinary course of business, the quantity of felled timber is first definitely determined. Turbotax premier federal e file state 2012 for pc download This is true whether the timber is cut under contract or whether you cut it yourself. Turbotax premier federal e file state 2012 for pc download Christmas trees. Turbotax premier federal e file state 2012 for pc download   Evergreen trees, such as Christmas trees, that are more than 6 years old when severed from their roots and sold for ornamental purposes are included in the term timber. Turbotax premier federal e file state 2012 for pc download They qualify for both rules discussed below. Turbotax premier federal e file state 2012 for pc download Election to treat cutting as a sale or exchange. Turbotax premier federal e file state 2012 for pc download   Under the general rule, the cutting of timber results in no gain or loss. Turbotax premier federal e file state 2012 for pc download It is not until a sale or exchange occurs that gain or loss is realized. Turbotax premier federal e file state 2012 for pc download But if you owned or had a contractual right to cut timber, you can elect to treat the cutting of timber as a section 1231 transaction in the year it is cut. Turbotax premier federal e file state 2012 for pc download Even though the cut timber is not actually sold or exchanged, you report your gain or loss on the cutting for the year the timber is cut. Turbotax premier federal e file state 2012 for pc download Any later sale results in ordinary business income or loss. Turbotax premier federal e file state 2012 for pc download See the example below. Turbotax premier federal e file state 2012 for pc download   To elect this treatment, you must: Own or hold a contractual right to cut the timber for a period of more than 1 year before it is cut, and Cut the timber for sale or use in your trade or business. Turbotax premier federal e file state 2012 for pc download Making the election. Turbotax premier federal e file state 2012 for pc download   You make the election on your return for the year the cutting takes place by including in income the gain or loss on the cutting and including a computation of your gain or loss. Turbotax premier federal e file state 2012 for pc download You do not have to make the election in the first year you cut the timber. Turbotax premier federal e file state 2012 for pc download You can make it in any year to which the election would apply. Turbotax premier federal e file state 2012 for pc download If the timber is partnership property, the election is made on the partnership return. Turbotax premier federal e file state 2012 for pc download This election cannot be made on an amended return. Turbotax premier federal e file state 2012 for pc download   Once you have made the election, it remains in effect for all later years unless you revoke it. Turbotax premier federal e file state 2012 for pc download Election under section 631(a) may be revoked. Turbotax premier federal e file state 2012 for pc download   If you previously elected for any tax year ending before October 23, 2004, to treat the cutting of timber as a sale or exchange under section 631(a), you may revoke this election without the consent of the IRS for any tax year ending after October 22, 2004. Turbotax premier federal e file state 2012 for pc download The prior election (and revocation) is disregarded for purposes of making a subsequent election. Turbotax premier federal e file state 2012 for pc download See Form T (Timber), Forest Activities Schedule, for more information. Turbotax premier federal e file state 2012 for pc download Gain or loss. Turbotax premier federal e file state 2012 for pc download   Your gain or loss on the cutting of standing timber is the difference between its adjusted basis for depletion and its FMV on the first day of your tax year in which it is cut. Turbotax premier federal e file state 2012 for pc download   Your adjusted basis for depletion of cut timber is based on the number of units (board feet, log scale, or other units) of timber cut during the tax year and considered to be sold or exchanged. Turbotax premier federal e file state 2012 for pc download Your adjusted basis for depletion is also based on the depletion unit of timber in the account used for the cut timber, and should be figured in the same manner as shown in section 611 and Regulations section 1. Turbotax premier federal e file state 2012 for pc download 611-3. Turbotax premier federal e file state 2012 for pc download   Depletion of timber is discussed in chapter 7. Turbotax premier federal e file state 2012 for pc download Example. Turbotax premier federal e file state 2012 for pc download   In April 2013, you owned 4,000 MBF (1,000 board feet) of standing timber longer than 1 year. Turbotax premier federal e file state 2012 for pc download It had an adjusted basis for depletion of $40 per MBF. Turbotax premier federal e file state 2012 for pc download You are a calendar year taxpayer. Turbotax premier federal e file state 2012 for pc download On January 1, 2013, the timber had a FMV of $350 per MBF. Turbotax premier federal e file state 2012 for pc download It was cut in April for sale. Turbotax premier federal e file state 2012 for pc download On your 2013 tax return, you elect to treat the cutting of the timber as a sale or exchange. Turbotax premier federal e file state 2012 for pc download You report the difference between the FMV and your adjusted basis for depletion as a gain. Turbotax premier federal e file state 2012 for pc download This amount is reported on Form 4797 along with your other section 1231 gains and losses to figure whether it is treated as a capital gain or as ordinary gain. Turbotax premier federal e file state 2012 for pc download You figure your gain as follows. Turbotax premier federal e file state 2012 for pc download FMV of timber January 1, 2013 $1,400,000 Minus: Adjusted basis for depletion 160,000 Section 1231 gain $1,240,000   The FMV becomes your basis in the cut timber, and a later sale of the cut timber, including any by-product or tree tops, will result in ordinary business income or loss. Turbotax premier federal e file state 2012 for pc download Outright sales of timber. Turbotax premier federal e file state 2012 for pc download   Outright sales of timber by landowners qualify for capital gains treatment using rules similar to the rules for certain disposal of timber under a contract with retained economic interest (defined later). Turbotax premier federal e file state 2012 for pc download However, for outright sales, the date of disposal is not deemed to be the date the timber is cut because the landowner can elect to treat the payment date as the date of disposal (see Date of disposal below). Turbotax premier federal e file state 2012 for pc download Cutting contract. Turbotax premier federal e file state 2012 for pc download   You must treat the disposal of standing timber under a cutting contract as a section 1231 transaction if all the following apply to you. Turbotax premier federal e file state 2012 for pc download You are the owner of the timber. Turbotax premier federal e file state 2012 for pc download You held the timber longer than 1 year before its disposal. Turbotax premier federal e file state 2012 for pc download You kept an economic interest in the timber. Turbotax premier federal e file state 2012 for pc download   You have kept an economic interest in standing timber if, under the cutting contract, the expected return on your investment is conditioned on the cutting of the timber. Turbotax premier federal e file state 2012 for pc download   The difference between the amount realized from the disposal of the timber and its adjusted basis for depletion is treated as gain or loss on its sale. Turbotax premier federal e file state 2012 for pc download Include this amount on Form 4797 along with your other section 1231 gains or losses. Turbotax premier federal e file state 2012 for pc download Date of disposal. Turbotax premier federal e file state 2012 for pc download   The date of disposal is the date the timber is cut. Turbotax premier federal e file state 2012 for pc download However, for outright sales by landowners or if you receive payment under the contract before the timber is cut, you can elect to treat the date of payment as the date of disposal. Turbotax premier federal e file state 2012 for pc download   This election applies only to figure the holding period of the timber. Turbotax premier federal e file state 2012 for pc download It has no effect on the time for reporting gain or loss (generally when the timber is sold or exchanged). Turbotax premier federal e file state 2012 for pc download   To make this election, attach a statement to the tax return filed by the due date (including extensions) for the year payment is received. Turbotax premier federal e file state 2012 for pc download The statement must identify the advance payments subject to the election and the contract under which they were made. Turbotax premier federal e file state 2012 for pc download   If you timely filed your return for the year you received payment without making the election, you can still make the election by filing an amended return within 6 months after the due date for that year's return (excluding extensions). Turbotax premier federal e file state 2012 for pc download Attach the statement to the amended return and write “Filed pursuant to section 301. Turbotax premier federal e file state 2012 for pc download 9100-2” at the top of the statement. Turbotax premier federal e file state 2012 for pc download File the amended return at the same address the original return was filed. Turbotax premier federal e file state 2012 for pc download Owner. Turbotax premier federal e file state 2012 for pc download   An owner is any person who owns an interest in the timber, including a sublessor and the holder of a contract to cut the timber. Turbotax premier federal e file state 2012 for pc download You own an interest in timber if you have the right to cut it for sale on your own account or for use in your business. Turbotax premier federal e file state 2012 for pc download Tree stumps. Turbotax premier federal e file state 2012 for pc download   Tree stumps are a capital asset if they are on land held by an investor who is not in the timber or stump business as a buyer, seller, or processor. Turbotax premier federal e file state 2012 for pc download Gain from the sale of stumps sold in one lot by such a holder is taxed as a capital gain. Turbotax premier federal e file state 2012 for pc download However, tree stumps held by timber operators after the saleable standing timber was cut and removed from the land are considered by-products. Turbotax premier federal e file state 2012 for pc download Gain from the sale of stumps in lots or tonnage by such operators is taxed as ordinary income. Turbotax premier federal e file state 2012 for pc download   See Form T (Timber) and its separate instructions for more information about dispositions of timber. Turbotax premier federal e file state 2012 for pc download Sale of a Farm The sale of your farm will usually involve the sale of both nonbusiness property (your home) and business property (the land and buildings used in the farm operation and perhaps machinery and livestock). Turbotax premier federal e file state 2012 for pc download If you have a gain from the sale, you may be allowed to exclude the gain on your home. Turbotax premier federal e file state 2012 for pc download For more information, see Publication 523, Selling Your Home. Turbotax premier federal e file state 2012 for pc download The gain on the sale of your business property is taxable. Turbotax premier federal e file state 2012 for pc download A loss on the sale of your business property to an unrelated person is deducted as an ordinary loss. Turbotax premier federal e file state 2012 for pc download Your taxable gain or loss on the sale of property used in your farm business is taxed under the rules for section 1231 transactions. Turbotax premier federal e file state 2012 for pc download See chapter 9. Turbotax premier federal e file state 2012 for pc download Losses from personal-use property, other than casualty or theft losses, are not deductible. Turbotax premier federal e file state 2012 for pc download If you receive payments for your farm in installments, your gain is taxed over the period of years the payments are received, unless you elect not to use the installment method of reporting the gain. Turbotax premier federal e file state 2012 for pc download See chapter 10 for information about installment sales. Turbotax premier federal e file state 2012 for pc download When you sell your farm, the gain or loss on each asset is figured separately. Turbotax premier federal e file state 2012 for pc download The tax treatment of gain or loss on the sale of each asset is determined by the classification of the asset. Turbotax premier federal e file state 2012 for pc download Each of the assets sold must be classified as one of the following. Turbotax premier federal e file state 2012 for pc download Capital asset held 1 year or less. Turbotax premier federal e file state 2012 for pc download Capital asset held longer than 1 year. Turbotax premier federal e file state 2012 for pc download Property (including real estate) used in your business and held 1 year or less (including draft, breeding, dairy, and sporting animals held less than the holding periods discussed earlier under Livestock ). Turbotax premier federal e file state 2012 for pc download Property (including real estate) used in your business and held longer than 1 year (including only draft, breeding, dairy, and sporting animals held for the holding periods discussed earlier). Turbotax premier federal e file state 2012 for pc download Property held primarily for sale or which is of the kind that would be included in inventory if on hand at the end of your tax year. Turbotax premier federal e file state 2012 for pc download Allocation of consideration paid for a farm. Turbotax premier federal e file state 2012 for pc download   The sale of a farm for a lump sum is considered a sale of each individual asset rather than a single asset. Turbotax premier federal e file state 2012 for pc download The residual method is required only if the group of assets sold constitutes a trade or business. Turbotax premier federal e file state 2012 for pc download This method determines gain or loss from the transfer of each asset. Turbotax premier federal e file state 2012 for pc download It also determines the buyer's basis in the business assets. Turbotax premier federal e file state 2012 for pc download For more information, see Sale of a Business in chapter 2 of Publication 544. Turbotax premier federal e file state 2012 for pc download Property used in farm operation. Turbotax premier federal e file state 2012 for pc download   The rules for excluding the gain on the sale of your home, described later under Sale of your home , do not apply to the property used for your farming business. Turbotax premier federal e file state 2012 for pc download Recognized gains and losses on business property must be reported on your return for the year of the sale. Turbotax premier federal e file state 2012 for pc download If the property was held longer than 1 year, it may qualify for section 1231 treatment (see chapter 9). Turbotax premier federal e file state 2012 for pc download Example. Turbotax premier federal e file state 2012 for pc download You sell your farm, including your main home, which you have owned since December 2001. Turbotax premier federal e file state 2012 for pc download You realize gain on the sale as follows. Turbotax premier federal e file state 2012 for pc download   Farm   Farm   With Home Without   Home Only Home Selling price $382,000 $158,000 $224,000 Cost (or other basis) 240,000 110,000 130,000 Gain $142,000 $48,000 $94,000 You must report the $94,000 gain from the sale of the property used in your farm business. Turbotax premier federal e file state 2012 for pc download All or a part of that gain may have to be reported as ordinary income from the recapture of depreciation or soil and water conservation expenses. Turbotax premier federal e file state 2012 for pc download Treat the balance as section 1231 gain. Turbotax premier federal e file state 2012 for pc download The $48,000 gain from the sale of your home is not taxable as long as you meet the requirements explained later under Sale of your home . Turbotax premier federal e file state 2012 for pc download Partial sale. Turbotax premier federal e file state 2012 for pc download   If you sell only part of your farm, you must report any recognized gain or loss on the sale of that part on your tax return for the year of the sale. Turbotax premier federal e file state 2012 for pc download You cannot wait until you have sold enough of the farm to recover its entire cost before reporting gain or loss. Turbotax premier federal e file state 2012 for pc download For a detailed discussion on installment sales, see Publication 544. Turbotax premier federal e file state 2012 for pc download Adjusted basis of the part sold. Turbotax premier federal e file state 2012 for pc download   This is the properly allocated part of your original cost or other basis of the entire farm plus or minus necessary adjustments for improvements, depreciation, etc. Turbotax premier federal e file state 2012 for pc download , on the part sold. Turbotax premier federal e file state 2012 for pc download If your home is on the farm, you must properly adjust the basis to exclude those costs from your farm asset costs, as discussed below under Sale of your home . Turbotax premier federal e file state 2012 for pc download Example. Turbotax premier federal e file state 2012 for pc download You bought a 600-acre farm for $700,000. Turbotax premier federal e file state 2012 for pc download The farm included land and buildings. Turbotax premier federal e file state 2012 for pc download The purchase contract designated $600,000 of the purchase price to the land. Turbotax premier federal e file state 2012 for pc download You later sold 60 acres of land on which you had installed a fence. Turbotax premier federal e file state 2012 for pc download Your adjusted basis for the part of your farm sold is $60,000 (1/10 of $600,000), plus any unrecovered cost (cost not depreciated) of the fence on the 60 acres at the time of sale. Turbotax premier federal e file state 2012 for pc download Use this amount to determine your gain or loss on the sale of the 60 acres. Turbotax premier federal e file state 2012 for pc download Assessed values for local property taxes. Turbotax premier federal e file state 2012 for pc download   If you paid a flat sum for the entire farm and no other facts are available for properly allocating your original cost or other basis between the land and the buildings, you can use the assessed values for local property taxes for the year of purchase to allocate the costs. Turbotax premier federal e file state 2012 for pc download Example. Turbotax premier federal e file state 2012 for pc download Assume that in the preceding example there was no breakdown of the $700,000 purchase price between land and buildings. Turbotax premier federal e file state 2012 for pc download However, in the year of purchase, local taxes on the entire property were based on assessed valuations of $420,000 for land and $140,000 for improvements, or a total of $560,000. Turbotax premier federal e file state 2012 for pc download The assessed valuation of the land is 3/4 (75%) of the total assessed valuation. Turbotax premier federal e file state 2012 for pc download Multiply the $700,000 total purchase price by 75% to figure basis of $525,000 for the 600 acres of land. Turbotax premier federal e file state 2012 for pc download The unadjusted basis of the 60 acres you sold would then be $52,500 (1/10 of $525,000). Turbotax premier federal e file state 2012 for pc download Sale of your home. Turbotax premier federal e file state 2012 for pc download   Your home is a capital asset and not property used in the trade or business of farming. Turbotax premier federal e file state 2012 for pc download If you sell a farm that includes a house you and your family occupy, you must determine the part of the selling price and the part of the cost or other basis allocable to your home. Turbotax premier federal e file state 2012 for pc download Your home includes the immediate surroundings and outbuildings relating to it that are not used for business purposes. Turbotax premier federal e file state 2012 for pc download   If you use part of your home for business, you must make an appropriate adjustment to the basis for depreciation allowed or allowable. Turbotax premier federal e file state 2012 for pc download For more information on basis, see chapter 6. Turbotax premier federal e file state 2012 for pc download More information. Turbotax premier federal e file state 2012 for pc download   For more information on selling your home, see Publication 523. Turbotax premier federal e file state 2012 for pc download Gain from condemnation. Turbotax premier federal e file state 2012 for pc download   If you have a gain from a condemnation or sale under threat of condemnation, you may use the preceding rules for excluding the gain, rather than the rules discussed under Postponing Gain in chapter 11. Turbotax premier federal e file state 2012 for pc download However, any gain that cannot be excluded (because it is more than the limit) may be postponed under the rules discussed under Postponing Gain in chapter 11. Turbotax premier federal e file state 2012 for pc download Foreclosure or Repossession If you do not make payments you owe on a loan secured by property, the lender may foreclose on the loan or repossess the property. Turbotax premier federal e file state 2012 for pc download The foreclosure or repossession is treated as a sale or exchange from which you may realize gain or loss. Turbotax premier federal e file state 2012 for pc download This is true even if you voluntarily return the property to the lender. Turbotax premier federal e file state 2012 for pc download You may also realize ordinary income from cancellation of debt if the loan balance is more than the FMV of the property. Turbotax premier federal e file state 2012 for pc download Buyer's (borrower's) gain or loss. Turbotax premier federal e file state 2012 for pc download   You figure and report gain or loss from a foreclosure or repossession in the same way as gain or loss from a sale or exchange. Turbotax premier federal e file state 2012 for pc download The gain or loss is the difference between your adjusted basis in the transferred property and the amount realized. Turbotax premier federal e file state 2012 for pc download See Determining Gain or Loss , earlier. Turbotax premier federal e file state 2012 for pc download Worksheet 8-1. Turbotax premier federal e file state 2012 for pc download Worksheet for Foreclosures andRepossessions Part 1. Turbotax premier federal e file state 2012 for pc download Use Part 1 to figure your ordinary income from the cancellation of debt upon foreclosure or repossession. Turbotax premier federal e file state 2012 for pc download Complete this part only if you were personally liable for the debt. Turbotax premier federal e file state 2012 for pc download Otherwise, go to Part 2. Turbotax premier federal e file state 2012 for pc download   1. Turbotax premier federal e file state 2012 for pc download Enter the amount of outstanding debt immediately before the transfer of property reduced by any amount for which you remain personally liable after the transfer of property   2. Turbotax premier federal e file state 2012 for pc download Enter the Fair Market Value of the transferred property   3. Turbotax premier federal e file state 2012 for pc download Ordinary income from cancellation of debt upon foreclosure or repossession. Turbotax premier federal e file state 2012 for pc download * Subtract line 2 from line 1. Turbotax premier federal e file state 2012 for pc download If zero or less, enter -0-   Part 2. Turbotax premier federal e file state 2012 for pc download Figure your gain or loss from foreclosure or repossession. Turbotax premier federal e file state 2012 for pc download   4. Turbotax premier federal e file state 2012 for pc download If you completed Part 1, enter the smaller of line 1 or line 2. Turbotax premier federal e file state 2012 for pc download If you did not complete Part 1, enter the outstanding debt immediately before the transfer of property   5. Turbotax premier federal e file state 2012 for pc download Enter any proceeds you received from the foreclosure sale   6. Turbotax premier federal e file state 2012 for pc download Add lines 4 and 5   7. Turbotax premier federal e file state 2012 for pc download Enter the adjusted basis of the transferred property   8. Turbotax premier federal e file state 2012 for pc download Gain or loss from foreclosure or repossession. Turbotax premier federal e file state 2012 for pc download Subtract line 7  from line 6   * The income may not be taxable. Turbotax premier federal e file state 2012 for pc download See Cancellation of debt . Turbotax premier federal e file state 2012 for pc download    You can use Worksheet 8-1 to figure your gain or loss from a foreclosure or repossession. Turbotax premier federal e file state 2012 for pc download Amount realized on a nonrecourse debt. Turbotax premier federal e file state 2012 for pc download   If you are not personally liable for repaying the debt (nonrecourse debt) secured by the transferred property, the amount you realize includes the full amount of the debt canceled by the transfer. Turbotax premier federal e file state 2012 for pc download The full canceled debt is included in the amount realized even if the fair market value of the property is less than the canceled debt. Turbotax premier federal e file state 2012 for pc download Example 1. Turbotax premier federal e file state 2012 for pc download Ann paid $200,000 for land used in her farming business. Turbotax premier federal e file state 2012 for pc download She paid $15,000 down and borrowed the remaining $185,000 from a bank. Turbotax premier federal e file state 2012 for pc download Ann is not personally liable for the loan (nonrecourse debt), but pledges the land as security. Turbotax premier federal e file state 2012 for pc download The bank foreclosed on the loan 2 years after Ann stopped making payments. Turbotax premier federal e file state 2012 for pc download When the bank foreclosed, the balance due on the loan was $180,000 and the FMV of the land was $170,000. Turbotax premier federal e file state 2012 for pc download The amount Ann realized on the foreclosure was $180,000, the debt canceled by the foreclosure. Turbotax premier federal e file state 2012 for pc download She figures her gain or loss on Form 4797, Part I, by comparing the amount realized ($180,000) with her adjusted basis ($200,000). Turbotax premier federal e file state 2012 for pc download She has a $20,000 deductible loss. Turbotax premier federal e file state 2012 for pc download Example 2. Turbotax premier federal e file state 2012 for pc download Assume the same facts as in Example 1 except the FMV of the land was $210,000. Turbotax premier federal e file state 2012 for pc download The result is the same. Turbotax premier federal e file state 2012 for pc download The amount Ann realized on the foreclosure is $180,000, the debt canceled by the foreclosure. Turbotax premier federal e file state 2012 for pc download Because her adjusted basis is $200,000, she has a deductible loss of $20,000, which she reports on Form 4797, Part I. Turbotax premier federal e file state 2012 for pc download Amount realized on a recourse debt. Turbotax premier federal e file state 2012 for pc download   If you are personally liable for the debt (recourse debt), the amount realized on the foreclosure or repossession includes the lesser of: The outstanding debt immediately before the transfer reduced by any amount for which you remain personally liable immediately after the transfer, or The fair market value of the transferred property. Turbotax premier federal e file state 2012 for pc download   You are treated as receiving ordinary income from the canceled debt for the part of the debt that is more than the fair market value. Turbotax premier federal e file state 2012 for pc download The amount realized does not include the canceled debt that is your income from cancellation of debt. Turbotax premier federal e file state 2012 for pc download See Cancellation of debt , later. Turbotax premier federal e file state 2012 for pc download Example 3. Turbotax premier federal e file state 2012 for pc download Assume the same facts as in Example 1 above except Ann is personally liable for the loan (recourse debt). Turbotax premier federal e file state 2012 for pc download In this case, the amount she realizes is $170,000. Turbotax premier federal e file state 2012 for pc download This is the canceled debt ($180,000) up to the FMV of the land ($170,000). Turbotax premier federal e file state 2012 for pc download Ann figures her gain or loss on the foreclosure by comparing the amount realized ($170,000) with her adjusted basis ($200,000). Turbotax premier federal e file state 2012 for pc download She has a $30,000 deductible loss, which she figures on Form 4797, Part I. Turbotax premier federal e file state 2012 for pc download She is also treated as receiving ordinary income from cancellation of debt. Turbotax premier federal e file state 2012 for pc download That income is $10,000 ($180,000 − $170,000). Turbotax premier federal e file state 2012 for pc download This is the part of the canceled debt not included in the amount realized. Turbotax premier federal e file state 2012 for pc download She reports this as other income on Schedule F, line 8. Turbotax premier federal e file state 2012 for pc download Seller's (lender's) gain or loss on repossession. Turbotax premier federal e file state 2012 for pc download   If you finance a buyer's purchase of property and later acquire an interest in it through foreclosure or repossession, you may have a gain or loss on the acquisition. Turbotax premier federal e file state 2012 for pc download For more information, see Repossession in Publication 537, Installment Sales. Turbotax premier federal e file state 2012 for pc download Cancellation of debt. Turbotax premier federal e file state 2012 for pc download   If property that is repossessed or foreclosed upon secures a debt for which you are personally liable (recourse debt), you generally must report as ordinary income the amount by which the canceled debt is more than the FMV of the property. Turbotax premier federal e file state 2012 for pc download This income is separate from any gain or loss realized from the foreclosure or repossession. Turbotax premier federal e file state 2012 for pc download Report the income from cancellation of a business debt on Schedule F, line 8. Turbotax premier federal e file state 2012 for pc download Report the income from cancellation of a nonbusiness debt as miscellaneous income on Form 1040. Turbotax premier federal e file state 2012 for pc download    You can use Worksheet 8-1 to figure your income from cancellation of debt. Turbotax premier federal e file state 2012 for pc download   However, income from cancellation of debt is not taxed if any of the following apply. Turbotax premier federal e file state 2012 for pc download The cancellation is intended as a gift. Turbotax premier federal e file state 2012 for pc download The debt is qualified farm debt (see chapter 3). Turbotax premier federal e file state 2012 for pc download The debt is qualified real property business debt (see chapter 5 of Publication 334). Turbotax premier federal e file state 2012 for pc download You are insolvent or bankrupt (see  chapter 3). Turbotax premier federal e file state 2012 for pc download The debt is qualified principal residence indebtedness (see chapter 3). Turbotax premier federal e file state 2012 for pc download   Use Form 982 to report the income exclusion. Turbotax premier federal e file state 2012 for pc download Abandonment The abandonment of property is a disposition of property. Turbotax premier federal e file state 2012 for pc download You abandon property when you voluntarily and permanently give up possession and use of the property with the intention of ending your ownership, but without passing it on to anyone else. Turbotax premier federal e file state 2012 for pc download Business or investment property. Turbotax premier federal e file state 2012 for pc download   Loss from abandonment of business or investment property is deductible as a loss. Turbotax premier federal e file state 2012 for pc download Loss from abandonment of business or investment property that is not treated as a sale or exchange generally is an ordinary loss. Turbotax premier federal e file state 2012 for pc download If your adjusted basis is more than the amount you realize (if any), then you have a loss. Turbotax premier federal e file state 2012 for pc download If the amount you realize (if any) is more than your adjusted basis, then you have a gain. Turbotax premier federal e file state 2012 for pc download This rule also applies to leasehold improvements the lessor made for the lessee. Turbotax premier federal e file state 2012 for pc download However, if the property is foreclosed on or repossessed in lieu of abandonment, gain or loss is figured as discussed earlier under Foreclosure or Repossession . Turbotax premier federal e file state 2012 for pc download   If the abandoned property is secured by debt, special rules apply. Turbotax premier federal e file state 2012 for pc download The tax consequences of abandonment of property that secures a debt depend on whether you are personally liable for the debt (recourse debt) or were not personally liable for the debt (nonrecourse debt). Turbotax premier federal e file state 2012 for pc download For more information, see chapter 3 of Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals). Turbotax premier federal e file state 2012 for pc download The abandonment loss is deducted in the tax year in which the loss is sustained. Turbotax premier federal e file state 2012 for pc download Report the loss on Form 4797, Part II, line 10. Turbotax premier federal e file state 2012 for pc download Personal-use property. Turbotax premier federal e file state 2012 for pc download   You cannot deduct any loss from abandonment of your home or other property held for personal use. Turbotax premier federal e file state 2012 for pc download Canceled debt. Turbotax premier federal e file state 2012 for pc download   If the abandoned property secures a debt for which you are personally liable and the debt is canceled, you will realize ordinary income equal to the canceled debt. Turbotax premier federal e file state 2012 for pc download This income is separate from any loss realized from abandonment of the property. Turbotax premier federal e file state 2012 for pc download Report income from cancellation of a debt related to a business or rental activity as business or rental income. Turbotax premier federal e file state 2012 for pc download Report income from cancellation of a nonbusiness debt as miscellaneous income on Form 1040. Turbotax premier federal e file state 2012 for pc download   However, income from cancellation of debt is not taxed in certain circumstances. Turbotax premier federal e file state 2012 for pc download See Cancellation of debt earlier under Foreclosure or Repossession . Turbotax premier federal e file state 2012 for pc download Forms 1099-A and 1099-C. Turbotax premier federal e file state 2012 for pc download   A lender who acquires an interest in your property in a foreclosure, repossession, or abandonment should send you Form 1099-A showing the information you need to figure your loss from the foreclosure, repossession, or abandonment. Turbotax premier federal e file state 2012 for pc download However, if the lender cancels part of your debt and the lender must file Form 1099-C, the lender may include the information about the foreclosure, repossession, or abandonment on that form instead of Form 1099-A. Turbotax premier federal e file state 2012 for pc download The lender must file Form 1099-C and send you a copy if the canceled debt is $600 or more and the lender is a financial institution, credit union, federal government agency, or any organization that has a significant trade or business of lending money. Turbotax premier federal e file state 2012 for pc download For foreclosures, repossessions, abandonments of property, and debt cancellations occurring in 2013, these forms should be sent to you by January 31, 2014. Turbotax premier federal e file state 2012 for pc download Prev  Up  Next   Home   More Online Publications