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Where can i file my state taxes only Publication 598 - Introductory Material Table of Contents What's New Introduction Useful Items - You may want to see: What's New Federal tax deposits must be made by electronic funds transfer. Where can i file my state taxes only Beginning January 1, 2011, you must use electronic funds transfer to make all federal tax deposits. Where can i file my state taxes only Forms 8109 and 8109-B, Federal Tax Deposit Coupon, cannot be used after 2010. Where can i file my state taxes only See Federal Tax Deposits Must be Made by Electronic Funds Transfer on page 3. Where can i file my state taxes only For large corporations, special rules apply for estimated tax payments that are required to be made for the period that includes July, August, or September of 2012, and the period that immediately follows these months. Where can i file my state taxes only See the instructions for line 12 on the 2012 Form 990-W (Worksheet), Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations. Where can i file my state taxes only The maximum cost of a low-cost article, for organizations eligible to receive charitable contributions, was increased to $9. Where can i file my state taxes only 70 for 2011. Where can i file my state taxes only See Distribution of low-cost articles on page 8. Where can i file my state taxes only The annual limit on associate member dues received by an agricultural or horticultural organization not treated as gross income was increased to $148 for 2011. Where can i file my state taxes only See Exception under Dues of Agricultural Organizations and Business Leagues on page 10. Where can i file my state taxes only The IRS has created a page on IRS. Where can i file my state taxes only gov that includes information about Pub. Where can i file my state taxes only 598 at www. Where can i file my state taxes only irs. Where can i file my state taxes only gov/pub598. Where can i file my state taxes only Introduction An exempt organization is not taxed on its income from an activity substantially related to the charitable, educational, or other purpose that is the basis for the organization's exemption. Where can i file my state taxes only Such income is exempt even if the activity is a trade or business. Where can i file my state taxes only However, if an exempt organization regularly carries on a trade or business not substantially related to its exempt purpose, except that it provides funds to carry out that purpose, the organization is subject to tax on its income from that unrelated trade or business. Where can i file my state taxes only This publication covers the rules for the tax on unrelated business income of exempt organizations. Where can i file my state taxes only It explains: Which organizations are subject to the tax (chapter 1), What the requirements are for filing a tax return (chapter 2), What an unrelated trade or business is (chapter 3), and How to figure unrelated business taxable income (chapter 4). Where can i file my state taxes only All section references in this publication are to the Internal Revenue Code. Where can i file my state taxes only Useful Items - You may want to see: Publication 557 Tax-Exempt Status for Your Organization Form (and Instructions) 990-T Exempt Organization Business Income Tax Return See chapter 5 for information about getting these publications and forms. Where can i file my state taxes only Comments and suggestions. Where can i file my state taxes only   We welcome your comments about this publication and your suggestions for future editions. Where can i file my state taxes only   You can write to us at: Internal Revenue Service Individual Forms and Publications Branch SE:W:CAR:MP:T:I 1111 Constitution Ave. Where can i file my state taxes only NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Where can i file my state taxes only Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Where can i file my state taxes only   You can email us at taxforms@irs. Where can i file my state taxes only gov. Where can i file my state taxes only Please put “publications Comment” on the subject line. Where can i file my state taxes only You can also send us comments from www. Where can i file my state taxes only irs. Where can i file my state taxes only gov/formspubs/, select “Comment on Tax Forms and Publications” under “Information about. Where can i file my state taxes only ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Where can i file my state taxes only Prev  Up  Next   Home   More Online Publications
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Update: Effect of Sequestration on Certain State & Local Government Filers of Form 8038-CP

Pursuant to the requirements of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, refund payments to certain state and local government filers claiming refundable credits under section 6431 of the Internal Revenue Code applicable to certain qualified bonds are subject to sequestration. This means that refund payments processed on or after October 1, 2013 and on or before September 30, 2014 will be reduced by the fiscal year 2014 sequestration rate of 7.2 percent, irrespective of when the amounts claimed by an issuer on any Form 8038-CP was filed with the IRS. The sequestration reduction rate will be applied unless and until a law is enacted that cancels or otherwise impacts the sequester, at which time the sequestration reduction rate is subject to change.

These reductions apply to Build America Bonds, Qualified School Construction Bonds, Qualified Zone Academy Bonds, New Clean Renewable Energy Bonds, and Qualified Energy Conservation Bonds for which the issuer elected to receive a direct credit subsidy pursuant to section 6431.  Issuers should complete Form 8038-CP in the manner provided by the Form 8038-CP Instructions, and affected issuers will be notified through correspondence that a portion of their requested payment was subject to the sequester reduction.  Issuers should use this correspondence to identify the portion(s) of amounts requested that were subject to the sequester reduction.

Issuers with any questions about the status of refunds claimed on Form 8038-CP, including any sequester reduction, should contact IRS Customer Account Services at 1-877-829-5500.

Click here to see the FY2013 article.

Page Last Reviewed or Updated: 26-Mar-2014

The Where Can I File My State Taxes Only

Where can i file my state taxes only 6. Where can i file my state taxes only   Basis of Assets Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Cost BasisReal Property Allocating the Basis Uniform Capitalization Rules Adjusted BasisIncreases to Basis Decreases to Basis Basis Other Than CostTaxable Exchanges Involuntary Conversions Nontaxable Exchanges Property Received as a Gift Property Transferred From a Spouse Inherited Property Property Distributed From a Partnership or Corporation Introduction Your basis is the amount of your investment in property for tax purposes. Where can i file my state taxes only Use basis to figure the gain or loss on the sale, exchange, or other disposition of property. Where can i file my state taxes only Also use basis to figure depreciation, amortization, depletion, and casualty losses. Where can i file my state taxes only If you use property for both business or investment purposes and for personal purposes, you must allocate the basis based on the use. Where can i file my state taxes only Only the basis allocated to the business or investment use of the property can be depreciated. Where can i file my state taxes only Your original basis in property is adjusted (increased or decreased) by certain events. Where can i file my state taxes only For example, if you make improvements to the property, increase your basis. Where can i file my state taxes only If you take deductions for depreciation, or casualty losses, or claim certain credits, reduce your basis. Where can i file my state taxes only Keep accurate records of all items that affect the basis of your assets. Where can i file my state taxes only For information on keeping records, see chapter 1. Where can i file my state taxes only Topics - This chapter discusses: Cost basis Adjusted basis Basis other than cost Useful Items - You may want to see: Publication 535 Business Expenses 544 Sales and Other Dispositions of Assets 551 Basis of Assets 946 How To Depreciate Property See chapter 16 for information about getting publications and forms. Where can i file my state taxes only Cost Basis The basis of property you buy is usually its cost. Where can i file my state taxes only Cost is the amount you pay in cash, debt obligations, other property, or services. Where can i file my state taxes only Your cost includes amounts you pay for sales tax, freight, installation, and testing. Where can i file my state taxes only The basis of real estate and business assets will include other items, discussed later. Where can i file my state taxes only Basis generally does not include interest payments. Where can i file my state taxes only However, see Carrying charges and Capitalized interest in chapter 4 of Publication 535. Where can i file my state taxes only You also may have to capitalize (add to basis) certain other costs related to buying or producing property. Where can i file my state taxes only Under the uniform capitalization rules, discussed later, you may have to capitalize direct costs and certain indirect costs of producing property. Where can i file my state taxes only Loans with low or no interest. Where can i file my state taxes only   If you buy property on a time-payment plan that charges little or no interest, the basis of your property is your stated purchase price minus the amount considered to be unstated interest. Where can i file my state taxes only You generally have unstated interest if your interest rate is less than the applicable federal rate. Where can i file my state taxes only See the discussion of unstated interest in Publication 537, Installment Sales. Where can i file my state taxes only Real Property Real property, also called real estate, is land and generally anything built on, growing on, or attached to land. Where can i file my state taxes only If you buy real property, certain fees and other expenses you pay are part of your cost basis in the property. Where can i file my state taxes only Some of these expenses are discussed next. Where can i file my state taxes only Lump sum purchase. Where can i file my state taxes only   If you buy improvements, such as buildings, and the land on which they stand for a lump sum, allocate your cost basis between the land and improvements. Where can i file my state taxes only Allocate the cost basis according to the respective fair market values (FMVs) of the land and improvements at the time of purchase. Where can i file my state taxes only Figure the basis of each asset by multiplying the lump sum by a fraction. Where can i file my state taxes only The numerator is the FMV of that asset and the denominator is the FMV of the whole property at the time of purchase. Where can i file my state taxes only Fair market value (FMV). Where can i file my state taxes only   FMV is the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all necessary facts. Where can i file my state taxes only Sales of similar property on or about the same date may help in figuring the FMV of the property. Where can i file my state taxes only If you are not certain of the FMV of the land and improvements, you can allocate the basis according to their assessed values for real estate tax purposes. Where can i file my state taxes only Real estate taxes. Where can i file my state taxes only   If you pay the real estate taxes the seller owed on real property you bought, and the seller did not reimburse you, treat those taxes as part of your basis. Where can i file my state taxes only   If you reimburse the seller for taxes the seller paid for you, you generally can deduct that amount as a tax expense. Where can i file my state taxes only Whether or not you reimburse the seller, do not include that amount in the basis of your property. Where can i file my state taxes only Settlement costs. Where can i file my state taxes only   Your basis includes the settlement fees and closing costs for buying the property. Where can i file my state taxes only See Publication 551 for a detailed list of items you can and cannot include in basis. Where can i file my state taxes only   Do not include fees and costs for getting a loan on the property. Where can i file my state taxes only Also, do not include amounts placed in escrow for the future payment of items such as taxes and insurance. Where can i file my state taxes only Points. Where can i file my state taxes only   If you pay points to get a loan (including a mortgage, second mortgage, or line-of-credit), do not add the points to the basis of the related property. Where can i file my state taxes only You may be able to deduct the points currently or over the term of the loan. Where can i file my state taxes only For more information about deducting points, see Points in chapter 4 of Publication 535. Where can i file my state taxes only Assumption of a mortgage. Where can i file my state taxes only   If you buy property and assume (or buy the property subject to) an existing mortgage, your basis includes the amount you pay for the property plus the amount you owe on the mortgage. Where can i file my state taxes only Example. Where can i file my state taxes only If you buy a farm for $100,000 cash and assume a mortgage of $400,000, your basis is $500,000. Where can i file my state taxes only Constructing assets. Where can i file my state taxes only   If you build property or have assets built for you, your expenses for this construction are part of your basis. Where can i file my state taxes only Some of these expenses include the following costs: Land, Labor and materials, Architect's fees, Building permit charges, Payments to contractors, Payments for rental equipment, and Inspection fees. Where can i file my state taxes only   In addition, if you use your own employees, farm materials, and equipment to build an asset, do not deduct the following expenses. Where can i file my state taxes only You must capitalize them (include them in the asset's basis). Where can i file my state taxes only Employee wages paid for the construction work, reduced by any employment credits allowed. Where can i file my state taxes only Depreciation on equipment you own while it is used in the construction. Where can i file my state taxes only Operating and maintenance costs for equipment used in the construction. Where can i file my state taxes only The cost of business supplies and materials used in the construction. Where can i file my state taxes only    Do not include the value of your own labor, or any other labor you did not pay for, in the basis of any property you construct. Where can i file my state taxes only Allocating the Basis In some instances, the rules for determining basis apply to a group of assets acquired in the same transaction or to property that consists of separate items. Where can i file my state taxes only To determine the basis of these assets or separate items, there must be an allocation of basis. Where can i file my state taxes only Group of assets acquired. Where can i file my state taxes only   If you buy multiple assets for a lump sum, allocate the amount you pay among the assets. Where can i file my state taxes only Use this allocation to figure your basis for depreciation and gain or loss on a later disposition of any of these assets. Where can i file my state taxes only You and the seller may agree in the sales contract to a specific allocation of the purchase price among the assets. Where can i file my state taxes only If this allocation is based on the value of each asset and you and the seller have adverse tax interests, the allocation generally will be accepted. Where can i file my state taxes only Farming business acquired. Where can i file my state taxes only   If you buy a group of assets that makes up a farming business, there are special rules you must use to allocate the purchase price among the assets. Where can i file my state taxes only Generally, reduce the purchase price by any cash received. Where can i file my state taxes only Allocate the remaining purchase price to the other business assets received in proportion to (but not more than) their FMV and in a certain order. Where can i file my state taxes only See Trade or Business Acquired under Allocating the Basis in Publication 551 for more information. Where can i file my state taxes only Transplanted embryo. Where can i file my state taxes only   If you buy a cow that is pregnant with a transplanted embryo, allocate to the basis of the cow the part of the purchase price equal to the FMV of the cow without the implant. Where can i file my state taxes only Allocate the rest of the purchase price to the basis of the calf. Where can i file my state taxes only Neither the cost allocated to the cow nor the cost allocated to the calf is deductible as a current business expense. Where can i file my state taxes only Uniform Capitalization Rules Under the uniform capitalization rules, you must include certain direct and indirect costs in the basis of property you produce or in your inventory costs, rather than claim them as a current deduction. Where can i file my state taxes only You recover these costs through depreciation, amortization, or cost of goods sold when you use, sell, or otherwise dispose of the property. Where can i file my state taxes only Generally, you are subject to the uniform capitalization rules if you do any of the following: Produce real or tangible personal property, or Acquire property for resale. Where can i file my state taxes only However, this rule does not apply to personal property if your average annual gross receipts for the 3-tax-year period ending with the year preceding the current tax year are $10 million or less. Where can i file my state taxes only You produce property if you construct, build, install, manufacture, develop, improve, or create the property. Where can i file my state taxes only You are not subject to the uniform capitalization rules if the property is produced for personal use. Where can i file my state taxes only In a farming business, you produce property if you raise or grow any agricultural or horticultural commodity, including plants and animals. Where can i file my state taxes only Plants. Where can i file my state taxes only   A plant produced in a farming business includes the following items: A fruit, nut, or other crop-bearing tree; An ornamental tree; A vine; A bush; Sod; and The crop or yield of a plant that will have more than one crop or yield. Where can i file my state taxes only Animals. Where can i file my state taxes only   An animal produced in a farming business includes any stock, poultry or other bird, and fish or other sea life. Where can i file my state taxes only The direct and indirect costs of producing plants or animals include preparatory costs and preproductive period costs. Where can i file my state taxes only Preparatory costs include the acquisition costs of the seed, seedling, plant, or animal. Where can i file my state taxes only For plants, preproductive period costs include the costs of items such as irrigation, pruning, frost protection, spraying, and harvesting. Where can i file my state taxes only For animals, preproductive period costs include the costs of items such as feed, maintaining pasture or pen areas, breeding, veterinary services, and bedding. Where can i file my state taxes only Exceptions. Where can i file my state taxes only   In a farming business, the uniform capitalization rules do not apply to: Any animal, Any plant with a preproductive period of 2 years or less, or Any costs of replanting certain plants lost or damaged due to casualty. Where can i file my state taxes only   Exceptions (1) and (2) do not apply to a corporation, partnership, or tax shelter required to use an accrual method of accounting. Where can i file my state taxes only See Accrual Method Required under Accounting Methods in chapter 2. Where can i file my state taxes only   In addition, you can elect not to use the uniform capitalization rules for plants with a preproductive period of more than 2 years. Where can i file my state taxes only If you make this election, special rules apply. Where can i file my state taxes only This election cannot be made by a corporation, partnership, or tax shelter required to use an accrual method of accounting. Where can i file my state taxes only This election also does not apply to any costs incurred for the planting, cultivation, maintenance, or development of any citrus or almond grove (or any part thereof) within the first 4 years the trees were planted. Where can i file my state taxes only    If you elect not to use the uniform capitalization rules, you must use the alternative depreciation system for all property used in any of your farming businesses and placed in service in any tax year during which the election is in effect. Where can i file my state taxes only See chapter 7, for additional information on depreciation. Where can i file my state taxes only Example. Where can i file my state taxes only You grow trees that have a preproductive period of more than 2 years. Where can i file my state taxes only The trees produce an annual crop. Where can i file my state taxes only You are an individual and the uniform capitalization rules apply to your farming business. Where can i file my state taxes only You must capitalize the direct costs and an allocable part of indirect costs incurred due to the production of the trees. Where can i file my state taxes only You are not required to capitalize the costs of producing the annual crop because its preproductive period is 2 years or less. Where can i file my state taxes only Preproductive period of more than 2 years. Where can i file my state taxes only   The preproductive period of plants grown in commercial quantities in the United States is based on their nationwide weighted average preproductive period. Where can i file my state taxes only Plants producing the crops or yields shown in Table 6-1 have a nationwide weighted average preproductive period of more than 2 years. Where can i file my state taxes only Other plants (not shown in Table 6-1) may also have a nationwide weighted average preproductive period of more than 2 years. Where can i file my state taxes only More information. Where can i file my state taxes only   For more information on the uniform capitalization rules that apply to property produced in a farming business, see Regulations section 1. Where can i file my state taxes only 263A-4. Where can i file my state taxes only Table 6-1. Where can i file my state taxes only Plants With a Preproductive Period of More Than 2 Years Plants producing the following crops or yields have a nationwide weighted average preproductive period of more than 2 years. Where can i file my state taxes only Almonds Apples Apricots Avocados Blueberries Cherries Chestnuts Coffee beans Currants Dates Figs Grapefruit Grapes Guavas Kiwifruit Kumquats Lemons Limes Macadamia nuts Mangoes Nectarines Olives Oranges Peaches Pears Pecans Persimmons Pistachio nuts Plums Pomegranates Prunes Tangelos Tangerines Tangors Walnuts Adjusted Basis Before figuring gain or loss on a sale, exchange, or other disposition of property or figuring allowable depreciation, depletion, or amortization, you must usually make certain adjustments to the cost basis or basis other than cost (discussed later) of the property. Where can i file my state taxes only The adjustments to the original basis are increases or decreases to the cost basis or other basis which result in the adjusted basis of the property. Where can i file my state taxes only Increases to Basis Increase the basis of any property by all items properly added to a capital account. Where can i file my state taxes only These include the cost of any improvements having a useful life of more than 1 year. Where can i file my state taxes only The following costs increase the basis of property. Where can i file my state taxes only The cost of extending utility service lines to property. Where can i file my state taxes only Legal fees, such as the cost of defending and perfecting title. Where can i file my state taxes only Legal fees for seeking a decrease in an assessment levied against property to pay for local improvements. Where can i file my state taxes only Assessments for items such as paving roads and building ditches that increase the value of the property assessed. Where can i file my state taxes only Do not deduct these expenses as taxes. Where can i file my state taxes only However, you can deduct as taxes amounts assessed for maintenance or repairs, or for meeting interest charges related to the improvements. Where can i file my state taxes only If you make additions or improvements to business property, depreciate the basis of each addition or improvement as separate depreciable property using the rules that would apply to the original property if you had placed it in service at the same time you placed the addition or improvement in service. Where can i file my state taxes only See chapter 7. Where can i file my state taxes only Deducting vs. Where can i file my state taxes only capitalizing costs. Where can i file my state taxes only   Do not add to your basis costs you can deduct as current expenses. Where can i file my state taxes only For example, amounts paid for incidental repairs or maintenance are deductible as business expenses and are not added to basis. Where can i file my state taxes only However, you can elect either to deduct or to capitalize certain other costs. Where can i file my state taxes only See chapter 7 in Publication 535. Where can i file my state taxes only Decreases to Basis The following are some items that reduce the basis of property. Where can i file my state taxes only Section 179 deduction. Where can i file my state taxes only Deductions previously allowed or allowable for amortization, depreciation, and depletion. Where can i file my state taxes only Alternative motor vehicle credit. Where can i file my state taxes only See Form 8910. Where can i file my state taxes only Alternative fuel vehicle refueling property credit. Where can i file my state taxes only See Form 8911. Where can i file my state taxes only Residential energy efficient property credits. Where can i file my state taxes only See Form 5695. Where can i file my state taxes only Investment credit (part or all) taken. Where can i file my state taxes only Casualty and theft losses and insurance reimbursements. Where can i file my state taxes only Payments you receive for granting an easement. Where can i file my state taxes only Exclusion from income of subsidies for energy conservation measures. Where can i file my state taxes only Certain canceled debt excluded from income. Where can i file my state taxes only Rebates from a manufacturer or seller. Where can i file my state taxes only Patronage dividends received from a cooperative association as a result of a purchase of property. Where can i file my state taxes only See Patronage Dividends in chapter 3. Where can i file my state taxes only Gas-guzzler tax. Where can i file my state taxes only See Form 6197. Where can i file my state taxes only Some of these items are discussed next. Where can i file my state taxes only For a more detailed list of items that decrease basis, see section 1016 of the Internal Revenue Code and Publication 551. Where can i file my state taxes only Depreciation and section 179 deduction. Where can i file my state taxes only   The adjustments you must make to the basis of the property if you take the section 179 deduction or depreciate the property are explained next. Where can i file my state taxes only For more information on these deductions, see chapter 7. Where can i file my state taxes only Section 179 deduction. Where can i file my state taxes only   If you take the section 179 expense deduction for all or part of the cost of qualifying business property, decrease the basis of the property by the deduction. Where can i file my state taxes only Depreciation. Where can i file my state taxes only   Decrease the basis of property by the depreciation you deducted or could have deducted on your tax returns under the method of depreciation you chose. Where can i file my state taxes only If you took less depreciation than you could have under the method chosen, decrease the basis by the amount you could have taken under that method. Where can i file my state taxes only If you did not take a depreciation deduction, reduce the basis by the full amount of the depreciation you could have taken. Where can i file my state taxes only   If you deducted more depreciation than you should have, decrease your basis by the amount you should have deducted plus the part of the excess depreciation you deducted that actually reduced your tax liability for any year. Where can i file my state taxes only   See chapter 7 for information on figuring the depreciation you should have claimed. Where can i file my state taxes only   In decreasing your basis for depreciation, take into account the amount deducted on your tax returns as depreciation and any depreciation you must capitalize under the uniform capitalization rules. Where can i file my state taxes only Casualty and theft losses. Where can i file my state taxes only   If you have a casualty or theft loss, decrease the basis of the property by any insurance or other reimbursement. Where can i file my state taxes only Also, decrease it by any deductible loss not covered by insurance. Where can i file my state taxes only See chapter 11 for information about figuring your casualty or theft loss. Where can i file my state taxes only   You must increase your basis in the property by the amount you spend on clean-up costs (such as debris removal) and repairs that restore the property to its pre-casualty condition. Where can i file my state taxes only To make this determination, compare the repaired property to the property before the casualty. Where can i file my state taxes only Easements. Where can i file my state taxes only   The amount you receive for granting an easement is usually considered to be proceeds from the sale of an interest in the real property. Where can i file my state taxes only It reduces the basis of the affected part of the property. Where can i file my state taxes only If the amount received is more than the basis of the part of the property affected by the easement, reduce your basis in that part to zero and treat the excess as a recognized gain. Where can i file my state taxes only See Easements and rights-of-way in chapter 3. Where can i file my state taxes only Exclusion from income of subsidies for energy conservation measures. Where can i file my state taxes only   You can exclude from gross income any subsidy you received from a public utility company for the purchase or installation of an energy conservation measure for a dwelling unit. Where can i file my state taxes only Reduce the basis of the property by the excluded amount. Where can i file my state taxes only Canceled debt excluded from income. Where can i file my state taxes only   If a debt you owe is canceled or forgiven, other than as a gift or bequest, you generally must include the canceled amount in your gross income for tax purposes. Where can i file my state taxes only A debt includes any indebtedness for which you are liable or which attaches to property you hold. Where can i file my state taxes only   You can exclude your canceled debt from income if the debt is any of the following. Where can i file my state taxes only Debt canceled in a bankruptcy case or when you are insolvent. Where can i file my state taxes only Qualified farm debt. Where can i file my state taxes only Qualified real property business debt (provided you are not a C corporation). Where can i file my state taxes only Qualified principal residence indebtedness. Where can i file my state taxes only Discharge of certain indebtedness of a qualified individual because of Midwestern disasters. Where can i file my state taxes only If you exclude canceled debt described in (1) or (2), you may have to reduce the basis of your depreciable and nondepreciable property. Where can i file my state taxes only If you exclude canceled debt described in (3), you must only reduce the basis of your depreciable property by the excluded amount. Where can i file my state taxes only   For more information about canceled debt in a bankruptcy case, see Publication 908, Bankruptcy Tax Guide. Where can i file my state taxes only For more information about insolvency and canceled debt that is qualified farm debt or qualified principal residence indebtedness, see chapter 3. Where can i file my state taxes only For more information about qualified real property business debt, see Publication 334, Tax Guide for Small Business. Where can i file my state taxes only For more information about canceled debt in Midwestern disaster areas, see Publication 4492-B, Information for Affected Taxpayers in the Midwestern Disaster Areas. Where can i file my state taxes only Basis Other Than Cost There are times when you cannot use cost as basis. Where can i file my state taxes only In these situations, the fair market value or the adjusted basis of property may be used. Where can i file my state taxes only Examples are discussed next. Where can i file my state taxes only Property changed from personal to business or rental use. Where can i file my state taxes only   When you hold property for personal use and then change it to business use or use it to produce rent, you must figure its basis for depreciation. Where can i file my state taxes only An example of changing property from personal to business use would be changing the use of your pickup truck that you originally purchased for your personal use to use in your farming business. Where can i file my state taxes only   The basis for depreciation is the lesser of: The FMV of the property on the date of the change, or Your adjusted basis on the date of the change. Where can i file my state taxes only   If you later sell or dispose of this property, the basis you use will depend on whether you are figuring a gain or loss. Where can i file my state taxes only The basis for figuring a gain is your adjusted basis in the property when you sell the property. Where can i file my state taxes only Figure the basis for a loss starting with the smaller of your adjusted basis or the FMV of the property at the time of the change to business or rental use. Where can i file my state taxes only Then make adjustments (increases and decreases) for the period after the change in the property's use, as discussed earlier under Adjusted Basis . Where can i file my state taxes only Property received for services. Where can i file my state taxes only   If you receive property for services, include the property's FMV in income. Where can i file my state taxes only The amount you include in income becomes your basis. Where can i file my state taxes only If the services were performed for a price agreed on beforehand, it will be accepted as the FMV of the property if there is no evidence to the contrary. Where can i file my state taxes only Example. Where can i file my state taxes only George Smith is an accountant and also operates a farming business. Where can i file my state taxes only George agreed to do some accounting work for his neighbor in exchange for a dairy cow. Where can i file my state taxes only The accounting work and the cow are each worth $1,500. Where can i file my state taxes only George must include $1,500 in income for his accounting services. Where can i file my state taxes only George's basis in the cow is $1,500. Where can i file my state taxes only Taxable Exchanges A taxable exchange is one in which the gain is taxable, or the loss is deductible. Where can i file my state taxes only A taxable gain or deductible loss also is known as a recognized gain or loss. Where can i file my state taxes only A taxable exchange occurs when you receive cash or get property that is not similar or related in use to the property exchanged. Where can i file my state taxes only If you receive property in exchange for other property in a taxable exchange, the basis of the property you receive is usually its FMV at the time of the exchange. Where can i file my state taxes only Example. Where can i file my state taxes only You trade a tract of farmland with an adjusted basis of $2,000 for a tractor that has an FMV of $6,000. Where can i file my state taxes only You must report a taxable gain of $4,000 for the land. Where can i file my state taxes only The tractor has a basis of $6,000. Where can i file my state taxes only Involuntary Conversions If you receive property as a result of an involuntary conversion, such as a casualty, theft, or condemnation, figure the basis of the replacement property you receive using the basis of the converted property. Where can i file my state taxes only Similar or related property. Where can i file my state taxes only   If the replacement property is similar or related in service or use to the converted property, the replacement property's basis is the same as the old property's basis on the date of the conversion. Where can i file my state taxes only However, make the following adjustments. Where can i file my state taxes only Decrease the basis by the following amounts. Where can i file my state taxes only Any loss you recognize on the involuntary conversion. Where can i file my state taxes only Any money you receive that you do not spend on similar property. Where can i file my state taxes only Increase the basis by the following amounts. Where can i file my state taxes only Any gain you recognize on the involuntary conversion. Where can i file my state taxes only Any cost of acquiring the replacement property. Where can i file my state taxes only Money or property not similar or related. Where can i file my state taxes only   If you receive money or property not similar or related in service or use to the converted property and you buy replacement property similar or related in service or use to the converted property, the basis of the replacement property is its cost decreased by the gain not recognized on the involuntary conversion. Where can i file my state taxes only Allocating the basis. Where can i file my state taxes only   If you buy more than one piece of replacement property, allocate your basis among the properties based on their respective costs. Where can i file my state taxes only Basis for depreciation. Where can i file my state taxes only   Special rules apply in determining and depreciating the basis of MACRS property acquired in an involuntary conversion. Where can i file my state taxes only For information, see Figuring the Deduction for Property Acquired in a Nontaxable Exchange under Figuring Depreciation Under MACRS in chapter 7. Where can i file my state taxes only For more information about involuntary conversions, see chapter 11. Where can i file my state taxes only Nontaxable Exchanges A nontaxable exchange is an exchange in which you are not taxed on any gain and you cannot deduct any loss. Where can i file my state taxes only A nontaxable gain or loss also is known as an unrecognized gain or loss. Where can i file my state taxes only If you receive property in a nontaxable exchange, its basis is usually the same as the basis of the property you transferred. Where can i file my state taxes only Like-Kind Exchanges The exchange of property for the same kind of property is the most common type of nontaxable exchange. Where can i file my state taxes only For an exchange to qualify as a like-kind exchange, you must hold for business or investment purposes both the property you transfer and the property you receive. Where can i file my state taxes only There must also be an exchange of like-kind property. Where can i file my state taxes only For more information, see Like-Kind Exchanges in  chapter 8. Where can i file my state taxes only The basis of the property you receive generally is the same as the adjusted basis of the property you gave up. Where can i file my state taxes only Example 1. Where can i file my state taxes only You traded a truck you used in your farming business for a new smaller truck to use in farming. Where can i file my state taxes only The adjusted basis of the old truck was $10,000. Where can i file my state taxes only The FMV of the new truck is $30,000. Where can i file my state taxes only Because this is a nontaxable exchange, you do not recognize any gain, and your basis in the new truck is $10,000, the same as the adjusted basis of the truck you traded. Where can i file my state taxes only Example 2. Where can i file my state taxes only You trade a field cultivator (adjusted basis of $8,000) for a planter (FMV of $9,000). Where can i file my state taxes only You use both the field cultivator and the planter in your farming business. Where can i file my state taxes only The basis of the planter you receive is $8,000, the same as the field cultivator traded Exchange expenses. Where can i file my state taxes only   Exchange expenses generally are the closing costs that you pay. Where can i file my state taxes only They include such items as brokerage commissions, attorney fees, and deed preparation fees. Where can i file my state taxes only Add them to the basis of the like-kind property you receive. Where can i file my state taxes only Property plus cash. Where can i file my state taxes only   If you trade property in a like-kind exchange and also pay money, the basis of the property you receive is the adjusted basis of the property you gave up plus the money you paid. Where can i file my state taxes only Example. Where can i file my state taxes only You trade in a truck (adjusted basis of $3,000) for another truck (FMV of $7,500) and pay $4,000. Where can i file my state taxes only Your basis in the new truck is $7,000 (the $3,000 adjusted basis of the old truck plus the $4,000 cash). Where can i file my state taxes only Special rules for related persons. Where can i file my state taxes only   If a like-kind exchange takes place directly or indirectly between related persons and either party disposes of the property within 2 years after the exchange, the exchange no longer qualifies for like-kind exchange treatment. Where can i file my state taxes only Each person must report any gain or loss not recognized on the original exchange unless the loss is not deductible under the related party rules. Where can i file my state taxes only Each person reports it on the tax return filed for the year in which the later disposition occurred. Where can i file my state taxes only If this rule applies, the basis of the property received in the original exchange will be its FMV. Where can i file my state taxes only For more information, see chapter 8. Where can i file my state taxes only Exchange of business property. Where can i file my state taxes only   Exchanging the property of one business for the property of another business generally is a multiple property exchange. Where can i file my state taxes only For information on figuring basis, see Multiple Property Exchanges in chapter 1 of Publication 544. Where can i file my state taxes only Basis for depreciation. Where can i file my state taxes only   Special rules apply in determining and depreciating the basis of MACRS property acquired in a like-kind transaction. Where can i file my state taxes only For information, see Figuring the Deduction for Property Acquired in a Nontaxable Exchange under Figuring Depreciation Under MACRS in chapter 7. Where can i file my state taxes only Partially Nontaxable Exchanges A partially nontaxable exchange is an exchange in which you receive unlike property or money in addition to like-kind property. Where can i file my state taxes only The basis of the property you receive is the same as the adjusted basis of the property you gave up with the following adjustments. Where can i file my state taxes only Decrease the basis by the following amounts. Where can i file my state taxes only Any money you receive. Where can i file my state taxes only Any loss you recognize on the exchange. Where can i file my state taxes only Increase the basis by the following amounts. Where can i file my state taxes only Any additional costs you incur. Where can i file my state taxes only Any gain you recognize on the exchange. Where can i file my state taxes only If the other party to the exchange assumes your liabilities, treat the debt assumption as money you received in the exchange. Where can i file my state taxes only Example 1. Where can i file my state taxes only You trade farmland (basis of $100,000) for another tract of farmland (FMV of $110,000) and $30,000 cash. Where can i file my state taxes only You realize a gain of $40,000. Where can i file my state taxes only This is the FMV of the land received plus the cash minus the basis of the land you traded ($110,000 + $30,000 − $100,000). Where can i file my state taxes only Include your gain in income (recognize gain) only to the extent of the cash received. Where can i file my state taxes only Your basis in the land you received is figured as follows. Where can i file my state taxes only Basis of land traded $100,000 Minus: Cash received (adjustment 1(a)) − 30,000   $70,000 Plus: Gain recognized (adjustment 2(b)) + 30,000 Basis of land received $100,000 Example 2. Where can i file my state taxes only You trade a truck (adjusted basis of $22,750) for another truck (FMV of $20,000) and $10,000 cash. Where can i file my state taxes only You realize a gain of $7,250. Where can i file my state taxes only This is the FMV of the truck received plus the cash minus the adjusted basis of the truck you traded ($20,000 + $10,000 − $22,750). Where can i file my state taxes only You include all the gain in your income (recognize gain) because the gain is less than the cash you received. Where can i file my state taxes only Your basis in the truck you received is figured as follows. Where can i file my state taxes only Adjusted basis of truck traded $22,750 Minus: Cash received (adjustment 1(a)) −10,000   $12,750 Plus: Gain recognized (adjustment 2(b)) + 7,250 Basis of truck received $20,000 Allocation of basis. Where can i file my state taxes only   If you receive like-kind and unlike properties in the exchange, allocate the basis first to the unlike property, other than money, up to its FMV on the date of the exchange. Where can i file my state taxes only The rest is the basis of the like-kind property. Where can i file my state taxes only Example. Where can i file my state taxes only You traded a tractor with an adjusted basis of $15,000 for another tractor that had an FMV of $12,500. Where can i file my state taxes only You also received $1,000 cash and a truck that had an FMV of $3,000. Where can i file my state taxes only The truck is unlike property. Where can i file my state taxes only You realized a gain of $1,500. Where can i file my state taxes only This is the FMV of the tractor received plus the FMV of the truck received plus the cash minus the adjusted basis of the tractor you traded ($12,500 + $3,000 + $1,000 − $15,000). Where can i file my state taxes only You include in income (recognize) all $1,500 of the gain because it is less than the FMV of the unlike property plus the cash received. Where can i file my state taxes only Your basis in the properties you received is figured as follows. Where can i file my state taxes only Adjusted basis of old tractor $15,000 Minus: Cash received (adjustment 1(a)) − 1,000   $14,000 Plus: Gain recognized (adjustment 2(b)) + 1,500 Total basis of properties received $15,500 Allocate the total basis of $15,500 first to the unlike property—the truck ($3,000). Where can i file my state taxes only This is the truck's FMV. Where can i file my state taxes only The rest ($12,500) is the basis of the tractor. Where can i file my state taxes only Sale and Purchase If you sell property and buy similar property in two mutually dependent transactions, you may have to treat the sale and purchase as a single nontaxable exchange. Where can i file my state taxes only Example. Where can i file my state taxes only You used a tractor on your farm for 3 years. Where can i file my state taxes only Its adjusted basis is $22,000 and its FMV is $40,000. Where can i file my state taxes only You are interested in a new tractor, which sells for $60,000. Where can i file my state taxes only Ordinarily, you would trade your old tractor for the new one and pay the dealer $20,000. Where can i file my state taxes only Your basis for depreciating the new tractor would then be $42,000 ($20,000 + $22,000, the adjusted basis of your old tractor). Where can i file my state taxes only However, you want a higher basis for depreciating the new tractor, so you agree to pay the dealer $60,000 for the new tractor if he will pay you $40,000 for your old tractor. Where can i file my state taxes only Because the two transactions are dependent on each other, you are treated as having exchanged your old tractor for the new one and paid $20,000 ($60,000 − $40,000). Where can i file my state taxes only Your basis for depreciating the new tractor is $42,000, the same as if you traded the old tractor. Where can i file my state taxes only Property Received as a Gift To figure the basis of property you receive as a gift, you must know its adjusted basis (defined earlier) to the donor just before it was given to you. Where can i file my state taxes only You also must know its FMV at the time it was given to you and any gift tax paid on it. Where can i file my state taxes only FMV equal to or greater than donor's adjusted basis. Where can i file my state taxes only   If the FMV of the property is equal to or greater than the donor's adjusted basis, your basis is the donor's adjusted basis when you received the gift. Where can i file my state taxes only Increase your basis by all or part of any gift tax paid, depending on the date of the gift. Where can i file my state taxes only   Also, for figuring gain or loss from a sale or other disposition of the property, or for figuring depreciation, depletion, or amortization deductions on business property, you must increase or decrease your basis (the donor's adjusted basis) by any required adjustments to basis while you held the property. Where can i file my state taxes only See Adjusted Basis , earlier. Where can i file my state taxes only   If you received a gift during the tax year, increase your basis in the gift (the donor's adjusted basis) by the part of the gift tax paid on it due to the net increase in value of the gift. Where can i file my state taxes only Figure the increase by multiplying the gift tax paid by the following fraction. Where can i file my state taxes only Net increase in value of the gift Amount of the gift   The net increase in value of the gift is the FMV of the gift minus the donor's adjusted basis. Where can i file my state taxes only The amount of the gift is its value for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. Where can i file my state taxes only Example. Where can i file my state taxes only In 2013, you received a gift of property from your mother that had an FMV of $50,000. Where can i file my state taxes only Her adjusted basis was $20,000. Where can i file my state taxes only The amount of the gift for gift tax purposes was $36,000 ($50,000 minus the $14,000 annual exclusion). Where can i file my state taxes only She paid a gift tax of $7,320. Where can i file my state taxes only Your basis, $26,076, is figured as follows. Where can i file my state taxes only Fair market value $50,000 Minus: Adjusted basis −20,000 Net increase in value $30,000 Gift tax paid $7,320 Multiplied by ($30,000 ÷ $36,000) × . Where can i file my state taxes only 83 Gift tax due to net increase in value $6,076 Adjusted basis of property to your mother +20,000 Your basis in the property $26,076 Note. Where can i file my state taxes only If you received a gift before 1977, your basis in the gift (the donor's adjusted basis) includes any gift tax paid on it. Where can i file my state taxes only However, your basis cannot exceed the FMV of the gift when it was given to you. Where can i file my state taxes only FMV less than donor's adjusted basis. Where can i file my state taxes only   If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property. Where can i file my state taxes only Your basis for figuring gain is the donor's adjusted basis plus or minus any required adjustments to basis while you held the property. Where can i file my state taxes only Your basis for figuring loss is its FMV when you received the gift plus or minus any required adjustments to basis while you held the property. Where can i file my state taxes only (See Adjusted Basis , earlier. Where can i file my state taxes only )   If you use the donor's adjusted basis for figuring a gain and get a loss, and then use the FMV for figuring a loss and get a gain, you have neither gain nor loss on the sale or other disposition of the property. Where can i file my state taxes only Example. Where can i file my state taxes only You received farmland as a gift from your parents when they retired from farming. Where can i file my state taxes only At the time of the gift, the land had an FMV of $80,000. Where can i file my state taxes only Your parents' adjusted basis was $100,000. Where can i file my state taxes only After you received the land, no events occurred that would increase or decrease your basis. Where can i file my state taxes only If you sell the land for $120,000, you will have a $20,000 gain because you must use the donor's adjusted basis at the time of the gift ($100,000) as your basis to figure a gain. Where can i file my state taxes only If you sell the land for $70,000, you will have a $10,000 loss because you must use the FMV at the time of the gift ($80,000) as your basis to figure a loss. Where can i file my state taxes only If the sales price is between $80,000 and $100,000, you have neither gain nor loss. Where can i file my state taxes only For instance, if the sales price was $90,000 and you tried to figure a gain using the donor's adjusted basis ($100,000), you would get a $10,000 loss. Where can i file my state taxes only If you then tried to figure a loss using the FMV ($80,000), you would get a $10,000 gain. Where can i file my state taxes only Business property. Where can i file my state taxes only   If you hold the gift as business property, your basis for figuring any depreciation, depletion, or amortization deductions is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you hold the property. Where can i file my state taxes only Property Transferred From a Spouse The basis of property transferred to you or transferred in trust for your benefit by your spouse is the same as your spouse's adjusted basis. Where can i file my state taxes only The same rule applies to a transfer by your former spouse if the transfer is incident to divorce. Where can i file my state taxes only However, for property transferred in trust, adjust your basis for any gain recognized by your spouse or former spouse if the liabilities assumed plus the liabilities to which the property is subject are more than the adjusted basis of the property transferred. Where can i file my state taxes only The transferor must give you the records needed to determine the adjusted basis and holding period of the property as of the date of the transfer. Where can i file my state taxes only For more information, see Property Settlements in Publication 504, Divorced or Separated Individuals. Where can i file my state taxes only Inherited Property Your basis in property you inherited from a decedent, who died before January 1, 2010, or after December 31, 2010, is generally one of the following: The FMV of the property at the date of the decedent's death. Where can i file my state taxes only If a federal estate return is filed, you can use its appraised value. Where can i file my state taxes only The FMV on the alternate valuation date, if the personal representative for the estate elects to use alternate valuation. Where can i file my state taxes only For information on the alternate valuation, see the Instructions for Form 706. Where can i file my state taxes only The decedent's adjusted basis in land to the extent of the value that is excluded from the decedent's taxable estate as a qualified conservation easement. Where can i file my state taxes only If a federal estate tax return does not have to be filed, your basis in the inherited property is its appraised value at the date of death for state inheritance or transmission taxes. Where can i file my state taxes only Special-use valuation method. Where can i file my state taxes only   Under certain conditions, when a person dies, the executor or personal representative of that person's estate may elect to value qualified real property at other than its FMV. Where can i file my state taxes only If so, the executor or personal representative values the qualified real property based on its use as a farm or other closely held business. Where can i file my state taxes only If the executor or personal representative elects this method of valuation for estate tax purposes, this value is the basis of the property for the qualified heirs. Where can i file my state taxes only The qualified heirs should be able to get the necessary value from the executor or personal representative of the estate. Where can i file my state taxes only   If you are a qualified heir who received special-use valuation property, increase your basis by any gain recognized by the estate or trust because of post-death appreciation. Where can i file my state taxes only Post-death appreciation is the property's FMV on the date of distribution minus the property's FMV either on the date of the individual's death or on the alternate valuation date. Where can i file my state taxes only Figure all FMVs without regard to the special-use valuation. Where can i file my state taxes only   You may be liable for an additional estate tax if, within 10 years after the death of the decedent, you transfer the property or the property stops being used as a farm. Where can i file my state taxes only This tax does not apply if you dispose of the property in a like-kind exchange or in an involuntary conversion in which all of the proceeds are reinvested in qualified replacement property. Where can i file my state taxes only The tax also does not apply if you transfer the property to a member of your family and certain requirements are met. Where can i file my state taxes only   You can elect to increase your basis in special-use valuation property if it becomes subject to the additional estate tax. Where can i file my state taxes only To increase your basis, you must make an irrevocable election and pay interest on the additional estate tax figured from the date 9 months after the decedent's death until the date of payment of the additional estate tax. Where can i file my state taxes only If you meet these requirements, increase your basis in the property to its FMV on the date of the decedent's death or the alternate valuation date. Where can i file my state taxes only The increase in your basis is considered to have occurred immediately before the event that resulted in the additional estate tax. Where can i file my state taxes only   You make the election by filing, with Form 706-A, United States Additional Estate Tax Return, a statement that: Contains your (and the estate's) name, address, and taxpayer identification number; Identifies the election as an election under section 1016(c) of the Internal Revenue Code; Specifies the property for which you are making the election; and Provides any additional information required by the Form 706-A instructions. Where can i file my state taxes only   For more information, see Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, Form 706-A, and the related instructions. Where can i file my state taxes only Property inherited from a decedent who died in 2010. Where can i file my state taxes only   If you inherited property from a decedent who died in 2010, different rules may apply. Where can i file my state taxes only See Publication 4895, Tax Treatment of Property Acquired From a Decendent Dying in 2010, for details. Where can i file my state taxes only Property Distributed From a Partnership or Corporation The following rules apply to determine a partner's basis and a shareholder's basis in property distributed respectively from a partnership to the partner with respect to the partner's interest in the partnership and from a corporation to the shareholder with respect to the shareholder's ownership of stock in the corporation. Where can i file my state taxes only Partner's basis. Where can i file my state taxes only   Unless there is a complete liquidation of a partner's interest, the basis of property (other than money) distributed by a partnership to the partner is its adjusted basis to the partnership immediately before the distribution. Where can i file my state taxes only However, the basis of the property to the partner cannot be more than the adjusted basis of his or her interest in the partnership reduced by any money received in the same transaction. Where can i file my state taxes only For more information, see Partner's Basis for Distributed Property in Publication 541, Partnerships. Where can i file my state taxes only Shareholder's basis. Where can i file my state taxes only   The basis of property distributed by a corporation to a shareholder is its fair market value. Where can i file my state taxes only For more information about corporate distributions, see Distributions to Shareholders in Publication 542, Corporations. Where can i file my state taxes only Prev  Up  Next   Home   More Online Publications