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Who Has Free State Tax Filing

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Who Has Free State Tax Filing

Who has free state tax filing 2. Who has free state tax filing   Ordinary or Capital Gain or Loss Table of Contents IntroductionSection 1231 transactions. Who has free state tax filing Topics - This chapter discusses: Useful Items - You may want to see: Capital Assets Noncapital AssetsCommodities derivative dealer. Who has free state tax filing Sales and Exchanges Between Related PersonsGain Is Ordinary Income Nondeductible Loss Other DispositionsSale of a Business Dispositions of Intangible Property Subdivision of Land Timber Precious Metals and Stones, Stamps, and Coins Coal and Iron Ore Conversion Transactions Introduction 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). Who has free state tax filing You must do this to figure your net capital gain or loss. Who has free state tax filing For individuals, a net capital gain may be taxed at a different tax rate than ordinary income. Who has free state tax filing See Capital Gains Tax Rates in chapter 4. Who has free state tax filing Your deduction for a net capital loss may be limited. Who has free state tax filing See Treatment of Capital Losses in chapter 4. Who has free state tax filing Capital gain or loss. Who has free state tax filing   Generally, you will have a capital gain or loss if you sell or exchange a capital asset. Who has free state tax filing You also may have a capital gain if your section 1231 transactions result in a net gain. Who has free state tax filing Section 1231 transactions. Who has free state tax filing   Section 1231 transactions are sales and exchanges of property held longer than 1 year and either used in a trade or business or held for the production of rents or royalties. Who has free state tax filing They also include certain involuntary conversions of business or investment property, including capital assets. Who has free state tax filing See Section 1231 Gains and Losses in chapter 3 for more information. Who has free state tax filing Topics - This chapter discusses: Capital assets Noncapital assets Sales and exchanges between  related persons Other dispositions Useful Items - You may want to see: Publication 550 Investment Income and Expenses Form (and Instructions) Schedule D (Form 1040) Capital Gains and Losses 4797 Sales of Business Property 8594 Asset Acquisition Statement Under Section 1060 8949 Sales and Other Dispositions of Capital Assets See chapter 5 for information about getting publications and forms. Who has free state tax filing Capital Assets Almost everything you own and use for personal purposes, pleasure, or investment is a capital asset. Who has free state tax filing For exceptions, see Noncapital Assets, later. Who has free state tax filing The following items are examples of capital assets. Who has free state tax filing Stocks and bonds. Who has free state tax filing A home owned and occupied by you and your family. Who has free state tax filing Timber grown on your home property or investment property, even if you make casual sales of the timber. Who has free state tax filing Household furnishings. Who has free state tax filing A car used for pleasure or commuting. Who has free state tax filing Coin or stamp collections. Who has free state tax filing Gems and jewelry. Who has free state tax filing Gold, silver, and other metals. Who has free state tax filing Personal-use property. Who has free state tax filing   Generally, property held for personal use is a capital asset. Who has free state tax filing Gain from a sale or exchange of that property is a capital gain. Who has free state tax filing Loss from the sale or exchange of that property is not deductible. Who has free state tax filing You can deduct a loss relating to personal-use property only if it results from a casualty or theft. Who has free state tax filing Investment property. Who has free state tax filing   Investment property (such as stocks and bonds) is a capital asset, and a gain or loss from its sale or exchange is a capital gain or loss. Who has free state tax filing This treatment does not apply to property used to produce rental income. Who has free state tax filing See Business assets, later, under Noncapital Assets. Who has free state tax filing Release of restriction on land. Who has free state tax filing   Amounts you receive for the release of a restrictive covenant in a deed to land are treated as proceeds from the sale of a capital asset. Who has free state tax filing Noncapital Assets A noncapital asset is property that is not a capital asset. Who has free state tax filing The following kinds of property are not capital assets. Who has free state tax filing Stock in trade, inventory, and other property you hold mainly for sale to customers in your trade or business. Who has free state tax filing Inventories are discussed in Publication 538, Accounting Periods and Methods. Who has free state tax filing But, see the Tip below. Who has free state tax filing Accounts or notes receivable acquired in the ordinary course of a trade or business for services rendered or from the sale of any properties described in (1), above. Who has free state tax filing Depreciable property used in your trade or business or as rental property (including section 197 intangibles defined later), even if the property is fully depreciated (or amortized). Who has free state tax filing Sales of this type of property are discussed in chapter 3. Who has free state tax filing Real property used in your trade or business or as rental property, even if the property is fully depreciated. Who has free state tax filing A copyright; a literary, musical, or artistic composition; a letter; a memorandum; or similar property (such as drafts of speeches, recordings, transcripts, manuscripts, drawings, or photographs): Created by your personal efforts, Prepared or produced for you (in the case of a letter, memorandum, or similar property), or Received from a person who created the property or for whom the property was prepared under circumstances (for example, by gift) entitling you to the basis of the person who created the property, or for whom it was prepared or produced. Who has free state tax filing But, see the Tip below. Who has free state tax filing U. Who has free state tax filing S. Who has free state tax filing Government publications you got from the government for free or for less than the normal sales price or that you acquired under circumstances entitling you to the basis of someone who got the publications for free or for less than the normal sales price. Who has free state tax filing Any commodities derivative financial instrument (discussed later) held by a commodities derivatives dealer unless it meets both of the following requirements. Who has free state tax filing It is established to the satisfaction of the IRS that the instrument has no connection to the activities of the dealer as a dealer. Who has free state tax filing The instrument is clearly identified in the dealer's records as meeting (a) by the end of the day on which it was acquired, originated, or entered into. Who has free state tax filing Any hedging transaction (defined later) that is clearly identified as a hedging transaction by the end of the day on which it was acquired, originated, or entered into. Who has free state tax filing Supplies of a type you regularly use or consume in the ordinary course of your trade or business. Who has free state tax filing You can elect to treat as capital assets certain self-created musical compositions or copyrights you sold or exchanged. Who has free state tax filing See chapter 4 of Publication 550 for details. Who has free state tax filing Property held mainly for sale to customers. Who has free state tax filing   Stock in trade, inventory, and other property you hold mainly for sale to customers in your trade or business are not capital assets. Who has free state tax filing Inventories are discussed in Publication 538. Who has free state tax filing Business assets. Who has free state tax filing   Real property and depreciable property used in your trade or business or as rental property (including section 197 intangibles defined later under Dispositions of Intangible Property) are not capital assets. Who has free state tax filing The sale or disposition of business property is discussed in chapter 3. Who has free state tax filing Letters and memoranda. Who has free state tax filing   Letters, memoranda, and similar property (such as drafts of speeches, recordings, transcripts, manuscripts, drawings, or photographs) are not treated as capital assets (as discussed earlier) if your personal efforts created them or if they were prepared or produced for you. Who has free state tax filing Nor is this property a capital asset if your basis in it is determined by reference to the person who created it or the person for whom it was prepared. Who has free state tax filing For this purpose, letters and memoranda addressed to you are considered prepared for you. Who has free state tax filing If letters or memoranda are prepared by persons under your administrative control, they are considered prepared for you whether or not you review them. Who has free state tax filing Commodities derivative financial instrument. Who has free state tax filing   A commodities derivative financial instrument is a commodities contract or other financial instrument for commodities (other than a share of corporate stock, a beneficial interest in a partnership or trust, a note, bond, debenture, or other evidence of indebtedness, or a section 1256 contract) the value or settlement price of which is calculated or determined by reference to a specified index (as defined in section 1221(b) of the Internal Revenue Code). Who has free state tax filing Commodities derivative dealer. Who has free state tax filing   A commodities derivative dealer is a person who regularly offers to enter into, assume, offset, assign, or terminate positions in commodities derivative financial instruments with customers in the ordinary course of a trade or business. Who has free state tax filing Hedging transaction. Who has free state tax filing   A hedging transaction is any transaction you enter into in the normal course of your trade or business primarily to manage any of the following. Who has free state tax filing Risk of price changes or currency fluctuations involving ordinary property you hold or will hold. Who has free state tax filing Risk of interest rate or price changes or currency fluctuations for borrowings you make or will make, or ordinary obligations you incur or will incur. Who has free state tax filing Sales and Exchanges Between Related Persons This section discusses the rules that may apply to the sale or exchange of property between related persons. Who has free state tax filing If these rules apply, gains may be treated as ordinary income and losses may not be deductible. Who has free state tax filing See Transfers to Spouse in chapter 1 for rules that apply to spouses. Who has free state tax filing Gain Is Ordinary Income If a gain is recognized on the sale or exchange of property to a related person, the gain may be ordinary income even if the property is a capital asset. Who has free state tax filing It is ordinary income if the sale or exchange is a depreciable property transaction or a controlled partnership transaction. Who has free state tax filing Depreciable property transaction. Who has free state tax filing   Gain on the sale or exchange of property, including a leasehold or a patent application, that is depreciable property in the hands of the person who receives it is ordinary income if the transaction is either directly or indirectly between any of the following pairs of entities. Who has free state tax filing A person and the person's controlled entity or entities. Who has free state tax filing A taxpayer and any trust in which the taxpayer (or his or her spouse) is a beneficiary unless the beneficiary's interest in the trust is a remote contingent interest; that is, the value of the interest computed actuarially is 5% or less of the value of the trust property. Who has free state tax filing An executor and a beneficiary of an estate unless the sale or exchange is in satisfaction of a pecuniary bequest (a bequest for a sum of money). Who has free state tax filing An employer (or any person related to the employer under rules (1), (2), or (3)) and a welfare benefit fund (within the meaning of section 419(e) of the Internal Revenue Code) that is controlled directly or indirectly by the employer (or any person related to the employer). Who has free state tax filing Controlled entity. Who has free state tax filing   A person's controlled entity is either of the following. Who has free state tax filing A corporation in which more than 50% of the value of all outstanding stock, or a partnership in which more than 50% of the capital interest or profits interest, is directly or indirectly owned by or for that person. Who has free state tax filing An entity whose relationship with that person is one of the following. Who has free state tax filing A corporation and a partnership if the same persons own more than 50% in value of the outstanding stock of the corporation and more than 50% of the capital interest or profits interest in the partnership. Who has free state tax filing Two corporations that are members of the same controlled group as defined in section 1563(a) of the Internal Revenue Code, except that “more than 50%” is substituted for “at least 80%” in that definition. Who has free state tax filing Two S corporations, if the same persons own more than 50% in value of the outstanding stock of each corporation. Who has free state tax filing Two corporations, one of which is an S corporation, if the same persons own more than 50% in value of the outstanding stock of each corporation. Who has free state tax filing Controlled partnership transaction. Who has free state tax filing   A gain recognized in a controlled partnership transaction may be ordinary income. Who has free state tax filing The gain is ordinary income if it results from the sale or exchange of property that, in the hands of the party who receives it, is a noncapital asset such as trade accounts receivable, inventory, stock in trade, or depreciable or real property used in a trade or business. Who has free state tax filing   A controlled partnership transaction is a transaction directly or indirectly between either of the following pairs of entities. Who has free state tax filing A partnership and a person who directly or indirectly owns more than 50% of the capital interest or profits interest in the partnership. Who has free state tax filing Two partnerships, if the same persons directly or indirectly own more than 50% of the capital interests or profits interests in both partnerships. Who has free state tax filing Determining ownership. Who has free state tax filing   In the transactions under Depreciable property transaction and Controlled partnership transaction, earlier, use the following rules to determine the ownership of stock or a partnership interest. Who has free state tax filing Stock or a partnership interest directly or indirectly owned by or for a corporation, partnership, estate, or trust is considered owned proportionately by or for its shareholders, partners, or beneficiaries. Who has free state tax filing (However, for a partnership interest owned by or for a C corporation, this applies only to shareholders who directly or indirectly own 5% or more in value of the stock of the corporation. Who has free state tax filing ) An individual is considered as owning the stock or partnership interest directly or indirectly owned by or for his or her family. Who has free state tax filing Family includes only brothers, sisters, half-brothers, half-sisters, spouse, ancestors, and lineal descendants. Who has free state tax filing For purposes of applying (1) or (2), above, stock or a partnership interest constructively owned by a person under (1) is treated as actually owned by that person. Who has free state tax filing But stock or a partnership interest constructively owned by an individual under (2) is not treated as owned by the individual for reapplying (2) to make another person the constructive owner of that stock or partnership interest. Who has free state tax filing Nondeductible Loss A loss on the sale or exchange of property between related persons is not deductible. Who has free state tax filing This applies to both direct and indirect transactions, but not to distributions of property from a corporation in a complete liquidation. Who has free state tax filing For the list of related persons, see Related persons next. Who has free state tax filing If a sale or exchange is between any of these related persons and involves the lump-sum sale of a number of blocks of stock or pieces of property, the gain or loss must be figured separately for each block of stock or piece of property. Who has free state tax filing The gain on each item is taxable. Who has free state tax filing The loss on any item is nondeductible. Who has free state tax filing Gains from the sales of any of these items may not be offset by losses on the sales of any of the other items. Who has free state tax filing Related persons. Who has free state tax filing   The following is a list of related persons. Who has free state tax filing Members of a family, including only brothers, sisters, half-brothers, half-sisters, spouse, ancestors (parents, grandparents, etc. Who has free state tax filing ), and lineal descendants (children, grandchildren, etc. Who has free state tax filing ). Who has free state tax filing An individual and a corporation if the individual directly or indirectly owns more than 50% in value of the outstanding stock of the corporation. Who has free state tax filing Two corporations that are members of the same controlled group as defined in section 267(f) of the Internal Revenue Code. Who has free state tax filing A trust fiduciary and a corporation if the trust or the grantor of the trust directly or indirectly owns more than 50% in value of the outstanding stock of the corporation. Who has free state tax filing A grantor and fiduciary, and the fiduciary and beneficiary, of any trust. Who has free state tax filing Fiduciaries of two different trusts, and the fiduciary and beneficiary of two different trusts, if the same person is the grantor of both trusts. Who has free state tax filing A tax-exempt educational or charitable organization and a person who directly or indirectly controls the organization, or a member of that person's family. Who has free state tax filing A corporation and a partnership if the same persons own more than 50% in value of the outstanding stock of the corporation and more than 50% of the capital interest or profits interest in the partnership. Who has free state tax filing Two S corporations if the same persons own more than 50% in value of the outstanding stock of each corporation. Who has free state tax filing Two corporations, one of which is an S corporation, if the same persons own more than 50% in value of the outstanding stock of each corporation. Who has free state tax filing An executor and a beneficiary of an estate unless the sale or exchange is in satisfaction of a pecuniary bequest. Who has free state tax filing Two partnerships if the same persons directly or indirectly own more than 50% of the capital interests or profits interests in both partnerships. Who has free state tax filing A person and a partnership if the person directly or indirectly owns more than 50% of the capital interest or profits interest in the partnership. Who has free state tax filing Partnership interests. Who has free state tax filing   The nondeductible loss rule does not apply to a sale or exchange of an interest in the partnership between the related persons described in (12) or (13) above. Who has free state tax filing Controlled groups. Who has free state tax filing   Losses on transactions between members of the same controlled group described in (3) earlier are deferred rather than denied. Who has free state tax filing   For more information, see section 267(f) of the Internal Revenue Code. Who has free state tax filing Ownership of stock or partnership interests. Who has free state tax filing   In determining whether an individual directly or indirectly owns any of the outstanding stock of a corporation or an interest in a partnership for a loss on a sale or exchange, the following rules apply. Who has free state tax filing Stock or a partnership interest directly or indirectly owned by or for a corporation, partnership, estate, or trust is considered owned proportionately by or for its shareholders, partners, or beneficiaries. Who has free state tax filing (However, for a partnership interest owned by or for a C corporation, this applies only to shareholders who directly or indirectly own 5% or more in value of the stock of the corporation. Who has free state tax filing ) An individual is considered as owning the stock or partnership interest directly or indirectly owned by or for his or her family. Who has free state tax filing Family includes only brothers, sisters, half-brothers, half-sisters, spouse, ancestors, and lineal descendants. Who has free state tax filing An individual owning (other than by applying (2)) any stock in a corporation is considered to own the stock directly or indirectly owned by or for his or her partner. Who has free state tax filing For purposes of applying (1), (2), or (3), stock or a partnership interest constructively owned by a person under (1) is treated as actually owned by that person. Who has free state tax filing But stock or a partnership interest constructively owned by an individual under (2) or (3) is not treated as owned by the individual for reapplying either (2) or (3) to make another person the constructive owner of that stock or partnership interest. Who has free state tax filing Indirect transactions. Who has free state tax filing   You cannot deduct your loss on the sale of stock through your broker if under a prearranged plan a related person or entity buys the same stock you had owned. Who has free state tax filing This does not apply to a cross-trade between related parties through an exchange that is purely coincidental and is not prearranged. Who has free state tax filing Property received from a related person. Who has free state tax filing   If, in a purchase or exchange, you received property from a related person who had a loss that was not allowable and you later sell or exchange the property at a gain, you recognize the gain only to the extent it is more than the loss previously disallowed to the related person. Who has free state tax filing This rule applies only to the original transferee. Who has free state tax filing Example 1. Who has free state tax filing Your brother sold stock to you for $7,600. Who has free state tax filing His cost basis was $10,000. Who has free state tax filing His loss of $2,400 was not deductible. Who has free state tax filing You later sell the same stock to an unrelated party for $10,500, realizing a gain of $2,900 ($10,500 − $7,600). Who has free state tax filing Your recognized gain is only $500, the gain that is more than the $2,400 loss not allowed to your brother. Who has free state tax filing Example 2. Who has free state tax filing Assume the same facts as in Example 1, except that you sell the stock for $6,900 instead of $10,500. Who has free state tax filing Your recognized loss is only $700 ($7,600 − $6,900). Who has free state tax filing You cannot deduct the loss not allowed to your brother. Who has free state tax filing Other Dispositions This section discusses rules for determining the treatment of gain or loss from various dispositions of property. Who has free state tax filing Sale of a Business The sale of a business usually is not a sale of one asset. Who has free state tax filing Instead, all the assets of the business are sold. Who has free state tax filing Generally, when this occurs, each asset is treated as being sold separately for determining the treatment of gain or loss. Who has free state tax filing A business usually has many assets. Who has free state tax filing When sold, these assets must be classified as capital assets, depreciable property used in the business, real property used in the business, or property held for sale to customers, such as inventory or stock in trade. Who has free state tax filing The gain or loss on each asset is figured separately. Who has free state tax filing The sale of capital assets results in capital gain or loss. Who has free state tax filing The sale of real property or depreciable property used in the business and held longer than 1 year results in gain or loss from a section 1231 transaction (discussed in chapter 3). Who has free state tax filing The sale of inventory results in ordinary income or loss. Who has free state tax filing Partnership interests. Who has free state tax filing   An interest in a partnership or joint venture is treated as a capital asset when sold. Who has free state tax filing The part of any gain or loss from unrealized receivables or inventory items will be treated as ordinary gain or loss. Who has free state tax filing For more information, see Disposition of Partner's Interest in Publication 541. Who has free state tax filing Corporation interests. Who has free state tax filing   Your interest in a corporation is represented by stock certificates. Who has free state tax filing When you sell these certificates, you usually realize capital gain or loss. Who has free state tax filing For information on the sale of stock, see chapter 4 in Publication 550. Who has free state tax filing Corporate liquidations. Who has free state tax filing   Corporate liquidations of property generally are treated as a sale or exchange. Who has free state tax filing Gain or loss generally is recognized by the corporation on a liquidating sale of its assets. Who has free state tax filing Gain or loss generally is recognized also on a liquidating distribution of assets as if the corporation sold the assets to the distributee at fair market value. Who has free state tax filing   In certain cases in which the distributee is a corporation in control of the distributing corporation, the distribution may not be taxable. Who has free state tax filing For more information, see section 332 of the Internal Revenue Code and the related regulations. Who has free state tax filing Allocation of consideration paid for a business. Who has free state tax filing   The sale of a trade or business for a lump sum is considered a sale of each individual asset rather than of a single asset. Who has free state tax filing Except for assets exchanged under any nontaxable exchange rules, both the buyer and seller of a business must use the residual method (explained later) to allocate the consideration to each business asset transferred. Who has free state tax filing This method determines gain or loss from the transfer of each asset and how much of the consideration is for goodwill and certain other intangible property. Who has free state tax filing It also determines the buyer's basis in the business assets. Who has free state tax filing Consideration. Who has free state tax filing   The buyer's consideration is the cost of the assets acquired. Who has free state tax filing The seller's consideration is the amount realized (money plus the fair market value of property received) from the sale of assets. Who has free state tax filing Residual method. Who has free state tax filing   The residual method must be used for any transfer of a group of assets that constitutes a trade or business and for which the buyer's basis is determined only by the amount paid for the assets. Who has free state tax filing This applies to both direct and indirect transfers, such as the sale of a business or the sale of a partnership interest in which the basis of the buyer's share of the partnership assets is adjusted for the amount paid under section 743(b) of the Internal Revenue Code. Who has free state tax filing Section 743(b) applies if a partnership has an election in effect under section 754 of the Internal Revenue Code. Who has free state tax filing   A group of assets constitutes a trade or business if either of the following applies. Who has free state tax filing Goodwill or going concern value could, under any circumstances, attach to them. Who has free state tax filing The use of the assets would constitute an active trade or business under section 355 of the Internal Revenue Code. Who has free state tax filing   The residual method provides for the consideration to be reduced first by the amount of Class I assets (defined below). Who has free state tax filing The consideration remaining after this reduction must be allocated among the various business assets in a certain order. Who has free state tax filing See Classes of assets next for the complete order. Who has free state tax filing Classes of assets. Who has free state tax filing   The following definitions are the classifications for deemed or actual asset acquisitions. Who has free state tax filing Allocate the consideration among the assets in the following order. Who has free state tax filing The amount allocated to an asset, other than a Class VII asset, cannot exceed its fair market value on the purchase date. Who has free state tax filing The amount you can allocate to an asset also is subject to any applicable limits under the Internal Revenue Code or general principles of tax law. Who has free state tax filing Class I assets are cash and general deposit accounts (including checking and savings accounts but excluding certificates of deposit). Who has free state tax filing Class II assets are certificates of deposit, U. Who has free state tax filing S. Who has free state tax filing Government securities, foreign currency, and actively traded personal property, including stock and securities. Who has free state tax filing Class III assets are accounts receivable, other debt instruments, and assets that you mark to market at least annually for federal income tax purposes. Who has free state tax filing However, see section 1. Who has free state tax filing 338-6(b)(2)(iii) of the regulations for exceptions that apply to debt instruments issued by persons related to a target corporation, contingent debt instruments, and debt instruments convertible into stock or other property. Who has free state tax filing Class IV assets are property of a kind that would properly be included in inventory if on hand at the end of the tax year or property held by the taxpayer primarily for sale to customers in the ordinary course of business. Who has free state tax filing Class V assets are all assets other than Class I, II, III, IV, VI, and VII assets. Who has free state tax filing    Note. Who has free state tax filing Furniture and fixtures, buildings, land, vehicles, and equipment, which constitute all or part of a trade or business are generally Class V assets. Who has free state tax filing Class VI assets are section 197 intangibles (other than goodwill and going concern value). Who has free state tax filing Class VII assets are goodwill and going concern value (whether the goodwill or going concern value qualifies as a section 197 intangible). Who has free state tax filing   If an asset described in one of the classifications described above can be included in more than one class, include it in the lower numbered class. Who has free state tax filing For example, if an asset is described in both Class II and Class IV, choose Class II. Who has free state tax filing Example. Who has free state tax filing The total paid in the sale of the assets of Company SKB is $21,000. Who has free state tax filing No cash or deposit accounts or similar accounts were sold. Who has free state tax filing The company's U. Who has free state tax filing S. Who has free state tax filing Government securities sold had a fair market value of $3,200. Who has free state tax filing The only other asset transferred (other than goodwill and going concern value) was inventory with a fair market value of $15,000. Who has free state tax filing Of the $21,000 paid for the assets of Company SKB, $3,200 is allocated to U. Who has free state tax filing S. Who has free state tax filing Government securities, $15,000 to inventory assets, and the remaining $2,800 to goodwill and going concern value. Who has free state tax filing Agreement. Who has free state tax filing   The buyer and seller may enter into a written agreement as to the allocation of any consideration or the fair market value of any of the assets. Who has free state tax filing This agreement is binding on both parties unless the IRS determines the amounts are not appropriate. Who has free state tax filing Reporting requirement. Who has free state tax filing   Both the buyer and seller involved in the sale of business assets must report to the IRS the allocation of the sales price among section 197 intangibles and the other business assets. Who has free state tax filing Use Form 8594, Asset Acquisition Statement Under Section 1060, to provide this information. Who has free state tax filing Generally, the buyer and seller should each attach Form 8594 to their federal income tax return for the year in which the sale occurred. Who has free state tax filing See the Instructions for Form 8594. Who has free state tax filing Dispositions of Intangible Property Intangible property is any personal property that has value but cannot be seen or touched. Who has free state tax filing It includes such items as patents, copyrights, and the goodwill value of a business. Who has free state tax filing Gain or loss on the sale or exchange of amortizable or depreciable intangible property held longer than 1 year (other than an amount recaptured as ordinary income) is a section 1231 gain or loss. Who has free state tax filing The treatment of section 1231 gain or loss and the recapture of amortization and depreciation as ordinary income are explained in chapter 3. Who has free state tax filing See chapter 8 of Publication 535, Business Expenses, for information on amortizable intangible property and chapter 1 of Publication 946, How To Depreciate Property, for information on intangible property that can and cannot be depreciated. Who has free state tax filing Gain or loss on dispositions of other intangible property is ordinary or capital depending on whether the property is a capital asset or a noncapital asset. Who has free state tax filing The following discussions explain special rules that apply to certain dispositions of intangible property. Who has free state tax filing Section 197 Intangibles Section 197 intangibles are certain intangible assets acquired after August 10, 1993 (after July 25, 1991, if chosen), and held in connection with the conduct of a trade or business or an activity entered into for profit whose costs are amortized over 15 years. Who has free state tax filing They include the following assets. Who has free state tax filing Goodwill. Who has free state tax filing Going concern value. Who has free state tax filing Workforce in place. Who has free state tax filing Business books and records, operating systems, and other information bases. Who has free state tax filing Patents, copyrights, formulas, processes, designs, patterns, know how, formats, and similar items. Who has free state tax filing Customer-based intangibles. Who has free state tax filing Supplier-based intangibles. Who has free state tax filing Licenses, permits, and other rights granted by a governmental unit. Who has free state tax filing Covenants not to compete entered into in connection with the acquisition of a business. Who has free state tax filing Franchises, trademarks, and trade names. Who has free state tax filing See chapter 8 of Publication 535 for a description of each intangible. Who has free state tax filing Dispositions. Who has free state tax filing   You cannot deduct a loss from the disposition or worthlessness of a section 197 intangible you acquired in the same transaction (or series of related transactions) as another section 197 intangible you still hold. Who has free state tax filing Instead, you must increase the adjusted basis of your retained section 197 intangible by the nondeductible loss. Who has free state tax filing If you retain more than one section 197 intangible, increase each intangible's adjusted basis. Who has free state tax filing Figure the increase by multiplying the nondeductible loss by a fraction, the numerator (top number) of which is the retained intangible's adjusted basis on the date of the loss and the denominator (bottom number) of which is the total adjusted basis of all retained intangibles on the date of the loss. Who has free state tax filing   In applying this rule, members of the same controlled group of corporations and commonly controlled businesses are treated as a single entity. Who has free state tax filing For example, a corporation cannot deduct a loss on the sale of a section 197 intangible if, after the sale, a member of the same controlled group retains other section 197 intangibles acquired in the same transaction as the intangible sold. Who has free state tax filing Covenant not to compete. Who has free state tax filing   A covenant not to compete (or similar arrangement) that is a section 197 intangible cannot be treated as disposed of or worthless before you have disposed of your entire interest in the trade or business for which the covenant was entered into. Who has free state tax filing Members of the same controlled group of corporations and commonly controlled businesses are treated as a single entity in determining whether a member has disposed of its entire interest in a trade or business. Who has free state tax filing Anti-churning rules. Who has free state tax filing   Anti-churning rules prevent a taxpayer from converting section 197 intangibles that do not qualify for amortization into property that would qualify for amortization. Who has free state tax filing However, these rules do not apply to part of the basis of property acquired by certain related persons if the transferor elects to do both the following. Who has free state tax filing Recognize gain on the transfer of the property. Who has free state tax filing Pay income tax on the gain at the highest tax rate. Who has free state tax filing   If the transferor is a partnership or S corporation, the partnership or S corporation (not the partners or shareholders) can make the election. Who has free state tax filing But each partner or shareholder must pay the tax on his or her share of gain. Who has free state tax filing   To make the election, you, as the transferor, must attach a statement containing certain information to your income tax return for the year of the transfer. Who has free state tax filing You must file the tax return by the due date (including extensions). Who has free state tax filing You must also notify the transferee of the election in writing by the due date of the return. Who has free state tax filing   If you timely filed your return without making the election, you can make the election by filing an amended return within 6 months after the due date of the return (excluding extensions). Who has free state tax filing Attach the statement to the amended return and write “Filed pursuant to section 301. Who has free state tax filing 9100-2” at the top of the statement. Who has free state tax filing File the amended return at the same address the original return was filed. Who has free state tax filing For more information about making the election, see Regulations section 1. Who has free state tax filing 197-2(h)(9). Who has free state tax filing For information about reporting the tax on your income tax return, see the Instructions for Form 4797. Who has free state tax filing Patents The transfer of a patent by an individual is treated as a sale or exchange of a capital asset held longer than 1 year. Who has free state tax filing This applies even if the payments for the patent are made periodically during the transferee's use or are contingent on the productivity, use, or disposition of the patent. Who has free state tax filing For information on the treatment of gain or loss on the transfer of capital assets, see chapter 4. Who has free state tax filing This treatment applies to your transfer of a patent if you meet all the following conditions. Who has free state tax filing You are the holder of the patent. Who has free state tax filing You transfer the patent other than by gift, inheritance, or devise. Who has free state tax filing You transfer all substantial rights to the patent or an undivided interest in all such rights. Who has free state tax filing You do not transfer the patent to a related person. Who has free state tax filing Holder. Who has free state tax filing   You are the holder of a patent if you are either of the following. Who has free state tax filing The individual whose effort created the patent property and who qualifies as the original and first inventor. Who has free state tax filing The individual who bought an interest in the patent from the inventor before the invention was tested and operated successfully under operating conditions and who is neither related to, nor the employer of, the inventor. Who has free state tax filing All substantial rights. Who has free state tax filing   All substantial rights to patent property are all rights that have value when they are transferred. Who has free state tax filing A security interest (such as a lien), or a reservation calling for forfeiture for nonperformance, is not treated as a substantial right for these rules and may be kept by you as the holder of the patent. Who has free state tax filing   All substantial rights to a patent are not transferred if any of the following apply to the transfer. Who has free state tax filing The rights are limited geographically within a country. Who has free state tax filing The rights are limited to a period less than the remaining life of the patent. Who has free state tax filing The rights are limited to fields of use within trades or industries and are less than all the rights that exist and have value at the time of the transfer. Who has free state tax filing The rights are less than all the claims or inventions covered by the patent that exist and have value at the time of the transfer. Who has free state tax filing Related persons. Who has free state tax filing   This tax treatment does not apply if the transfer is directly or indirectly between you and a related person as defined earlier in the list under Nondeductible Loss, with the following changes. Who has free state tax filing Members of your family include your spouse, ancestors, and lineal descendants, but not your brothers, sisters, half-brothers, or half-sisters. Who has free state tax filing Substitute “25% or more” ownership for “more than 50%. Who has free state tax filing ”   If you fit within the definition of a related person independent of family status, the brother-sister exception in (1), earlier, does not apply. Who has free state tax filing For example, a transfer between a brother and a sister as beneficiary and fiduciary of the same trust is a transfer between related persons. Who has free state tax filing The brother-sister exception does not apply because the trust relationship is independent of family status. Who has free state tax filing Franchise, Trademark, or Trade Name If you transfer or renew a franchise, trademark, or trade name for a price contingent on its productivity, use, or disposition, the amount you receive generally is treated as an amount realized from the sale of a noncapital asset. Who has free state tax filing A franchise includes an agreement that gives one of the parties the right to distribute, sell, or provide goods, services, or facilities within a specified area. Who has free state tax filing Significant power, right, or continuing interest. Who has free state tax filing   If you keep any significant power, right, or continuing interest in the subject matter of a franchise, trademark, or trade name that you transfer or renew, the amount you receive is ordinary royalty income rather than an amount realized from a sale or exchange. Who has free state tax filing   A significant power, right, or continuing interest in a franchise, trademark, or trade name includes, but is not limited to, the following rights in the transferred interest. Who has free state tax filing A right to disapprove any assignment of the interest, or any part of it. Who has free state tax filing A right to end the agreement at will. Who has free state tax filing A right to set standards of quality for products used or sold, or for services provided, and for the equipment and facilities used to promote such products or services. Who has free state tax filing A right to make the recipient sell or advertise only your products or services. Who has free state tax filing A right to make the recipient buy most supplies and equipment from you. Who has free state tax filing A right to receive payments based on the productivity, use, or disposition of the transferred item of interest if those payments are a substantial part of the transfer agreement. Who has free state tax filing Subdivision of Land If you own a tract of land and, to sell or exchange it, you subdivide it into individual lots or parcels, the gain normally is ordinary income. Who has free state tax filing However, you may receive capital gain treatment on at least part of the proceeds provided you meet certain requirements. Who has free state tax filing See section 1237 of the Internal Revenue Code. Who has free state tax filing Timber Standing timber held as investment property is a capital asset. Who has free state tax filing Gain or loss from its sale is reported as a capital gain or loss on Form 8949, and Schedule D (Form 1040), as applicable. Who has free state tax filing If you held the timber primarily for sale to customers, it is not a capital asset. Who has free state tax filing Gain or loss on its sale is ordinary business income or loss. Who has free state tax filing It is reported in the gross receipts or sales and cost of goods sold items of your return. Who has free state tax filing 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. Who has free state tax filing These sales constitute a very minor part of their farm businesses. Who has free state tax filing In these cases, amounts realized from such sales, and the expenses of cutting, hauling, etc. Who has free state tax filing , are ordinary farm income and expenses reported on Schedule F (Form 1040), Profit or Loss From Farming. Who has free state tax filing Different rules apply if you owned the timber longer than 1 year and elect to either: Treat timber cutting as a sale or exchange, or Enter into a cutting contract. Who has free state tax filing Timber is considered cut on the date when, in the ordinary course of business, the quantity of felled timber is first definitely determined. Who has free state tax filing This is true whether the timber is cut under contract or whether you cut it yourself. Who has free state tax filing Under the rules discussed below, disposition of the timber is treated as a section 1231 transaction. Who has free state tax filing See chapter 3. Who has free state tax filing Gain or loss is reported on Form 4797. Who has free state tax filing Christmas trees. Who has free state tax filing   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. Who has free state tax filing They qualify for both rules discussed below. Who has free state tax filing Election to treat cutting as a sale or exchange. Who has free state tax filing   Under the general rule, the cutting of timber results in no gain or loss. Who has free state tax filing It is not until a sale or exchange occurs that gain or loss is realized. Who has free state tax filing 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 the timber is cut. Who has free state tax filing 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. Who has free state tax filing Any later sale results in ordinary business income or loss. Who has free state tax filing See Example, later. Who has free state tax filing   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 for use in your trade or business. Who has free state tax filing Making the election. Who has free state tax filing   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 the gain or loss. Who has free state tax filing You do not have to make the election in the first year you cut timber. Who has free state tax filing You can make it in any year to which the election would apply. Who has free state tax filing If the timber is partnership property, the election is made on the partnership return. Who has free state tax filing This election cannot be made on an amended return. Who has free state tax filing   Once you have made the election, it remains in effect for all later years unless you cancel it. Who has free state tax filing   If you previously elected to treat the cutting of timber as a sale or exchange, you may revoke this election without the consent of the IRS. Who has free state tax filing The prior election (and revocation) is disregarded for purposes of making a subsequent election. Who has free state tax filing See Form T (Timber), Forest Activities Schedule, for more information. Who has free state tax filing Gain or loss. Who has free state tax filing   Your gain or loss on the cutting of standing timber is the difference between its adjusted basis for depletion and its fair market value on the first day of your tax year in which it is cut. Who has free state tax filing   Your adjusted basis for depletion of cut timber is based on the number of units (feet board measure, log scale, or other units) of timber cut during the tax year and considered to be sold or exchanged. Who has free state tax filing 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 of the Internal Revenue Code and the related regulations. Who has free state tax filing   Timber depletion is discussed in chapter 9 of Publication 535. Who has free state tax filing Example. Who has free state tax filing In April 2013, you had owned 4,000 MBF (1,000 board feet) of standing timber longer than 1 year. Who has free state tax filing It had an adjusted basis for depletion of $40 per MBF. Who has free state tax filing You are a calendar year taxpayer. Who has free state tax filing On January 1, 2013, the timber had a fair market value (FMV) of $350 per MBF. Who has free state tax filing It was cut in April for sale. Who has free state tax filing On your 2013 tax return, you elect to treat the cutting of the timber as a sale or exchange. Who has free state tax filing You report the difference between the fair market value and your adjusted basis for depletion as a gain. Who has free state tax filing This amount is reported on Form 4797 along with your other section 1231 gains and losses to figure whether it is treated as capital gain or as ordinary gain. Who has free state tax filing You figure your gain as follows. Who has free state tax filing FMV of timber January 1, 2013 $1,400,000 Minus: Adjusted basis for depletion 160,000 Section 1231 gain $1,240,000 The fair market value 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. Who has free state tax filing Outright sales of timber. Who has free state tax filing   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 below). Who has free state tax filing 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 below). Who has free state tax filing Cutting contract. Who has free state tax filing   You must treat the disposal of standing timber under a cutting contract as a section 1231 transaction if all the following apply to you. Who has free state tax filing You are the owner of the timber. Who has free state tax filing You held the timber longer than 1 year before its disposal. Who has free state tax filing You kept an economic interest in the timber. Who has free state tax filing   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. Who has free state tax filing   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. Who has free state tax filing Include this amount on Form 4797 along with your other section 1231 gains or losses to figure whether it is treated as capital or ordinary gain or loss. Who has free state tax filing Date of disposal. Who has free state tax filing   The date of disposal is the date the timber is cut. Who has free state tax filing 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. Who has free state tax filing   This election applies only to figure the holding period of the timber. Who has free state tax filing It has no effect on the time for reporting gain or loss (generally when the timber is sold or exchanged). Who has free state tax filing   To make this election, attach a statement to the tax return filed by the due date (including extensions) for the year payment is received. Who has free state tax filing The statement must identify the advance payments subject to the election and the contract under which they were made. Who has free state tax filing   If you timely filed your return for the year you received payment without making the election, you still can make the election by filing an amended return within 6 months after the due date for that year's return (excluding extensions). Who has free state tax filing Attach the statement to the amended return and write “Filed pursuant to section 301. Who has free state tax filing 9100-2” at the top of the statement. Who has free state tax filing File the amended return at the same address the original return was filed. Who has free state tax filing Owner. Who has free state tax filing   The owner of timber is any person who owns an interest in it, including a sublessor and the holder of a contract to cut the timber. Who has free state tax filing 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. Who has free state tax filing Tree stumps. Who has free state tax filing   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. Who has free state tax filing Gain from the sale of stumps sold in one lot by such a holder is taxed as a capital gain. Who has free state tax filing However, tree stumps held by timber operators after the saleable standing timber was cut and removed from the land are considered by-products. Who has free state tax filing Gain from the sale of stumps in lots or tonnage by such operators is taxed as ordinary income. Who has free state tax filing   See Form T (Timber) and its separate instructions for more information about dispositions of timber. Who has free state tax filing Precious Metals and Stones, Stamps, and Coins Gold, silver, gems, stamps, coins, etc. Who has free state tax filing , are capital assets except when they are held for sale by a dealer. Who has free state tax filing Any gain or loss from their sale or exchange generally is a capital gain or loss. Who has free state tax filing If you are a dealer, the amount received from the sale is ordinary business income. Who has free state tax filing Coal and Iron Ore You must treat the disposal of coal (including lignite) or iron ore mined in the United States as a section 1231 transaction if both the following apply to you. Who has free state tax filing You owned the coal or iron ore longer than 1 year before its disposal. Who has free state tax filing You kept an economic interest in the coal or iron ore. Who has free state tax filing For this rule, the date the coal or iron ore is mined is considered the date of its disposal. Who has free state tax filing Your gain or loss is the difference between the amount realized from disposal of the coal or iron ore and the adjusted basis you use to figure cost depletion (increased by certain expenses not allowed as deductions for the tax year). Who has free state tax filing This amount is included on Form 4797 along with your other section 1231 gains and losses. Who has free state tax filing You are considered an owner if you own or sublet an economic interest in the coal or iron ore in place. Who has free state tax filing If you own only an option to buy the coal in place, you do not qualify as an owner. Who has free state tax filing In addition, this gain or loss treatment does not apply to income realized by an owner who is a co-adventurer, partner, or principal in the mining of coal or iron ore. Who has free state tax filing The expenses of making and administering the contract under which the coal or iron ore was disposed of and the expenses of preserving the economic interest kept under the contract are not allowed as deductions in figuring taxable income. Who has free state tax filing Rather, their total, along with the adjusted depletion basis, is deducted from the amount received to determine gain. Who has free state tax filing If the total of these expenses plus the adjusted depletion basis is more than the amount received, the result is a loss. Who has free state tax filing Special rule. Who has free state tax filing   The above treatment does not apply if you directly or indirectly dispose of the iron ore or coal to any of the following persons. Who has free state tax filing A related person whose relationship to you would result in the disallowance of a loss (see Nondeductible Loss under Sales and Exchanges Between Related Persons, earlier). Who has free state tax filing An individual, trust, estate, partnership, association, company, or corporation owned or controlled directly or indirectly by the same interests that own or control your business. Who has free state tax filing Conversion Transactions Recognized gain on the disposition or termination of any position held as part of certain conversion transactions is treated as ordinary income. Who has free state tax filing This applies if substantially all your expected return is attributable to the time value of your net investment (like interest on a loan) and the transaction is any of the following. Who has free state tax filing An applicable straddle (generally, any set of offsetting positions with respect to personal property, including stock). Who has free state tax filing A transaction in which you acquire property and, at or about the same time, you contract to sell the same or substantially identical property at a specified price. Who has free state tax filing Any other transaction that is marketed and sold as producing capital gain from a transaction in which substantially all of your expected return is due to the time value of your net investment. Who has free state tax filing For more information, see chapter 4 of Publication 550. Who has free state tax filing Prev  Up  Next   Home   More Online Publications
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The Who Has Free State Tax Filing

Who has free state tax filing Publication 526 - Main Content Table of Contents Organizations That Qualify To Receive Deductible ContributionsTypes of Qualified Organizations Contributions You Can DeductContributions From Which You Benefit Expenses Paid for Student Living With You Out-of-Pocket Expenses in Giving Services Expenses of Whaling Captains Contributions You Cannot DeductContributions to Individuals Contributions to Nonqualified Organizations Contributions From Which You Benefit Value of Time or Services Personal Expenses Appraisal Fees Contributions to Donor-Advised Funds Partial Interest in Property Contributions of PropertyContributions Subject to Special Rules Determining Fair Market Value Giving Property That Has Decreased in Value Giving Property That Has Increased in Value Penalty When To DeductChecks. Who has free state tax filing Text message. Who has free state tax filing Credit card. Who has free state tax filing Pay-by-phone account. Who has free state tax filing Stock certificate. Who has free state tax filing Promissory note. Who has free state tax filing Option. Who has free state tax filing Borrowed funds. Who has free state tax filing Conditional gift. Who has free state tax filing Limits on Deductions50% Limit 30% Limit Special 30% Limit for Capital Gain Property 20% Limit Special 50% Limit for Qualified Conservation Contributions How To Figure Your Deduction When Limits Apply Records To KeepCash Contributions Noncash Contributions Out-of-Pocket Expenses How To ReportReporting expenses for student living with you. Who has free state tax filing Total deduction over $500. Who has free state tax filing Deduction over $5,000 for one item. Who has free state tax filing Vehicle donations. Who has free state tax filing Clothing and household items not in good used condition. Who has free state tax filing Easement on building in historic district. Who has free state tax filing Deduction over $500,000. Who has free state tax filing How To Get Tax HelpLow Income Taxpayer Clinics Organizations That Qualify To Receive Deductible Contributions You can deduct your contributions only if you make them to a qualified organization. Who has free state tax filing Most organizations, other than churches and governments, must apply to the IRS to become a qualified organization. Who has free state tax filing How to check whether an organization can receive deductible charitable contributions. Who has free state tax filing   You can ask any organization whether it is a qualified organization, and most will be able to tell you. Who has free state tax filing Or go to IRS. Who has free state tax filing gov. Who has free state tax filing Click on “Tools” and then on “Exempt Organizations Select Check” (www. Who has free state tax filing irs. Who has free state tax filing gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check). Who has free state tax filing This online tool will enable you to search for qualified organizations. Who has free state tax filing You can also call the IRS to find out if an organization is qualified. Who has free state tax filing Call 1-877-829-5500. Who has free state tax filing People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD equipment can call 1-800-829-4059. Who has free state tax filing Deaf or hard of hearing individuals can also contact the IRS through relay services such as the Federal Relay Service at www. Who has free state tax filing gsa. Who has free state tax filing gov/fedrelay. Who has free state tax filing Types of Qualified Organizations Generally, only the following types of organizations can be qualified organizations. Who has free state tax filing A community chest, corporation, trust, fund, or foundation organized or created in or under the laws of the United States, any state, the District of Columbia, or any possession of the United States (including Puerto Rico). Who has free state tax filing It must, however, be organized and operated only for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. Who has free state tax filing Certain organizations that foster national or international amateur sports competition also qualify. Who has free state tax filing War veterans' organizations, including posts, auxiliaries, trusts, or foundations, organized in the United States or any of its possessions (including Puerto Rico). Who has free state tax filing Domestic fraternal societies, orders, and associations operating under the lodge system. Who has free state tax filing (Your contribution to this type of organization is deductible only if it is to be used solely for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. Who has free state tax filing ) Certain nonprofit cemetery companies or corporations. Who has free state tax filing (Your contribution to this type of organization is not deductible if it can be used for the care of a specific lot or mausoleum crypt. Who has free state tax filing ) The United States or any state, the District of Columbia, a U. Who has free state tax filing S. Who has free state tax filing possession (including Puerto Rico), a political subdivision of a state or U. Who has free state tax filing S. Who has free state tax filing possession, or an Indian tribal government or any of its subdivisions that perform substantial government functions. Who has free state tax filing (Your contribution to this type of organization is deductible only if it is to be used solely for public purposes. Who has free state tax filing ) Example 1. Who has free state tax filing You contribute cash to your city's police department to be used as a reward for information about a crime. Who has free state tax filing The city police department is a qualified organization, and your contribution is for a public purpose. Who has free state tax filing You can deduct your contribution. Who has free state tax filing Example 2. Who has free state tax filing You make a voluntary contribution to the social security trust fund, not earmarked for a specific account. Who has free state tax filing Because the trust fund is part of the U. Who has free state tax filing S. Who has free state tax filing Government, you contributed to a qualified organization. Who has free state tax filing You can deduct your contribution. Who has free state tax filing Examples. Who has free state tax filing   The following list gives some examples of qualified organizations. Who has free state tax filing Churches, a convention or association of churches, temples, synagogues, mosques, and other religious organizations. Who has free state tax filing Most nonprofit charitable organizations such as the American Red Cross and the United Way. Who has free state tax filing Most nonprofit educational organizations, including the Boy Scouts of America, Girl Scouts of America, colleges, and museums. Who has free state tax filing This also includes nonprofit daycare centers that provide childcare to the general public if substantially all the childcare is provided to enable parents and guardians to be gainfully employed. Who has free state tax filing However, if your contribution is a substitute for tuition or other enrollment fee, it is not deductible as a charitable contribution, as explained later under Contributions You Cannot Deduct . Who has free state tax filing Nonprofit hospitals and medical research organizations. Who has free state tax filing Utility company emergency energy programs, if the utility company is an agent for a charitable organization that assists individuals with emergency energy needs. Who has free state tax filing Nonprofit volunteer fire companies. Who has free state tax filing Nonprofit organizations that develop and maintain public parks and recreation facilities. Who has free state tax filing Civil defense organizations. Who has free state tax filing Canadian charities. Who has free state tax filing   You may be able to deduct contributions to certain Canadian charitable organizations covered under an income tax treaty with Canada. Who has free state tax filing To deduct your contribution to a Canadian charity, you generally must have income from sources in Canada. Who has free state tax filing See Publication 597, Information on the United States-Canada Income Tax Treaty, for information on how to figure your deduction. Who has free state tax filing Mexican charities. Who has free state tax filing   Under the U. Who has free state tax filing S. Who has free state tax filing -Mexico income tax treaty, a contribution to a Mexican charitable organization may be deductible, but only if and to the extent the contribution would have been treated as a charitable contribution to a public charity created or organized under U. Who has free state tax filing S. Who has free state tax filing law. Who has free state tax filing To deduct your contribution to a Mexican charity, you must have income from sources in Mexico. Who has free state tax filing The limits described in Limits on Deductions , later, apply and are figured using your income from Mexican sources. Who has free state tax filing Israeli charities. Who has free state tax filing   Under the U. Who has free state tax filing S. Who has free state tax filing -Israel income tax treaty, a contribution to an Israeli charitable organization is deductible if and to the extent the contribution would have been treated as a charitable contribution if the organization had been created or organized under U. Who has free state tax filing S. Who has free state tax filing law. Who has free state tax filing To deduct your contribution to an Israeli charity, you must have income from sources in Israel. Who has free state tax filing The limits described in Limits on Deductions , later, apply. Who has free state tax filing The deduction is also limited to 25% of your adjusted gross income from Israeli sources. Who has free state tax filing Contributions You Can Deduct Generally, you can deduct contributions of money or property you make to, or for the use of, a qualified organization. Who has free state tax filing A contribution is “for the use of” a qualified organization when it is held in a legally enforceable trust for the qualified organization or in a similar legal arrangement. Who has free state tax filing The contributions must be made to a qualified organization and not set aside for use by a specific person. Who has free state tax filing If you give property to a qualified organization, you generally can deduct the fair market value of the property at the time of the contribution. Who has free state tax filing See Contributions of Property , later. Who has free state tax filing Your deduction for charitable contributions generally cannot be more than 50% of your adjusted gross income (AGI), but in some cases 20% and 30% limits may apply. Who has free state tax filing In addition, the total of your charitable contributions deduction and certain other itemized deductions may be limited. Who has free state tax filing See Limits on Deductions , later. Who has free state tax filing Table 1 in this publication gives examples of contributions you can and cannot deduct. Who has free state tax filing Contributions From Which You Benefit If you receive a benefit as a result of making a contribution to a qualified organization, you can deduct only the amount of your contribution that is more than the value of the benefit you receive. Who has free state tax filing Also see Contributions From Which You Benefit under Contributions You Cannot Deduct, later. Who has free state tax filing If you pay more than fair market value to a qualified organization for goods or services, the excess may be a charitable contribution. Who has free state tax filing For the excess amount to qualify, you must pay it with the intent to make a charitable contribution. Who has free state tax filing Example 1. Who has free state tax filing You pay $65 for a ticket to a dinner-dance at a church. Who has free state tax filing Your entire $65 payment goes to the church. Who has free state tax filing The ticket to the dinner-dance has a fair market value of $25. Who has free state tax filing When you buy your ticket, you know its value is less than your payment. Who has free state tax filing To figure the amount of your charitable contribution, subtract the value of the benefit you receive ($25) from your total payment ($65). Who has free state tax filing You can deduct $40 as a charitable contribution to the church. Who has free state tax filing Example 2. Who has free state tax filing At a fundraising auction conducted by a charity, you pay $600 for a week's stay at a beach house. Who has free state tax filing The amount you pay is no more than the fair rental value. Who has free state tax filing You have not made a deductible charitable contribution. Who has free state tax filing Athletic events. Who has free state tax filing   If you make a payment to, or for the benefit of, a college or university and, as a result, you receive the right to buy tickets to an athletic event in the athletic stadium of the college or university, you can deduct 80% of the payment as a charitable contribution. Who has free state tax filing   If any part of your payment is for tickets (rather than the right to buy tickets), that part is not deductible. Who has free state tax filing Subtract the price of the tickets from your payment. Who has free state tax filing You can deduct 80% of the remaining amount as a charitable contribution. Who has free state tax filing Example 1. Who has free state tax filing You pay $300 a year for membership in a university's athletic scholarship program. Who has free state tax filing The only benefit of membership is that you have the right to buy one season ticket for a seat in a designated area of the stadium at the university's home football games. Who has free state tax filing You can deduct $240 (80% of $300) as a charitable contribution. Who has free state tax filing Example 2. Who has free state tax filing The facts are the same as in Example 1 except your $300 payment includes the purchase of one season ticket for the stated ticket price of $120. Who has free state tax filing You must subtract the usual price of a ticket ($120) from your $300 payment. Who has free state tax filing The result is $180. Who has free state tax filing Your deductible charitable contribution is $144 (80% of $180). Who has free state tax filing Charity benefit events. Who has free state tax filing   If you pay a qualified organization more than fair market value for the right to attend a charity ball, banquet, show, sporting event, or other benefit event, you can deduct only the amount that is more than the value of the privileges or other benefits you receive. Who has free state tax filing   If there is an established charge for the event, that charge is the value of your benefit. Who has free state tax filing If there is no established charge, the reasonable value of the right to attend the event is the value of your benefit. Who has free state tax filing Whether you use the tickets or other privileges has no effect on the amount you can deduct. Who has free state tax filing However, if you return the ticket to the qualified organization for resale, you can deduct the entire amount you paid for the ticket. Who has free state tax filing    Even if the ticket or other evidence of payment indicates that the payment is a “contribution,” this does not mean you can deduct the entire amount. Who has free state tax filing If the ticket shows the price of admission and the amount of the contribution, you can deduct the contribution amount. Who has free state tax filing Example. Who has free state tax filing You pay $40 to see a special showing of a movie for the benefit of a qualified organization. Who has free state tax filing Printed on the ticket is “Contribution–$40. Who has free state tax filing ” If the regular price for the movie is $8, your contribution is $32 ($40 payment − $8 regular price). Who has free state tax filing Membership fees or dues. Who has free state tax filing   You may be able to deduct membership fees or dues you pay to a qualified organization. Who has free state tax filing However, you can deduct only the amount that is more than the value of the benefits you receive. Who has free state tax filing   You cannot deduct dues, fees, or assessments paid to country clubs and other social organizations. Who has free state tax filing They are not qualified organizations. Who has free state tax filing Certain membership benefits can be disregarded. Who has free state tax filing   Both you and the organization can disregard the following membership benefits if you get them in return for an annual payment of $75 or less. Who has free state tax filing Any rights or privileges, other than those discussed under Athletic events , earlier, that you can use frequently while you are a member, such as: Free or discounted admission to the organization's facilities or events, Free or discounted parking, Preferred access to goods or services, and Discounts on the purchase of goods and services. Who has free state tax filing Admission, while you are a member, to events open only to members of the organization if the organization reasonably projects that the cost per person (excluding any allocated overhead) is not more than $10. Who has free state tax filing 20. Who has free state tax filing Token items. Who has free state tax filing   You do not have to reduce your contribution by the value of any benefit you receive if both of the following are true. Who has free state tax filing You receive only a small item or other benefit of token value. Who has free state tax filing The qualified organization correctly determines that the value of the item or benefit you received is not substantial and informs you that you can deduct your payment in full. Who has free state tax filing The organization determines whether the value of an item or benefit is substantial by using Revenue Procedures 90-12 and 92-49 and the inflation adjustment in Revenue Procedure 2012–41. Who has free state tax filing Written statement. Who has free state tax filing   A qualified organization must give you a written statement if you make a payment of more than $75 that is partly a contribution and partly for goods or services. Who has free state tax filing The statement must say you can deduct only the amount of your payment that is more than the value of the goods or services you received. Who has free state tax filing It must also give you a good faith estimate of the value of those goods or services. Who has free state tax filing   The organization can give you the statement either when it solicits or when it receives the payment from you. Who has free state tax filing Exception. Who has free state tax filing   An organization will not have to give you this statement if one of the following is true. Who has free state tax filing The organization is: A governmental organization described in (5) under Types of Qualified Organizations , earlier, or An organization formed only for religious purposes, and the only benefit you receive is an intangible religious benefit (such as admission to a religious ceremony) that generally is not sold in commercial transactions outside the donative context. Who has free state tax filing You receive only items whose value is not substantial as described under Token items , earlier. Who has free state tax filing You receive only membership benefits that can be disregarded, as described under Membership fees or dues , earlier. Who has free state tax filing Expenses Paid for Student Living With You You may be able to deduct some expenses of having a student live with you. Who has free state tax filing You can deduct qualifying expenses for a foreign or American student who: Lives in your home under a written agreement between you and a qualified organization (defined later) as part of a program of the organization to provide educational opportunities for the student, Is not your relative (defined later) or dependent (also defined later), and Is a full-time student in the twelfth or any lower grade at a school in the United States. Who has free state tax filing You can deduct up to $50 a month for each full calendar month the student lives with you. Who has free state tax filing Any month when conditions (1) through (3) above are met for 15 or more days counts as a full month. Who has free state tax filing Qualified organization. Who has free state tax filing   For these purposes, a qualified organization can be any of the organizations described earlier under Types of Qualified Organizations , except those in (4) and (5). Who has free state tax filing For example, if you are providing a home for a student as part of a state or local government program, you cannot deduct your expenses as charitable contributions. Who has free state tax filing But see Foster parents under Out-of-Pocket Expenses in Giving Services, later, if you provide the home as a foster parent. Who has free state tax filing Relative. Who has free state tax filing   The term “relative” means any of the following persons. Who has free state tax filing Your child, stepchild, foster child, or a descendant of any of them (for example, your grandchild). Who has free state tax filing A legally adopted child is considered your child. Who has free state tax filing Your brother, sister, half brother, half sister, stepbrother, or stepsister. Who has free state tax filing Your father, mother, grandparent, or other direct ancestor. Who has free state tax filing Your stepfather or stepmother. Who has free state tax filing A son or daughter of your brother or sister. Who has free state tax filing A brother or sister of your father or mother. Who has free state tax filing Your son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law. Who has free state tax filing Dependent. Who has free state tax filing   For this purpose, the term “dependent” means: A person you can claim as a dependent, or A person you could have claimed as a dependent except that: He or she received gross income of $3,900 or more, He or she filed a joint return, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. Who has free state tax filing    Foreign students brought to this country under a qualified international education exchange program and placed in American homes for a temporary period generally are not U. Who has free state tax filing S. Who has free state tax filing residents and cannot be claimed as dependents. Who has free state tax filing Qualifying expenses. Who has free state tax filing   You may be able to deduct the cost of books, tuition, food, clothing, transportation, medical and dental care, entertainment, and other amounts you actually spend for the well-being of the student. Who has free state tax filing Expenses that do not qualify. Who has free state tax filing   You cannot deduct depreciation on your home, the fair market value of lodging, and similar items not considered amounts actually spent by you. Who has free state tax filing Nor can you deduct general household expenses, such as taxes, insurance, and repairs. Who has free state tax filing Reimbursed expenses. Who has free state tax filing   In most cases, you cannot claim a charitable contribution deduction if you are compensated or reimbursed for any part of the costs of having a student live with you. Who has free state tax filing However, you may be able to claim a charitable contribution deduction for the unreimbursed portion of your expenses if you are reimbursed only for an extraordinary or one-time item, such as a hospital bill or vacation trip, you paid in advance at the request of the student's parents or the sponsoring organization. Who has free state tax filing Mutual exchange program. Who has free state tax filing   You cannot deduct the costs of a foreign student living in your home under a mutual exchange program through which your child will live with a family in a foreign country. Who has free state tax filing Reporting expenses. Who has free state tax filing   For a list of what you must file with your return if you deduct expenses for a student living with you, see Reporting expenses for student living with you under How To Report, later. Who has free state tax filing Out-of-Pocket Expenses in Giving Services Table 2. Who has free state tax filing Volunteers' Questions and Answers If you volunteer for a qualified organization, the following questions and answers may apply to you. Who has free state tax filing All of the rules explained in this publication also apply. Who has free state tax filing See, in particular, Out-of-Pocket Expenses in Giving Services . Who has free state tax filing Question Answer I volunteer 6 hours a week in the office of a qualified organization. Who has free state tax filing The receptionist is paid $10 an hour for the same work. Who has free state tax filing Can I deduct $60 a week for my time? No, you cannot deduct the value of your time or services. Who has free state tax filing  The office is 30 miles from my home. Who has free state tax filing Can I deduct any of my car expenses for these trips? Yes, you can deduct the costs of gas and oil that are directly related to getting to and from the place where you volunteer. Who has free state tax filing If you do not want to figure your actual costs, you can deduct 14 cents for each mile. Who has free state tax filing I volunteer as a Red Cross nurse's aide at a hospital. Who has free state tax filing Can I deduct the cost of the uniforms I must wear? Yes, you can deduct the cost of buying and cleaning your uniforms if the hospital is a qualified organization, the uniforms are not suitable for everyday use, and you must wear them when volunteering. Who has free state tax filing I pay a babysitter to watch my children while I volunteer for a qualified organization. Who has free state tax filing Can I deduct these costs? No, you cannot deduct payments for childcare expenses as a charitable contribution, even if you would be unable to volunteer without childcare. Who has free state tax filing (If you have childcare expenses so you can work for pay, see Publication 503, Child and Dependent Care Expenses. Who has free state tax filing ) Although you cannot deduct the value of your services given to a qualified organization, you may be able to deduct some amounts you pay in giving services to a qualified organization. Who has free state tax filing The amounts must be: Unreimbursed, Directly connected with the services, Expenses you had only because of the services you gave, and Not personal, living, or family expenses. Who has free state tax filing Table 2 contains questions and answers that apply to some individuals who volunteer their services. Who has free state tax filing Underprivileged youths selected by charity. Who has free state tax filing   You can deduct reasonable unreimbursed out-of-pocket expenses you pay to allow underprivileged youths to attend athletic events, movies, or dinners. Who has free state tax filing The youths must be selected by a charitable organization whose goal is to reduce juvenile delinquency. Who has free state tax filing Your own similar expenses in accompanying the youths are not deductible. Who has free state tax filing Conventions. Who has free state tax filing   If a qualified organization selects you to attend a convention as its representative, you can deduct your unreimbursed expenses for travel, including reasonable amounts for meals and lodging, while away from home overnight for the convention. Who has free state tax filing However, see Travel , later. Who has free state tax filing   You cannot deduct personal expenses for sightseeing, fishing parties, theater tickets, or nightclubs. Who has free state tax filing You also cannot deduct travel, meals and lodging, and other expenses for your spouse or children. Who has free state tax filing   You cannot deduct your travel expenses in attending a church convention if you go only as a member of your church rather than as a chosen representative. Who has free state tax filing You can, however, deduct unreimbursed expenses that are directly connected with giving services for your church during the convention. Who has free state tax filing Uniforms. Who has free state tax filing   You can deduct the cost and upkeep of uniforms that are not suitable for everyday use and that you must wear while performing donated services for a charitable organization. Who has free state tax filing Foster parents. Who has free state tax filing   You may be able to deduct as a charitable contribution some of the costs of being a foster parent (foster care provider) if you have no profit motive in providing the foster care and are not, in fact, making a profit. Who has free state tax filing A qualified organization must select the individuals you take into your home for foster care. Who has free state tax filing   You can deduct expenses that meet both of the following requirements. Who has free state tax filing They are unreimbursed out-of-pocket expenses to feed, clothe, and care for the foster child. Who has free state tax filing They are incurred primarily to benefit the qualified organization. Who has free state tax filing   Unreimbursed expenses that you cannot deduct as charitable contributions may be considered support provided by you in determining whether you can claim the foster child as a dependent. Who has free state tax filing For details, see Publication 501, Exemptions, Standard Deduction, and Filing Information. Who has free state tax filing Example. Who has free state tax filing You cared for a foster child because you wanted to adopt her, not to benefit the agency that placed her in your home. Who has free state tax filing Your unreimbursed expenses are not deductible as charitable contributions. Who has free state tax filing Church deacon. Who has free state tax filing   You can deduct as a charitable contribution any unreimbursed expenses you have while in a permanent diaconate program established by your church. Who has free state tax filing These expenses include the cost of vestments, books, and transportation required in order to serve in the program as either a deacon candidate or an ordained deacon. Who has free state tax filing Car expenses. Who has free state tax filing   You can deduct as a charitable contribution any unreimbursed out-of-pocket expenses, such as the cost of gas and oil, directly related to the use of your car in giving services to a charitable organization. Who has free state tax filing You cannot deduct general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance. Who has free state tax filing   If you do not want to deduct your actual expenses, you can use a standard mileage rate of 14 cents a mile to figure your contribution. Who has free state tax filing   You can deduct parking fees and tolls whether you use your actual expenses or the standard mileage rate. Who has free state tax filing   You must keep reliable written records of your car expenses. Who has free state tax filing For more information, see Car expenses under Records To Keep, later. Who has free state tax filing Travel. Who has free state tax filing   Generally, you can claim a charitable contribution deduction for travel expenses necessarily incurred while you are away from home performing services for a charitable organization only if there is no significant element of personal pleasure, recreation, or vacation in the travel. Who has free state tax filing This applies whether you pay the expenses directly or indirectly. Who has free state tax filing You are paying the expenses indirectly if you make a payment to the charitable organization and the organization pays for your travel expenses. Who has free state tax filing   The deduction for travel expenses will not be denied simply because you enjoy providing services to the charitable organization. Who has free state tax filing Even if you enjoy the trip, you can take a charitable contribution deduction for your travel expenses if you are on duty in a genuine and substantial sense throughout the trip. Who has free state tax filing However, if you have only nominal duties, or if for significant parts of the trip you do not have any duties, you cannot deduct your travel expenses. Who has free state tax filing Example 1. Who has free state tax filing You are a troop leader for a tax-exempt youth group and you take the group on a camping trip. Who has free state tax filing You are responsible for overseeing the setup of the camp and for providing adult supervision for other activities during the entire trip. Who has free state tax filing You participate in the activities of the group and enjoy your time with them. Who has free state tax filing You oversee the breaking of camp and you transport the group home. Who has free state tax filing You can deduct your travel expenses. Who has free state tax filing Example 2. Who has free state tax filing You sail from one island to another and spend 8 hours a day counting whales and other forms of marine life. Who has free state tax filing The project is sponsored by a charitable organization. Who has free state tax filing In most circumstances, you cannot deduct your expenses. Who has free state tax filing Example 3. Who has free state tax filing You work for several hours each morning on an archeological dig sponsored by a charitable organization. Who has free state tax filing The rest of the day is free for recreation and sightseeing. Who has free state tax filing You cannot take a charitable contribution deduction even though you work very hard during those few hours. Who has free state tax filing Example 4. Who has free state tax filing You spend the entire day attending a charitable organization's regional meeting as a chosen representative. Who has free state tax filing In the evening you go to the theater. Who has free state tax filing You can claim your travel expenses as charitable contributions, but you cannot claim the cost of your evening at the theater. Who has free state tax filing Daily allowance (per diem). Who has free state tax filing   If you provide services for a charitable organization and receive a daily allowance to cover reasonable travel expenses, including meals and lodging while away from home overnight, you must include in income any part of the allowance that is more than your deductible travel expenses. Who has free state tax filing You may be able to deduct any necessary travel expenses that are more than the allowance. Who has free state tax filing Deductible travel expenses. Who has free state tax filing   These include: Air, rail, and bus transportation, Out-of-pocket expenses for your car, Taxi fares or other costs of transportation between the airport or station and your hotel, Lodging costs, and The cost of meals. Who has free state tax filing Because these travel expenses are not business-related, they are not subject to the same limits as business related expenses. Who has free state tax filing For information on business travel expenses, see Travel in Publication 463, Travel, Entertainment, Gift, and Car Expenses. Who has free state tax filing Expenses of Whaling Captains You may be able to deduct as a charitable contribution any reasonable and necessary whaling expenses you pay during the year to carry out sanctioned whaling activities. Who has free state tax filing The deduction is limited to $10,000 a year. Who has free state tax filing To claim the deduction, you must be recognized by the Alaska Eskimo Whaling Commission as a whaling captain charged with the responsibility of maintaining and carrying out sanctioned whaling activities. Who has free state tax filing Sanctioned whaling activities are subsistence bowhead whale hunting activities conducted under the management plan of the Alaska Eskimo Whaling Commission. Who has free state tax filing Whaling expenses include expenses for: Acquiring and maintaining whaling boats, weapons, and gear used in sanctioned whaling activities, Supplying food for the crew and other provisions for carrying out these activities, and Storing and distributing the catch from these activities. Who has free state tax filing You must keep records showing the time, place, date, amount, and nature of the expenses. Who has free state tax filing For details, see Revenue Procedure 2006-50, which is on page 944 of Internal Revenue Bulletin 2006-47 at www. Who has free state tax filing irs. Who has free state tax filing gov/pub/irs-irbs/irb06-47. Who has free state tax filing pdf. Who has free state tax filing Contributions You Cannot Deduct There are some contributions you cannot deduct and others you can deduct only in part. Who has free state tax filing You cannot deduct as a charitable contribution: A contribution to a specific individual, A contribution to a nonqualified organization, The part of a contribution from which you receive or expect to receive a benefit, The value of your time or services, Your personal expenses, A qualified charitable distribution from an individual retirement arrangement (IRA), Appraisal fees, Certain contributions to donor-advised funds, or Certain contributions of partial interests in property. Who has free state tax filing Detailed discussions of these items follow. Who has free state tax filing Contributions to Individuals You cannot deduct contributions to specific individuals, including the following. Who has free state tax filing Contributions to fraternal societies made for the purpose of paying medical or burial expenses of members. Who has free state tax filing Contributions to individuals who are needy or worthy. Who has free state tax filing You cannot deduct these contributions even if you make them to a qualified organization for the benefit of a specific person. Who has free state tax filing But you can deduct a contribution to a qualified organization that helps needy or worthy individuals if you do not indicate that your contribution is for a specific person. Who has free state tax filing Example. Who has free state tax filing You can deduct contributions to a qualified organization for flood relief, hurricane relief, or other disaster relief. Who has free state tax filing However, you cannot deduct contributions earmarked for relief of a particular individual or family. Who has free state tax filing Payments to a member of the clergy that can be spent as he or she wishes, such as for personal expenses. Who has free state tax filing Expenses you paid for another person who provided services to a qualified organization. Who has free state tax filing Example. Who has free state tax filing Your son does missionary work. Who has free state tax filing You pay his expenses. Who has free state tax filing You cannot claim a deduction for your son's unreimbursed expenses related to his contribution of services. Who has free state tax filing Payments to a hospital that are for a specific patient's care or for services for a specific patient. Who has free state tax filing You cannot deduct these payments even if the hospital is operated by a city, state, or other qualified organization. Who has free state tax filing Contributions to Nonqualified Organizations You cannot deduct contributions to organizations that are not qualified to receive tax-deductible contributions, including the following. Who has free state tax filing Certain state bar associations if: The bar is not a political subdivision of a state, The bar has private, as well as public, purposes, such as promoting the professional interests of members, and Your contribution is unrestricted and can be used for private purposes. Who has free state tax filing Chambers of commerce and other business leagues or organizations. Who has free state tax filing Civic leagues and associations. Who has free state tax filing Communist organizations. Who has free state tax filing Country clubs and other social clubs. Who has free state tax filing Foreign organizations other than certain Canadian, Israeli, or Mexican charitable organizations. Who has free state tax filing (See Canadian charities , Mexican charities , and Israeli charities under Organizations That Qualify To Receive Deductible Contributions, earlier. Who has free state tax filing ) Also, you cannot deduct a contribution you made to any qualifying organization if the contribution is earmarked to go to a foreign organization. Who has free state tax filing However, certain contributions to a qualified organization for use in a program conducted by a foreign charity may be deductible as long as they are not earmarked to go to the foreign charity. Who has free state tax filing For the contribution to be deductible, the qualified organization must approve the program as furthering its own exempt purposes and must keep control over the use of the contributed funds. Who has free state tax filing The contribution is also deductible if the foreign charity is only an administrative arm of the qualified organization. Who has free state tax filing Homeowners' associations. Who has free state tax filing Labor unions. Who has free state tax filing But you may be able to deduct union dues as a miscellaneous itemized deduction, subject to the 2%-of-adjusted-gross-income limit, on Schedule A (Form 1040). Who has free state tax filing See Publication 529, Miscellaneous Deductions. Who has free state tax filing Political organizations and candidates. Who has free state tax filing Contributions From Which You Benefit If you receive or expect to receive a financial or economic benefit as a result of making a contribution to a qualified organization, you cannot deduct the part of the contribution that represents the value of the benefit you receive. Who has free state tax filing See Contributions From Which You Benefit under Contributions You Can Deduct, earlier. Who has free state tax filing These contributions include the following. Who has free state tax filing Contributions for lobbying. Who has free state tax filing This includes amounts you earmark for use in, or in connection with, influencing specific legislation. Who has free state tax filing Contributions to a retirement home for room, board, maintenance, or admittance. Who has free state tax filing Also, if the amount of your contribution depends on the type or size of apartment you will occupy, it is not a charitable contribution. Who has free state tax filing Costs of raffles, bingo, lottery, etc. Who has free state tax filing You cannot deduct as a charitable contribution amounts you pay to buy raffle or lottery tickets or to play bingo or other games of chance. Who has free state tax filing For information on how to report gambling winnings and losses, see Deductions Not Subject to the 2% Limit in Publication 529. Who has free state tax filing Dues to fraternal orders and similar groups. Who has free state tax filing However, see Membership fees or dues under Contributions From Which You Benefit, earlier. Who has free state tax filing Tuition, or amounts you pay instead of tuition. Who has free state tax filing You cannot deduct as a charitable contribution amounts you pay as tuition even if you pay them for children to attend parochial schools or qualifying nonprofit daycare centers. Who has free state tax filing You also cannot deduct any fixed amount you must pay in addition to, or instead of, tuition to enroll in a private school, even if it is designated as a “donation. Who has free state tax filing ” Contributions connected with split-dollar insurance arrangements. Who has free state tax filing You cannot deduct any part of a contribution to a charitable organization if, in connection with the contribution, the organization directly or indirectly pays, has paid, or is expected to pay any premium on any life insurance, annuity, or endowment contract for which you, any member of your family, or any other person chosen by you (other than a qualified charitable organization) is a beneficiary. Who has free state tax filing Example. Who has free state tax filing You donate money to a charitable organization. Who has free state tax filing The charity uses the money to purchase a cash value life insurance policy. Who has free state tax filing The beneficiaries under the insurance policy include members of your family. Who has free state tax filing Even though the charity may eventually get some benefit out of the insurance policy, you cannot deduct any part of the donation. Who has free state tax filing Qualified Charitable Distributions A qualified charitable distribution (QCD) is a distribution made directly by the trustee of your individual retirement arrangement (IRA), other than a SEP or SIMPLE IRA, to certain qualified organizations. Who has free state tax filing You must have been at least age 70½ when the distribution was made. Who has free state tax filing Your total QCDs for the year cannot be more than $100,000. Who has free state tax filing If all the requirements are met, a QCD is nontaxable, but you cannot claim a charitable contribution deduction for a QCD. Who has free state tax filing See Publication 590, Individual Retirement Arrangements (IRAs), for more information about QCDs. Who has free state tax filing Value of Time or Services You cannot deduct the value of your time or services, including: Blood donations to the American Red Cross or to blood banks, and The value of income lost while you work as an unpaid volunteer for a qualified organization. Who has free state tax filing Personal Expenses You cannot deduct personal, living, or family expenses, such as the following items. Who has free state tax filing The cost of meals you eat while you perform services for a qualified organization, unless it is necessary for you to be away from home overnight while performing the services. Who has free state tax filing Adoption expenses, including fees paid to an adoption agency and the costs of keeping a child in your home before adoption is final. Who has free state tax filing However, you may be able to claim a tax credit for these expenses. Who has free state tax filing Also, you may be able to exclude from your gross income amounts paid or reimbursed by your employer for your adoption expenses. Who has free state tax filing See Form 8839, Qualified Adoption Expenses, and its instructions, for more information. Who has free state tax filing You also may be able to claim an exemption for the child. Who has free state tax filing See Exemptions for Dependents in Publication 501 for more information. Who has free state tax filing Appraisal Fees You cannot deduct as a charitable contribution any fees you pay to find the fair market value of donated property. Who has free state tax filing But you can claim them, subject to the 2%-of-adjusted-gross-income limit, as a miscellaneous itemized deduction on Schedule A (Form 1040). Who has free state tax filing See Deductions Subject to the 2% Limit in Publication 529 for more information. Who has free state tax filing Contributions to Donor-Advised Funds You cannot deduct a contribution to a donor-advised fund if: The qualified organization that sponsors the fund is a war veterans' organization, a fraternal society, or a nonprofit cemetery company, or You do not have an acknowledgment from that sponsoring organization that it has exclusive legal control over the assets contributed. Who has free state tax filing There are also other circumstances in which you cannot deduct your contribution to a donor-advised fund. Who has free state tax filing Generally, a donor-advised fund is a fund or account in which a donor can, because of being a donor, advise the fund how to distribute or invest amounts held in the fund. Who has free state tax filing For details, see Internal Revenue Code section 170(f)(18). Who has free state tax filing Partial Interest in Property Generally, you cannot deduct a contribution of less than your entire interest in property. Who has free state tax filing For details, see Partial Interest in Property under Contributions of Property, later. Who has free state tax filing Contributions of Property If you contribute property to a qualified organization, the amount of your charitable contribution is generally the fair market value of the property at the time of the contribution. Who has free state tax filing However, if the property has increased in value, you may have to make some adjustments to the amount of your deduction. Who has free state tax filing See Giving Property That Has Increased in Value , later. Who has free state tax filing For information about the records you must keep and the information you must furnish with your return if you donate property, see Records To Keep and How To Report , later. Who has free state tax filing Contributions Subject to Special Rules Special rules apply if you contribute: Clothing or household items, A car, boat, or airplane, Taxidermy property, Property subject to a debt, A partial interest in property, A fractional interest in tangible personal property, A qualified conservation contribution, A future interest in tangible personal property, Inventory from your business, or A patent or other intellectual property. Who has free state tax filing These special rules are described next. Who has free state tax filing Clothing and Household Items You cannot take a deduction for clothing or household items you donate unless the clothing or household items are in good used condition or better. Who has free state tax filing Exception. Who has free state tax filing   You can take a deduction for a contribution of an item of clothing or a household item that is not in good used condition or better if you deduct more than $500 for it and include a qualified appraisal of it with your return. Who has free state tax filing Household items. Who has free state tax filing   Household items include: Furniture and furnishings, Electronics, Appliances, Linens, and Other similar items. Who has free state tax filing   Household items do not include: Food, Paintings, antiques, and other objects of art, Jewelry and gems, and Collections. Who has free state tax filing Fair market value. Who has free state tax filing   To determine the fair market value of these items, use the rules under Determining Fair Market Value , later. Who has free state tax filing Cars, Boats, and Airplanes The following rules apply to any donation of a qualified vehicle. Who has free state tax filing A qualified vehicle is: A car or any motor vehicle manufactured mainly for use on public streets, roads, and highways, A boat, or An airplane. Who has free state tax filing Deduction more than $500. Who has free state tax filing   If you donate a qualified vehicle with a claimed fair market value of more than $500, you can deduct the smaller of: The gross proceeds from the sale of the vehicle by the organization, or The vehicle's fair market value on the date of the contribution. Who has free state tax filing If the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to figure the deductible amount, as described under Giving Property That Has Increased in Value , later. Who has free state tax filing Form 1098-C. Who has free state tax filing   You must attach to your return Copy B of the Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, (or other statement containing the same information as Form 1098-C) you received from the organization. Who has free state tax filing The Form 1098-C (or other statement) will show the gross proceeds from the sale of the vehicle. Who has free state tax filing   If you e-file your return, you must: Attach Copy B of Form 1098-C to Form 8453, U. Who has free state tax filing S. Who has free state tax filing Individual Income Tax Transmittal for an IRS e-file Return, and mail the forms to the IRS, or Include Copy B of Form 1098-C as a pdf attachment if your software program allows it. Who has free state tax filing   If you do not attach Form 1098-C (or other statement), you cannot deduct your contribution. Who has free state tax filing    You must get Form 1098-C (or other statement) within 30 days of the sale of the vehicle. Who has free state tax filing But if exception 1 or 2 (described later) applies, you must get Form 1098-C (or other statement) within 30 days of your donation. Who has free state tax filing Filing deadline approaching and still no Form 1098-C. Who has free state tax filing   If the filing deadline is approaching and you still do not have a Form 1098-C, you have two choices. Who has free state tax filing Request an automatic 6-month extension of time to file your return. Who has free state tax filing You can get this extension by filing Form 4868, Application for Automatic Extension of Time To File U. Who has free state tax filing S. Who has free state tax filing Individual Income Tax Return. Who has free state tax filing For more information, see the instructions for Form 4868. Who has free state tax filing File the return on time without claiming the deduction for the qualified vehicle. Who has free state tax filing After receiving the Form 1098-C, file an amended return, Form 1040X, Amended U. Who has free state tax filing S. Who has free state tax filing Individual Income Tax Return, claiming the deduction. Who has free state tax filing Attach Copy B of Form 1098-C (or other statement) to the amended return. Who has free state tax filing Exceptions. Who has free state tax filing   There are two exceptions to the rules just described for deductions of more than $500. Who has free state tax filing Exception 1—vehicle used or improved by organization. Who has free state tax filing   If the qualified organization makes a significant intervening use of or material improvement to the vehicle before transferring it, you generally can deduct the vehicle's fair market value at the time of the contribution. Who has free state tax filing But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. Who has free state tax filing The Form 1098-C (or other statement) will show whether this exception applies. Who has free state tax filing    Exception 2—vehicle given or sold to needy individual. Who has free state tax filing   If the qualified organization will give the vehicle, or sell it for a price well below fair market value, to a needy individual to further the organization's charitable purpose, you generally can deduct the vehicle's fair market value at the time of the contribution. Who has free state tax filing But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. Who has free state tax filing The Form 1098-C (or other statement) will show whether this exception applies. Who has free state tax filing   This exception does not apply if the organization sells the vehicle at auction. Who has free state tax filing In that case, you cannot deduct the vehicle's fair market value. Who has free state tax filing Example. Who has free state tax filing Anita donates a used car to a qualified organization. Who has free state tax filing She bought it 3 years ago for $9,000. Who has free state tax filing A used car guide shows the fair market value for this type of car is $6,000. Who has free state tax filing However, Anita gets a Form 1098-C from the organization showing the car was sold for $2,900. Who has free state tax filing Neither exception 1 nor exception 2 applies. Who has free state tax filing If Anita itemizes her deductions, she can deduct $2,900 for her donation. Who has free state tax filing She must attach Form 1098-C and Form 8283 to her return. Who has free state tax filing Deduction $500 or less. Who has free state tax filing   If the qualified organization sells the vehicle for $500 or less and exceptions 1 and 2 do not apply, you can deduct the smaller of: $500, or The vehicle's fair market value on the date of the contribution. Who has free state tax filing But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value , later. Who has free state tax filing   If the vehicle's fair market value is at least $250 but not more than $500, you must have a written statement from the qualified organization acknowledging your donation. Who has free state tax filing The statement must contain the information and meet the tests for an acknowledgment described under Contributions of $250 or More under Records To Keep, later. Who has free state tax filing Fair market value. Who has free state tax filing   To determine a vehicle's fair market value, use the rules described under Determining Fair Market Value , later. Who has free state tax filing Donations of inventory. Who has free state tax filing   The vehicle donation rules just described do not apply to donations of inventory. Who has free state tax filing For example, these rules do not apply if you are a car dealer who donates a car you had been holding for sale to customers. Who has free state tax filing See Inventory , later. Who has free state tax filing Taxidermy Property If you donate taxidermy property to a qualified organization, your deduction is limited to your basis in the property or its fair market value, whichever is less. Who has free state tax filing This applies if you prepared, stuffed, or mounted the property or paid or incurred the cost of preparing, stuffing, or mounting the property. Who has free state tax filing Your basis for this purpose includes only the cost of preparing, stuffing, and mounting the property. Who has free state tax filing Your basis does not include transportation or travel costs. Who has free state tax filing It also does not include the direct or indirect costs for hunting or killing an animal, such as equipment costs. Who has free state tax filing In addition, it does not include the value of your time. Who has free state tax filing Taxidermy property means any work of art that: Is the reproduction or preservation of an animal, in whole or in part, Is prepared, stuffed, or mounted to recreate one or more characteristics of the animal, and Contains a part of the body of the dead animal. Who has free state tax filing Property Subject to a Debt If you contribute property subject to a debt (such as a mortgage), you must reduce the fair market value of the property by: Any allowable deduction for interest you paid (or will pay) that is attributable to any period after the contribution, and If the property is a bond, the lesser of: Any allowable deduction for interest you paid (or will pay) to buy or carry the bond that is attributable to any period before the contribution, or The interest, including bond discount, receivable on the bond that is attributable to any period before the contribution, and that is not includible in your income due to your accounting method. Who has free state tax filing This prevents you from deducting the same amount as both investment interest and a charitable contribution. Who has free state tax filing If the recipient (or another person) assumes the debt, you must also reduce the fair market value of the property by the amount of the outstanding debt assumed. Who has free state tax filing The amount of the debt is also treated as an amount realized on the sale or exchange of property for purposes of figuring your taxable gain (if any). Who has free state tax filing For more information, see Bargain Sales under Giving Property That Has Increased in Value, later. Who has free state tax filing Partial Interest in Property Generally, you cannot deduct a charitable contribution of less than your entire interest in property. Who has free state tax filing Right to use property. Who has free state tax filing   A contribution of the right to use property is a contribution of less than your entire interest in that property and is not deductible. Who has free state tax filing Example 1. Who has free state tax filing You own a 10-story office building and donate rent-free use of the top floor to a charitable organization. Who has free state tax filing Because you still own the building, you have contributed a partial interest in the property and cannot take a deduction for the contribution. Who has free state tax filing Example 2. Who has free state tax filing Mandy White owns a vacation home at the beach that she sometimes rents to others. Who has free state tax filing For a fund-raising auction at her church, she donated the right to use the vacation home for 1 week. Who has free state tax filing At the auction, the church received and accepted a bid from Lauren Green equal to the fair rental value of the home for 1 week. Who has free state tax filing Mandy cannot claim a deduction because of the partial interest rule. Who has free state tax filing Lauren cannot claim a deduction either, because she received a benefit equal to the amount of her payment. Who has free state tax filing See Contributions From Which You Benefit , earlier. Who has free state tax filing Exceptions. Who has free state tax filing   You can deduct a charitable contribution of a partial interest in property only if that interest represents one of the following items. Who has free state tax filing A remainder interest in your personal home or farm. Who has free state tax filing A remainder interest is one that passes to a beneficiary after the end of an earlier interest in the property. Who has free state tax filing Example. Who has free state tax filing You keep the right to live in your home during your lifetime and give your church a remainder interest that begins upon your death. Who has free state tax filing You can deduct the value of the remainder interest. Who has free state tax filing An undivided part of your entire interest. Who has free state tax filing This must consist of a part of every substantial interest or right you own in the property and must last as long as your interest in the property lasts. Who has free state tax filing But see Fractional Interest in Tangible Personal Property , later. Who has free state tax filing Example. Who has free state tax filing You contribute voting stock to a qualified organization but keep the right to vote the stock. Who has free state tax filing The right to vote is a substantial right in the stock. Who has free state tax filing You have not contributed an undivided part of your entire interest and cannot deduct your contribution. Who has free state tax filing A partial interest that would be deductible if transferred to certain types of trusts. Who has free state tax filing A qualified conservation contribution (defined later). Who has free state tax filing For information about how to figure the value of a contribution of a partial interest in property, see Partial Interest in Property Not in Trust in Publication 561. Who has free state tax filing Fractional Interest in Tangible Personal Property You cannot deduct a charitable contribution of a fractional interest in tangible personal property unless all interests in the property are held immediately before the contribution by: You, or You and the qualifying organization receiving the contribution. Who has free state tax filing If you make an additional contribution later, the fair market value of that contribution will be determined by using the smaller of: The fair market value of the property at the time of the initial contribution, or The fair market value of the property at the time of the additional contribution. Who has free state tax filing Tangible personal property is defined later under Future Interest in Tangible Personal Property . Who has free state tax filing A fractional interest in property is an undivided portion of your entire interest in the property. Who has free state tax filing Example. Who has free state tax filing An undivided one-quarter interest in a painting that entitles an art museum to possession of the painting for 3 months of each year is a fractional interest in the property. Who has free state tax filing Recapture of deduction. Who has free state tax filing   You must recapture your charitable contribution deduction by including it in your income if both of the following statements are true. Who has free state tax filing You contributed a fractional interest in tangible personal property after August 17, 2006. Who has free state tax filing You do not contribute the rest of your interests in the property to the original recipient or, if it no longer exists, another qualified organization on or before the earlier of: The date that is 10 years after the date of the initial contribution, or The date of your death. Who has free state tax filing   Recapture is also required if the qualified organization has not taken substantial physical possession of the property and used it in a way related to the organization's purpose during the period beginning on the date of the initial contribution and ending on the earlier of: The date that is 10 years after the date of the initial contribution, or The date of your death. Who has free state tax filing Additional tax. Who has free state tax filing   If you must recapture your deduction, you must also pay interest and an additional tax equal to 10% of the amount recaptured. Who has free state tax filing Qualified Conservation Contribution A qualified conservation contribution is a contribution of a qualified real property interest to a qualified organization to be used only for conservation purposes. Who has free state tax filing Qualified organization. Who has free state tax filing   For purposes of a qualified conservation contribution, a qualified organization is: A governmental unit, A publicly supported charity, or An organization controlled by, and operated for the exclusive benefit of, a governmental unit or a publicly supported charity. Who has free state tax filing The organization also must have a commitment to protect the conservation purposes of the donation and must have the resources to enforce the restrictions. Who has free state tax filing   A publicly supported charity is an organization of the type described in (1) under Types of Qualified Organizations , earlier, that normally receives a substantial part of its support, other than income from its exempt activities, from direct or indirect contributions from the general public or from governmental units. Who has free state tax filing Qualified real property interest. Who has free state tax filing   This is any of the following interests in real property. Who has free state tax filing Your entire interest in real estate other than a mineral interest (subsurface oil, gas, or other minerals, and the right of access to these minerals). Who has free state tax filing A remainder interest. Who has free state tax filing A restriction (granted in perpetuity) on the use that may be made of the real property. Who has free state tax filing Conservation purposes. Who has free state tax filing   Your contribution must be made only for one of the following conservation purposes. Who has free state tax filing Preserving land areas for outdoor recreation by, or for the education of, the general public. Who has free state tax filing Protecting a relatively natural habitat of fish, wildlife, or plants, or a similar ecosystem. Who has free state tax filing Preserving open space, including farmland and forest land, if it yields a significant public benefit. Who has free state tax filing The open space must be preserved either for the scenic enjoyment of the general public or under a clearly defined federal, state, or local governmental conservation policy. Who has free state tax filing Preserving a historically important land area or a certified historic structure. Who has free state tax filing Building in registered historic district. Who has free state tax filing   If a building in a registered historic district is a certified historic structure, a contribution of a qualified real property interest that is an easement or other restriction on the exterior of the building is deductible only if it meets all of the following conditions. Who has free state tax filing The restriction must preserve the entire exterior of the building (including its front, sides, rear, and height) and must prohibit any change to the exterior of the building that is inconsistent with its historical character. Who has free state tax filing You and the organization receiving the contribution must enter into a written agreement certifying, under penalty of perjury, that the organization: Is a qualified organization with a purpose of environmental protection, land conservation, open space preservation, or historic preservation, and Has the resources to manage and enforce the restriction and a commitment to do so. Who has free state tax filing You must include with your return: A qualified appraisal, Photographs of the building's entire exterior, and A description of all restrictions on development of the building, such as zoning laws and restrictive covenants. Who has free state tax filing   If you claimed the rehabilitation credit for the building for any of the 5 years before the year of the contribution, your charitable deduction is reduced. Who has free state tax filing For more information, see Form 3468, Investment Credit, and Internal Revenue Code section 170(f)(14). Who has free state tax filing   If you claim a deduction of more than $10,000, your deduction will not be allowed unless you pay a $500 filing fee. Who has free state tax filing See Form 8283-V, Payment Voucher for Filing Fee Under Section 170(f)(13), and its instructions. Who has free state tax filing You may be able to deduct the filing fee as a miscellaneous itemized deduction, subject to the 2%-of-adjusted-gross-income limit, on Schedule A (Form 1040). Who has free state tax filing See Deductions Subject to the 2% Limit in Publication 529 for more information. Who has free state tax filing More information. Who has free state tax filing   For information about determining the fair market value of qualified conservation contributions, see Publication 561. Who has free state tax filing For information about the limits that apply to deductions for this type of contribution, see Limits on Deductions , later. Who has free state tax filing For more information about qualified conservation contributions, see Regulations section 1. Who has free state tax filing 170A-14. Who has free state tax filing Future Interest in Tangible Personal Property You cannot deduct the value of a charitable contribution of a future interest in tangible personal property until all intervening interests in and rights to the actual possession or enjoyment of the property have either expired or been turned over to someone other than yourself, a related person, or a related organization. Who has free state tax filing But see Fractional Interest in Tangible Personal Property , earlier, and Tangible personal property put to unrelated use , later. Who has free state tax filing Related persons include your spouse, children, grandchildren, brothers, sisters, and parents. Who has free state tax filing Related organizations may include a partnership or corporation in which you have an interest, or an estate or trust with which you have a connection. Who has free state tax filing Tangible personal property. Who has free state tax filing   This is any property, other than land or buildings, that can be seen or touched. Who has free state tax filing It includes furniture, books, jewelry, paintings, and cars. Who has free state tax filing Future interest. Who has free state tax filing   This is any interest that is to begin at some future time, regardless of whether it is designated as a future interest under state law. Who has free state tax filing Example. Who has free state tax filing You own an antique car that you contribute to a museum. Who has free state tax filing You give up ownership, but retain the right to keep the car in your garage with your personal collection. Who has free state tax filing Because you keep an interest in the property, you cannot deduct the contribution. Who has free state tax filing If you turn the car over to the museum in a later year, giving up all rights to its use, possession, and enjoyment, you can take a deduction for the contribution in that later year. Who has free state tax filing Inventory If you contribute inventory (property you sell in the course of your business), the amount you can deduct is the smaller of its fair market value on the day you contributed it or its basis. Who has free state tax filing The basis of contributed inventory is any cost incurred for the inventory in an earlier year that you would otherwise include in your opening inventory for the year of the contribution. Who has free state tax filing You must remove the amount of your charitable contribution deduction from your opening inventory. Who has free state tax filing It is not part of the cost of goods sold. Who has free state tax filing If the cost of donated inventory is not included in your opening inventory, the inventory's basis is zero and you cannot claim a charitable contribution deduction. Who has free state tax filing Treat the inventory's cost as you would ordinarily treat it under your method of accounting. Who has free state tax filing For example, include the purchase price of inventory bought and donated in the same year in the cost of goods sold for that year. Who has free state tax filing A special rule applies to certain donations of food inventory. Who has free state tax filing See Food Inventory, later. Who has free state tax filing Patents and Other Intellectual Property If you donate intellectual property to a qualified organization, your deduction is limited to the basis of the property or the fair market value of the property, whichever is smaller. Who has free state tax filing Intellectual property means any of the following: Patents. Who has free state tax filing Copyrights (other than a copyright described in Internal Revenue Code sections 1221(a)(3) or 1231(b)(1)(C)). Who has free state tax filing Trademarks. Who has free state tax filing Trade names. Who has free state tax filing Trade secrets. Who has free state tax filing Know-how. Who has free state tax filing Software (other than software described in Internal Revenue Code section 197(e)(3)(A)(i)). Who has free state tax filing Other similar property or applications or registrations of such property. Who has free state tax filing Additional deduction based on income. Who has free state tax filing   You may be able to claim additional charitable contribution deductions in the year of the contribution and years following, based on the income, if any, from the donated property. Who has free state tax filing   The following table shows the percentage of income from the property that you can deduct for each of your tax years ending on or after the date of the contribution. Who has free state tax filing In the table, “tax year 1,” for example, means your first tax year ending on or after the date of the contribution. Who has free state tax filing However, you can take the additional deduction only to the extent the total of the amounts figured using this table is more than the amount of the deduction claimed for the original donation of the property. Who has free state tax filing   After the legal life of the intellectual property ends, or after the 10th anniversary of the donation, whichever is earlier, no additional deduction is allowed. Who has free state tax filing The additional deductions cannot be taken for intellectual property donated to certain private foundations. Who has free state tax filing Tax year Deductible percentage 1 100% 2 100% 3 90% 4 80% 5 70% 6 60% 7 50% 8 40% 9 30% 10 20% 11 10% 12 10% Reporting requirements. Who has free state tax filing   You must inform the organization at the time of the donation that you intend to treat the donation as a contribution subject to the provisions just discussed. Who has free state tax filing   The organization is required to file an information return showing the income from the property, with a copy to you. Who has free state tax filing This is done on Form 8899, Notice of Income From Donated Intellectual Property. Who has free state tax filing Determining Fair Market Value This section discusses general guidelines for determining the fair market value of various types of donated property. Who has free state tax filing Publication 561 contains a more complete discussion. Who has free state tax filing Fair market value 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 the relevant facts. Who has free state tax filing Used clothing. Who has free state tax filing   The fair market value of used clothing and other personal items is usually far less than the price you paid for them. Who has free state tax filing There are no fixed formulas or methods for finding the value of items of clothing. Who has free state tax filing   You should claim as the value the price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops. Who has free state tax filing      Also see Clothing and Household Items , earlier. Who has free state tax filing Example. Who has free state tax filing    Kristin donated a coat to a thrift store operated by her church. Who has free state tax filing She paid $300 for the coat 3 years ago. Who has free state tax filing Similar coats in the thrift store sell for $50. Who has free state tax filing The fair market value of the coat is $50. Who has free state tax filing Kristin's donation is limited to $50. Who has free state tax filing Household items. Who has free state tax filing   The fair market value of used household items, such as furniture, appliances, and linens, is usually much lower than the price paid when new. Who has free state tax filing These items may have little or no market value because they are in a worn condition, out of style, or no longer useful. Who has free state tax filing For these reasons, formulas (such as using a percentage of the cost to buy a new replacement item) are not acceptable in determining value. Who has free state tax filing   You should support your valuation with photographs, canceled checks, receipts from your purchase of the items, or other evidence. Who has free state tax filing Magazine or newspaper articles and photographs that describe the items and statements by the recipients of the items are also useful. Who has free state tax filing Do not include any of this evidence with your tax return. Who has free state tax filing   If the property is valuable because it is old or unique, see the discussion under Paintings, Antiques, and Other Objects of Art in Publication 561. Who has free state tax filing   Also see Clothing and Household Items , earlier. Who has free state tax filing Cars, boats, and airplanes. Who has free state tax filing   If you contribute a car, boat, or airplane to a charitable organization, you must determine its fair market value. Who has free state tax filing Boats. Who has free state tax filing   Except for small, inexpensive boats, the valuation of boats should be based on an appraisal by a marine surveyor or appraiser because the physical condition is critical to the value. Who has free state tax filing Cars. Who has free state tax filing   Certain commercial firms and trade organizations publish used car pricing guides, commonly called “blue books,” containing complete dealer sale prices or dealer average prices for recent model years. Who has free state tax filing The guides may be published monthly or seasonally, and for different regions of the country. Who has free state tax filing These guides also provide estimates for adjusting for unusual equipment, unusual mileage, and physical condition. Who has free state tax filing The prices are not “official” and these publications are not considered an appraisal of any specific donated property. Who has free state tax filing But they do provide clues for making an appraisal and suggest relative prices for comparison with current sales and offerings in your area. Who has free state tax filing   These publications are sometimes available from public libraries, or from the loan officer at a bank, credit union, or finance company. Who has free state tax filing You can also find used car pricing information on the Internet. Who has free state tax filing   To find the fair market value of a donated car, use the price listed in a used car guide for a private party sale, not the dealer retail value. Who has free state tax filing However, the fair market value may be less if the car has engine trouble, body damage, high mileage, or any type of excessive wear. Who has free state tax filing The fair market value of a donated car is the same as the price listed in a used car guide for a private party sale only if the guide lists a sales price for a car that is the same make, model, and year, sold in the same area, in the same condition, with the same or similar options or accessories, and with the same or similar warranties as the donated car. Who has free state tax filing Example. Who has free state tax filing You donate a used car in poor condition to a local high school for use by students studying car repair. Who has free state tax filing A used car guide shows the dealer retail value for this type of car in poor condition is $1,600. Who has free state tax filing However, the guide shows the price for a private party sale of the car is only $750. Who has free state tax filing The fair market value of the car is considered to be $750. Who has free state tax filing Large quantities. Who has free state tax filing   If you contribute a large number of the same item, fair market value is the price at which comparable numbers of the item are being sold. Who has free state tax filing Example. Who has free state tax filing You purchase 500 bibles for $1,000. Who has free state tax filing The person who sells them to you says the retail value of these bibles is $3,000. Who has free state tax filing If you contribute the bibles to a qualified organization, you can claim a deduction only for the price at which similar numbers of the same bible are currently being sold. Who has free state tax filing Your charitable contribution is $1,000, unless you can show that similar numbers of that bible wer