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1040ez Tax Form 2014

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1040ez Tax Form 2014

1040ez tax form 2014 1. 1040ez tax form 2014   Investment Income Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: General InformationSSN for joint account. 1040ez tax form 2014 Custodian account for your child. 1040ez tax form 2014 Penalty for failure to supply SSN. 1040ez tax form 2014 Certification. 1040ez tax form 2014 Underreported interest and dividends. 1040ez tax form 2014 How to stop backup withholding due to underreporting. 1040ez tax form 2014 How to stop backup withholding due to an incorrect identification number. 1040ez tax form 2014 Reporting backup withholding. 1040ez tax form 2014 Nonresident aliens. 1040ez tax form 2014 Penalties. 1040ez tax form 2014 Savings account with parent as trustee. 1040ez tax form 2014 Interest IncomeInterest not reported on Form 1099-INT. 1040ez tax form 2014 Nominees. 1040ez tax form 2014 Incorrect amount. 1040ez tax form 2014 Information reporting requirement. 1040ez tax form 2014 Taxable Interest — General Below-Market Loans U. 1040ez tax form 2014 S. 1040ez tax form 2014 Savings Bonds U. 1040ez tax form 2014 S. 1040ez tax form 2014 Treasury Bills, Notes, and Bonds Bonds Sold Between Interest Dates Insurance State or Local Government Obligations Discount on Debt InstrumentsOriginal Issue Discount (OID) Market Discount Bonds Discount on Short-Term Obligations Election To Report All Interest as OID When To Report Interest IncomeConstructive receipt. 1040ez tax form 2014 How To Report Interest IncomeSchedule B (Form 1040A or 1040). 1040ez tax form 2014 Worksheet for savings bonds distributed from a retirement or profit-sharing plan. 1040ez tax form 2014 File Form 1099-INT with the IRS. 1040ez tax form 2014 Dividends and Other DistributionsDividends not reported on Form 1099-DIV. 1040ez tax form 2014 Nominees. 1040ez tax form 2014 Ordinary Dividends Capital Gain Distributions Nondividend Distributions Liquidating Distributions Distributions of Stock and Stock Rights Other Distributions How To Report Dividend IncomeElection. 1040ez tax form 2014 Independent contractor. 1040ez tax form 2014 Investment interest deducted. 1040ez tax form 2014 Exception 1. 1040ez tax form 2014 Exception 2. 1040ez tax form 2014 Undistributed capital gains. 1040ez tax form 2014 File Form 1099-DIV with the IRS. 1040ez tax form 2014 Stripped Preferred Stock REMICs, FASITs, and Other CDOsREMICs Collateralized Debt Obligations (CDOs) FASITs S CorporationsLimit on losses and deductions. 1040ez tax form 2014 Passive activity losses. 1040ez tax form 2014 Form 8582. 1040ez tax form 2014 Investment ClubsInvestments in name of member. 1040ez tax form 2014 Tax Treatment of the Club Topics - This chapter discusses: Interest Income , Discount on Debt Instruments , When To Report Interest Income , How To Report Interest Income , Dividends and Other Distributions , How To Report Dividend Income , Stripped Preferred Stock , Real estate mortgage investment conduits (REMICs), financial asset securitization investment trusts (FASITs), and other collateralized debt obligations (CDOs) , S Corporations , and Investment Clubs . 1040ez tax form 2014 Useful Items - You may want to see: Publication 525 Taxable and Nontaxable Income 537 Installment Sales 590 Individual Retirement Arrangements (IRAs) 925 Passive Activity and At-Risk Rules 1212 Guide to Original Issue Discount (OID) Instruments Form (and Instructions) Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends Schedule D (Form 1040) Capital Gains and Losses 1040 U. 1040ez tax form 2014 S. 1040ez tax form 2014 Individual Income Tax Return 1040A U. 1040ez tax form 2014 S. 1040ez tax form 2014 Individual Income Tax Return 1040EZ Income Tax Return for Single and Joint Filers With No Dependents 1099 General Instructions for Certain Information Returns 2439 Notice to Shareholder of Undistributed Long-Term Capital Gains 3115 Application for Change in Accounting Method 6251 Alternative Minimum Tax — Individuals 8582 Passive Activity Loss Limitations 8615 Tax for Certain Children Who Have Unearned Income 8814 Parents' Election To Report Child's Interest and Dividends 8815 Exclusion of Interest From Series EE and I U. 1040ez tax form 2014 S. 1040ez tax form 2014 Savings Bonds Issued After 1989 8818 Optional Form To Record Redemption of Series EE and I U. 1040ez tax form 2014 S. 1040ez tax form 2014 Savings Bonds Issued After 1989 8824 Like-Kind Exchanges 8949 Sales and Other Dispositions of Capital Assets 8960 Net Investment Income Tax—Individuals, Estates, and Trusts See chapter 5, How To Get Tax Help , for information about getting these publications and forms. 1040ez tax form 2014 General Information A few items of general interest are covered here. 1040ez tax form 2014 Recordkeeping. 1040ez tax form 2014 You should keep a list showing sources and investment income amounts you receive during the year. 1040ez tax form 2014 Also keep the forms you receive showing your investment income (Forms 1099-INT, Interest Income, and 1099-DIV, Dividends and Distributions, for example) as an important part of your records. 1040ez tax form 2014 Net investment income tax (NIIT). 1040ez tax form 2014   Beginning in 2013, you may be subject to the NIIT. 1040ez tax form 2014 The NIIT is a 3. 1040ez tax form 2014 8% tax on the lesser of your net investment income or the amount of your modified adjusted gross income (MAGI) that is over a threshold amount based on your filing status. 1040ez tax form 2014    Filing Status Threshold Amount Married filing jointly $250,000 Married filing separately $125,000 Single $200,000 Head of household (with qualifying person) $200,000 Qualifying Widow(er) with dependent child $250,000    For more information, see Form 8960 and Instructions for Form 8960. 1040ez tax form 2014 Tax on unearned income of certain children. 1040ez tax form 2014   Part of a child's 2013 unearned income may be taxed at the parent's tax rate. 1040ez tax form 2014 This may happen if all of the following are true. 1040ez tax form 2014 The child had more than $2,000 of unearned income. 1040ez tax form 2014 The child is required to file a tax return. 1040ez tax form 2014 The child was: Under age 18 at the end of 2013, Age 18 at the end of 2013 and did not have earned income that was more than half of the child's support, or A full-time student over age 18 and under age 24 at the end of 2013 and did not have earned income that was more than half of the child's support. 1040ez tax form 2014 At least one of the child's parents was alive at the end of 2013. 1040ez tax form 2014 The child does not file a joint return for 2013. 1040ez tax form 2014 A child born on January 1, 1996, is considered to be age 18 at the end of 2013; a child born on January 1, 1995, is considered to be age 19 at the end of 2013; a child born on January 1, 1990, is considered to be age 24 at the end of 2013. 1040ez tax form 2014   If all of these statements are true, Form 8615 must be completed and attached to the child's tax return. 1040ez tax form 2014 If any of these statements is not true, Form 8615 is not required and the child's income is taxed at his or her own tax rate. 1040ez tax form 2014    However, the parent can choose to include the child's interest and dividends on the parent's return if certain requirements are met. 1040ez tax form 2014 Use Form 8814 for this purpose. 1040ez tax form 2014   For more information about the tax on unearned income of children and the parents' election, see Publication 929, Tax Rules for Children and Dependents. 1040ez tax form 2014 Beneficiary of an estate or trust. 1040ez tax form 2014   Interest, dividends, and other investment income you receive as a beneficiary of an estate or trust is generally taxable income. 1040ez tax form 2014 You should receive a Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc. 1040ez tax form 2014 , from the fiduciary. 1040ez tax form 2014 Your copy of Schedule K-1 (Form 1041) and its instructions will tell you where to report the income on your Form 1040. 1040ez tax form 2014 Social security number (SSN). 1040ez tax form 2014   You must give your name and SSN or individual tax identification number (ITIN) to any person required by federal tax law to make a return, statement, or other document that relates to you. 1040ez tax form 2014 This includes payers of interest and dividends. 1040ez tax form 2014 If you do not give your SSN or ITIN to the payer of interest, you may have to pay a penalty. 1040ez tax form 2014 SSN for joint account. 1040ez tax form 2014   If the funds in a joint account belong to one person, list that person's name first on the account and give that person's SSN to the payer. 1040ez tax form 2014 (For information on who owns the funds in a joint account, see Joint accounts , later. 1040ez tax form 2014 ) If the joint account contains combined funds, give the SSN of the person whose name is listed first on the account. 1040ez tax form 2014 This is because only one name and SSN can be shown on Form 1099. 1040ez tax form 2014   These rules apply both to joint ownership by a married couple and to joint ownership by other individuals. 1040ez tax form 2014 For example, if you open a joint savings account with your child using funds belonging to the child, list the child's name first on the account and give the child's SSN. 1040ez tax form 2014 Custodian account for your child. 1040ez tax form 2014   If your child is the actual owner of an account that is recorded in your name as custodian for the child, give the child's SSN to the payer. 1040ez tax form 2014 For example, you must give your child's SSN to the payer of dividends on stock owned by your child, even though the dividends are paid to you as custodian. 1040ez tax form 2014 Penalty for failure to supply SSN. 1040ez tax form 2014   You will be subject to a penalty if, when required, you fail to: Include your SSN on any return, statement, or other document, Give your SSN to another person who must include it on any return, statement, or other document, or Include the SSN of another person on any return, statement, or other document. 1040ez tax form 2014 The penalty is $50 for each failure up to a maximum penalty of $100,000 for any calendar year. 1040ez tax form 2014   You will not be subject to this penalty if you can show that your failure to provide the SSN was due to reasonable cause and not to willful neglect. 1040ez tax form 2014   If you fail to supply an SSN, you may also be subject to backup withholding. 1040ez tax form 2014 Backup withholding. 1040ez tax form 2014   Your investment income is generally not subject to regular withholding. 1040ez tax form 2014 However, it may be subject to backup withholding to ensure that income tax is collected on the income. 1040ez tax form 2014 Under backup withholding, the bank, broker, or other payer of interest, original issue discount (OID), dividends, cash patronage dividends, or royalties must withhold, as income tax, on the amount you are paid, applying the appropriate withholding rate. 1040ez tax form 2014   Backup withholding applies if: You do not give the payer your identification number (either a social security number or an employer identification number) in the required manner, The IRS notifies the payer that you gave an incorrect identification number, The IRS notifies the payer that you are subject to backup withholding on interest or dividends because you have underreported interest or dividends on your income tax return, or You are required, but fail, to certify that you are not subject to backup withholding for the reason described in (3). 1040ez tax form 2014 Certification. 1040ez tax form 2014   For new accounts paying interest or dividends, you must certify under penalties of perjury that your SSN is correct and that you are not subject to backup withholding. 1040ez tax form 2014 Your payer will give you a Form W-9, Request for Taxpayer Identification Number and Certification, or similar form, to make this certification. 1040ez tax form 2014 If you fail to make this certification, backup withholding may begin immediately on your new account or investment. 1040ez tax form 2014 Underreported interest and dividends. 1040ez tax form 2014   You will be considered to have underreported your interest and dividends if the IRS has determined for a tax year that: You failed to include any part of a reportable interest or dividend payment required to be shown on your return, or You were required to file a return and to include a reportable interest or dividend payment on that return, but you failed to file the return. 1040ez tax form 2014 How to stop backup withholding due to underreporting. 1040ez tax form 2014   If you have been notified that you underreported interest or dividends, you can request a determination from the IRS to prevent backup withholding from starting or to stop backup withholding once it has begun. 1040ez tax form 2014 You must show that at least one of the following situations applies. 1040ez tax form 2014 No underreporting occurred. 1040ez tax form 2014 You have a bona fide dispute with the IRS about whether underreporting occurred. 1040ez tax form 2014 Backup withholding will cause or is causing an undue hardship, and it is unlikely that you will underreport interest and dividends in the future. 1040ez tax form 2014 You have corrected the underreporting by filing a return if you did not previously file one and by paying all taxes, penalties, and interest due for any underreported interest or dividend payments. 1040ez tax form 2014   If the IRS determines that backup withholding should stop, it will provide you with a certification and will notify the payers who were sent notices earlier. 1040ez tax form 2014 How to stop backup withholding due to an incorrect identification number. 1040ez tax form 2014   If you have been notified by a payer that you are subject to backup withholding because you have provided an incorrect SSN or employer identification number, you can stop it by following the instructions the payer gives you. 1040ez tax form 2014 Reporting backup withholding. 1040ez tax form 2014   If backup withholding is deducted from your interest or dividend income or other reportable payment, the bank or other business must give you an information return for the year (for example, a Form 1099-INT) indicating the amount withheld. 1040ez tax form 2014 The information return will show any backup withholding as “Federal income tax withheld. 1040ez tax form 2014 ” Nonresident aliens. 1040ez tax form 2014    Generally, payments made to nonresident aliens are not subject to backup withholding. 1040ez tax form 2014 You can use Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, to certify exempt status. 1040ez tax form 2014 However, this does not exempt you from the 30% (or lower treaty) withholding rate that may apply to your investment income. 1040ez tax form 2014 For information on the 30% rate, see Publication 519, U. 1040ez tax form 2014 S. 1040ez tax form 2014 Tax Guide for Aliens. 1040ez tax form 2014 Penalties. 1040ez tax form 2014   There are civil and criminal penalties for giving false information to avoid backup withholding. 1040ez tax form 2014 The civil penalty is $500. 1040ez tax form 2014 The criminal penalty, upon conviction, is a fine of up to $1,000, or imprisonment of up to 1 year, or both. 1040ez tax form 2014 Where to report investment income. 1040ez tax form 2014   Table 1-1 gives an overview of the forms and schedules to use to report some common types of investment income. 1040ez tax form 2014 But see the rest of this publication for detailed information about reporting investment income. 1040ez tax form 2014 Joint accounts. 1040ez tax form 2014   If two or more persons hold property (such as a savings account, bond, or stock) as joint tenants, tenants by the entirety, or tenants in common, each person's share of any interest or dividends from the property is determined by local law. 1040ez tax form 2014 Community property states. 1040ez tax form 2014   If you are married and receive a distribution that is community income, one-half of the distribution is generally considered to be received by each spouse. 1040ez tax form 2014 If you file separate returns, you must each report one-half of any taxable distribution. 1040ez tax form 2014 See Publication 555, Community Property, for more information on community income. 1040ez tax form 2014   If the distribution is not considered community property and you and your spouse file separate returns, each of you must report your separate taxable distributions. 1040ez tax form 2014 Example. 1040ez tax form 2014 You and your spouse have a joint money market account. 1040ez tax form 2014 Under state law, half the income from the account belongs to you, and half belongs to your spouse. 1040ez tax form 2014 If you file separate returns, you each report half the income. 1040ez tax form 2014 Income from property given to a child. 1040ez tax form 2014   Property you give as a parent to your child under the Model Gifts of Securities to Minors Act, the Uniform Gifts to Minors Act, or any similar law becomes the child's property. 1040ez tax form 2014   Income from the property is taxable to the child, except that any part used to satisfy a legal obligation to support the child is taxable to the parent or guardian having that legal obligation. 1040ez tax form 2014 Savings account with parent as trustee. 1040ez tax form 2014   Interest income from a savings account opened for a minor child, but placed in the name and subject to the order of the parents as trustees, is taxable to the child if, under the law of the state in which the child resides, both of the following are true. 1040ez tax form 2014 The savings account legally belongs to the child. 1040ez tax form 2014 The parents are not legally permitted to use any of the funds to support the child. 1040ez tax form 2014 Table 1-1. 1040ez tax form 2014 Where To Report Common Types of Investment Income (For detailed information about reporting investment income, see the rest of this publication, especially How To Report Interest Income and How To Report Dividend Income in chapter 1. 1040ez tax form 2014 ) Type of Income If you file Form 1040, report on . 1040ez tax form 2014 . 1040ez tax form 2014 . 1040ez tax form 2014 If you can file Form 1040A, report on . 1040ez tax form 2014 . 1040ez tax form 2014 . 1040ez tax form 2014 If you can file Form 1040EZ, report on . 1040ez tax form 2014 . 1040ez tax form 2014 . 1040ez tax form 2014 Tax-exempt interest (Form 1099-INT, box 8) Line 8b Line 8b Space to the left of line 2 (enter “TEI” and the amount) Taxable interest that totals $1,500 or less Line 8a (You may need to file Schedule B as well. 1040ez tax form 2014 ) Line 8a (You may need to file Schedule B as well. 1040ez tax form 2014 ) Line 2 Taxable interest that totals more than $1,500 Line 8a; also use Schedule B, line 1 Line 8a; also use Schedule B, line 1   Savings bond interest you will exclude because of higher education expenses Schedule B; also use Form 8815 Schedule B; also use Form 8815   Ordinary dividends that total $1,500 or less Line 9a (You may need to file Schedule B as well. 1040ez tax form 2014 ) Line 9a (You may need to file Schedule B as well. 1040ez tax form 2014 )   Ordinary dividends that total more than $1,500 Line 9a; also use Schedule B, line 5 Line 9a; also use Schedule B, line 5   Qualified dividends (if you do not have to file Schedule D) Line 9b; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 2 Line 9b; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 2   Qualified dividends (if you have to file Schedule D) Line 9b; also use the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet, line 2 You cannot use Form 1040A    You cannot use Form 1040EZ Capital gain distributions (if you do not have to file Schedule D) Line 13; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 3 Line 10; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 3   Capital gain distributions (if you have to file Schedule D) Schedule D, line 13; also use the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet     Section 1250, 1202, or collectibles gain (Form 1099-DIV, box 2b, 2c, or 2d) Form 8949 and Schedule D     Nondividend distributions (Form 1099-DIV, box 3) Generally not reported*     Undistributed capital gains (Form 2439, boxes 1a - 1d) Schedule D     Gain or loss from sales of stocks or bonds Line 13; also use Form 8949, Schedule D, and the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet You cannot use Form 1040A   Gain or loss from exchanges of like-kind investment property Line 13; also use Schedule D, Form 8824, and the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet     *Report any amounts in excess of your basis in your mutual fund shares on Form 8949. 1040ez tax form 2014 Use Part II if you held the shares more than 1 year. 1040ez tax form 2014 Use Part I if you held your mutual fund shares 1 year or less. 1040ez tax form 2014 For details on Form 8949, see Reporting Capital Gains and Losses in chapter 4, and the Instructions for Form 8949. 1040ez tax form 2014 Accuracy-related penalty. 1040ez tax form 2014   An accuracy-related penalty of 20% can be charged for underpayments of tax due to negligence or disregard of rules or regulations or substantial understatement of tax. 1040ez tax form 2014 For information on the penalty and any interest that applies, see Penalties in chapter 2. 1040ez tax form 2014 Interest Income This section discusses the tax treatment of different types of interest income. 1040ez tax form 2014 In general, any interest that you receive or that is credited to your account and can be withdrawn is taxable income. 1040ez tax form 2014 (It does not have to be entered in your passbook. 1040ez tax form 2014 ) Exceptions to this rule are discussed later. 1040ez tax form 2014 Form 1099-INT. 1040ez tax form 2014   Interest income is generally reported to you on Form 1099-INT, or a similar statement, by banks, savings and loans, and other payers of interest. 1040ez tax form 2014 This form shows you the interest you received during the year. 1040ez tax form 2014 Keep this form for your records. 1040ez tax form 2014 You do not have to attach it to your tax return. 1040ez tax form 2014   Report on your tax return the total interest income you receive for the tax year. 1040ez tax form 2014 Interest not reported on Form 1099-INT. 1040ez tax form 2014   Even if you do not receive Form 1099-INT, you must still report all of your interest income. 1040ez tax form 2014 For example, you may receive distributive shares of interest from partnerships or S corporations. 1040ez tax form 2014 This interest is reported to you on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. 1040ez tax form 2014 , and Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, Credits, etc. 1040ez tax form 2014 Nominees. 1040ez tax form 2014   Generally, if someone receives interest as a nominee for you, that person must give you a Form 1099-INT showing the interest received on your behalf. 1040ez tax form 2014   If you receive a Form 1099-INT that includes amounts belonging to another person, see the discussion on Nominee distributions , later, under How To Report Interest Income. 1040ez tax form 2014 Incorrect amount. 1040ez tax form 2014   If you receive a Form 1099-INT that shows an incorrect amount (or other incorrect information), you should ask the issuer for a corrected form. 1040ez tax form 2014 The new Form 1099-INT you receive will be marked “Corrected. 1040ez tax form 2014 ” Form 1099-OID. 1040ez tax form 2014   Reportable interest income also may be shown on Form 1099-OID, Original Issue Discount. 1040ez tax form 2014 For more information about amounts shown on this form, see Original Issue Discount (OID) , later in this chapter. 1040ez tax form 2014 Exempt-interest dividends. 1040ez tax form 2014   Exempt-interest dividends you receive from a mutual fund or other regulated investment company, including those received from a qualified fund of funds in any tax year beginning after December 22, 2010, are not included in your taxable income. 1040ez tax form 2014 (However, see Information reporting requirement , next. 1040ez tax form 2014 ) Exempt-interest dividends should be shown in box 10 of Form 1099-DIV. 1040ez tax form 2014 You do not reduce your basis for distributions that are exempt-interest dividends. 1040ez tax form 2014 Information reporting requirement. 1040ez tax form 2014   Although exempt-interest dividends are not taxable, you must show them on your tax return if you have to file. 1040ez tax form 2014 This is an information reporting requirement and does not change the exempt-interest dividends into taxable income. 1040ez tax form 2014 See How To Report Interest Income , later. 1040ez tax form 2014 Note. 1040ez tax form 2014 Exempt-interest dividends paid from specified private activity bonds may be subject to the alternative minimum tax. 1040ez tax form 2014 The exempt-interest dividends subject to the alternative minimum tax are shown in box 11 of Form 1099-DIV. 1040ez tax form 2014 See Form 6251 and its instructions for more information about this tax. 1040ez tax form 2014 Private activity bonds are discussed later under State or Local Government Obligations. 1040ez tax form 2014 Interest on VA dividends. 1040ez tax form 2014   Interest on insurance dividends left on deposit with the Department of Veterans Affairs (VA) is not taxable. 1040ez tax form 2014 This includes interest paid on dividends on converted United States Government Life Insurance policies and on National Service Life Insurance policies. 1040ez tax form 2014 Individual retirement arrangements (IRAs). 1040ez tax form 2014   Interest on a Roth IRA generally is not taxable. 1040ez tax form 2014 Interest on a traditional IRA is tax deferred. 1040ez tax form 2014 You generally do not include it in your income until you make withdrawals from the IRA. 1040ez tax form 2014 See Publication 590 for more information. 1040ez tax form 2014 Taxable Interest — General Taxable interest includes interest you receive from bank accounts, loans you make to others, and other sources. 1040ez tax form 2014 The following are some sources of taxable interest. 1040ez tax form 2014 Dividends that are actually interest. 1040ez tax form 2014   Certain distributions commonly called dividends are actually interest. 1040ez tax form 2014 You must report as interest so-called “dividends” on deposits or on share accounts in: Cooperative banks, Credit unions, Domestic building and loan associations, Domestic savings and loan associations, Federal savings and loan associations, and Mutual savings banks. 1040ez tax form 2014  The “dividends” will be shown as interest income on Form 1099-INT. 1040ez tax form 2014 Money market funds. 1040ez tax form 2014   Money market funds are offered by nonbank financial institutions such as mutual funds and stock brokerage houses, and pay dividends. 1040ez tax form 2014 Generally, amounts you receive from money market funds should be reported as dividends, not as interest. 1040ez tax form 2014 Certificates of deposit and other deferred interest accounts. 1040ez tax form 2014   If you open any of these accounts, interest may be paid at fixed intervals of 1 year or less during the term of the account. 1040ez tax form 2014 You generally must include this interest in your income when you actually receive it or are entitled to receive it without paying a substantial penalty. 1040ez tax form 2014 The same is true for accounts that mature in 1 year or less and pay interest in a single payment at maturity. 1040ez tax form 2014 If interest is deferred for more than 1 year, see Original Issue Discount (OID) , later. 1040ez tax form 2014 Interest subject to penalty for early withdrawal. 1040ez tax form 2014   If you withdraw funds from a deferred interest account before maturity, you may have to pay a penalty. 1040ez tax form 2014 You must report the total amount of interest paid or credited to your account during the year, without subtracting the penalty. 1040ez tax form 2014 See Penalty on early withdrawal of savings under How To Report Interest Income, later, for more information on how to report the interest and deduct the penalty. 1040ez tax form 2014 Money borrowed to invest in certificate of deposit. 1040ez tax form 2014   The interest you pay on money borrowed from a bank or savings institution to meet the minimum deposit required for a certificate of deposit from the institution and the interest you earn on the certificate are two separate items. 1040ez tax form 2014 You must report the total interest you earn on the certificate in your income. 1040ez tax form 2014 If you itemize deductions, you can deduct the interest you pay as investment interest, up to the amount of your net investment income. 1040ez tax form 2014 See Interest Expenses in chapter 3. 1040ez tax form 2014 Example. 1040ez tax form 2014 You deposited $5,000 with a bank and borrowed $5,000 from the bank to make up the $10,000 minimum deposit required to buy a 6-month certificate of deposit. 1040ez tax form 2014 The certificate earned $575 at maturity in 2013, but you received only $265, which represented the $575 you earned minus $310 interest charged on your $5,000 loan. 1040ez tax form 2014 The bank gives you a Form 1099-INT for 2013 showing the $575 interest you earned. 1040ez tax form 2014 The bank also gives you a statement showing that you paid $310 interest for 2013. 1040ez tax form 2014 You must include the $575 in your income. 1040ez tax form 2014 If you itemize your deductions on Schedule A (Form 1040), Itemized Deductions, you can deduct $310, subject to the net investment income limit. 1040ez tax form 2014 Gift for opening account. 1040ez tax form 2014   If you receive noncash gifts or services for making deposits or for opening an account in a savings institution, you may have to report the value as interest. 1040ez tax form 2014   For deposits of less than $5,000, gifts or services valued at more than $10 must be reported as interest. 1040ez tax form 2014 For deposits of $5,000 or more, gifts or services valued at more than $20 must be reported as interest. 1040ez tax form 2014 The value is determined by the cost to the financial institution. 1040ez tax form 2014 Example. 1040ez tax form 2014 You open a savings account at your local bank and deposit $800. 1040ez tax form 2014 The account earns $20 interest. 1040ez tax form 2014 You also receive a $15 calculator. 1040ez tax form 2014 If no other interest is credited to your account during the year, the Form 1099-INT you receive will show $35 interest for the year. 1040ez tax form 2014 You must report $35 interest income on your tax return. 1040ez tax form 2014 Interest on insurance dividends. 1040ez tax form 2014   Interest on insurance dividends left on deposit with an insurance company that can be withdrawn annually is taxable to you in the year it is credited to your account. 1040ez tax form 2014 However, if you can withdraw it only on the anniversary date of the policy (or other specified date), the interest is taxable in the year that date occurs. 1040ez tax form 2014 Prepaid insurance premiums. 1040ez tax form 2014   Any increase in the value of prepaid insurance premiums, advance premiums, or premium deposit funds is interest if it is applied to the payment of premiums due on insurance policies or made available for you to withdraw. 1040ez tax form 2014 U. 1040ez tax form 2014 S. 1040ez tax form 2014 obligations. 1040ez tax form 2014   Interest on U. 1040ez tax form 2014 S. 1040ez tax form 2014 obligations, such as U. 1040ez tax form 2014 S. 1040ez tax form 2014 Treasury bills, notes, and bonds, issued by any agency or instrumentality of the United States is taxable for federal income tax purposes. 1040ez tax form 2014 Interest on tax refunds. 1040ez tax form 2014   Interest you receive on tax refunds is taxable income. 1040ez tax form 2014 Interest on condemnation award. 1040ez tax form 2014   If the condemning authority pays you interest to compensate you for a delay in payment of an award, the interest is taxable. 1040ez tax form 2014 Installment sale payments. 1040ez tax form 2014   If a contract for the sale or exchange of property provides for deferred payments, it also usually provides for interest payable with the deferred payments. 1040ez tax form 2014 That interest is taxable when you receive it. 1040ez tax form 2014 If little or no interest is provided for in a deferred payment contract, part of each payment may be treated as interest. 1040ez tax form 2014 See Unstated Interest and Original Issue Discount (OID) in Publication 537. 1040ez tax form 2014 Interest on annuity contract. 1040ez tax form 2014   Accumulated interest on an annuity contract you sell before its maturity date is taxable. 1040ez tax form 2014 Usurious interest. 1040ez tax form 2014   Usurious interest is interest charged at an illegal rate. 1040ez tax form 2014 This is taxable as interest unless state law automatically changes it to a payment on the principal. 1040ez tax form 2014 Interest income on frozen deposits. 1040ez tax form 2014   Exclude from your gross income interest on frozen deposits. 1040ez tax form 2014 A deposit is frozen if, at the end of the year, you cannot withdraw any part of the deposit because: The financial institution is bankrupt or insolvent, or The state in which the institution is located has placed limits on withdrawals because other financial institutions in the state are bankrupt or insolvent. 1040ez tax form 2014   The amount of interest you must exclude is the interest that was credited on the frozen deposits minus the sum of: The net amount you withdrew from these deposits during the year, and The amount you could have withdrawn as of the end of the year (not reduced by any penalty for premature withdrawals of a time deposit). 1040ez tax form 2014 If you receive a Form 1099-INT for interest income on deposits that were frozen at the end of 2013, see Frozen deposits under How To Report Interest Income for information about reporting this interest income exclusion on your tax return. 1040ez tax form 2014   The interest you exclude is treated as credited to your account in the following year. 1040ez tax form 2014 You must include it in income in the year you can withdraw it. 1040ez tax form 2014 Example. 1040ez tax form 2014 $100 of interest was credited on your frozen deposit during the year. 1040ez tax form 2014 You withdrew $80 but could not withdraw any more as of the end of the year. 1040ez tax form 2014 You must include $80 in your income and exclude $20 from your income for the year. 1040ez tax form 2014 You must include the $20 in your income for the year you can withdraw it. 1040ez tax form 2014 Bonds traded flat. 1040ez tax form 2014    If you buy a bond at a discount when interest has been defaulted or when the interest has accrued but has not been paid, the transaction is described as trading a bond flat. 1040ez tax form 2014 The defaulted or unpaid interest is not income and is not taxable as interest if paid later. 1040ez tax form 2014 When you receive a payment of that interest, it is a return of capital that reduces the remaining cost basis of your bond. 1040ez tax form 2014 Interest that accrues after the date of purchase, however, is taxable interest income for the year received or accrued. 1040ez tax form 2014 See Bonds Sold Between Interest Dates , later in this chapter. 1040ez tax form 2014 Below-Market Loans If you make a below-market gift or demand loan, you must report as interest income any forgone interest (defined later) from that loan. 1040ez tax form 2014 The below-market loan rules and exceptions are described in this section. 1040ez tax form 2014 For more information, see section 7872 of the Internal Revenue Code and its regulations. 1040ez tax form 2014 If you receive a below-market loan, you may be able to deduct the forgone interest as well as any interest you actually paid, but not if it is personal interest. 1040ez tax form 2014 Loans subject to the rules. 1040ez tax form 2014   The rules for below-market loans apply to: Gift loans, Pay-related loans, Corporation-shareholder loans, Tax avoidance loans, and Certain loans made to qualified continuing care facilities under a continuing care contract. 1040ez tax form 2014 A pay-related loan is any below-market loan between an employer and an employee or between an independent contractor and a person for whom the contractor provides services. 1040ez tax form 2014 A tax avoidance loan is any below-market loan where the avoidance of federal tax is one of the main purposes of the interest arrangement. 1040ez tax form 2014 Forgone interest. 1040ez tax form 2014   For any period, forgone interest is: The amount of interest that would be payable for that period if interest accrued on the loan at the applicable federal rate and was payable annually on December 31, minus Any interest actually payable on the loan for the period. 1040ez tax form 2014 Applicable federal rate. 1040ez tax form 2014   Applicable federal rates are published by the IRS each month in the Internal Revenue Bulletin. 1040ez tax form 2014 Some IRS offices have these bulletins available for research. 1040ez tax form 2014 See chapter 5, How To Get Tax Help , for other ways to get this information. 1040ez tax form 2014 Rules for below-market loans. 1040ez tax form 2014   The rules that apply to a below-market loan depend on whether the loan is a gift loan, demand loan, or term loan. 1040ez tax form 2014 Gift and demand loans. 1040ez tax form 2014   A gift loan is any below-market loan where the forgone interest is in the nature of a gift. 1040ez tax form 2014   A demand loan is a loan payable in full at any time upon demand by the lender. 1040ez tax form 2014 A demand loan is a below-market loan if no interest is charged or if interest is charged at a rate below the applicable federal rate. 1040ez tax form 2014   A demand loan or gift loan that is a below-market loan is generally treated as an arm's-length transaction in which the lender is treated as having made: A loan to the borrower in exchange for a note that requires the payment of interest at the applicable federal rate, and An additional payment to the borrower in an amount equal to the forgone interest. 1040ez tax form 2014 The borrower is generally treated as transferring the additional payment back to the lender as interest. 1040ez tax form 2014 The lender must report that amount as interest income. 1040ez tax form 2014   The lender's additional payment to the borrower is treated as a gift, dividend, contribution to capital, pay for services, or other payment, depending on the substance of the transaction. 1040ez tax form 2014 The borrower may have to report this payment as taxable income, depending on its classification. 1040ez tax form 2014 These transfers are considered to occur annually, generally on December 31. 1040ez tax form 2014 Term loans. 1040ez tax form 2014   A term loan is any loan that is not a demand loan. 1040ez tax form 2014 A term loan is a below-market loan if the amount of the loan is more than the present value of all payments due under the loan. 1040ez tax form 2014   A lender who makes a below-market term loan other than a gift loan is treated as transferring an additional lump-sum cash payment to the borrower (as a dividend, contribution to capital, etc. 1040ez tax form 2014 ) on the date the loan is made. 1040ez tax form 2014 The amount of this payment is the amount of the loan minus the present value, at the applicable federal rate, of all payments due under the loan. 1040ez tax form 2014 An equal amount is treated as original issue discount (OID). 1040ez tax form 2014 The lender must report the annual part of the OID as interest income. 1040ez tax form 2014 The borrower may be able to deduct the OID as interest expense. 1040ez tax form 2014 See Original Issue Discount (OID) , later. 1040ez tax form 2014 Exceptions to the below-market loan rules. 1040ez tax form 2014   Exceptions to the below-market loan rules are discussed here. 1040ez tax form 2014 Exception for loans of $10,000 or less. 1040ez tax form 2014   The rules for below-market loans do not apply to any day on which the total outstanding amount of loans between the borrower and lender is $10,000 or less. 1040ez tax form 2014 This exception applies only to: Gift loans between individuals if the gift loan is not directly used to buy or carry income-producing assets, and Pay-related loans or corporation-shareholder loans if the avoidance of federal tax is not a principal purpose of the interest arrangement. 1040ez tax form 2014 This exception does not apply to a term loan described in (2) earlier that previously has been subject to the below-market loan rules. 1040ez tax form 2014 Those rules will continue to apply even if the outstanding balance is reduced to $10,000 or less. 1040ez tax form 2014 Exception for loans to continuing care facilities. 1040ez tax form 2014   Loans to qualified continuing care facilities under continuing care contracts are not subject to the rules for below-market loans for the calendar year if the lender or the lender's spouse is age 62 or older at the end of the year. 1040ez tax form 2014 For the definitions of qualified continuing care facility and continuing care contract, see Internal Revenue Code section 7872(h). 1040ez tax form 2014 Exception for loans without significant tax effect. 1040ez tax form 2014   Loans are excluded from the below-market loan rules if their interest arrangements do not have a significant effect on the federal tax liability of the borrower or the lender. 1040ez tax form 2014 These loans include: Loans made available by the lender to the general public on the same terms and conditions that are consistent with the lender's customary business practice; Loans subsidized by a federal, state, or municipal government that are made available under a program of general application to the public; Certain employee-relocation loans; Certain loans from a foreign person, unless the interest income would be effectively connected with the conduct of a U. 1040ez tax form 2014 S. 1040ez tax form 2014 trade or business and would not be exempt from U. 1040ez tax form 2014 S. 1040ez tax form 2014 tax under an income tax treaty; Gift loans to a charitable organization, contributions to which are deductible, if the total outstanding amount of loans between the organization and lender is $250,000 or less at all times during the tax year; and Other loans on which the interest arrangement can be shown to have no significant effect on the federal tax liability of the lender or the borrower. 1040ez tax form 2014 For a loan described in (6) above, all the facts and circumstances are used to determine if the interest arrangement has a significant effect on the federal tax liability of the lender or borrower. 1040ez tax form 2014 Some factors to be considered are: Whether items of income and deduction generated by the loan offset each other; The amount of these items; The cost to you of complying with the below-market loan rules, if they were to apply; and Any reasons other than taxes for structuring the transaction as a below-market loan. 1040ez tax form 2014 If you structure a transaction to meet this exception and one of the principal purposes of that structure is the avoidance of federal tax, the loan will be considered a tax-avoidance loan, and this exception will not apply. 1040ez tax form 2014 Limit on forgone interest for gift loans of $100,000 or less. 1040ez tax form 2014   For gift loans between individuals, if the outstanding loans between the lender and borrower total $100,000 or less, the forgone interest to be included in income by the lender and deducted by the borrower is limited to the amount of the borrower's net investment income for the year. 1040ez tax form 2014 If the borrower's net investment income is $1,000 or less, it is treated as zero. 1040ez tax form 2014 This limit does not apply to a loan if the avoidance of federal tax is one of the main purposes of the interest arrangement. 1040ez tax form 2014 Effective dates. 1040ez tax form 2014    These rules apply to term loans made after June 6, 1984, and to demand loans outstanding after that date. 1040ez tax form 2014 U. 1040ez tax form 2014 S. 1040ez tax form 2014 Savings Bonds This section provides tax information on U. 1040ez tax form 2014 S. 1040ez tax form 2014 savings bonds. 1040ez tax form 2014 It explains how to report the interest income on these bonds and how to treat transfers of these bonds. 1040ez tax form 2014 U. 1040ez tax form 2014 S. 1040ez tax form 2014 savings bonds currently offered to individuals include Series EE bonds and Series I bonds. 1040ez tax form 2014 For other information on U. 1040ez tax form 2014 S. 1040ez tax form 2014 savings bonds, write to:  For Series HH/H: Bureau of the Fiscal Service Division of Customer Assistance P. 1040ez tax form 2014 O. 1040ez tax form 2014 Box 2186 Parkersburg, WV 26106-2186  For Series EE and I paper savings bonds: Bureau of the Fiscal Service Division of Customer Assistance P. 1040ez tax form 2014 O. 1040ez tax form 2014 Box 7012 Parkersburg, WV 26106-7012  For Series EE and I electronic bonds: Bureau of the Fiscal Service  Division of Customer Assistance P. 1040ez tax form 2014 O. 1040ez tax form 2014 Box 7015 Parkersburg, WV 26106-7015 Or, on the Internet, visit: www. 1040ez tax form 2014 treasurydirect. 1040ez tax form 2014 gov/indiv/indiv. 1040ez tax form 2014 htm. 1040ez tax form 2014 Accrual method taxpayers. 1040ez tax form 2014   If you use an accrual method of accounting, you must report interest on U. 1040ez tax form 2014 S. 1040ez tax form 2014 savings bonds each year as it accrues. 1040ez tax form 2014 You cannot postpone reporting interest until you receive it or until the bonds mature. 1040ez tax form 2014 Cash method taxpayers. 1040ez tax form 2014   If you use the cash method of accounting, as most individual taxpayers do, you generally report the interest on U. 1040ez tax form 2014 S. 1040ez tax form 2014 savings bonds when you receive it. 1040ez tax form 2014 But see Reporting options for cash method taxpayers , later. 1040ez tax form 2014 Series HH bonds. 1040ez tax form 2014   These bonds were issued at face value. 1040ez tax form 2014 Interest is paid twice a year by direct deposit to your bank account. 1040ez tax form 2014 If you are a cash method taxpayer, you must report interest on these bonds as income in the year you receive it. 1040ez tax form 2014   Series HH bonds were first offered in 1980 and last offered in August 2004. 1040ez tax form 2014 Before 1980, series H bonds were issued. 1040ez tax form 2014 Series H bonds are treated the same as series HH bonds. 1040ez tax form 2014 If you are a cash method taxpayer, you must report the interest when you receive it. 1040ez tax form 2014   Series H bonds have a maturity period of 30 years. 1040ez tax form 2014 Series HH bonds mature in 20 years. 1040ez tax form 2014 The last series H bonds matured in 2009. 1040ez tax form 2014 The last series HH bonds will mature in 2024. 1040ez tax form 2014 Series EE and series I bonds. 1040ez tax form 2014   Interest on these bonds is payable when you redeem the bonds. 1040ez tax form 2014 The difference between the purchase price and the redemption value is taxable interest. 1040ez tax form 2014 Series EE bonds. 1040ez tax form 2014   Series EE bonds were first offered in January 1980 and have a maturity period of 30 years. 1040ez tax form 2014 Before July 1980, series E bonds were issued. 1040ez tax form 2014 The original 10-year maturity period of series E bonds has been extended to 40 years for bonds issued before December 1965 and 30 years for bonds issued after November 1965. 1040ez tax form 2014 Paper series EE and series E bonds are issued at a discount. 1040ez tax form 2014 The face value is payable to you at maturity. 1040ez tax form 2014 Electronic series EE bonds are issued at their face value. 1040ez tax form 2014 The face value plus accrued interest is payable to you at maturity. 1040ez tax form 2014 As of January 1, 2012, paper savings bonds were no longer sold at financial institutions. 1040ez tax form 2014    Owners of paper series EE bonds can convert them to electronic bonds. 1040ez tax form 2014 These converted bonds do not retain the denomination listed on the paper certificate but are posted at their purchase price (with accrued interest). 1040ez tax form 2014 Series I bonds. 1040ez tax form 2014   Series I bonds were first offered in 1998. 1040ez tax form 2014 These are inflation-indexed bonds issued at their face amount with a maturity period of 30 years. 1040ez tax form 2014 The face value plus all accrued interest is payable to you at maturity. 1040ez tax form 2014 Reporting options for cash method taxpayers. 1040ez tax form 2014   If you use the cash method of reporting income, you can report the interest on series EE, series E, and series I bonds in either of the following ways. 1040ez tax form 2014 Method 1. 1040ez tax form 2014 Postpone reporting the interest until the earlier of the year you cash or dispose of the bonds or the year in which they mature. 1040ez tax form 2014 (However, see Savings bonds traded , later. 1040ez tax form 2014 )  Note. 1040ez tax form 2014 Series EE bonds issued in 1983 matured in 2013. 1040ez tax form 2014 If you have used method 1, you generally must report the interest on these bonds on your 2013 return. 1040ez tax form 2014 The last series E bonds were issued in 1980 and matured in 2010. 1040ez tax form 2014 If you used method 1, you generally should have reported the interest on these bonds on your 2010 return. 1040ez tax form 2014 Method 2. 1040ez tax form 2014 Choose to report the increase in redemption value as interest each year. 1040ez tax form 2014  You must use the same method for all series EE, series E, and series I bonds you own. 1040ez tax form 2014 If you do not choose method 2 by reporting the increase in redemption value as interest each year, you must use method 1. 1040ez tax form 2014 If you plan to cash your bonds in the same year you will pay for higher educational expenses, you may want to use method 1 because you may be able to exclude the interest from your income. 1040ez tax form 2014 To learn how, see Education Savings Bond Program, later. 1040ez tax form 2014 Change from method 1. 1040ez tax form 2014   If you want to change your method of reporting the interest from method 1 to method 2, you can do so without permission from the IRS. 1040ez tax form 2014 In the year of change, you must report all interest accrued to date and not previously reported for all your bonds. 1040ez tax form 2014   Once you choose to report the interest each year, you must continue to do so for all series EE, series E, and series I bonds you own and for any you get later, unless you request permission to change, as explained next. 1040ez tax form 2014 Change from method 2. 1040ez tax form 2014   To change from method 2 to method 1, you must request permission from the IRS. 1040ez tax form 2014 Permission for the change is automatically granted if you send the IRS a statement that meets all the following requirements. 1040ez tax form 2014 You have typed or printed the following number at the top: “131. 1040ez tax form 2014 ” It includes your name and social security number under “131. 1040ez tax form 2014 ” It includes the year of change (both the beginning and ending dates). 1040ez tax form 2014 It identifies the savings bonds for which you are requesting this change. 1040ez tax form 2014 It includes your agreement to: Report all interest on any bonds acquired during or after the year of change when the interest is realized upon disposition, redemption, or final maturity, whichever is earliest; and Report all interest on the bonds acquired before the year of change when the interest is realized upon disposition, redemption, or final maturity, whichever is earliest, with the exception of the interest reported in prior tax years. 1040ez tax form 2014   You must attach this statement to your tax return for the year of change, which you must file by the due date (including extensions). 1040ez tax form 2014   You can have an automatic extension of 6 months from the due date of your return for the year of change (excluding extensions) to file the statement with an amended return. 1040ez tax form 2014 On the statement, type or print “Filed pursuant to section 301. 1040ez tax form 2014 9100-2. 1040ez tax form 2014 ” To get this extension, you must have filed your original return for the year of the change by the due date (including extensions). 1040ez tax form 2014    By the date you file the original statement with your return, you must also send a signed copy to the address below. 1040ez tax form 2014    Internal Revenue Service Attention: CC:IT&A (Automatic Rulings Branch) P. 1040ez tax form 2014 O. 1040ez tax form 2014 Box 7604 Benjamin Franklin Station Washington, DC 20044   If you use a private delivery service, send the signed copy to the address below. 1040ez tax form 2014 Internal Revenue Service Attention: CC:IT&A  (Automatic Rulings Branch) Room 5336 1111 Constitution Avenue, NW Washington, DC 20224    Instead of filing this statement, you can request permission to change from method 2 to method 1 by filing Form 3115. 1040ez tax form 2014 In that case, follow the form instructions for an automatic change. 1040ez tax form 2014 No user fee is required. 1040ez tax form 2014 Co-owners. 1040ez tax form 2014   If a U. 1040ez tax form 2014 S. 1040ez tax form 2014 savings bond is issued in the names of co-owners, such as you and your child or you and your spouse, interest on the bond is generally taxable to the co-owner who bought the bond. 1040ez tax form 2014 One co-owner's funds used. 1040ez tax form 2014   If you used your funds to buy the bond, you must pay the tax on the interest. 1040ez tax form 2014 This is true even if you let the other co-owner redeem the bond and keep all the proceeds. 1040ez tax form 2014 Under these circumstances, the co-owner who redeemed the bond will receive a Form 1099-INT at the time of redemption and must provide you with another Form 1099-INT showing the amount of interest from the bond taxable to you. 1040ez tax form 2014 The co-owner who redeemed the bond is a “nominee. 1040ez tax form 2014 ” See Nominee distributions under How To Report Interest Income, later, for more information about how a person who is a nominee reports interest income belonging to another person. 1040ez tax form 2014 Both co-owners' funds used. 1040ez tax form 2014   If you and the other co-owner each contribute part of the bond's purchase price, the interest is generally taxable to each of you, in proportion to the amount each of you paid. 1040ez tax form 2014 Community property. 1040ez tax form 2014   If you and your spouse live in a community property state and hold bonds as community property, one-half of the interest is considered received by each of you. 1040ez tax form 2014 If you file separate returns, each of you generally must report one-half of the bond interest. 1040ez tax form 2014 For more information about community property, see Publication 555. 1040ez tax form 2014 Table 1-2. 1040ez tax form 2014   These rules are also shown in Table 1-2. 1040ez tax form 2014 Child as only owner. 1040ez tax form 2014   Interest on U. 1040ez tax form 2014 S. 1040ez tax form 2014 savings bonds bought for and registered only in the name of your child is income to your child, even if you paid for the bonds and are named as beneficiary. 1040ez tax form 2014 If the bonds are series EE, series E, or series I bonds, the interest on the bonds is income to your child in the earlier of the year the bonds are cashed or disposed of or the year the bonds mature, unless your child chooses to report the interest income each year. 1040ez tax form 2014 Choice to report interest each year. 1040ez tax form 2014   The choice to report the accrued interest each year can be made either by your child or by you for your child. 1040ez tax form 2014 This choice is made by filing an income tax return that shows all the interest earned to date, and by stating on the return that your child chooses to report the interest each year. 1040ez tax form 2014 Either you or your child should keep a copy of this return. 1040ez tax form 2014   Unless your child is otherwise required to file a tax return for any year after making this choice, your child does not have to file a return only to report the annual accrual of U. 1040ez tax form 2014 S. 1040ez tax form 2014 savings bond interest under this choice. 1040ez tax form 2014 However, see Tax on unearned income of certain children , earlier, under General Information. 1040ez tax form 2014 Neither you nor your child can change the way you report the interest unless you request permission from the IRS, as discussed earlier under Change from method 2 . 1040ez tax form 2014 Ownership transferred. 1040ez tax form 2014   If you bought series E, series EE, or series I bonds entirely with your own funds and had them reissued in your co-owner's name or beneficiary's name alone, you must include in your gross income for the year of reissue all interest that you earned on these bonds and have not previously reported. 1040ez tax form 2014 But, if the bonds were reissued in your name alone, you do not have to report the interest accrued at that time. 1040ez tax form 2014   This same rule applies when bonds (other than bonds held as community property) are transferred between spouses or incident to divorce. 1040ez tax form 2014 Example. 1040ez tax form 2014 You bought series EE bonds entirely with your own funds. 1040ez tax form 2014 You did not choose to report the accrued interest each year. 1040ez tax form 2014 Later, you transfer the bonds to your former spouse under a divorce agreement. 1040ez tax form 2014 You must include the deferred accrued interest, from the date of the original issue of the bonds to the date of transfer, in your income in the year of transfer. 1040ez tax form 2014 Your former spouse includes in income the interest on the bonds from the date of transfer to the date of redemption. 1040ez tax form 2014 Table 1-2. 1040ez tax form 2014 Who Pays the Tax on U. 1040ez tax form 2014 S. 1040ez tax form 2014 Savings Bond Interest IF . 1040ez tax form 2014 . 1040ez tax form 2014 . 1040ez tax form 2014 THEN the interest must be reported by . 1040ez tax form 2014 . 1040ez tax form 2014 . 1040ez tax form 2014 you buy a bond in your name and the name of another person as co-owners, using only your own funds you. 1040ez tax form 2014 you buy a bond in the name of another person, who is the sole owner of the bond the person for whom you bought the bond. 1040ez tax form 2014 you and another person buy a bond as co-owners, each contributing part of the purchase price both you and the other co-owner, in proportion to the amount each paid for the bond. 1040ez tax form 2014 you and your spouse, who live in a community property state, buy a bond that is community property you and your spouse. 1040ez tax form 2014 If you file separate returns, both you and your spouse generally report one-half of the interest. 1040ez tax form 2014 Purchased jointly. 1040ez tax form 2014   If you and a co-owner each contributed funds to buy series E, series EE, or series I bonds jointly and later have the bonds reissued in the co-owner's name alone, you must include in your gross income for the year of reissue your share of all the interest earned on the bonds that you have not previously reported. 1040ez tax form 2014 The former co-owner does not have to include in gross income at the time of reissue his or her share of the interest earned that was not reported before the transfer. 1040ez tax form 2014 This interest, however, as well as all interest earned after the reissue, is income to the former co-owner. 1040ez tax form 2014   This income-reporting rule also applies when the bonds are reissued in the name of your former co-owner and a new co-owner. 1040ez tax form 2014 But the new co-owner will report only his or her share of the interest earned after the transfer. 1040ez tax form 2014   If bonds that you and a co-owner bought jointly are reissued to each of you separately in the same proportion as your contribution to the purchase price, neither you nor your co-owner has to report at that time the interest earned before the bonds were reissued. 1040ez tax form 2014 Example 1. 1040ez tax form 2014 You and your spouse each spent an equal amount to buy a $1,000 series EE savings bond. 1040ez tax form 2014 The bond was issued to you and your spouse as co-owners. 1040ez tax form 2014 You both postpone reporting interest on the bond. 1040ez tax form 2014 You later have the bond reissued as two $500 bonds, one in your name and one in your spouse's name. 1040ez tax form 2014 At that time neither you nor your spouse has to report the interest earned to the date of reissue. 1040ez tax form 2014 Example 2. 1040ez tax form 2014 You bought a $1,000 series EE savings bond entirely with your own funds. 1040ez tax form 2014 The bond was issued to you and your spouse as co-owners. 1040ez tax form 2014 You both postponed reporting interest on the bond. 1040ez tax form 2014 You later have the bond reissued as two $500 bonds, one in your name and one in your spouse's name. 1040ez tax form 2014 You must report half the interest earned to the date of reissue. 1040ez tax form 2014 Transfer to a trust. 1040ez tax form 2014   If you own series E, series EE, or series I bonds and transfer them to a trust, giving up all rights of ownership, you must include in your income for that year the interest earned to the date of transfer if you have not already reported it. 1040ez tax form 2014 However, if you are considered the owner of the trust and if the increase in value both before and after the transfer continues to be taxable to you, you can continue to defer reporting the interest earned each year. 1040ez tax form 2014 You must include the total interest in your income in the year you cash or dispose of the bonds or the year the bonds finally mature, whichever is earlier. 1040ez tax form 2014   The same rules apply to previously unreported interest on series EE or series E bonds if the transfer to a trust consisted of series HH or series H bonds you acquired in a trade for the series EE or series E bonds. 1040ez tax form 2014 See Savings bonds traded , later. 1040ez tax form 2014 Decedents. 1040ez tax form 2014   The manner of reporting interest income on series E, series EE, or series I bonds, after the death of the owner (decedent), depends on the accounting and income-reporting methods previously used by the decedent. 1040ez tax form 2014 Decedent who reported interest each year. 1040ez tax form 2014   If the bonds transferred because of death were owned by a person who used an accrual method, or who used the cash method and had chosen to report the interest each year, the interest earned in the year of death up to the date of death must be reported on that person's final return. 1040ez tax form 2014 The person who acquires the bonds includes in income only interest earned after the date of death. 1040ez tax form 2014 Decedent who postponed reporting interest. 1040ez tax form 2014   If the transferred bonds were owned by a decedent who had used the cash method and had not chosen to report the interest each year, and who had bought the bonds entirely with his or her own funds, all interest earned before death must be reported in one of the following ways. 1040ez tax form 2014 The surviving spouse or personal representative (executor, administrator, etc. 1040ez tax form 2014 ) who files the final income tax return of the decedent can choose to include on that return all interest earned on the bonds before the decedent's death. 1040ez tax form 2014 The person who acquires the bonds then includes in income only interest earned after the date of death. 1040ez tax form 2014 If the choice in (1) is not made, the interest earned up to the date of death is income in respect of the decedent and should not be included in the decedent's final return. 1040ez tax form 2014 All interest earned both before and after the decedent's death (except any part reported by the estate on its income tax return) is income to the person who acquires the bonds. 1040ez tax form 2014 If that person uses the cash method and does not choose to report the interest each year, he or she can postpone reporting it until the year the bonds are cashed or disposed of or the year they mature, whichever is earlier. 1040ez tax form 2014 In the year that person reports the interest, he or she can claim a deduction for any federal estate tax paid on the part of the interest included in the decedent's estate. 1040ez tax form 2014 For more information on income in respect of a decedent, see Publication 559, Survivors, Executors, and Administrators. 1040ez tax form 2014 Example 1. 1040ez tax form 2014 Your uncle, a cash method taxpayer, died and left you a $1,000 series EE bond. 1040ez tax form 2014 He had bought the bond for $500 and had not chosen to report the interest each year. 1040ez tax form 2014 At the date of death, interest of $200 had accrued on the bond, and its value of $700 was included in your uncle's estate. 1040ez tax form 2014 Your uncle's executor chose not to include the $200 accrued interest in your uncle's final income tax return. 1040ez tax form 2014 The $200 is income in respect of the decedent. 1040ez tax form 2014 You are a cash method taxpayer and do not choose to report the interest each year as it is earned. 1040ez tax form 2014 If you cash the bond when it reaches maturity value of $1,000, you report $500 interest income—the difference between maturity value of $1,000 and the original cost of $500. 1040ez tax form 2014 For that year, you can deduct (as a miscellaneous itemized deduction not subject to the 2%-of-adjusted-gross-income limit) any federal estate tax paid because the $200 interest was included in your uncle's estate. 1040ez tax form 2014 Example 2. 1040ez tax form 2014 If, in Example 1 , the executor had chosen to include the $200 accrued interest in your uncle's final return, you would report only $300 as interest when you cashed the bond at maturity. 1040ez tax form 2014 $300 is the interest earned after your uncle's death. 1040ez tax form 2014 Example 3. 1040ez tax form 2014 If, in Example 1 , you make or have made the choice to report the increase in redemption value as interest each year, you include in gross income for the year you acquire the bond all of the unreported increase in value of all series E, series EE, and series I bonds you hold, including the $200 on the bond you inherited from your uncle. 1040ez tax form 2014 Example 4. 1040ez tax form 2014 When your aunt died, she owned series HH bonds that she had acquired in a trade for series EE bonds. 1040ez tax form 2014 You were the beneficiary of these bonds. 1040ez tax form 2014 Your aunt used the cash method and did not choose to report the interest on the series EE bonds each year as it accrued. 1040ez tax form 2014 Your aunt's executor chose not to include any interest earned before your aunt's death on her final return. 1040ez tax form 2014 The income in respect of the decedent is the sum of the unreported interest on the series EE bonds and the interest, if any, payable on the series HH bonds but not received as of the date of your aunt's death. 1040ez tax form 2014 You must report any interest received during the year as income on your return. 1040ez tax form 2014 The part of the interest payable but not received before your aunt's death is income in respect of the decedent and may qualify for the estate tax deduction. 1040ez tax form 2014 For information on when to report the interest on the series EE bonds traded, see Savings bonds traded , later. 1040ez tax form 2014 Savings bonds distributed from a retirement or profit-sharing plan. 1040ez tax form 2014   If you acquire a U. 1040ez tax form 2014 S. 1040ez tax form 2014 savings bond in a taxable distribution from a retirement or profit-sharing plan, your income for the year of distribution includes the bond's redemption value (its cost plus the interest accrued before the distribution). 1040ez tax form 2014 When you redeem the bond (whether in the year of distribution or later), your interest income includes only the interest accrued after the bond was distributed. 1040ez tax form 2014 To figure the interest reported as a taxable distribution and your interest income when you redeem the bond, see Worksheet for savings bonds distributed from a retirement or profit-sharing plan under How To Report Interest Income, later. 1040ez tax form 2014 Savings bonds traded. 1040ez tax form 2014   If you postponed reporting the interest on your series EE or series E bonds, you did not recognize taxable income when you traded the bonds for series HH or series H bonds, unless you received cash in the trade. 1040ez tax form 2014 (You cannot trade series I bonds for series HH bonds. 1040ez tax form 2014 After August 31, 2004, you cannot trade any other series of bonds for series HH bonds. 1040ez tax form 2014 ) Any cash you received is income up to the amount of the interest earned on the bonds traded. 1040ez tax form 2014 When your series HH or series H bonds mature, or if you dispose of them before maturity, you report as interest the difference between their redemption value and your cost. 1040ez tax form 2014 Your cost is the sum of the amount you paid for the traded series EE or series E bonds plus any amount you had to pay at the time of the trade. 1040ez tax form 2014 Example. 1040ez tax form 2014 You traded series EE bonds (on which you postponed reporting the interest) for $2,500 in series HH bonds and $223 in cash. 1040ez tax form 2014 You reported the $223 as taxable income on your tax return. 1040ez tax form 2014 At the time of the trade, the series EE bonds had accrued interest of $523 and a redemption value of $2,723. 1040ez tax form 2014 You hold the series HH bonds until maturity, when you receive $2,500. 1040ez tax form 2014 You must report $300 as interest income in the year of maturity. 1040ez tax form 2014 This is the difference between their redemption value, $2,500, and your cost, $2,200 (the amount you paid for the series EE bonds). 1040ez tax form 2014 (It is also the difference between the accrued interest of $523 on the series EE bonds and the $223 cash received on the trade. 1040ez tax form 2014 ) Choice to report interest in year of trade. 1040ez tax form 2014   You could have chosen to treat all of the previously unreported accrued interest on series EE or series E bonds traded for series HH bonds as income in the year of the trade. 1040ez tax form 2014 If you made this choice, it is treated as a change from method 1. 1040ez tax form 2014 See Change from method 1 under Series EE and series I bonds, earlier. 1040ez tax form 2014 Form 1099-INT for U. 1040ez tax form 2014 S. 1040ez tax form 2014 savings bond interest. 1040ez tax form 2014   When you cash a bond, the bank or other payer that redeems it must give you a Form 1099-INT if the interest part of the payment you receive is $10 or more. 1040ez tax form 2014 Box 3 of your Form 1099-INT should show the interest as the difference between the amount you received and the amount paid for the bond. 1040ez tax form 2014 However, your Form 1099-INT may show more interest than you have to include on your income tax return. 1040ez tax form 2014 For example, this may happen if any of the following are true. 1040ez tax form 2014 You chose to report the increase in the redemption value of the bond each year. 1040ez tax form 2014 The interest shown on your Form 1099-INT will not be reduced by amounts previously included in income. 1040ez tax form 2014 You received the bond from a decedent. 1040ez tax form 2014 The interest shown on your Form 1099-INT will not be reduced by any interest reported by the decedent before death, or on the decedent's final return, or by the estate on the estate's income tax return. 1040ez tax form 2014 Ownership of the bond was transferred. 1040ez tax form 2014 The interest shown on your Form 1099-INT will not be reduced by interest that accrued before the transfer. 1040ez tax form 2014 You were named as a co-owner, and the other co-owner contributed funds to buy the bond. 1040ez tax form 2014 The interest shown on your Form 1099-INT will not be reduced by the amount you received as nominee for the other co-owner. 1040ez tax form 2014 (See Co-owners , earlier in this section, for more information about the reporting requirements. 1040ez tax form 2014 ) You received the bond in a taxable distribution from a retirement or profit-sharing plan. 1040ez tax form 2014 The interest shown on your Form 1099-INT will not be reduced by the interest portion of the amount taxable as a distribution from the plan and not taxable as interest. 1040ez tax form 2014 (This amount is generally shown on Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. 1040ez tax form 2014 , for the year of distribution. 1040ez tax form 2014 )   For more information on including the correct amount of interest on your return, see U. 1040ez tax form 2014 S. 1040ez tax form 2014 savings bond interest previously reported or Nominee distributions under How To Report Interest Income, later. 1040ez tax form 2014    Interest on U. 1040ez tax form 2014 S. 1040ez tax form 2014 savings bonds is exempt from state and local taxes. 1040ez tax form 2014 The Form 1099-INT you receive will indicate the amount that is for U. 1040ez tax form 2014 S. 1040ez tax form 2014 savings bonds interest in box 3. 1040ez tax form 2014 Do not include this income on your state or local income tax return. 1040ez tax form 2014 Education Savings Bond Program You may be able to exclude from income all or part of the interest you receive on the redemption of qualified U. 1040ez tax form 2014 S. 1040ez tax form 2014 savings bonds during the year if you pay qualified higher educational expenses during the same year. 1040ez tax form 2014 This exclusion is known as the Education Savings Bond Program. 1040ez tax form 2014 You do not qualify for this exclusion if your filing status is married filing separately. 1040ez tax form 2014 Form 8815. 1040ez tax form 2014   Use Form 8815 to figure your exclusion. 1040ez tax form 2014 Attach the form to your Form 1040 or Form 1040A. 1040ez tax form 2014 Qualified U. 1040ez tax form 2014 S. 1040ez tax form 2014 savings bonds. 1040ez tax form 2014   A qualified U. 1040ez tax form 2014 S. 1040ez tax form 2014 savings bond is a series EE bond issued after 1989 or a series I bond. 1040ez tax form 2014 The bond must be issued either in your name (sole owner) or in your and your spouse's names (co-owners). 1040ez tax form 2014 You must be at least 24 years old before the bond's issue date. 1040ez tax form 2014 For example, a bond bought by a parent and issued in the name of his or her child under age 24 does not qualify for the exclusion by the parent or child. 1040ez tax form 2014    The issue date of a bond may be earlier than the date the bond is purchased because the issue date assigned to a bond is the first day of the month in which it is purchased. 1040ez tax form 2014 Beneficiary. 1040ez tax form 2014   You can designate any individual (including a child) as a beneficiary of the bond. 1040ez tax form 2014 Verification by IRS. 1040ez tax form 2014   If you claim the exclusion, the IRS will check it by using bond redemption information from the Department of Treasury. 1040ez tax form 2014 Qualified expenses. 1040ez tax form 2014   Qualified higher educational expenses are tuition and fees required for you, your spouse, or your dependent (for whom you claim an exemption) to attend an eligible educational institution. 1040ez tax form 2014   Qualified expenses include any contribution you make to a qualified tuition program or to a Coverdell education savings account. 1040ez tax form 2014 For information about these programs, see Publication 970, Tax Benefits for Education. 1040ez tax form 2014   Qualified expenses do not include expenses for room and board or for courses involving sports, games, or hobbies that are not part of a degree or certificate granting program. 1040ez tax form 2014 Eligible educational institutions. 1040ez tax form 2014   These institutions include most public, private, and nonprofit universities, colleges, and vocational schools that are accredited and eligible to participate in student aid programs run by the Department of Education. 1040ez tax form 2014 Reduction for certain benefits. 1040ez tax form 2014   You must reduce your qualified higher educational expenses by all of the following tax-free benefits. 1040ez tax form 2014 Tax-free part of scholarships and fellowships. 1040ez tax form 2014 Expenses used to figure the tax-free portion of distributions from a Coverdell ESA. 1040ez tax form 2014 Expenses used to figure the tax-free portion of distributions from a qualified tuition program. 1040ez tax form 2014 Any tax-free payments (other than gifts or inheritances) received as educational assistance, such as: Veterans' educational assistance benefits, Qualified tuition reductions, or Employer-provided educational assistance. 1040ez tax form 2014 Any expense used in figuring the American Opportunity and lifetime learning credits. 1040ez tax form 2014 For information about these benefits, see Publication 970. 1040ez tax form 2014 Amount excludable. 1040ez tax form 2014   If the total proceeds (interest and principal) from the qualified U. 1040ez tax form 2014 S. 1040ez tax form 2014 savings bonds you redeem during the year are not more than your adjusted qualified higher educational expenses for the year, you may be able to exclude all of the interest. 1040ez tax form 2014 If the proceeds are more than the expenses, you may be able to exclude only part of the interest. 1040ez tax form 2014   To determine the excludable amount, multiply the interest part of the proceeds by a fraction. 1040ez tax form 2014 The numer
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Consumer Protection Offices

City, county, regional, and state consumer offices offer a variety of important services. They might mediate complaints, conduct investigations, prosecute offenders of consumer laws, license and regulate professional service providers, provide educational materials and advocate for consumer rights. To save time, call before sending a written complaint. Ask if the office handles the type of complaint you have and if complaint forms are provided.

State Consumer Protection Offices

Colorado Office of the Attorney General

Website: Colorado Office of the Attorney General

Address: Colorado Office of the Attorney General
Consumer Protection Section
1300 Broadway, 10th Floor
Denver, CO 80203

Phone Number: 720-508-6006

Toll-free: 1-800-222-4444 (CO)

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County Consumer Protection Offices

Pueblo County District Attorney's Office

Website: Pueblo County District Attorney's Office

Address: Pueblo County District Attorney's Office
Economic Crimes Unit
701 Court St.
Pueblo, CO 81003

Phone Number: 719-583-6030

Weld County District Attorney's Office

Website: Weld County District Attorney's Office

Address: Weld County District Attorney's Office
915 10th St.
PO Box 1167
Greeley, CO 80632-1167

Phone Number: 970-356-4010

Fourth Judicial District Attorney's Office

Website: Fourth Judicial District Attorney's Office

Address: Fourth Judicial District Attorney's Office
Economic Crimes Division
El Paso and Teller Counties
105 E. Vermijo Ave.
Colorado Springs, CO 80903

Phone Number: 719-520-6000 719-520-6002 (Fraud Hotline)

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City Consumer Protection Offices

Denver District Attorney's Office

Website: Denver District Attorney's Office

Address: Denver District Attorney's Office
Economic Crimes Unit
201 W. Colfax Ave.
Denver, CO 80202

Phone Number: 720-913-9179

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Banking Authorities

The officials listed in this section regulate and supervise state-chartered banks. Many of them handle or refer problems and complaints about other types of financial institutions as well. Some also answer general questions about banking and consumer credit. If you are dealing with a federally chartered bank, check Federal Agencies.

Department of Regulatory Agencies

Website: Department of Regulatory Agencies

Address: Department of Regulatory Agencies
Division of Banking
1560 Broadway, Suite 975
Denver, CO 80202

Phone Number: 303-894-7575

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Insurance Regulators

Each state has its own laws and regulations for each type of insurance. The officials listed in this section enforce these laws. Many of these offices can also provide you with information to help you make informed insurance buying decisions.

Department of Regulatory Agencies

Website: Department of Regulatory Agencies

Address: Department of Regulatory Agencies
Division of Insurance
1560 Broadway, Suite 850
Denver, CO 80202

Phone Number: 303-894-7490

Toll-free: 1-800-930-3745 (CO)

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Securities Administrators

Each state has its own laws and regulations for securities brokers and securities - including stocks, mutual funds, commodities, real estate, etc. The officials and agencies listed in this section enforce these laws and regulations. Many of these offices can also provide information to help you make informed investment decisions.

Department of Regulatory Agencies

Website: Department of Regulatory Agencies

Address: Department of Regulatory Agencies
Division of Securities
1560 Broadway, Suite 900
Denver, CO 80202

Phone Number: 303-894-2320

TTY: 1-800-659-2656

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Utility Commissions

State Utility Commissions regulate services and rates for gas, electricity and telephones within your state. In some states, the utility commissions regulate other services such as water, transportation, and the moving of household goods. Many utility commissions handle consumer complaints. Sometimes, if a number of complaints are received about the same utility matter, they will conduct investigations.

Public Utilities Commission

Website: Public Utilities Commission

Address: Public Utilities Commission
Consumer Protection Division
1560 Broadway, Suite 250
Denver, CO 80202

Phone Number: 303-894-2070

Toll-free: 1-800-456-0858 (CO)

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The 1040ez Tax Form 2014

1040ez tax form 2014 3. 1040ez tax form 2014   Claiming the Special Depreciation Allowance Table of Contents Introduction What Is Qualified Property?Qualified Reuse and Recycling Property Qualified Cellulosic Biofuel Plant Property Qualified Disaster Assistance Property Certain Qualified Property Acquired After December 31, 2007 Election to Accelerate Certain Credits in Lieu of the Special Depreciation Allowance How Much Can You Deduct? How Can You Elect Not To Claim an Allowance? When Must You Recapture an Allowance? Introduction You can take a special depreciation allowance to recover part of the cost of qualified property (defined next), placed in service during the tax year. 1040ez tax form 2014 The allowance applies only for the first year you place the property in service. 1040ez tax form 2014 For qualified property placed in service in 2013, you can take an additional 50% special allowance. 1040ez tax form 2014 The allowance is an additional deduction you can take after any section 179 deduction and before you figure regular depreciation under MACRS for the year you place the property in service. 1040ez tax form 2014 This chapter explains what is qualified property. 1040ez tax form 2014 It also includes rules regarding how to figure an allowance, how to elect not to claim an allowance, and when you must recapture an allowance. 1040ez tax form 2014 Corporations can elect to accelerate certain minimum tax credits in lieu of claiming the special depreciation allowance for eligible qualified property. 1040ez tax form 2014 See Election to Accelerate Certain Credits in Lieu of the Special Depreciation Allowance , later. 1040ez tax form 2014 See chapter 6 for information about getting publications and forms. 1040ez tax form 2014 What Is Qualified Property? Your property is qualified property if it is one of the following. 1040ez tax form 2014 Qualified reuse and recycling property. 1040ez tax form 2014 Qualified cellulosic biofuel plant property. 1040ez tax form 2014 Qualified disaster assistance property. 1040ez tax form 2014 Certain qualified property acquired after December 31, 2007. 1040ez tax form 2014 The following discussions provide information about the types of qualified property listed above for which you can take the special depreciation allowance. 1040ez tax form 2014 Qualified Reuse and Recycling Property You can take a 50% special depreciation allowance for qualified reuse and recycling property. 1040ez tax form 2014 Qualified reuse and recycling property is any machinery or equipment (not including buildings or real estate), along with any appurtenance, that is used exclusively to collect, distribute, or recycle qualified reuse and recyclable materials (as defined in section 168(m)(3)(B) of the Internal Revenue Code). 1040ez tax form 2014 Qualified reuse and recycling property also includes software necessary to operate such equipment. 1040ez tax form 2014 The property must meet the following requirements. 1040ez tax form 2014 The property must be depreciated under MACRS. 1040ez tax form 2014 The property must have a useful life of at least 5 years. 1040ez tax form 2014 The original use of the property must begin with you after August 31, 2008. 1040ez tax form 2014 You must have acquired the property by purchase (as discussed under Property Acquired by Purchase in chapter 2 ) after August 31, 2008, with no binding written contract for the acquisition in effect before September 1, 2008. 1040ez tax form 2014 The property must be placed in service for use in your trade or business after August 31, 2008. 1040ez tax form 2014 Excepted Property Qualified reuse and recycling property does not include any of the following. 1040ez tax form 2014 Any rolling stock or other equipment used to transport reuse or recyclable materials. 1040ez tax form 2014 Property required to be depreciated using the Alternative Depreciation System (ADS). 1040ez tax form 2014 For other property required to be depreciated using ADS, see Required use of ADS under Which Depreciation System (GDS or ADS) Applies , in chapter 4 . 1040ez tax form 2014 Other bonus depreciation property to which section 168(k) of the Internal Revenue Code applies. 1040ez tax form 2014 Property for which you elected not to claim any special depreciation allowance (discussed later). 1040ez tax form 2014 Property placed in service and disposed of in the same tax year. 1040ez tax form 2014 Property converted from business use to personal use in the same tax year acquired. 1040ez tax form 2014 Property converted from personal use to business use in the same or later tax year may be qualified reuse and recycling property. 1040ez tax form 2014 Qualified Cellulosic Biofuel Plant Property You can take a 50% special depreciation allowance for qualified cellulosic biofuel plant property. 1040ez tax form 2014 Cellulosic biofuel is any liquid fuel which is produced from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis. 1040ez tax form 2014 Examples include bagasse (from sugar cane), corn stalks, and switchgrass. 1040ez tax form 2014 The property must meet the following requirements. 1040ez tax form 2014 The property is used in the United States solely to produce cellulosic biofuel. 1040ez tax form 2014 The original use of the property must begin with you after December 20, 2006. 1040ez tax form 2014 You must have acquired the property by purchase (as discussed under Property Acquired by Purchase in chapter 2 ) after December 20, 2006, with no binding written contract for acquisition in effect before December 21, 2006. 1040ez tax form 2014 The property must be placed in service for use in your trade or business or for the production of income after October 3, 2008, and before January 3, 2013. 1040ez tax form 2014 Note. 1040ez tax form 2014 For property placed in service after January 2, 2013, and before January 1, 2014, you can take a 50% special depreciation allowance for qualified second generation biofuel plant property that is used solely in the United States to produce second generation biofuel (as defined in section 40(b)(6)(E)). 1040ez tax form 2014 The other requirements for qualified second generation biofuel plant property to be eligible for the special depreciation allowance are identical to the requirements discussed for Qualified Cellulosic Biofuel Plant Property above. 1040ez tax form 2014 Special Rules Sale-leaseback. 1040ez tax form 2014   If you sold qualified cellulosic biofuel plant property you placed in service after October 3, 2008, and leased it back within 3 months after you originally placed it in service, the property is treated as originally placed in service no earlier than the date it is used by you under the leaseback. 1040ez tax form 2014   The property will not qualify for the special allowance if the lessee or a related person to the lessee or lessor had a written binding contract in effect for the acquisition of the property before December 21, 2006. 1040ez tax form 2014 Syndicated leasing transactions. 1040ez tax form 2014   If qualified cellulosic biofuel plant property is originally placed in service by a lessor after October 3, 2008, the property is sold within 3 months of the date it was placed in service, and the user of the property does not change, then the property is treated as originally placed in service by the taxpayer no earlier than the date of the last sale. 1040ez tax form 2014   Multiple units of property subject to the same lease will be treated as originally placed in service no earlier than the date of sale if the property is sold within 3 months after the final unit is placed in service and the period between the times the first and last units are placed in service does not exceed 12 months. 1040ez tax form 2014 Excepted Property Qualified cellulosic biofuel plant property does not include any of the following. 1040ez tax form 2014 Property placed in service and disposed of in the same tax year. 1040ez tax form 2014 Property converted from business use to personal use in the same tax year it is acquired. 1040ez tax form 2014 Property converted from personal use to business use in the same or later tax year may be qualified cellulosic biomass ethanol plant property. 1040ez tax form 2014 Property required to be depreciated using the Alternative Depreciation System (ADS). 1040ez tax form 2014 For other property required to be depreciated using ADS, see Required use of ADS under Which Depreciation System (GDS or ADS) Applies , in chapter 4 . 1040ez tax form 2014 Property any portion of which is financed with the proceeds of any obligation the interest on which is exempt from tax under section 103 of the Internal Revenue Code. 1040ez tax form 2014 Property for which you elected not to claim any special depreciation allowance (discussed later). 1040ez tax form 2014 Property for which a deduction was taken under section 179C for certain qualified refinery property. 1040ez tax form 2014 Other bonus depreciation property to which section 168(k) of the Internal Revenue Code applies. 1040ez tax form 2014 Qualified Disaster Assistance Property You can take a 50% special depreciation allowance for qualified disaster assistance property placed in service in federally declared disaster areas in which the disaster occurred in 2009. 1040ez tax form 2014 A list of the federally declared disaster areas is available at the FEMA website at www. 1040ez tax form 2014 fema. 1040ez tax form 2014 gov. 1040ez tax form 2014 Your property is qualified disaster assistance property if it meets the following requirements. 1040ez tax form 2014 The property is nonresidential real property or residential real property placed in service before January 1, 2014, in a federally declared disaster area in which the disaster occurred in 2009. 1040ez tax form 2014 You must have acquired the property by purchase (as discussed under Property Acquired by Purchase in chapter 2 ) on or after the applicable disaster date, with no binding written contract for the acquisition in effect before the applicable disaster date. 1040ez tax form 2014 The property must rehabilitate property damaged, or replace property destroyed or condemned, as a result of the applicable federally declared disaster. 1040ez tax form 2014 The property must be similar in nature to, and located in the same county as, the rehabilitated or replaced property. 1040ez tax form 2014 The original use of the property within the applicable disaster area must have begun with you on or after the applicable disaster date. 1040ez tax form 2014 The property is placed in service by you on or before the date which is the last day of the fourth calendar year. 1040ez tax form 2014 Substantially all (80% or more) of the use of the property must be in the active conduct of your trade or business in a federally declared disaster area, occurring in 2009. 1040ez tax form 2014 It is not excepted property (explained later in Excepted Property ). 1040ez tax form 2014 Special Rules Sale-leaseback. 1040ez tax form 2014   If you sold qualified disaster assistance property you placed in service after the applicable disaster date and leased it back within 3 months after you originally placed it in service, the property is treated as originally placed in service no earlier than the date it is used by you under the leaseback. 1040ez tax form 2014   The property will not qualify for the special allowance if the lessee or a related person to the lessee or lessor had a written binding contract in effect for the acquisition of the property before the applicable disaster date. 1040ez tax form 2014 Syndicated leasing transactions. 1040ez tax form 2014   If qualified disaster assistance property is originally placed in service by a lessor after the applicable disaster date, the property is sold within 3 months of the date it was placed in service, and the user of the property does not change, then the property is treated as originally placed in service by the taxpayer no earlier than the date of the last sale. 1040ez tax form 2014   Multiple units of property subject to the same lease will be treated as originally placed in service no earlier than the date of sale if the property is sold within 3 months after the final unit is placed in service and the period between the times the first and last units are placed in service does not exceed 12 months. 1040ez tax form 2014 Excepted Property Qualified disaster assistance property does not include any of the following. 1040ez tax form 2014 Property required to be depreciated using the Alternative Depreciation System (ADS). 1040ez tax form 2014 For other property required to be depreciated using ADS, see Required use of ADS under Which Depreciation System (GDS or ADS) Applies , in chapter 4 . 1040ez tax form 2014 Property any portion of which is financed with the proceeds of a tax-exempt obligation under section 103 of the Internal Revenue Code. 1040ez tax form 2014 Any qualified revitalization building (defined later) placed in service before January 1, 2010, for which you have elected to claim a commercial revitalization deduction for qualified revitalization expenditures. 1040ez tax form 2014 Any property used in connection with any private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, or any store, the principal business of which is the sale of alcoholic beverages for consumption off premises. 1040ez tax form 2014 Any property for which the special allowance under section 168(k) or section 1400N(d) of the Internal Revenue Code applies. 1040ez tax form 2014 Property for which you elected not to claim any special depreciation allowance (discussed later). 1040ez tax form 2014 Property placed in service and disposed of in the same tax year. 1040ez tax form 2014 Property converted from business use to personal use in the same tax year acquired. 1040ez tax form 2014 Property converted from personal use to business use in the same or later tax year may be qualified disaster assistance property. 1040ez tax form 2014 Any gambling or animal racing property (defined later). 1040ez tax form 2014 Qualified revitalization building. 1040ez tax form 2014   This is a commercial building and its structural components that you placed in service in a renewal community before January 1, 2010. 1040ez tax form 2014 If the building is new, the original use of the building must begin with you. 1040ez tax form 2014 If the building is not new, you must substantially rehabilitate the building and then place it in service. 1040ez tax form 2014 For more information, including definitions of substantially rehabilitated building and qualified revitalization expenditure, see section 1400I(b) of the Internal Revenue Code. 1040ez tax form 2014 Gambling or animal racing property. 1040ez tax form 2014   Gambling or animal racing property includes the following personal and real property. 1040ez tax form 2014 Any equipment, furniture, software, or other property used directly in connection with gambling, the racing of animals, or the on-site viewing of such racing. 1040ez tax form 2014 Any real property determined by square footage (other than any portion that is less than 100 square feet) that is dedicated to gambling, the racing of animals, or the on-site viewing of such racing. 1040ez tax form 2014 Certain Qualified Property Acquired After December 31, 2007 You can take a 50% special depreciation deduction allowance for certain qualified property acquired after December 31, 2007. 1040ez tax form 2014 Your property is qualified property if it meets the following requirements. 1040ez tax form 2014 It is one of the following types of property. 1040ez tax form 2014 Tangible property depreciated under MACRS with a recovery period of 20 years or less. 1040ez tax form 2014 Water utility property. 1040ez tax form 2014 Computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified. 1040ez tax form 2014 (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. 1040ez tax form 2014 ) Qualified leasehold improvement property (defined under Qualified leasehold improvement property later). 1040ez tax form 2014 You must have acquired the property after December 31, 2007, with no binding written contract for the acquisition in effect before January 1, 2008. 1040ez tax form 2014 The property must be placed in service for use in your trade or business or for the production of income before January 1, 2014 (before January 1, 2015, for certain property with a long production period and certain aircraft (defined next)). 1040ez tax form 2014 The original use of the property must begin with you after December 31, 2007. 1040ez tax form 2014 It is not excepted property (explained later in Excepted property). 1040ez tax form 2014 Qualified leasehold improvement property. 1040ez tax form 2014    Generally, this is any improvement to an interior part of a building that is nonresidential real property, if all the following requirements are met. 1040ez tax form 2014 The improvement is made under or according to a lease by the lessee (or any sublessee) or the lessor of that part of the building. 1040ez tax form 2014 That part of the building is to be occupied exclusively by the lessee (or any sublessee) of that part. 1040ez tax form 2014 The improvement is placed in service more than 3 years after the date the building was first placed in service by any person. 1040ez tax form 2014 The improvement is section 1250 property. 1040ez tax form 2014 See chapter 3 in Publication 544, Sales and Other Dispositions of Assets, for the definition of section 1250 property. 1040ez tax form 2014   However, a qualified leasehold improvement does not include any improvement for which the expenditure is attributable to any of the following. 1040ez tax form 2014 The enlargement of the building. 1040ez tax form 2014 Any elevator or escalator. 1040ez tax form 2014 Any structural component benefiting a common area. 1040ez tax form 2014 The internal structural framework of the building. 1040ez tax form 2014   Generally, a binding commitment to enter into a lease is treated as a lease and the parties to the commitment are treated as the lessor and lessee. 1040ez tax form 2014 However, a lease between related persons is not treated as a lease. 1040ez tax form 2014 Related persons. 1040ez tax form 2014   For this purpose, the following are related persons. 1040ez tax form 2014 Members of an affiliated group. 1040ez tax form 2014 An individual and a member of his or her family, including only a spouse, child, parent, brother, sister, half-brother, half-sister, ancestor, and lineal descendant. 1040ez tax form 2014 A corporation and an individual who directly or indirectly owns 80% or more of the value of the outstanding stock of that corporation. 1040ez tax form 2014 Two corporations that are members of the same controlled group. 1040ez tax form 2014 A trust fiduciary and a corporation if 80% or more of the value of the outstanding stock is directly or indirectly owned by or for the trust or grantor of the trust. 1040ez tax form 2014 The grantor and fiduciary, and the fiduciary and beneficiary, of any trust. 1040ez tax form 2014 The fiduciaries of two different trusts, and the fiduciaries and beneficiaries of two different trusts, if the same person is the grantor of both trusts. 1040ez tax form 2014 A tax-exempt educational or charitable organization and any person (or, if that person is an individual, a member of that person's family) who directly or indirectly controls the organization. 1040ez tax form 2014 Two S corporations, and an S corporation and a regular corporation, if the same persons own 80% or more of the value of the outstanding stock of each corporation. 1040ez tax form 2014 A corporation and a partnership if the same persons own both of the following. 1040ez tax form 2014 80% or more of the value of the outstanding stock of the corporation. 1040ez tax form 2014 80% or more of the capital or profits interest in the partnership. 1040ez tax form 2014 The executor and beneficiary of any estate. 1040ez tax form 2014 Long Production Period Property To be qualified property, long production period property must meet the following requirements. 1040ez tax form 2014 It must meet the requirements in (2)-(5), above. 1040ez tax form 2014 The property has a recovery period of at least 10 years or is transportation property. 1040ez tax form 2014 Transportation property is tangible personal property used in the trade or business of transporting persons or property. 1040ez tax form 2014 The property is subject to section 263A of the Internal Revenue Code. 1040ez tax form 2014 The property has an estimated production period exceeding 1 year and an estimated production cost exceeding $1,000,000. 1040ez tax form 2014 Noncommercial Aircraft To be qualified property, noncommercial aircraft must meet the following requirements. 1040ez tax form 2014 It must meet the requirements in (2)-(5), above. 1040ez tax form 2014 The aircraft must not be tangible personal property used in the trade or business of transporting persons or property (except for agricultural or firefighting purposes). 1040ez tax form 2014 The aircraft must be purchased (as discussed under Property Acquired by Purchase in chapter 2 ) by a purchaser who at the time of the contract for purchase, makes a nonrefundable deposit of the lesser of 10% of the cost or $100,000. 1040ez tax form 2014 The aircraft must have an estimated production period exceeding four months and a cost exceeding $200,000. 1040ez tax form 2014 Special Rules Sale-leaseback. 1040ez tax form 2014   If you sold qualified property you placed in service after December 31, 2007, and leased it back within 3 months after you originally placed in service, the property is treated as originally placed in service no earlier than the date it is used by you under the leaseback. 1040ez tax form 2014   The property will not qualify for the special depreciation allowance if the lessee or a related person to the lessee or lessor had a written binding contract in effect for the acquisition of the property before January 1, 2008. 1040ez tax form 2014 Syndicated leasing transactions. 1040ez tax form 2014   If qualified property is originally placed in service by a lessor after December 31, 2007, the property is sold within 3 months of the date it was placed in service, and the user of the property does not change, then the property is treated as originally placed in service by the taxpayer no earlier than the date of the last sale. 1040ez tax form 2014   Multiple units of property subject to the same lease will be treated as originally placed in service no earlier than the date of the last sale if the property is sold within 3 months after the final unit is placed in service and the period between the time the first and last units are placed in service does not exceed 12 months. 1040ez tax form 2014 Excepted Property Qualified property does not include any of the following. 1040ez tax form 2014 Property placed in service and disposed of in the same tax year. 1040ez tax form 2014 Property converted from business use to personal use in the same tax year acquired. 1040ez tax form 2014 Property converted from personal use to business use in the same or later tax year may be qualified property. 1040ez tax form 2014 Property required to be depreciated under the Alternative Depreciation System (ADS). 1040ez tax form 2014 This includes listed property used 50% or less in a qualified business use. 1040ez tax form 2014 For other property required to be depreciated using ADS, see Required use of ADS under Which Depreciation System (GDS or ADS) Applies , in chapter 4 . 1040ez tax form 2014 Qualified restaurant property (as defined in section 168(e)(7) of the Internal Revenue Code). 1040ez tax form 2014 Qualified retail improvement property (as defined in section 168(e)(8) of the Internal Revenue Code). 1040ez tax form 2014 Property for which you elected not to claim any special depreciation allowance (discussed later). 1040ez tax form 2014 Property for which you elected to accelerate certain credits in lieu of the special depreciation allowance (discussed next). 1040ez tax form 2014 Election to Accelerate Certain Credits in Lieu of the Special Depreciation Allowance An election made by a corporation to claim pre-2006 unused minimum tax credits in lieu of claiming the special depreciation allowance for either its first tax year ending after March 31, 2008, its first tax year ending after December 31, 2008, or its first tax year ending after December 31, 2010, continues to apply to round 2 extension property (as defined in section 168(k)(4)(I)(iv)), unless the corporation made an election not to apply the section 168(k)(4) election to round 2 extension property for its first tax year ending after December 31, 2010. 1040ez tax form 2014 For 2013, round 2 extension property generally is long production period and noncommercial aircraft if acquired after March 31, 2008, and placed in service after December 31, 2012, but before January 1, 2014. 1040ez tax form 2014 An election made by a corporation to claim pre-2006 unused minimum tax credits in lieu of claiming the special depreciation allowance for either its first tax year ending after March 31, 2008, its first tax year ending after December 31, 2008, or its first tax year ending after December 31, 2010, continues to apply to round 3 extension property (as defined in section 168(k)(4)(J)(iv)), unless the corporation makes an election not to apply the section 168(k)(4) election to round 3 extension property. 1040ez tax form 2014 If a corporation did not make a section 168(k)(4) election for either its first tax year ending after March 31, 2008, its first tax year ending after December 31, 2008, or its first tax year ending after December 31, 2010, the corporation may elect for its first tax year ending after December 31, 2012, to claim pre-2006 unused minimum tax credits in lieu of claiming the special depreciation allowance for only round 3 extension property. 1040ez tax form 2014 If you make an election to accelerate these credits in lieu of claiming the special depreciation allowance for eligible property, you must not take the 50% special depreciation allowance for the property and must depreciate the basis in the property under MACRS using the straight line method. 1040ez tax form 2014 See Which Depreciation Method Applies in chapter 4 . 1040ez tax form 2014 Once made, the election cannot be revoked without IRS consent. 1040ez tax form 2014 Additional guidance. 1040ez tax form 2014   For additional guidance on the election to accelerate the research or minimum tax credit in lieu of claiming the special depreciation allowance, see Rev. 1040ez tax form 2014 Proc. 1040ez tax form 2014 2008-65 on page 1082 of Internal Revenue Bulletin 2008-44, available at www. 1040ez tax form 2014 irs. 1040ez tax form 2014 gov/pub/irs-irbs/irb08-44. 1040ez tax form 2014 pdf, Rev. 1040ez tax form 2014 Proc. 1040ez tax form 2014 2009-16 on page 449 of Internal Revenue Bulletin 2009-06, available at www. 1040ez tax form 2014 irs. 1040ez tax form 2014 gov/pub/irs-irbs/irb09-06. 1040ez tax form 2014 pdf, and Rev. 1040ez tax form 2014 Proc. 1040ez tax form 2014 2009-33 on page 150 of Internal Revenue Bulletin 2009-29, available at www. 1040ez tax form 2014 irs. 1040ez tax form 2014 gov/pub/irs-irbs/irb09-29. 1040ez tax form 2014 pdf. 1040ez tax form 2014 Also, see Form 3800, General Business Credit; Form 8827, Credit for Prior Year Minimum Tax — Corporations; and related instructions. 1040ez tax form 2014   Additional guidance regarding the election to accelerate the minimum tax credit in lieu of claiming the special depreciation allowance for round 2 extension property and round 3 extension property may also be available in later Internal Revenue Bulletins available at www. 1040ez tax form 2014 irs. 1040ez tax form 2014 gov/irb. 1040ez tax form 2014 How Much Can You Deduct? Figure the special depreciation allowance by multiplying the depreciable basis of qualified reuse and recycling property, qualified cellulosic biofuel plant property, qualified disaster assistance property, and certain qualified property acquired after December 31, 2007, by 50%. 1040ez tax form 2014 For qualified property other than listed property, enter the special allowance on line 14 in Part II of Form 4562. 1040ez tax form 2014 For qualified property that is listed property, enter the special allowance on line 25 in Part V of Form 4562. 1040ez tax form 2014 If you place qualified property in service in a short tax year, you can take the full amount of a special depreciation allowance. 1040ez tax form 2014 Depreciable basis. 1040ez tax form 2014   This is the property's cost or other basis multiplied by the percentage of business/investment use, reduced by the total amount of any credits and deductions allocable to the property. 1040ez tax form 2014   The following are examples of some credits and deductions that reduce depreciable basis. 1040ez tax form 2014 Any section 179 deduction. 1040ez tax form 2014 Any deduction for removal of barriers to the disabled and the elderly. 1040ez tax form 2014 Any disabled access credit, enhanced oil recovery credit, and credit for employer-provided childcare facilities and services. 1040ez tax form 2014 Basis adjustment to investment credit property under section 50(c) of the Internal Revenue Code. 1040ez tax form 2014   For additional credits and deductions that affect basis, see section 1016 of the Internal Revenue Code. 1040ez tax form 2014   For information about how to determine the cost or other basis of property, see What Is the Basis of Your Depreciable Property in chapter 1 . 1040ez tax form 2014 For a discussion of business/investment use, see Partial business or investment use under Property Used in Your Business or Income-Producing Activity in chapter 1 . 1040ez tax form 2014 Depreciating the remaining cost. 1040ez tax form 2014   After you figure your special depreciation allowance for your qualified property, you can use the remaining cost to figure your regular MACRS depreciation deduction (discussed in chapter 4 . 1040ez tax form 2014 Therefore, you must reduce the depreciable basis of the property by the special depreciation allowance before figuring your regular MACRS depreciation deduction. 1040ez tax form 2014 Example. 1040ez tax form 2014 On November 1, 2013, Tom Brown bought and placed in service in his business qualified property that cost $450,000. 1040ez tax form 2014 He did not elect to claim a section 179 deduction. 1040ez tax form 2014 He deducts 50% of the cost ($225,000) as a special depreciation allowance for 2013. 1040ez tax form 2014 He uses the remaining $225,000 of cost to figure his regular MACRS depreciation deduction for 2013 and later years. 1040ez tax form 2014 Like-kind exchanges and involuntary conversions. 1040ez tax form 2014   If you acquire qualified property in a like-kind exchange or involuntary conversion, the carryover basis of the acquired property is eligible for a special depreciation allowance. 1040ez tax form 2014 After you figure your special allowance, you can use the remaining carryover basis to figure your regular MACRS depreciation deduction. 1040ez tax form 2014 In the year you claim the allowance (the year you place in service the property received in the exchange or dispose of involuntarily converted property), you must reduce the carryover basis of the property by the allowance before figuring your regular MACRS depreciation deduction. 1040ez tax form 2014 See Figuring the Deduction for Property Acquired in a Nontaxable Exchange , in chapter 4 under How Is the Depreciation Deduction Figured . 1040ez tax form 2014 The excess basis (the part of the acquired property's basis that exceeds its carryover basis) is also eligible for a special depreciation allowance. 1040ez tax form 2014 How Can You Elect Not To Claim an Allowance? You can elect, for any class of property, not to deduct any special allowances for all property in such class placed in service during the tax year. 1040ez tax form 2014 To make an election, attach a statement to your return indicating what election you are making and the class of property for which you are making the election. 1040ez tax form 2014 When to make election. 1040ez tax form 2014   Generally, you must make the election on a timely filed tax return (including extensions) for the year in which you place the property in service. 1040ez tax form 2014   However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the original return (not including extensions). 1040ez tax form 2014 Attach the election statement to the amended return. 1040ez tax form 2014 On the amended return, write “Filed pursuant to section 301. 1040ez tax form 2014 9100-2. 1040ez tax form 2014 ” Revoking an election. 1040ez tax form 2014   Once you elect not to deduct a special depreciation allowance for a class of property, you cannot revoke the election without IRS consent. 1040ez tax form 2014 A request to revoke the election is a request for a letter ruling. 1040ez tax form 2014 If you elect not to have any special allowance apply, the property may be subject to an alternative minimum tax adjustment for depreciation. 1040ez tax form 2014 When Must You Recapture an Allowance? When you dispose of property for which you claimed a special depreciation allowance, any gain on the disposition is generally recaptured (included in income) as ordinary income up to the amount of the special depreciation allowance previously allowed or allowable. 1040ez tax form 2014 See When Do You Recapture MACRS Depreciation in chapter 4 or more information. 1040ez tax form 2014 Recapture of allowance deducted for qualified GO Zone property. 1040ez tax form 2014   If, in any year after the year you claim the special depreciation allowance for qualified GO Zone property (including specified GO Zone extension property), the property ceases to be used in the GO Zone, you may have to recapture as ordinary income the excess benefit you received from claiming the special depreciation allowance. 1040ez tax form 2014 For additional guidance, see Notice 2008-25 on page 484 of Internal Revenue Bulletin 2008-9. 1040ez tax form 2014 Qualified cellulosic biomass ethanol plant property and qualified cellulosic biofuel plant property. 1040ez tax form 2014   If, in any year after the year you claim the special depreciation allowance for any qualified cellulosic biomass ethanol plant property or qualified biofuel plant property, the property ceases to be qualified cellulosic biomass ethanol plant property or qualified biofuel plant property, you may have to recapture as ordinary income the excess benefit you received from claiming the special depreciation allowance. 1040ez tax form 2014 Recapture of allowance for qualified Recovery Assistance property. 1040ez tax form 2014   If, in any year after the year you claim the special depreciation allowance for qualified Recovery Assistance property, the property ceases to be used in the Kansas disaster area, you may have to recapture as ordinary income the excess benefit you received from claiming the special depreciation allowance. 1040ez tax form 2014 For additional guidance, see Notice 2008-67 on page 307 of Internal Revenue Bulletin 2008-32. 1040ez tax form 2014 Recapture of allowance for qualified disaster assistance property. 1040ez tax form 2014   If, in any year after the year you claim the special depreciation allowance for qualified disaster assistance property, the property ceases to be used in the applicable disaster area, you may have to recapture as ordinary income the excess benefit you received from claiming the special depreciation allowance. 1040ez tax form 2014   For additional guidance, see Notice 2008-67 on page 307 of Internal Revenue Bulletin 2008-32. 1040ez tax form 2014 Prev  Up  Next   Home   More Online Publications