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1040nr Tax Form

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1040nr Tax Form

1040nr tax form Depreciation Table of Contents Introduction Special Depreciation AllowanceQualified Property Election Not To Claim the Allowance Rules for Returns Filed Before June 1, 2002 Passenger Automobiles New York Liberty Zone BenefitsSpecial Liberty Zone Depreciation Allowance Increased Section 179 Deduction Liberty Zone Leasehold Improvement Property If you depreciate business property that you acquired and placed in service after September 10, 2001, new law contains provisions that may affect your depreciation deduction for that property. 1040nr tax form Publication 946, How To Depreciate Property, contains information on depreciation. 1040nr tax form However, Publication 946 does not contain the new provisions because it was printed before the law was enacted. 1040nr tax form The new provisions are in the Supplement to Publication 946, which is reprinted below. 1040nr tax form Supplement to Publication 946 How To Depreciate Property   Introduction After Publication 946 was printed, the Job Creation and Worker Assistance Act of 2002 was signed into law by the President. 1040nr tax form The new law made several changes in the tax rules explained in the publication. 1040nr tax form Some of the changes apply to property placed in service during 2001. 1040nr tax form This supplemental publication describes those changes and explains what you should do if you are affected by them. 1040nr tax form The situations and examples in Publication 946 do not reflect any of the changes made by the Job Creation and Worker Assistance Act of 2002. 1040nr tax form The new law contains the following provisions. 1040nr tax form 30% depreciation deductions (special depreciation allowance and special New York Liberty Zone (Liberty Zone) depreciation allowance) for the year qualified property is placed in service after September 10, 2001. 1040nr tax form An increased dollar limit on the section 179 deduction for qualified Liberty Zone property purchased after September 10, 2001. 1040nr tax form A shorter recovery period for qualified Liberty Zone leasehold improvement property placed in service after September 10, 2001. 1040nr tax form An increase in the maximum depreciation deduction for 2001 for a qualified passenger automobile placed in service after September 10, 2001. 1040nr tax form If you believe you qualify for an increased deduction under any of these new rules, you must file the revised 2001 Form 4562 (dated March 2002) for 2001 calendar or fiscal years and 2000 fiscal years ending after September 10, 2001. 1040nr tax form If you have already filed a tax return, this supplemental publication explains how to claim these benefits and how to elect not to claim the special depreciation allowance or special Liberty Zone depreciation allowance. 1040nr tax form See Table 2 at the end of the supplement for an overview of the rules that apply if you filed your return before June 1, 2002. 1040nr tax form Special Depreciation Allowance You can take a special depreciation allowance for qualified property you place in service after September 10, 2001. 1040nr tax form The allowance is an additional deduction of 30% of the property's depreciable basis. 1040nr tax form To figure the depreciable basis, you must first multiply the property's cost or other basis by the percentage of business/investment use and then reduce that amount by any section 179 deduction and certain other deductions and credits for the property. 1040nr tax form See What Is the Basis for Depreciation? on page 23 in Publication 946 for more information on figuring depreciable basis. 1040nr tax form The allowance is deductible for both regular tax and alternative minimum tax (AMT) purposes. 1040nr tax form There is no AMT adjustment required for any depreciation figured on the remaining basis of the property. 1040nr tax form In the year you claim the allowance (generally the year you place the property in service), you must reduce the depreciable basis of the property by the allowance before figuring your regular depreciation deduction. 1040nr tax form Example 1. 1040nr tax form On November 1, 2001, you bought and placed in service in your business qualified property that cost $100,000. 1040nr tax form You did not elect to claim a section 179 deduction. 1040nr tax form You can deduct 30% of the cost ($30,000) as a special depreciation allowance for 2001. 1040nr tax form You use the remaining $70,000 of cost to figure your regular depreciation deduction for 2001 and later years. 1040nr tax form Example 2. 1040nr tax form The facts are the same as in Example 1, except that you choose to deduct $24,000 of the property's cost as a section 179 deduction. 1040nr tax form You use the remaining $76,000 of cost to figure your special depreciation allowance of $22,800 ($76,000 × 30%). 1040nr tax form You use the remaining $53,200 of cost to figure your regular depreciation deduction for 2001 and later years. 1040nr tax form Qualified Property To qualify for the special depreciation allowance, your property must meet the following requirements. 1040nr tax form It is new property of one of the following types. 1040nr tax form Property depreciated under the modified accelerated cost recovery system (MACRS) with a recovery period of 20 years or less. 1040nr tax form See Can You Use MACRS To Depreciate Your Property and Which Recovery Period Applies? on pages 7 and 23, respectively, in Publication 946. 1040nr tax form Water utility property. 1040nr tax form See 25-year property on page 22 in Publication 946. 1040nr tax form Computer software that is not a section 197 intangible as described in Computer software on page 5 in Publication 946. 1040nr tax form (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. 1040nr tax form ) Qualified leasehold improvement property (defined later). 1040nr tax form It meets the following tests (explained later under Tests To Be Met). 1040nr tax form Acquisition date test. 1040nr tax form Placed in service date test. 1040nr tax form Original use test. 1040nr tax form It is not excepted property (explained later under Excepted Property). 1040nr tax form Qualified leasehold improvement property. 1040nr tax form    Generally, this is any improvement to an interior part of a building that is nonresidential real property, provided all of the following requirements are met. 1040nr tax form The improvement is made under or pursuant to a lease by the lessee (or any sublessee) or the lessor of that part of the building. 1040nr tax form That part of the building is to be occupied exclusively by the lessee (or any sublessee) of that part. 1040nr tax form The improvement is placed in service more than 3 years after the date the building was first placed in service. 1040nr tax form   However, a qualified leasehold improvement does not include any improvement for which the expenditure is attributable to any of the following. 1040nr tax form The enlargement of the building. 1040nr tax form Any elevator or escalator. 1040nr tax form Any structural component benefiting a common area. 1040nr tax form The internal structural framework of the building. 1040nr tax form   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. 1040nr tax form However, a binding commitment between related persons is not treated as a lease. 1040nr tax form Related persons. 1040nr tax form   For this purpose, the following are related persons. 1040nr tax form Members of an affiliated group. 1040nr tax form The persons listed in items (1) through (9) under Related persons on page 8 of Publication 946 (except that “80% or more” should be substituted for “more than 10%” each place it appears). 1040nr tax form An executor and a beneficiary of the same estate. 1040nr tax form Tests To Be Met To qualify for the special depreciation allowance, the property must meet all of the following tests. 1040nr tax form Acquisition date test. 1040nr tax form    Generally, you must have acquired the property either: After September 10, 2001, and before September 11, 2004, but only if no written binding contract for the acquisition was in effect before September 11, 2001, or Pursuant to a written binding contract entered into after September 10, 2001, and before September 11, 2004. 1040nr tax form   Property you manufacture, construct, or produce for your own use meets this test if you began the manufacture, construction, or production of the property after September 10, 2001, and before September 11, 2004. 1040nr tax form Placed in service date test. 1040nr tax form   Generally, the property must be placed in service for use in your trade or business or for the production of income after September 10, 2001, and before January 1, 2005. 1040nr tax form   If you sold property you placed in service after September 10, 2001, and you leased it back within 3 months after the property was originally placed in service, the property is treated as placed in service no earlier than the date it is used under the leaseback. 1040nr tax form Original use test. 1040nr tax form   The original use of the property must have begun with you after September 10, 2001. 1040nr tax form “Original use” means the first use to which the property is put, whether or not by you. 1040nr tax form Additional capital expenditures you incurred after September 10, 2001, to recondition or rebuild your property meet the original use test. 1040nr tax form Excepted Property The following property does not qualify for the special depreciation allowance. 1040nr tax form Property used by any person before September 11, 2001. 1040nr tax form Property required to be depreciated using ADS. 1040nr tax form This includes listed property used 50% or less in a qualified business use. 1040nr tax form Qualified New York Liberty Zone leasehold improvement property (defined next). 1040nr tax form Qualified New York Liberty Zone leasehold improvement property. 1040nr tax form   This is any qualified leasehold improvement property (as defined earlier) if all of the following requirements are met. 1040nr tax form The improvement is to a building located in the New York Liberty Zone (defined later under New York Liberty Zone Benefits). 1040nr tax form The improvement is placed in service after September 10, 2001, and before January 1, 2007. 1040nr tax form No written binding contract for the improvement was in effect before September 11, 2001. 1040nr tax form Election Not To Claim the Allowance You can elect not to claim the special depreciation allowance for qualified property. 1040nr tax form If you make this election for any property, it applies to all property in the same property class placed in service during the year. 1040nr tax form To make this election, attach a statement to your return indicating you elect not to claim the allowance and the class of property for which you are making the election. 1040nr tax form When to make election. 1040nr tax form   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. 1040nr tax form   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). 1040nr tax form Attach the election statement to the amended return. 1040nr tax form At the top of the election statement, write “Filed pursuant to section 301. 1040nr tax form 9100–2. 1040nr tax form ” Revoking an election. 1040nr tax form   Once you elect not to deduct the special depreciation allowance for a class of property, you cannot revoke the election without IRS consent. 1040nr tax form A request to revoke the election is subject to a user fee. 1040nr tax form Rules for Returns Filed Before June 1, 2002 The following rules apply if you placed qualified property in service after September 10, 2001, and filed your return before June 1, 2002. 1040nr tax form The rules apply to returns for the following years. 1040nr tax form 2000 fiscal years that end after September 10, 2001. 1040nr tax form 2001 calendar and fiscal years. 1040nr tax form Claiming the allowance. 1040nr tax form   If you did not claim the allowance on your return and did not make the election not to claim the allowance, you can do either of the following to claim the allowance. 1040nr tax form File an amended return by the due date (not including extensions) of your return for the year following the year the property was placed in service. 1040nr tax form Write “Filed Pursuant to Rev. 1040nr tax form Proc. 1040nr tax form 2002–33” at the top of the amended return. 1040nr tax form File Form 3115, Application for Change in Accounting Method, with your return for the year following the year the property was placed in service. 1040nr tax form Your return must be filed by the due date (including extensions). 1040nr tax form Write “Automatic Change Filed Under Rev. 1040nr tax form Proc. 1040nr tax form 2002–33” on the appropriate line of Form 3115. 1040nr tax form You must also file a copy (with signature) of the completed Form 3115 with the IRS National Office no later than when you file the original with your return. 1040nr tax form For more information about filing Form 3115, including the address to send it to, see Revenue Procedure 2002–9, Revenue Procedure 2002–19, and Revenue Procedure 2002–33. 1040nr tax form Example 1. 1040nr tax form You are an individual and you use the calendar year. 1040nr tax form You placed qualified property in service for your business in December 2001. 1040nr tax form You filed your 2001 income tax return before April 15, 2002. 1040nr tax form You did not claim the special depreciation allowance for the property and did not make the election not to claim the allowance. 1040nr tax form You can claim the special allowance by filing an amended 2001 return by April 15, 2003, with “Filed Pursuant to Rev. 1040nr tax form Proc. 1040nr tax form 2002–33” at the top of the amended return. 1040nr tax form You must file an amended return by April 15, 2003, even if you get an extension of time to file your 2002 tax return. 1040nr tax form Example 2. 1040nr tax form The facts concerning your 2001 return are the same as in Example 1. 1040nr tax form In addition, you got an automatic 4-month extension of time (to August 15, 2003) to file your 2002 return. 1040nr tax form You can claim the special allowance by filing a Form 3115 (with “Filed Pursuant to Rev. 1040nr tax form Proc. 1040nr tax form 2002–33” on the appropriate line) with your 2002 return by August 15, 2003. 1040nr tax form You must also file a copy of this Form 3115 with the IRS National Office no later than when you file your 2002 return. 1040nr tax form Electing not to claim the allowance. 1040nr tax form   Generally, you have elected not to claim the special depreciation allowance for a class of property if you: Filed your return timely (including extensions) for the year you placed qualified property in service and indicated on a statement with the return that you are not claiming the allowance, or Filed your return timely and filed an amended return within 6 months of the due date of the original return (not including extensions) and indicated on a statement with the amended return that you are not claiming the allowance. 1040nr tax form The statement must indicate that you are not deducting the special depreciation allowance and the class of property to which the election applies. 1040nr tax form The statement can be either attached to or written on the return. 1040nr tax form You can, for example, write “not deducting 30%” on Form 4562. 1040nr tax form Deemed election. 1040nr tax form   If you have not followed either of the procedures described above to elect not to claim the allowance, you may still be treated as making the election. 1040nr tax form You will be treated as making the election if you meet both of the following conditions. 1040nr tax form You filed your return for the year you placed the property in service and claimed depreciation, but not the special allowance, for any class of property. 1040nr tax form You do not file an amended return or a Form 3115 within the time prescribed for claiming the special allowance. 1040nr tax form See Claiming the allowance, earlier. 1040nr tax form Passenger Automobiles The limit on your depreciation deduction (including any section 179 deduction) for any passenger automobile that is qualified property (defined earlier) placed in service after September 10, 2001, and for which you claim the special depreciation allowance is increased. 1040nr tax form Generally, the limit is increased from $3,060 to $7,660. 1040nr tax form However, if the automobile is a qualified electric car, the limit is increased from $9,280 to $23,080 ($22,980 if placed in service in 2002). 1040nr tax form Table 1 shows the maximum deduction amounts for 2001. 1040nr tax form Table 1. 1040nr tax form Maximum Deduction for 2001 Qualified Vehicle Placed in Service Before Sept. 1040nr tax form 11 Placed in Service After Sept. 1040nr tax form 10 Passenger automobile $3,060 $7,660 Electric car 9,280 23,080 1 1$22,980 if you place an electric car in service in 2002. 1040nr tax form Election not to claim the allowance. 1040nr tax form   The increased maximum depreciation deduction does not apply if you elected not to claim the special depreciation allowance as explained earlier under Election Not To Claim the Allowance and Rules for Returns Filed Before June 1, 2002. 1040nr tax form New York Liberty Zone Benefits Several benefits are available for property you place in service in the New York Liberty Zone (Liberty Zone). 1040nr tax form They include a special depreciation allowance for the year you place the property in service, an increased section 179 deduction, and the classification of certain leasehold improvement property as 5-year property. 1040nr tax form Area defined. 1040nr tax form   The New York Liberty Zone is the area located on or south of Canal Street, East Broadway (east of its intersection with Canal Street), or Grand Street (east of its intersection with East Broadway) in the Borough of Manhattan in the City of New York, New York. 1040nr tax form Special Liberty Zone Depreciation Allowance You can take a special depreciation allowance for qualified Liberty Zone property you place in service after September 10, 2001. 1040nr tax form The allowance is an additional deduction of 30% of the property's depreciable basis. 1040nr tax form To figure the depreciable basis, you must first multiply the property's cost or other basis by the percentage of business/investment use and then reduce that amount by any section 179 deduction and certain other deductions and credits for the property. 1040nr tax form See What Is the Basis for Depreciation? on page 23 in Publication 946 for more information on figuring depreciable basis. 1040nr tax form The allowance is deductible for both regular tax and alternative minimum tax (AMT) purposes. 1040nr tax form There is no AMT adjustment required for any depreciation figured on the remaining basis of the property. 1040nr tax form In the year you claim the allowance (generally the year you place the property in service), you must reduce the depreciable basis of the property by the allowance before figuring your regular depreciation deduction. 1040nr tax form You cannot claim the special Liberty Zone depreciation allowance for property eligible for the special depreciation allowance explained earlier in Qualified Property under Special Depreciation Allowance. 1040nr tax form Qualified property is eligible for only one special depreciation allowance. 1040nr tax form Example 1. 1040nr tax form On November 1, 2001, you bought and placed in service in your business, which is in the Liberty Zone, qualified Liberty Zone property that cost $200,000. 1040nr tax form You did not elect to claim a section 179 deduction. 1040nr tax form You can deduct 30% of the cost ($60,000) as a special Liberty Zone depreciation allowance for 2001. 1040nr tax form You use the remaining $140,000 of cost to figure your regular depreciation deduction for 2001 and later years. 1040nr tax form Example 2. 1040nr tax form The facts are the same as in Example 1, except that you choose to deduct $59,000 of the property's cost as a section 179 deduction. 1040nr tax form (See Increased Section 179 Deduction, later, for information concerning how this section 179 deduction amount is figured). 1040nr tax form You use the remaining $141,000 of cost to figure your special Liberty Zone depreciation allowance of $42,300 ($141,000 × 30%). 1040nr tax form You use the remaining $98,700 of cost to figure your regular depreciation deduction for 2001 and later years. 1040nr tax form Qualified Liberty Zone Property For a 2001 calendar or fiscal year and a 2000 fiscal year that ends after September 10, 2001, property qualifies for the special Liberty Zone depreciation allowance if it meets the following requirements. 1040nr tax form It is one of the following types of property. 1040nr tax form Used property depreciated under MACRS with a recovery period of 20 years or less. 1040nr tax form See Can You Use MACRS To Depreciate Your Property and Which Recovery Period Applies? on pages 7 and 23, respectively, in Publication 946. 1040nr tax form Used water utility property. 1040nr tax form See 25-year property on page 22 in Publication 946. 1040nr tax form Used computer software that is not a section 197 intangible as described in Computer software on page 5 in Publication 946. 1040nr tax form (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. 1040nr tax form ) Certain nonresidential real property and residential rental property (defined later). 1040nr tax form It meets the following tests (explained later under Tests to be met). 1040nr tax form Acquisition date test. 1040nr tax form Placed in service date test. 1040nr tax form Substantial use test. 1040nr tax form Original use test. 1040nr tax form It is not excepted property (explained later under Excepted property). 1040nr tax form Nonresidential real property and residential rental property. 1040nr tax form   This property is qualifying property only to the extent it rehabilitates real property damaged, or replaces real property destroyed or condemned, as a result of the terrorist attack of September 11, 2001. 1040nr tax form Property is treated as replacing destroyed or condemned property if, as part of an integrated plan, such property replaces real property included in a continuous area that includes real property destroyed or condemned. 1040nr tax form   For these purposes, real property is considered destroyed (or condemned) only if an entire building or structure was destroyed (or condemned) as a result of the terrorist attack. 1040nr tax form Otherwise, the property is considered damaged real property. 1040nr tax form For example, if certain structural components of a building (such as walls, floors, or plumbing fixtures) are damaged or destroyed as a result of the terrorist attack, but the building is not destroyed (or condemned), then only costs related to replacing the damaged or destroyed structural components qualify for the special Liberty Zone depreciation allowance. 1040nr tax form Tests to be met. 1040nr tax form   To qualify for the special Liberty Zone depreciation allowance, your property must meet all of the following tests. 1040nr tax form Acquisition date test. 1040nr tax form   You must have acquired the property by purchase after September 10, 2001, and there must not have been a binding written contract for the acquisition in effect before September 11, 2001. 1040nr tax form   For information on the acquisition of property by purchase, see Property Acquired by Purchase on page 15 of Publication 946. 1040nr tax form   Property you manufacture, construct, or produce for your own use meets this test if you began the manufacture, construction, or production of the property after September 10, 2001. 1040nr tax form Placed in service date test. 1040nr tax form   Generally, the property must be placed in service for use in your trade or business or for the production of income before January 1, 2007 (January 1, 2010, in the case of qualifying nonresidential real property and residential rental property). 1040nr tax form   If you sold property you placed in service after September 10, 2001, and you leased it back within 3 months after the property was originally placed in service, the property is treated as placed in service no earlier than the date it is used under the leaseback. 1040nr tax form Substantial use test. 1040nr tax form   Substantially all use of the property must be in the Liberty Zone and in the active conduct of your trade or business in the Liberty Zone. 1040nr tax form Original use test. 1040nr tax form   The original use of the property in the Liberty Zone must have begun with you after September 10, 2001. 1040nr tax form   Used property can be qualified Liberty Zone property if it has not previously been used within the Liberty Zone. 1040nr tax form Also, additional capital expenditures you incurred after September 10, 2001, to recondition or rebuild your property meet the original use test if the original use of the property in the Liberty Zone began with you. 1040nr tax form Excepted property. 1040nr tax form   The following property does not qualify for the special Liberty Zone depreciation allowance. 1040nr tax form Property eligible for the special depreciation allowance explained earlier in Qualified Property under Special Depreciation Allowance. 1040nr tax form Property required to be depreciated using ADS. 1040nr tax form This includes listed property used 50% or less in a qualified business use. 1040nr tax form Qualified New York Liberty Zone leasehold improvement property (defined earlier in Excepted Property under Special Depreciation Allowance). 1040nr tax form Example. 1040nr tax form In December 2001, you bought and placed in service in your business in the Liberty Zone the following property. 1040nr tax form New office furniture with a MACRS recovery period of 7 years. 1040nr tax form A used computer with a MACRS recovery period of 5 years. 1040nr tax form The computer had not previously been used within the Liberty Zone. 1040nr tax form Because the office furniture is new property, it qualifies for the special depreciation allowance, but not the special Liberty Zone depreciation allowance. 1040nr tax form Because the computer is used property that had not previously been used in the Liberty Zone, it qualifies for the special Liberty Zone depreciation allowance, but not the special depreciation allowance. 1040nr tax form Election Not To Claim the Liberty Zone Allowance You can elect not to claim the special Liberty Zone depreciation allowance for qualified property. 1040nr tax form If you make this election for any property, it applies to all property in the same property class placed in service during the year. 1040nr tax form To make this election, attach a statement to your return indicating you elect not to claim the allowance and the class of property for which you are making the election. 1040nr tax form When to make the election. 1040nr tax form   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. 1040nr tax form   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). 1040nr tax form Attach the election statement to the amended return. 1040nr tax form At the top of the election statement, write “Filed pursuant to section 301. 1040nr tax form 9100–2. 1040nr tax form ” Revoking an election. 1040nr tax form   Once you elect not to deduct the special Liberty Zone depreciation allowance for a class of property, you cannot revoke the election without IRS consent. 1040nr tax form A request to revoke the election is subject to a user fee. 1040nr tax form Returns filed before June 1, 2002. 1040nr tax form   The rules that apply to the special depreciation allowance discussed earlier in Rules for Returns Filed Before June 1, 2002 under Special Depreciation Allowance also apply to the special Liberty Zone depreciation allowance. 1040nr tax form Increased Section 179 Deduction Under section 179 of the Internal Revenue Code, you can choose to recover all or part of the cost of certain qualifying property, up to a limit, by deducting it in the year you place the property in service. 1040nr tax form For tax years beginning in 2000, that limit was $20,000. 1040nr tax form For tax years beginning in 2001 and 2002, that limit is generally $24,000. 1040nr tax form If the cost of qualifying section 179 property placed in service in a year is over $200,000, you must reduce the dollar limit (but not below zero) by the amount of the cost over $200,000. 1040nr tax form Increased Dollar Limit The dollar limit on the section 179 deduction is increased for certain property placed in service in the Liberty Zone. 1040nr tax form The increase is the smaller of the following amounts. 1040nr tax form $35,000. 1040nr tax form The cost of section 179 property that is qualified Liberty Zone property placed in service during the year. 1040nr tax form If you use the revised 2001 Form 4562 (dated March 2002) for a tax year beginning in 2000, you must reduce the section 179 dollar limit to $20,000 before adding the additional amount for qualified property. 1040nr tax form Qualified property. 1040nr tax form   To qualify for the increased section 179 deduction, your property must be section 179 property that is either: Qualified Liberty Zone property, or Property that would be qualified Liberty Zone property except that it is eligible for the special depreciation allowance. 1040nr tax form Qualified Liberty Zone property is explained earlier in Qualified Liberty Zone Property under Special Liberty Zone Depreciation Allowance. 1040nr tax form Property eligible for the special depreciation allowance is explained earlier in Qualified Property under Special Depreciation Allowance. 1040nr tax form For information on the requirements that must be met for property to qualify for the section 179 deduction, see What Property Qualifies? on page 14 of Publication 946. 1040nr tax form Example 1. 1040nr tax form In 2002, you place in service in your business, which is in the Liberty Zone, qualified property (defined earlier) costing $25,000. 1040nr tax form Because this cost is less than $35,000, the dollar limit on the section 179 deduction is increased by $25,000 to $49,000 ($24,000 + $25,000). 1040nr tax form Example 2. 1040nr tax form In 2002, you place in service in your business, which is in the Liberty Zone, qualified property (defined earlier) costing $75,000. 1040nr tax form Because $35,000 is less than the cost of the property you place in service, the dollar limit on the section 179 deduction you can claim is increased by $35,000 to $59,000 ($24,000 + $35,000). 1040nr tax form Reduced Dollar Limit Generally, you must reduce the dollar limit for a year by the cost of qualifying section 179 property placed in service in the year that is more than $200,000. 1040nr tax form However, if the cost of your Liberty Zone property exceeds $200,000, you take into account only 50% (instead of 100%) of the cost of qualified property placed in service in a year. 1040nr tax form Example. 1040nr tax form In 2002, you place in service in your business, which is in the Liberty Zone, qualified property costing $460,000. 1040nr tax form Your increased dollar limit is $59,000 ($35,000 + $24,000). 1040nr tax form Because 50% of the cost of the property you place in service ($230,000) is $30,000 more than $200,000, you must reduce your $59,000 dollar limit to $29,000 ($59,000 - $30,000). 1040nr tax form Recapture Rules Rules similar to those explained on page 20 of Publication 946 under When Must You Recapture the Deduction? apply with respect to any qualified property you stop using in the Liberty Zone. 1040nr tax form Returns Filed Before June 1, 2002 If you filed a return before June 1, 2002, and did not deduct the increased section 179 amount for qualified property placed in service after September 10, 2001, you can deduct the increased amount by filing an amended return by the due date (not including extensions) of the return for the year after the year the property was placed in service. 1040nr tax form This rule applies to returns for the following years. 1040nr tax form 2000 fiscal years that end after September 10, 2001. 1040nr tax form 2001 calendar and fiscal years. 1040nr tax form On the amended return, write “Filed Pursuant to Rev. 1040nr tax form Proc. 1040nr tax form 2002–33. 1040nr tax form ” Liberty Zone Leasehold Improvement Property Qualified Liberty Zone leasehold improvement property (described earlier in Qualified Property under Special Depreciation Allowance) is 5-year property. 1040nr tax form This means that it is depreciated over a recovery period of 5 years. 1040nr tax form For information about recovery periods, see Which Recovery Period Applies? on page 23 of Publication 946. 1040nr tax form The straight-line method must be used with respect to qualified Liberty Zone leasehold improvement property. 1040nr tax form Under ADS, the recovery period for qualified Liberty Zone leasehold improvement property is 9 years. 1040nr tax form Returns Filed Before June 1, 2002 If you filed either of the following returns before June 1, 2002, and did not depreciate qualified Liberty Zone leasehold improvement property placed in service during the tax year as 5-year property using the straight line method, you should file an amended return before you file your return for the year after the year the property was placed in service. 1040nr tax form Your 2000 fiscal year return (for a 2000 fiscal year that ends after September 10, 2001). 1040nr tax form Your 2001 calendar or fiscal year return. 1040nr tax form On the amended return, write “Filed Pursuant to Rev. 1040nr tax form Proc. 1040nr tax form 2002–33. 1040nr tax form ” Table 2. 1040nr tax form Rules for Returns Filed Before June 1, 2002 Note:This chart highlights the rules for returns affected by the Job Creation and Worker Assistance Act of 2002 that were filed before June 1, 2002, without accounting for any of the new benefits under the law. 1040nr tax form See the text for definitions and examples. 1040nr tax form Do not rely on this chart alone. 1040nr tax form IF you want to. 1040nr tax form . 1040nr tax form . 1040nr tax form THEN you. 1040nr tax form . 1040nr tax form . 1040nr tax form BY. 1040nr tax form . 1040nr tax form . 1040nr tax form claim the special depreciation allowance or special Liberty Zone depreciation allowance • must file an amended return • the due date (not including extensions) of your return for the year after the year the property was placed in service, or • must file Form 3115, Application for Change in Accounting Method, with your return for the year after the year the property was placed in service • the due date (including extensions) of your return for the year after the year the property was placed in service, and • must file a copy of your completed Form 3115 with the IRS National Office • the date you file the original Form 3115 with your return for the year after the year the property was placed in service. 1040nr tax form elect not to claim the special depreciation allowance or the special Liberty Zone depreciation allowance 1 • must have filed your return timely for the year the property was placed in service, and   • must file an amended return stating you are not claiming the allowance • the date that is 6 months after the due date of the original return (not including extensions). 1040nr tax form deduct the increased section 179 amount • must file an amended return • the due date (not including extensions) of your return for the year after the year the property was placed in service. 1040nr tax form use a 5-year recovery period for depreciating qualified Liberty Zone leasehold improvement property • should file an amended return • the date you file your return for the year after the year the property was placed in service. 1040nr tax form 1See also Deemed election under Rules for Returns Filed Before June 1, 2002, earlier. 1040nr tax form Prev  Up  Next   Home   More Online Publications
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Abilene, TX

Website: Better Business Bureau

Email: info@abilene.bbb.org

Address: Better Business Bureau
3300 S. 14th St., Suite 307
Abilene, TX 79605-5052

Phone Number: 325-691-1533

Amarillo, TX

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Email: info@txpanhandle.bbb.org

Address: Better Business Bureau
720 S. Tyler St., Suite B112
Amarillo, TX 79101

Phone Number: 806-379-6222

Austin, TX

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Email: info@austin.bbb.org

Address: Better Business Bureau
1005 La Posada Dr.
Austin, TX 78752

Phone Number: 512-445-2911

Beaumont, TX

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Address: Better Business Bureau
550 Fannin St., Suite 100
Beaumont, TX 77701

Phone Number: 409-835-5348

College Station, TX

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Email: info@bbbbryan.org

Address: Better Business Bureau
418 Tarrow St.
College Station, TX 77840-1822

Phone Number: 979-260-2222

Toll-free: 1-800-392-3798

Corpus Christi, TX

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Email: info@corpuschristi.bbb.org

Address: Better Business Bureau
719 S. Shoreline, Suite 304
Corpus Christi, TX 78401

Phone Number: 361-852-4949

Dallas, TX

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Email: info@dallas.bbb.org

Address: Better Business Bureau
1601 Elm St., Suite 3838
Dallas, TX 75201

Phone Number: 214-220-2000

El Paso, TX

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Address: Better Business Bureau
550 E. Paisano
El Paso, TX 79901

Phone Number: 915-577-0191

Fort Worth, TX

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Address: Better Business Bureau
1300 Summit Ave., Suite 101
Fort Worth, TX 76102

Phone Number: 817-332-7585

Houston, TX

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Address: Better Business Bureau
1333 W. Loop South, Suite 1200
Houston, TX 77027

Phone Number: 713-868-9500

Longview, TX

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Email: info@easttexas.bbb.org

Address: Better Business Bureau
102 Commander Dr., Suite 7
Longview, TX 75605

Phone Number: 903-758-3222

Lubbock, TX

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Address: Better Business Bureau
3333 66th St.
Lubbock, TX 79413

Phone Number: 806-763-0459

Midland, TX

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Email: info@permianbasinbbb.org

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306 W. Wall St., Suite 1350
Midland, TX 79701

Phone Number: 432-563-1880

San Angelo, TX

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3134 Executive Dr., Suite A
San Angelo, TX 76904

Phone Number: 325-949-2989

San Antonio, TX

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Email: info@sanantonio.bbb.org

Address: Better Business Bureau
425 Soledad St., Suite 500
San Antonio, TX 78205

Phone Number: 210-828-9441

Tyler, TX

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Address: Better Business Bureau
3600 Old Bullard Rd.
Building 1, Suite 101
Tyler, TX 75701

Phone Number: 903-581-5704

Waco, TX

Website: Better Business Bureau

Email: info@centraltx.bbb.org

Address: Better Business Bureau
200 W. Hwy 6, Suite 225
Waco, TX 76712

Phone Number: 254-755-7772

Weslaco, TX

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Address: Better Business Bureau
502 E. Expressway 83, Suite C
Weslaco, TX 78596

Phone Number: 956-968-3678

Wichita Falls, TX

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Email: bbbnt@bbbnorcentx.org

Address: Better Business Bureau
2107 Kemp Blvd.
Wichita Falls, TX 76309

Phone Number: 940-691-1172

The 1040nr Tax Form

1040nr tax form Index A Accelerated cost recovery system (ACRS):, ACRS Defined Alternate method, Alternate ACRS Method (Modified Straight Line Method) Classes of recovery property, Classes of Recovery Property Deduction, short tax year, ACRS Deduction in Short Tax Year Defined, ACRS Defined Dispositions, Early dispositions of ACRS property other than 15-, 18-, or 19-year real property. 1040nr tax form Recovery periods, Recovery Periods Unadjusted basis, Unadjusted Basis B Basis: Adjusted, Adjusted basis. 1040nr tax form Unadjusted, ACRS, Unadjusted Basis C Changing methods, How To Change Methods D Declining balance method, Declining Balance Method Deduction: ACRS, How To Figure the Deduction How to figure, How To Figure the Deduction Dispositions, Dispositions, Dispositions I Income forecast method, Income Forecast Method L Listed property:, Listed Property Defined 5% owner, 5% owner. 1040nr tax form Computers, related equipment, Computers and Related Peripheral Equipment Defined, Listed Property Defined Entertainment use, Entertainment Use Leased, Leased Property Other transportation property, Other Property Used for Transportation Predominant use test, Predominant Use Test Qualified business use, Qualified Business Use Recordkeeping, What Records Must Be Kept, Adequate Records Related person, Related person. 1040nr tax form Reporting on Form 4562, Reporting Information on Form 4562 Use by employee, Employees M Methods of figuring depreciation:, Income Forecast Method ACRS, How To Figure the Deduction Declining Balance, Declining Balance Method Income forecast, Income Forecast Method Straight line, Straight Line Method P Passenger automobile: Defined, Passenger Automobile Defined Predominant use test, applying, Applying the Predominant Use Test Property: ACRS, What Can and Cannot Be Depreciated Under ACRS Intangible, Intangible property. 1040nr tax form R Recapture: Depreciation, Depreciation Recapture Excess depreciation, listed property, Recapture of excess depreciation. 1040nr tax form Recordkeeping: For listed property, What Records Must Be Kept S Salvage value, Salvage Value Straight line method, Straight Line Method U Useful life, Useful Life V Videocassettes, Videocassettes. 1040nr tax form Prev  Up     Home   More Online Publications