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1040x Form For 2012

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1040x Form For 2012

1040x form for 2012 6. 1040x form for 2012   Tax Treaty Benefits Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Purpose of Tax Treaties Common Benefits Competent Authority AssistanceAdditional filing. 1040x form for 2012 Obtaining Copies of Tax Treaties Topics - This chapter discusses: Some common tax treaty benefits, How to get help in certain situations, and How to get copies of tax treaties. 1040x form for 2012 Useful Items - You may want to see: Publication 597 Information on the United States—Canada Income Tax Treaty 901 U. 1040x form for 2012 S. 1040x form for 2012 Tax Treaties See chapter 7 for information about getting these publications. 1040x form for 2012 Purpose of Tax Treaties The United States has tax treaties or conventions with many countries. 1040x form for 2012 See Table 6-1 at the end of this chapter for a list of these countries. 1040x form for 2012 Under these treaties and conventions, citizens and residents of the United States who are subject to taxes imposed by the foreign countries are entitled to certain credits, deductions, exemptions, and reductions in the rate of taxes of those foreign countries. 1040x form for 2012 If a foreign country with which the United States has a treaty imposes a tax on you, you may be entitled to benefits under the treaty. 1040x form for 2012 Treaty benefits generally are available to residents of the United States. 1040x form for 2012 They generally are not available to U. 1040x form for 2012 S. 1040x form for 2012 citizens who do not reside in the United States. 1040x form for 2012 However, certain treaty benefits and safeguards, such as the nondiscrimination provisions, are available to U. 1040x form for 2012 S. 1040x form for 2012 citizens residing in the treaty countries. 1040x form for 2012 U. 1040x form for 2012 S. 1040x form for 2012 citizens residing in a foreign country also may be entitled to benefits under that country's tax treaties with third countries. 1040x form for 2012 Certification of U. 1040x form for 2012 S. 1040x form for 2012 residency. 1040x form for 2012   Use Form 8802, Application for United States Residency Certification, to request certification of U. 1040x form for 2012 S. 1040x form for 2012 residency for purposes of claiming benefits under a tax treaty. 1040x form for 2012 Certification can be requested for the current and any prior calendar years. 1040x form for 2012 You should examine the specific treaty articles to find if you are entitled to a tax credit, tax exemption, reduced rate of tax, or other treaty benefit or safeguard. 1040x form for 2012 Common Benefits Some common tax treaty benefits are explained below. 1040x form for 2012 The credits, deductions, exemptions, reductions in rate, and other benefits provided by tax treaties are subject to conditions and various restrictions. 1040x form for 2012 Benefits provided by certain treaties are not provided by others. 1040x form for 2012 Personal service income. 1040x form for 2012 If you are a U. 1040x form for 2012 S. 1040x form for 2012 resident who is in a treaty country for a limited number of days in the tax year and you meet certain other requirements, the payment you receive for personal services performed in that country may be exempt from that country's income tax. 1040x form for 2012 Professors and teachers. 1040x form for 2012 If you are a U. 1040x form for 2012 S. 1040x form for 2012 resident, the payment you receive for the first 2 or 3 years that you are teaching or doing research in a treaty country may be exempt from that country's income tax. 1040x form for 2012 Students, trainees, and apprentices. 1040x form for 2012 If you are a U. 1040x form for 2012 S. 1040x form for 2012 resident, amounts you receive from the United States for study, research, or business, professional and technical training may be exempt from a treaty country's income tax. 1040x form for 2012 Some treaties exempt grants, allowances, and awards received from governmental and certain nonprofit organizations. 1040x form for 2012 Also, under certain circumstances, a limited amount of pay received by students, trainees, and apprentices may be exempt from the income tax of many treaty countries. 1040x form for 2012 Pensions and annuities. 1040x form for 2012 If you are a U. 1040x form for 2012 S. 1040x form for 2012 resident, nongovernment pensions and annuities you receive may be exempt from the income tax of treaty countries. 1040x form for 2012 Most treaties contain separate provisions for exempting government pensions and annuities from treaty country income tax, and some treaties provide exemption from the treaty country's income tax for social security payments. 1040x form for 2012 Investment income. 1040x form for 2012 If you are a U. 1040x form for 2012 S. 1040x form for 2012 resident, investment income, such as interest and dividends, that you receive from sources in a treaty country may be exempt from that country's income tax or taxed at a reduced rate. 1040x form for 2012 Several treaties provide exemption for capital gains (other than from sales of real property in most cases) if specified requirements are met. 1040x form for 2012 Tax credit provisions. 1040x form for 2012 If you are a U. 1040x form for 2012 S. 1040x form for 2012 resident who receives income from or owns capital in a foreign country, you may be taxed on that income or capital by both the United States and the treaty country. 1040x form for 2012 Most treaties allow you to take a credit against or deduction from the treaty country's taxes based on the U. 1040x form for 2012 S. 1040x form for 2012 tax on the income. 1040x form for 2012 Nondiscrimination provisions. 1040x form for 2012 Most U. 1040x form for 2012 S. 1040x form for 2012 tax treaties provide that the treaty country cannot discriminate by imposing more burdensome taxes on U. 1040x form for 2012 S. 1040x form for 2012 citizens who are residents of the treaty country than it imposes on its own citizens in the same circumstances. 1040x form for 2012 Saving clauses. 1040x form for 2012 U. 1040x form for 2012 S. 1040x form for 2012 treaties contain saving clauses that provide that the treaties do not affect the U. 1040x form for 2012 S. 1040x form for 2012 taxation of its own citizens and residents. 1040x form for 2012 As a result, U. 1040x form for 2012 S. 1040x form for 2012 citizens and residents generally cannot use the treaty to reduce their U. 1040x form for 2012 S. 1040x form for 2012 tax liability. 1040x form for 2012 However, most treaties provide exceptions to saving clauses that allow certain provisions of the treaty to be claimed by U. 1040x form for 2012 S. 1040x form for 2012 citizens or residents. 1040x form for 2012 It is important that you examine the applicable saving clause to determine if an exception applies. 1040x form for 2012 More information on treaties. 1040x form for 2012   Publication 901 contains an explanation of treaty provisions that apply to amounts received by teachers, students, workers, and government employees and pensioners who are alien nonresidents or residents of the United States. 1040x form for 2012 Since treaty provisions generally are reciprocal, you usually can substitute “United States” for the name of the treaty country whenever it appears, and vice versa when “U. 1040x form for 2012 S. 1040x form for 2012 ” appears in the treaty exemption discussions in Publication 901. 1040x form for 2012   Publication 597 contains an explanation of a number of frequently-used provisions of the United States–Canada income tax treaty. 1040x form for 2012 Competent Authority Assistance If you are a U. 1040x form for 2012 S. 1040x form for 2012 citizen or resident alien, you can request assistance from the U. 1040x form for 2012 S. 1040x form for 2012 competent authority if you think that the actions of the United States, a treaty country, or both, cause or will cause a tax situation not intended by the treaty between the two countries. 1040x form for 2012 You should read any treaty articles, including the mutual agreement procedure article, that apply in your situation. 1040x form for 2012 The U. 1040x form for 2012 S. 1040x form for 2012 competent authority cannot consider requests involving countries with which the United States does not have a tax treaty. 1040x form for 2012 Effect of request for assistance. 1040x form for 2012   If your request provides a basis for competent authority assistance, the U. 1040x form for 2012 S. 1040x form for 2012 competent authority generally will consult with the treaty country competent authority on how to resolve the situation. 1040x form for 2012 How to make your request. 1040x form for 2012   It is important that you make your request for competent authority consideration as soon as either of the following occurs. 1040x form for 2012 You are denied treaty benefits. 1040x form for 2012 Actions taken by both the United States and the foreign country result in double taxation or will result in taxation not intended by the treaty. 1040x form for 2012   In addition to making a request for assistance, you should take steps so that any agreement reached by the competent authorities is not barred by administrative, legal, or procedural barriers. 1040x form for 2012 Some of the steps you should consider taking include the following. 1040x form for 2012 Filing a protective claim for credit or refund of U. 1040x form for 2012 S. 1040x form for 2012 taxes. 1040x form for 2012 Delaying the expiration of any period of limitations on the making of a refund or other tax adjustment. 1040x form for 2012 Avoiding the lapse or termination of your right to appeal any tax determination. 1040x form for 2012 Complying with all applicable procedures for invoking competent authority consideration. 1040x form for 2012 Contesting an adjustment or seeking an appropriate correlative adjustment with respect to the U. 1040x form for 2012 S. 1040x form for 2012 or treaty country tax. 1040x form for 2012 Taxpayers can consult with the U. 1040x form for 2012 S. 1040x form for 2012 competent authority to determine whether they need to take protective steps and when any required steps need to be taken. 1040x form for 2012   The request should contain all essential items of information, including the following items. 1040x form for 2012 A reference to the treaty and the treaty provisions on which the request is based. 1040x form for 2012 The years and amounts involved in both U. 1040x form for 2012 S. 1040x form for 2012 dollars and foreign currency. 1040x form for 2012 A brief description of the issues for which competent authority assistance is requested. 1040x form for 2012   A complete listing of the information that must be included with the request can be found in Revenue Procedure 2006-54, or its successor. 1040x form for 2012 Revenue Procedure 2006-54 is available at www. 1040x form for 2012 irs. 1040x form for 2012 gov/irb/2006-49_IRB/ar13. 1040x form for 2012 html. 1040x form for 2012   Also, see Notice 2013-78, which provides proposed updates to the procedures for requesting U. 1040x form for 2012 S. 1040x form for 2012 competent authority assistance under tax treaties. 1040x form for 2012 As noted, Revenue Procedure 2006-54 will be superseded by a revenue procedure to be published in the future. 1040x form for 2012    Your request for competent authority consideration should be addressed to:   Deputy Commissioner (International) Large Business and International Division Internal Revenue Service 1111 Constitution Avenue, NW Routing M4-365 Washington, DC 20224 Attn: TAIT Additional filing. 1040x form for 2012   In the case of U. 1040x form for 2012 S. 1040x form for 2012 - initiated adjustments, you also must file a copy of the request with the IRS office where your case is pending. 1040x form for 2012 If the request is filed after the matter has been designated for litigation or while a suit contesting your relevant tax liability is pending in a United States court, a copy of the request, with a separate statement attached identifying the court where the suit is pending and the docket number of the action, also must be filed with the: Office of Associate Chief Counsel (International) Internal Revenue Service 1111 Constitution Avenue, NW Washington, DC 20224 Additional details on the procedures for requesting competent authority assistance are included in Revenue Procedure 2006-54, or its successor. 1040x form for 2012 Obtaining Copies of Tax Treaties Table 6-1 lists those countries with which the United States has income tax treaties. 1040x form for 2012 This table is updated through October 31, 2013. 1040x form for 2012 You can get complete information about treaty provisions from the taxing authority in the country from which you receive income or from the treaty itself. 1040x form for 2012 You can obtain the text of most U. 1040x form for 2012 S. 1040x form for 2012 treaties at IRS. 1040x form for 2012 gov. 1040x form for 2012 You also can request the text of treaties from the Department of Treasury at the following address. 1040x form for 2012 Department of Treasury Office of Business and Public Liaison Rm. 1040x form for 2012 3411 1500 Pennsylvania Avenue, NW  Washington, DC 20220 If you have questions about a treaty and you are in the United States, Puerto Rico, or the U. 1040x form for 2012 S. 1040x form for 2012 Virgin Islands, you can call the IRS at 1-800-829-1040. 1040x form for 2012 Table 6–1. 1040x form for 2012 List of Tax Treaties (Updated through October 31, 2013) Country Official Text  Symbol1 General  Effective Date Citation Applicable Treasury Explanations  or Treasury Decision (T. 1040x form for 2012 D. 1040x form for 2012 ) Australia TIAS 10773 Dec. 1040x form for 2012 1, 1983 1986-2 C. 1040x form for 2012 B. 1040x form for 2012 220 1986-2 C. 1040x form for 2012 B. 1040x form for 2012 246 Protocol TIAS Jan. 1040x form for 2012 1, 2004     Austria TIAS Jan. 1040x form for 2012 1, 1999     Bangladesh TIAS Jan. 1040x form for 2012 1, 2007     Barbados TIAS 11090 Jan. 1040x form for 2012 1, 1984 1991-2 C. 1040x form for 2012 B. 1040x form for 2012 436 1991-2 C. 1040x form for 2012 B. 1040x form for 2012 466 Protocol TIAS Jan. 1040x form for 2012 1, 2005     Belgium TIAS Jan. 1040x form for 2012 1, 2008     Bulgaria TIAS Jan. 1040x form for 2012 1, 2009     Canada2 TIAS 11087 Jan. 1040x form for 2012 1, 1985 1986-2 C. 1040x form for 2012 B. 1040x form for 2012 258 1987-2 C. 1040x form for 2012 B. 1040x form for 2012 298 Protocol TIAS Jan. 1040x form for 2012 1, 2009     China, People's Republic of TIAS 12065 Jan. 1040x form for 2012 1, 1987 1988-1 C. 1040x form for 2012 B. 1040x form for 2012 414 1988-1 C. 1040x form for 2012 B. 1040x form for 2012 447 Commonwealth of Independent States3 TIAS 8225 Jan. 1040x form for 2012 1, 1976 1976-2 C. 1040x form for 2012 B. 1040x form for 2012 463 1976-2 C. 1040x form for 2012 B. 1040x form for 2012 475 Cyprus TIAS 10965 Jan. 1040x form for 2012 1, 1986 1989-2 C. 1040x form for 2012 B. 1040x form for 2012 280 1989-2 C. 1040x form for 2012 B. 1040x form for 2012 314 Czech Republic TIAS Jan. 1040x form for 2012 1, 1993     Denmark TIAS Jan. 1040x form for 2012 1, 2001     Protocol TIAS Jan. 1040x form for 2012 1, 2008     Egypt TIAS 10149 Jan. 1040x form for 2012 1, 1982 1982-1 C. 1040x form for 2012 B. 1040x form for 2012 219 1982-1 C. 1040x form for 2012 B. 1040x form for 2012 243 Estonia TIAS Jan. 1040x form for 2012 1, 2000     Finland TIAS 12101 Jan. 1040x form for 2012 1, 1991     Protocol TIAS Jan. 1040x form for 2012 1, 2008     France TIAS Jan. 1040x form for 2012 1, 1996     Protocol TIAS Jan. 1040x form for 2012 1, 2009     Germany TIAS Jan. 1040x form for 2012 1, 1990     Protocol TIAS Jan. 1040x form for 2012 1, 2008     Greece TIAS 2902 Jan. 1040x form for 2012 1, 1953 1958-2 C. 1040x form for 2012 B. 1040x form for 2012 1054 T. 1040x form for 2012 D. 1040x form for 2012 6109, 1954-2 C. 1040x form for 2012 B. 1040x form for 2012 638 Hungary TIAS 9560 Jan. 1040x form for 2012 1, 1980 1980-1 C. 1040x form for 2012 B. 1040x form for 2012 333 1980-1 C. 1040x form for 2012 B. 1040x form for 2012 354 Iceland TIAS 8151 Jan. 1040x form for 2012 1, 2009     India TIAS Jan. 1040x form for 2012 1, 1991     Indonesia TIAS 11593 Jan. 1040x form for 2012 1, 1990     Ireland TIAS Jan. 1040x form for 2012 1, 1998     Israel TIAS Jan. 1040x form for 2012 1, 1995     Italy TIAS Jan. 1040x form for 2012 1, 2010     Jamaica TIAS 10207 Jan. 1040x form for 2012 1, 1982 1982-1 C. 1040x form for 2012 B. 1040x form for 2012 257 1982-1 C. 1040x form for 2012 B. 1040x form for 2012 291 Japan TIAS Jan. 1040x form for 2012 1, 2005     Kazakhstan TIAS Jan. 1040x form for 2012 1, 1996     Korea, South TIAS 9506 Jan. 1040x form for 2012 1, 1980 1979-2 C. 1040x form for 2012 B. 1040x form for 2012 435 1979-2 C. 1040x form for 2012 B. 1040x form for 2012 458 Latvia TIAS Jan. 1040x form for 2012 1, 2000     Lithuania TIAS Jan. 1040x form for 2012 1, 2000     Luxembourg TIAS Jan. 1040x form for 2012 1, 2001     Malta TIAS Jan. 1040x form for 2012 1, 2011     Mexico TIAS Jan. 1040x form for 2012 1,1994     Protocol TIAS Jan. 1040x form for 2012 1, 2004               Table 6–1 (continued). 1040x form for 2012 Country Official Text  Symbol1 General  Effective Date Citation Applicable Treasury Explanations  or Treasury Decision (T. 1040x form for 2012 D. 1040x form for 2012 ) Morocco TIAS 10195 Jan. 1040x form for 2012 1, 1981 1982-2 C. 1040x form for 2012 B. 1040x form for 2012 405 1982-2 C. 1040x form for 2012 B. 1040x form for 2012 427 Netherlands TIAS Jan. 1040x form for 2012 1, 1994     Protocol TIAS Jan. 1040x form for 2012 1, 2005     New Zealand TIAS 10772 Nov. 1040x form for 2012 2, 1983 1990-2 C. 1040x form for 2012 B. 1040x form for 2012 274 1990-2 C. 1040x form for 2012 B. 1040x form for 2012 303 Protocol TIAS Jan. 1040x form for 2012 1, 2011     Norway TIAS 7474 Jan. 1040x form for 2012 1, 1971 1973-1 C. 1040x form for 2012 B. 1040x form for 2012 669 1973-1 C. 1040x form for 2012 B. 1040x form for 2012 693 Protocol TIAS 10205 Jan. 1040x form for 2012 1, 1982 1982-2 C. 1040x form for 2012 B. 1040x form for 2012 440 1982-2 C. 1040x form for 2012 B. 1040x form for 2012 454 Pakistan TIAS 4232 Jan. 1040x form for 2012 1, 1959 1960-2 C. 1040x form for 2012 B. 1040x form for 2012 646 T. 1040x form for 2012 D. 1040x form for 2012 6431, 1960-1 C. 1040x form for 2012 B. 1040x form for 2012 755 Philippines TIAS 10417 Jan. 1040x form for 2012 1, 1983 1984-2 C. 1040x form for 2012 B. 1040x form for 2012 384 1984-2 C. 1040x form for 2012 B. 1040x form for 2012 412 Poland TIAS 8486 Jan. 1040x form for 2012 1, 1974 1977-1 C. 1040x form for 2012 B. 1040x form for 2012 416 1977-1 C. 1040x form for 2012 B. 1040x form for 2012 427 Portugal TIAS Jan. 1040x form for 2012 1, 1996     Romania TIAS 8228 Jan. 1040x form for 2012 1, 1974 1976-2 C. 1040x form for 2012 B. 1040x form for 2012 492 1976-2 C. 1040x form for 2012 B. 1040x form for 2012 504 Russia TIAS Jan. 1040x form for 2012 1, 1994     Slovak Republic TIAS Jan. 1040x form for 2012 1, 1993     Slovenia TIAS Jan. 1040x form for 2012 1, 2002     South Africa TIAS Jan. 1040x form for 2012 1, 1998     Spain TIAS Jan. 1040x form for 2012 1, 1991     Sri Lanka TIAS Jan. 1040x form for 2012 1, 2004     Sweden TIAS Jan. 1040x form for 2012 1, 1996     Protocol TIAS Jan. 1040x form for 2012 1, 2007     Switzerland TIAS Jan. 1040x form for 2012 1, 1998     Thailand TIAS Jan. 1040x form for 2012 1, 1998     Trinidad and Tobago TIAS 7047 Jan. 1040x form for 2012 1, 1970 1971-2 C. 1040x form for 2012 B. 1040x form for 2012 479   Tunisia TIAS Jan. 1040x form for 2012 1, 1990     Turkey TIAS Jan. 1040x form for 2012 1, 1998     Ukraine TIAS Jan. 1040x form for 2012 1, 2001     United Kingdom TIAS Jan. 1040x form for 2012 1, 2004     Venezuela TIAS Jan. 1040x form for 2012 1, 2000      1(TIAS) — Treaties and Other International Act Series. 1040x form for 2012  2Information on the treaty can be found in Publication 597, Information on the United States—Canada Income Tax Treaty. 1040x form for 2012 3The U. 1040x form for 2012 S. 1040x form for 2012 -U. 1040x form for 2012 S. 1040x form for 2012 S. 1040x form for 2012 R. 1040x form for 2012 income tax treaty applies to the countries of Armenia, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, and Uzbekistan. 1040x form for 2012 Prev  Up  Next   Home   More Online Publications
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The 1040x Form For 2012

1040x form for 2012 Publication 908 - Main Content Table of Contents Bankruptcy Code Tax Compliance RequirementsTax Returns Due for Periods Ending Before the Bankruptcy Filing in Chapter 13 Cases Tax Returns Due After the Bankruptcy Filing Individuals in Chapter 12 or 13 Individuals in Chapter 7 or 11Debtor's Election To End Tax Year – Form 1040 Taxes and the Bankruptcy Estate Bankruptcy Estate – Income, Deductions, and Credits Tax Reporting – Chapter 11 Cases Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due Tax Return Example – Form 1041 Partnerships and CorporationsFiling Requirements Partnerships Corporations Receiverships Determination of TaxPrompt Determination Requests Court Jurisdiction Over Tax MattersBankruptcy Court Tax Court Federal Tax ClaimsUnsecured Tax Claims Discharge of Unpaid Tax Debt CancellationExclusions Reduction of Tax Attributes Partnerships Corporations Tax Attribute Reduction Example How To Get Tax HelpTaxpayer Advocacy Panel (TAP). 1040x form for 2012 Low Income Taxpayer Clinics (LITCs). 1040x form for 2012 Bankruptcy Code Tax Compliance Requirements Tax Returns Due for Periods Ending Before the Bankruptcy Filing in Chapter 13 Cases The Bankruptcy Code requires chapter 13 debtors to file all required tax returns for tax periods ending within 4 years of the debtor's bankruptcy filing. 1040x form for 2012 All such federal tax returns must be filed with the IRS before the date first set for the first meeting of creditors. 1040x form for 2012 The debtor may request the trustee to hold the meeting open for an additional 120 days to enable the debtor to file the returns (or until the day the returns are due under an automatic IRS extension, if later). 1040x form for 2012 After notice and hearing, the bankruptcy court may extend the period for another 30 days. 1040x form for 2012 Failure to timely file the returns can prevent confirmation of a chapter 13 plan and result in either dismissal of the chapter 13 case or conversion to a chapter 7 case. 1040x form for 2012 Note. 1040x form for 2012 Individual debtors should use their home address when filing Form 1040 with the IRS. 1040x form for 2012 Returns should not be filed “in care of” the trustee's address. 1040x form for 2012 Ordering tax transcripts and copies of returns. 1040x form for 2012   Trustees may require the debtor to submit copies or transcripts of the debtor's returns as proof of filing. 1040x form for 2012 The debtor can request free transcripts of the debtor's income tax returns by filing Form 4506-T, Request for Transcript of Tax Return, with the IRS or by placing a request on the IRS's free Automated Delivery Service (ADS), available by calling 1-800-829-1040. 1040x form for 2012 If requested through ADS, the transcript will be mailed to the debtor's most current address according to the IRS's records. 1040x form for 2012 Transcripts requested using Form 4506-T may be mailed to any address, including to the attention of the trustee in the debtor's bankruptcy case. 1040x form for 2012 Transcripts are normally mailed within 10 to 15 days of receipt of the request by the IRS. 1040x form for 2012 A transcript contains most of the information on the debtor's filed return, but it is not a copy of the return. 1040x form for 2012 To request a copy of the debtor's filed return, file Form 4506, Request for Copy of Tax Return. 1040x form for 2012 It may take up to 60 days for the IRS to provide the copies after receipt of the debtor's request, and there is a fee of $57. 1040x form for 2012 00 per tax return for copies of the returns. 1040x form for 2012 Tax Returns Due After the Bankruptcy Filing For debtors filing bankruptcy under all chapters (chapters 7, 11, 12, or 13), the Bankruptcy Code provides that if the debtor does not file a tax return that becomes due after the commencement of the bankruptcy case, or obtain an extension for filing the return before the due date, the taxing authority may request that the bankruptcy court either dismiss the case or convert the case to a case under another chapter of the Bankruptcy Code. 1040x form for 2012 If the debtor does not file the required return or obtain an extension within 90 days after the request is made, the bankruptcy court must dismiss or convert the case. 1040x form for 2012 Tax returns and payment of taxes in chapter 11 cases. 1040x form for 2012   The Bankruptcy Code provides that a chapter 11 debtor's failure to timely file tax returns and pay taxes owed after the date of the “order for relief” (the bankruptcy petition date in voluntary cases) is cause for dismissal of the chapter 11 case, conversion to a chapter 7 case, or appointment of a chapter 11 trustee. 1040x form for 2012 Disclosure of debtor's return information to trustee. 1040x form for 2012   In bankruptcy cases filed under chapter 7 or 11 by individuals, the debtor's income tax returns for the year the bankruptcy case begins and for earlier years are, upon written request, open to inspection by or disclosure to the trustee. 1040x form for 2012 If the bankruptcy case was not voluntary, disclosure cannot be made before the bankruptcy court has entered an order for relief, unless the court rules that the disclosure is needed for determining whether relief should be ordered. 1040x form for 2012    In bankruptcy cases other than those of individuals filing under chapter 7 or 11, the debtor's income tax returns for the current and prior years are, upon written request, open to inspection by or disclosure to the trustee, but only if the IRS finds that the trustee has a material interest that will be affected by information on the return. 1040x form for 2012 Material interest is generally defined as a financial or monetary interest. 1040x form for 2012 Material interest is not limited to the trustee's responsibility to file a return on behalf of the bankruptcy estate. 1040x form for 2012   However, the U. 1040x form for 2012 S. 1040x form for 2012 Trustee (an officer of the Department of Justice, responsible for maintaining and supervising a panel of private trustees for chapter 7 bankruptcy cases) and the standing chapter 13 trustee (the administrator of chapter 13 cases in a specific geographic region) generally do not have a material interest in the debtor’s return or return information. 1040x form for 2012 Disclosure of bankruptcy estate's return information to debtor. 1040x form for 2012    The bankruptcy estate's tax return(s) are open, upon written request, to inspection by or disclosure to the individual debtor in a chapter 7 or 11 bankruptcy. 1040x form for 2012 Disclosure of the estate's return to the debtor may be necessary to enable the debtor to determine the amount and nature of the tax attributes, if any, that the debtor assumes when the bankruptcy estate terminates. 1040x form for 2012 Individuals in Chapter 12 or 13 Only individuals may file a chapter 13 bankruptcy. 1040x form for 2012 Chapter 13 relief is not available to corporations or partnerships. 1040x form for 2012 The bankruptcy estate is not treated as a separate entity for tax purposes when an individual files a petition under chapter 12 (Adjustment of Debts of a Family Farmer or Fisherman with Regular Annual Income) or 13 (Adjustment of Debts of an Individual with Regular Income) of the Bankruptcy Code. 1040x form for 2012 In these cases the individual continues to file the same federal income tax returns that were filed prior to the bankruptcy petition, Form 1040, U. 1040x form for 2012 S. 1040x form for 2012 Individual Income Tax Return. 1040x form for 2012 On the debtor's individual tax return, Form 1040, report all income received during the entire year and deduct all allowable expenses. 1040x form for 2012 Do not include in income the amount from any debt canceled due to the debtor's bankruptcy. 1040x form for 2012 To the extent the debtor has any losses, credits, or basis in property that were previously reduced as a result of canceled debt, these reductions must be included on the debtor's return. 1040x form for 2012 See Debt Cancellation, later. 1040x form for 2012 Interest on trust accounts in chapter 13 cases. 1040x form for 2012   In chapter 13 proceedings, do not include interest earned on amounts held by the trustee in trust accounts as income on the debtor's return. 1040x form for 2012 This interest is not available to either the debtor or creditors, it is available only to the trustee for use by the U. 1040x form for 2012 S. 1040x form for 2012 Trustee system. 1040x form for 2012 The interest is also not taxable to the trustee as income. 1040x form for 2012 Individuals in Chapter 7 or 11 When an individual debtor files for bankruptcy under chapter 7 or 11 of the Bankruptcy Code, the bankruptcy estate is treated as a new taxable entity, separate from the individual taxpayer. 1040x form for 2012 The bankruptcy estate in a chapter 7 case is represented by a trustee. 1040x form for 2012 The trustee is appointed to administer the estate and liquidate any nonexempt assets. 1040x form for 2012 In chapter 11 cases, the debtor often remains in control of the assets as a “debtor-in-possession” and acts as the bankruptcy trustee. 1040x form for 2012 However, the bankruptcy court, for cause, may appoint a trustee if such appointment is in the best interests of the creditors and the estate. 1040x form for 2012 During the chapter 7 or 11 bankruptcy, the debtor continues to file an individual tax return on Form 1040. 1040x form for 2012 The bankruptcy trustee files a Form 1041 for the bankruptcy estate. 1040x form for 2012 However, when a debtor in a chapter 11 bankruptcy case remains a debtor-in-possession, he or she must file both a Form 1040 individual return and a Form 1041 estate return for the bankruptcy estate (if return filing requirements are met). 1040x form for 2012 Although a husband and wife may file a joint bankruptcy petition whose bankruptcy estates are jointly administered, the estates are be treated as two separate entities for tax purposes. 1040x form for 2012 Two separate bankruptcy estate income tax returns must be filed (if each spouse separately meets the filing requirements). 1040x form for 2012 For information about determining the tax due and paying tax for a chapter 7 or 11 bankruptcy estate, see Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due, later. 1040x form for 2012 Debtor's Election To End Tax Year – Form 1040 Short tax years. 1040x form for 2012   An individual debtor in a chapter 7 or 11 case may elect to close the debtor's tax year for the year in which the bankruptcy petition is filed, as of the day before the date on which the bankruptcy case commences. 1040x form for 2012 If the debtor makes this election, the debtor's tax year is divided into 2 short tax years of less than 12 months each. 1040x form for 2012 The first tax year ends on the day before the commencement date and the second tax year begins on the commencement date. 1040x form for 2012   If the election is made, the debtor's federal income tax liability for the first short tax year becomes an allowable claim against the bankruptcy estate arising before the bankruptcy filing. 1040x form for 2012 Also, the tax liability for the first short tax year is not subject to discharge under the Bankruptcy Code. 1040x form for 2012    If the debtor does not make an election to end the tax year, the commencement of the bankruptcy case does not affect the debtor's tax year. 1040x form for 2012 Also, no part of the debtor's income tax liability for the year in which the bankruptcy case commences can be collected from the bankruptcy estate. 1040x form for 2012 Note. 1040x form for 2012 The debtor cannot make a short tax year election if no assets, other than exempt property, are in the bankruptcy estate. 1040x form for 2012 Making the Election - Filing Requirements First short tax year. 1040x form for 2012   The debtor can elect to end the debtor's tax year by filing a return on Form 1040 for the first short tax year. 1040x form for 2012 The return must be filed on or before the 15th day of the fourth full month after the end of that first tax year. 1040x form for 2012 Second short tax year. 1040x form for 2012   If the debtor elects to end the tax year on the day before filing the bankruptcy case, the debtor must file the return for the first short tax year in the manner discussed above. 1040x form for 2012   If the debtor makes this election, the debtor must also file a separate Form 1040 for the second short tax year by the regular due date. 1040x form for 2012 To avoid delays in processing the return, write “Second Short Year Return After Section 1398 Election” at the top of the return. 1040x form for 2012 Example. 1040x form for 2012 Jane Doe, an individual calendar year taxpayer, filed a bankruptcy petition under chapter 7 or 11 on May 8, 2012. 1040x form for 2012 If Jane elected to close her tax year at the commencement of her case, Jane's first short year for 2012 runs from January 1 through May 7, 2012. 1040x form for 2012 Jane's second short year runs from May 8, 2012, through December 31, 2012. 1040x form for 2012 To have a timely filed election for the first short year, Jane must file Form 1040 (or an extension of time to file) for the period January 1 through May 7 by September 15. 1040x form for 2012 To avoid delays in processing the return, write “Section 1398 Election” at the top of the return. 1040x form for 2012 The debtor may also make the election by attaching a statement to Form 4868, Automatic Extension of Time to File an U. 1040x form for 2012 S. 1040x form for 2012 Individual Tax Return. 1040x form for 2012 The statement must state that the debtor elects under IRC section 1398(d)(2) to close the debtor's tax year on the day before filing the bankruptcy case. 1040x form for 2012 The debtor must file Form 4868 by the due date of the return for the first short tax year. 1040x form for 2012 The debtor's spouse may also elect to close his or her tax year, see Election by debtor's spouse, below. 1040x form for 2012 Election by debtor's spouse. 1040x form for 2012   If the debtor is married, the debtor's spouse may join in the election to end the tax year. 1040x form for 2012 If the debtor and spouse make a joint election, the debtor must file a joint return for the first short tax year. 1040x form for 2012 The debtor must elect by the due date for filing the return for the first short tax year. 1040x form for 2012 Once the election is made, it cannot be revoked for the first short tax year. 1040x form for 2012 However, the election does not prevent the debtor and the spouse from filing separate returns for the second short tax year. 1040x form for 2012 Later bankruptcy of spouse. 1040x form for 2012    If the debtor's spouse files for bankruptcy later in the same year, he or she may also choose to end his or her tax year, regardless of whether he or she joined in the election to end the debtor's tax year. 1040x form for 2012   As each spouse has a separate bankruptcy, one or both of them may have 3 short tax years in the same calendar year. 1040x form for 2012 If the debtor's spouse joined the debtor's election or if the debtor had not made the election to end the tax year, the debtor can join in the spouse's election. 1040x form for 2012 However, if the debtor made an election and the spouse did not join that election, the debtor cannot then join the spouse's later election. 1040x form for 2012 The debtor and the spouse are precluded from this election because they have different tax years. 1040x form for 2012 This results because the debtor does not have a tax year ending the day before the spouse's filing for bankruptcy, and the debtor cannot file a joint return for a year ending on the day before the spouse's filing of bankruptcy. 1040x form for 2012 Example 1. 1040x form for 2012 Paul and Mary Harris are calendar-year taxpayers. 1040x form for 2012 Paul's voluntary chapter 7 bankruptcy case begins on March 4. 1040x form for 2012 If Paul does not make an election, his tax year does not end on March 3. 1040x form for 2012 If he makes an election, Paul's first tax year is January 1–March 3, and his second tax year begins on March 4. 1040x form for 2012 Mary could join in Paul's election as long as they file a joint return for the tax year January 1–March 3. 1040x form for 2012 They must make the election by July 15, the due date for filing the joint return. 1040x form for 2012 Example 2. 1040x form for 2012 Fred and Ethel Barnes are calendar-year taxpayers. 1040x form for 2012 Fred's voluntary chapter 7 bankruptcy case begins on May 6, and Ethel's bankruptcy case begins on November 1 of the same year. 1040x form for 2012 Ethel could elect to end her tax year on October 31. 1040x form for 2012 If Fred did not elect to end his tax year on May 5, or if he elected to do so but Ethel had not joined in his election, Ethel would have 2 tax years in the same calendar year if she decided to close her tax year. 1040x form for 2012 Her first tax year is January 1–October 31, and her second year is November 1–December 31. 1040x form for 2012 If Fred did not end his tax year as of May 5, he could join in Ethel's election to close her tax year on October 31, but only if they file a joint return for the tax year January 1–October 31. 1040x form for 2012 If Fred elected to end his tax year on May 5, but Ethel did not join in Fred's election, Fred cannot join in Ethel's election to end her tax year on October 31. 1040x form for 2012 Fred and Ethel cannot file a joint return for that short tax year because their tax years preceding October 31 were not the same. 1040x form for 2012 Example 3. 1040x form for 2012 Jack and Karen Thomas are calendar-year taxpayers. 1040x form for 2012 Karen's voluntary chapter 7 bankruptcy case began on April 10, and Jack's voluntary chapter 7 bankruptcy case began on October 3 of the same year. 1040x form for 2012 Karen elected to close her tax year on April 9 and Jack joins in Karen's election. 1040x form for 2012 Under these facts, Jack would have 3 tax years for the same calendar year if he makes the election relating to his own bankruptcy case. 1040x form for 2012 The first tax year would be January 1–April 9; the second, April 10–October 2; and the third, October 3–December 31. 1040x form for 2012 Karen may join in Jack's election if they file a joint return for the second short tax year (April 10–October 2). 1040x form for 2012 If Karen does join in, she would have the same 3 short tax years as Jack. 1040x form for 2012 Also, if Karen joins in Jack's election, they may file a joint return for the third tax year (October 3–December 31), but they are not required to do so. 1040x form for 2012 Annualizing taxable income. 1040x form for 2012   If the debtor elects to close the tax year, the debtor must annualize taxable income for each short tax year in the same manner a change in annual accounting period is calculated. 1040x form for 2012 See Short Tax Year in Publication 538, for information on how to annualize the debtor's income and to figure the tax for the short tax year. 1040x form for 2012 Dismissal of bankruptcy case. 1040x form for 2012   If the bankruptcy court later dismisses an individual chapter 7 or 11 case, the bankruptcy estate is no longer treated as a separate taxable entity. 1040x form for 2012 It is as if no bankruptcy estate was created for tax purposes. 1040x form for 2012 In this situation, the debtor must file amended tax returns on Form 1040X, to replace all full or short year individual returns (Form 1040) and bankruptcy estate returns (Form 1041) filed as a result of the bankruptcy case. 1040x form for 2012 Income, deductions, and credits previously reported by the bankruptcy estate must be reported on the debtor's amended returns. 1040x form for 2012 Attach a statement to the amended returns explaining why the debtor is filing an amended return. 1040x form for 2012 Taxes and the Bankruptcy Estate Property of the bankruptcy estate. 1040x form for 2012   At the commencement of a bankruptcy case a bankruptcy estate is created. 1040x form for 2012 Bankruptcy law determines which of the debtor's assets become part of a bankruptcy estate. 1040x form for 2012 This estate generally includes all of the debtor's legal and equitable interests in property as of the commencement date. 1040x form for 2012 However, there are exceptions and certain property is exempted or excluded from the bankruptcy estate. 1040x form for 2012 Note. 1040x form for 2012 Exempt property and abandoned property are initially part of the bankruptcy estate, but are subsequently removed from the estate. 1040x form for 2012 Excluded property is never included in the estate. 1040x form for 2012 Transfer of assets between debtor and bankruptcy estate. 1040x form for 2012   The transfer (other than by sale or exchange) of an asset from the debtor to the bankruptcy estate is not treated as a disposition for income tax purposes. 1040x form for 2012 The transfer does not result in gain or loss, acceleration of income or deductions, or recapture of deductions or credits. 1040x form for 2012 For example, the transfer of an installment obligation to the estate would not accelerate gain under the rules for reporting installment sales. 1040x form for 2012 The estate assumes the same basis, holding period, and character of the transferred assets. 1040x form for 2012 Also, the estate generally accounts for the transferred assets in the same manner as debtor. 1040x form for 2012   When the bankruptcy estate is terminated or dissolved, any resulting transfer (other than by sale or exchange) of the estate's assets back to the debtor is also not treated as a disposition for tax purposes. 1040x form for 2012 The transfer does not result in gain or loss, acceleration of income or deductions, or recapture of deductions or credits to the estate. 1040x form for 2012 Abandoned property. 1040x form for 2012    The abandonment of property by the estate to the debtor is a nontaxable disposition of property. 1040x form for 2012 If the debtor received abandoned property from the bankruptcy estate, the debtor assumes the same basis in the property that the bankruptcy estate had. 1040x form for 2012 Separate taxable entity. 1040x form for 2012   When an individual files a bankruptcy petition under chapter 7 or 11, the bankruptcy estate is treated as a separate taxable entity from the debtor. 1040x form for 2012 The court appointed trustee or the debtor-in-possession is responsible for preparing and filing all of the bankruptcy estate's tax returns, including its income tax return on Form 1041, U. 1040x form for 2012 S. 1040x form for 2012 Income Tax Return for Estates and Trusts, and paying its taxes. 1040x form for 2012 The debtor remains responsible for filing his or her own returns on Form 1040, U. 1040x form for 2012 S. 1040x form for 2012 Individual Income Tax Return, and paying taxes on income that does not belong to the estate. 1040x form for 2012 Employer identification number. 1040x form for 2012   The trustee or debtor-in-possession must obtain an EIN for a bankruptcy estate. 1040x form for 2012 The trustee or debtor-in-possession uses this EIN on all tax returns filed for the bankruptcy estate with the IRS, including estimated tax returns. 1040x form for 2012 See Employer identification number, under Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due, later. 1040x form for 2012    The social security number of the individual debtor cannot be used as the EIN for the bankruptcy estate. 1040x form for 2012 Income, deductions, and credits – Form 1040. 1040x form for 2012   In an individual chapter 7 or 11 bankruptcy case, do not include the income, deductions, and credits that belong to the bankruptcy estate on the debtor's individual income tax return (Form 1040). 1040x form for 2012 Also, do not include as income on the debtor's return the amount of any debt canceled by reason of the bankruptcy discharge. 1040x form for 2012 The bankruptcy estate must reduce certain losses, credits, and the basis in property (to the extent of these items) by the amount of canceled debt. 1040x form for 2012 See Debt Cancellation, below. 1040x form for 2012 Note. 1040x form for 2012 The debtor may not be able to claim certain deductions available to the bankruptcy estate such as administrative expenses. 1040x form for 2012 Additionally, the bankruptcy exclusion cannot be used to exclude income from a cancelled debt if the discharge of indebtedness was not within the bankruptcy case, even though the debtor was under the bankruptcy court's protection at the time. 1040x form for 2012 However, other exclusions, such as the insolvency exclusion, may apply. 1040x form for 2012 Bankruptcy Estate – Income, Deductions, and Credits Bankruptcy Estate Income Income of the estate in individual chapter 7 cases. 1040x form for 2012    The gross income of the bankruptcy estate includes gross income of the debtor to which the estate is entitled under the Bankruptcy Code. 1040x form for 2012 Gross income also includes income generated by the bankruptcy estate from property of the estate after the commencement of the case. 1040x form for 2012   Gross income of the bankruptcy estate does not include amounts received or accrued by the debtor before the commencement of the case. 1040x form for 2012 Additionally, in chapter 7 cases, gross income of the bankruptcy estate does not include any income that the debtor earns after the date of the bankruptcy petition. 1040x form for 2012 Income of the estate in individual chapter 11 cases. 1040x form for 2012    In chapter 11 cases, under IRC section 1398(e)(1), gross income of the bankruptcy estate includes income that the debtor earns for services performed after the bankruptcy petition date. 1040x form for 2012 Also, earnings from services performed by an individual debtor after the commencement of the chapter 11 case are property of the bankruptcy estate under section 1115 of the Bankruptcy Code (11 U. 1040x form for 2012 S. 1040x form for 2012 C. 1040x form for 2012 section 1115). 1040x form for 2012 Note. 1040x form for 2012 A debtor-in-possession may be compensated by the estate for managing or operating a trade or business that the debtor conducted before the commencement of the bankruptcy case. 1040x form for 2012 Such payments should be reported by the debtor as miscellaneous income on his or her individual income tax return (Form 1040). 1040x form for 2012 Amounts paid by the estate to the debtor-in-possession for managing or operating the trade or business may qualify as administrative expenses of the estate. 1040x form for 2012 See Administrative expenses, below. 1040x form for 2012 Conversion or dismissal of chapter 11 cases. 1040x form for 2012   If a chapter 11 case is converted to a chapter 13 case, the chapter 13 estate is not a separate taxable entity and earnings from post-conversion services and income from property of the estate realized after the conversion to chapter 13 are taxed to the debtor. 1040x form for 2012 If the chapter 11 case is converted to a chapter 7 case, 11 U. 1040x form for 2012 S. 1040x form for 2012 C. 1040x form for 2012 section 1115 does not apply after conversion and: Earnings from post-conversion services will be taxed to the debtor, rather than the estate, and The property of the chapter 11 estate will become property of the chapter 7 estate. 1040x form for 2012 Any income on this property will be taxed to the estate even if the income is realized after the conversion to chapter 7. 1040x form for 2012 If a chapter 11 case is dismissed, the debtor is treated as if the bankruptcy case had never been filed and as if no bankruptcy estate had been created. 1040x form for 2012 Bankruptcy Estate Deductions and Credits A bankruptcy estate deducts expenses incurred in a trade, business, or activity, and uses credits in the same way the debtor would have deducted or credited them had he or she continued operations. 1040x form for 2012 Note. 1040x form for 2012 Expenses may be disallowed under other provisions of the IRC (such as the disallowance of certain capital expenditures or expenses relating to tax-exempt interest). 1040x form for 2012 Administrative expenses. 1040x form for 2012   Allowable expenses include administrative expenses. 1040x form for 2012    Administrative expenses can only be deducted by the estate, never by the debtor. 1040x form for 2012   The bankruptcy estate is allowed deductions for bankruptcy administrative expenses and fees, including accounting fees, attorney fees, and court costs. 1040x form for 2012 These expenses are deductible on Form 1040, Schedule A as miscellaneous itemized deductions not subject to the 2% floor on miscellaneous itemized deductions, because they would not have been incurred if property had not been held by the bankruptcy estate. 1040x form for 2012 See IRC section 67(e). 1040x form for 2012 Administrative expenses of the bankruptcy estate attributable to conducting a trade or business for the production of estate rents or royalties are deductible in arriving at adjusted gross income on Form 1040, Schedules C, E, and F. 1040x form for 2012 Note. 1040x form for 2012 The bankruptcy estate uses Form 1041 as a transmittal for the tax return prepared using Form 1040 and its schedules. 1040x form for 2012 See Transmittal for Form 1040 under Tax Return Filing Requirements and Payment of Tax, later. 1040x form for 2012 Administrative expense loss. 1040x form for 2012   If the administrative expenses of the bankruptcy estate are more than its gross income for a tax year, the excess amount may be carried back 3 years and forward 7 years. 1040x form for 2012 The amounts can only be carried to a tax year of the estate and never to a debtor's tax year. 1040x form for 2012 The excess amount to be carried back or forward is treated like a net operating loss (NOL) and must first be carried back to the earliest year possible. 1040x form for 2012 For a discussion of NOLs, see Publication 536. 1040x form for 2012 Attribute carryovers. 1040x form for 2012   The bankruptcy estate may use its tax attributes the same way that the debtor would have used them. 1040x form for 2012 These items are determined as of the first day of the debtor's tax year in which the bankruptcy case begins. 1040x form for 2012 The bankruptcy estate assumes the following tax attributes from the debtor: NOL carryovers, Carryovers of excess charitable contributions, Recovery of tax benefit items, Credit carryovers, Capital loss carryovers, Basis, holding period, and character of assets, Method of accounting, Passive activity loss and credit carryovers, Unused at-risk deductions, and Other tax attributes provided in the regulations. 1040x form for 2012   Certain tax attributes of the bankruptcy estate must be reduced by the amount of income that was previously excluded as a result of cancellation of debt during the bankruptcy proceeding. 1040x form for 2012 See Debt Cancellation, later. 1040x form for 2012   When the bankruptcy estate is terminated (for example, when the case ends), the debtor assumes any remaining tax attributes previously taken over by the bankruptcy estate. 1040x form for 2012 The debtor also generally assumes any of the tax attributes, listed above, that arose during the administration of the bankruptcy estate. 1040x form for 2012 Note. 1040x form for 2012 The debtor does not assume the bankruptcy estate's administrative expense losses because they cannot be used by an individual taxpayer filing Form 1040. 1040x form for 2012 See Administrative expense loss, above. 1040x form for 2012 Passive and at-risk activities. 1040x form for 2012   For bankruptcy cases beginning after November 8, 1992, passive activity carryover losses and credits and unused at-risk deductions are treated as tax attributes passing from the debtor to the bankruptcy estate, which the estate then passes back to the debtor when the bankruptcy estate terminates. 1040x form for 2012 Additionally, transfers to the debtor (other than by sale or exchange) of interests in passive or at-risk activities are treated as non-taxable exchanges. 1040x form for 2012 These transfers include the return of exempt property and abandonment of estate property to the debtor. 1040x form for 2012 Carrybacks from the debtor's activities. 1040x form for 2012   The debtor cannot carry back any NOL or credit carryback from a tax year ending after the bankruptcy case has begun to any tax year ending before the case began. 1040x form for 2012 Carrybacks from the bankruptcy estate. 1040x form for 2012   If the bankruptcy estate has an NOL that did not pass to the estate from the debtor under the attribute carryover rules, the estate can carry the loss back not only to its own earlier tax years but also to the debtor's tax years before the year the bankruptcy case began. 1040x form for 2012 The estate may also carry back excess credits, such as the general business credit, to the pre-bankruptcy tax years. 1040x form for 2012 Tax Reporting – Chapter 11 Cases Allocation of income and credits on information returns and required statement for returns for individual chapter 11 cases. 1040x form for 2012    In chapter 11 cases, when an employer issues a Form W-2 reporting all of the debtor's wages, salary, or other compensation for a calendar year, and a portion of the earnings represent post-petition services includible in the estate's gross income, the Form W-2 amounts must be allocated between the estate and the debtor. 1040x form for 2012 The debtor-in-possession or trustee must allocate the income amount reported in box 1 and the income tax withheld reported in box 2 between the debtor and the estate. 1040x form for 2012 These allocations must reflect that the debtor's gross earnings from post-petition services and gross income from post-petition property are, generally, includible in the estate's gross income and not the debtor's gross income. 1040x form for 2012 The debtor and trustee may use a simple percentage method to allocate income and income tax withheld. 1040x form for 2012 The same method must be used to allocate the income and the withheld tax. 1040x form for 2012 Example. 1040x form for 2012 If 20% of the wages reported on Form W-2 for a calendar year were earned after the commencement of the case and are included in the estate's gross income, 20% of the withheld income tax reported on Form W-2 must also be claimed as a credit on the estate's income tax return. 1040x form for 2012 Likewise, 80% of wages must be reported by the debtor and 80% of the income tax withheld must be claimed as a credit on the debtor's income tax return. 1040x form for 2012 See IRC section 31(a). 1040x form for 2012   If information returns are issued to the debtor for gross income, gross proceeds, or other reportable payments that should have been reported to the bankruptcy estate, the debtor-in-possession or trustee must allocate the improperly reported income in a reasonable manner between the debtor and the estate. 1040x form for 2012 In general, the allocation must ensure that any income and income tax withheld attributable to the post-petition period is reported on the estate's return, and any income and income tax withheld attributable to the pre-petition period is reported on the debtor's return. 1040x form for 2012    IRS Notice 2006-83 requires the debtor to attach a statement to his or her individual income tax return (Form 1040) stating that the return is filed subject to a chapter 11 bankruptcy case. 1040x form for 2012 The statement must also: Show the allocations of income and income tax withheld, Describe the method used to allocate income and income tax withheld, and List the filing date of the bankruptcy case, the bankruptcy court in which the case is pending, the bankruptcy court case number, and the bankruptcy estate's EIN. 1040x form for 2012 Note. 1040x form for 2012 The debtor-in-possession or trustee must attach a similar statement to the bankruptcy estate's income tax return (Form 1041). 1040x form for 2012   The model Notice 2006-83 Statement, shown above, may be used by debtors, debtors-in-possession, and trustees to satisfy the reporting requirement. 1040x form for 2012 Self-employment taxes in individual chapter 11 cases. 1040x form for 2012   IRC section 1401 imposes a tax upon the self-employment income, that is, the net earnings from self-employment of an individual. 1040x form for 2012 Net earnings from self-employment are equal to the gross income derived by an individual from any trade or business carried on by such individual, less deductions attributable to the business. 1040x form for 2012   Neither section 1115 of the Bankruptcy Code nor IRC section 1398 addresses the application of self-employment tax to the post-petition earnings of the individual debtor. 1040x form for 2012 Therefore, if the debtor continues to derive gross income from the performance of services as a self-employed individual after the commencement of the bankruptcy case, the debtor must continue to report the debtor's self-employment income on Schedule SE (Form 1040) of the debtor's income tax return. 1040x form for 2012 This schedule includes self-employment income earned post-petition and the attributable deductions. 1040x form for 2012 The debtor must pay any self-employment tax imposed by IRC section 1401. 1040x form for 2012 Employment taxes and employer's obligation to file Form W-2 in individual chapter 11 cases. 1040x form for 2012   In chapter 11 cases, post-petition wages earned by a debtor are generally treated as gross income of the estate. 1040x form for 2012 However, section 1115 of the Bankruptcy Code (11 U. 1040x form for 2012 S. 1040x form for 2012 C. 1040x form for 2012 section 1115) does not affect the determination of what are deemed wages for Federal Insurance Contributions Act (FICA) tax, Federal Unemployment Tax Act (FUTA) tax, or Federal Income Tax Withholding purposes. 1040x form for 2012 See Notice 2006-83. 1040x form for 2012   The reporting and withholding obligations of a debtor's employer also do not change. 1040x form for 2012 An employer should continue to report the wages and tax withholding on a Form W-2 issued under the debtor's name and social security number. 1040x form for 2012 Notice to persons required to file information returns (other than Form W-2, Wage and Tax Statement) in individual chapter 11 cases. 1040x form for 2012   Within a reasonable time after the commencement of a chapter 11 bankruptcy case, the trustee or debtor-in-possession should provide notification of the bankruptcy estate's EIN to all persons (or entities) that are required to file information returns for the bankruptcy estate's gross income, gross proceeds, or other types of reportable payments. 1040x form for 2012 See IRC section 6109(a)(2). 1040x form for 2012 As these payments are the property of the estate under section 1115 of the Bankruptcy Code, the payors should report the gross income, gross proceeds, or other reportable payments on the appropriate information return using the estate's name and EIN as required under the IRC and regulations (see IRC sections 6041 through 6049). 1040x form for 2012   The trustee or debtor-in-possession should not, however, provide the EIN to a person (or entity) filing Form W-2 reporting the debtor's wages or other compensation, as section 1115 of the Bankruptcy Code does not affect the determination of what constitutes wages for purposes of federal income tax withholding or FICA. 1040x form for 2012 See Notice 2006-83. 1040x form for 2012 An employer should continue to report all wage income and tax withholding, both pre-petition and post-petition, on a Form W-2 to the debtor under the debtor's social security number. 1040x form for 2012   The debtor in a chapter 11 case is not required to file a new Form W-4 with an employer solely because the debtor filed a chapter 11 case and the post-petition wages are includible in the estate's income and not the debtor's income. 1040x form for 2012 However, a new Form W-4 may be necessary if the debtor is no longer entitled to claim the same number of allowances previously claimed because certain deductions or credits now belong to the estate. 1040x form for 2012 See Employment Tax Regulations section 31. 1040x form for 2012 3402(f)(2)-1. 1040x form for 2012 Additionally, the debtor may wish to file a new Form W-4 to increase the income tax withheld from post-petition wages allocated to the estate to avoid having to make estimated tax payments for the estate. 1040x form for 2012 See IRC section 6654(a). 1040x form for 2012 Notice required in converted and dismissed cases. 1040x form for 2012   When a chapter 11 bankruptcy case is closed, dismissed, or converted to a chapter 12 or 13 case, the bankruptcy estate ends as a separate taxable entity. 1040x form for 2012 The debtor should, within a reasonable time, send notice of such event to the persons (or entities) previously notified of the bankruptcy case. 1040x form for 2012 This helps to ensure that gross income, proceeds, and other reportable payments realized after the event are reported to the debtor under the correct TIN rather than to the estate. 1040x form for 2012   When a chapter 11 case is converted to a chapter 7 case, the bankruptcy estate will continue to exist as a separate taxable entity. 1040x form for 2012 Gross income (other than post-conversion income from the debtor's services), gross proceeds, or other reportable payments should continue to be reported to the estate if they are property of the chapter 7 estate. 1040x form for 2012 However, income from services performed by the debtor after conversion of the case to chapter 7 is not property of the chapter 7 estate. 1040x form for 2012 After the conversion, the debtor should notify payors required to report the debtor's nonemployee compensation that compensation earned after the conversion should be reported using the debtor's name and TIN, not the estate's name and EIN. 1040x form for 2012 Employment taxes. 1040x form for 2012   The trustee or debtor-in-possession must withhold income and social security taxes and file employment tax returns for any wages paid by the trustee or debtor, including wage claims paid as administrative expenses. 1040x form for 2012 See Publication 15, Circular E, Employer's Tax Guide, for details on employer tax responsibilities. 1040x form for 2012   The trustee also has the duty to prepare and file Forms W-2 for wage claims paid by the trustee, regardless of whether the claims accrued before or during bankruptcy. 1040x form for 2012 For a further discussion of employment taxes, see Employment Taxes, later. 1040x form for 2012 Notice 2006-83 Statement Pending Bankruptcy Case The taxpayer, , filed a bankruptcy petition under chapter 11 of the Bankruptcy Code in the bankruptcy court for the District of . 1040x form for 2012 The bankruptcy court case number is . 1040x form for 2012 Gross income, and withheld federal income tax, reported on Form W-2, Forms 1099, Schedule K-1, and other information returns received under the taxpayer's name and social security number (or other taxpayer identification number) are allocated between the taxpayer's TIN and the bankruptcy estate's EIN as follows, using [describe allocation method]:. 1040x form for 2012   Year Taxpayer   Estate 1. 1040x form for 2012 Form W-2, Payor: $   $     Withheld income tax shown on Form W-2 $   $   2. 1040x form for 2012 Form 1099-INT Payor: $   $     Withheld income tax (if any) shown on Form 1099-INT $   $   3. 1040x form for 2012 Form 1099-DIV Payor: $   $     Withheld income tax (if any) shown on Form 1099-DIV $   $   4. 1040x form for 2012 Form 1099-MISC Payor: $   $     Withheld income tax (if any) shown on Form 1099-MISC $   $   Bankruptcy Estate Tax Return Filing Requirements and Payment of Tax Due Filing Requirements Filing threshold. 1040x form for 2012   If the bankruptcy estate has gross income that meets or exceeds the minimum amount required for filing, the trustee or debtor-in-possession must file an income tax return on Form 1041. 1040x form for 2012 This amount is equal to the sum of the personal exemption amount plus the basic standard deduction for a married individual filing separately. 1040x form for 2012   For 2012, the threshold filing amount for a bankruptcy estate is $9,750 (the sum of the $3,800 personal exemption plus the $5,950 standard deduction for married individuals filing separately). 1040x form for 2012   These amounts are generally adjusted annually. 1040x form for 2012 See the present year Form 1041 Instructions at www. 1040x form for 2012 irs. 1040x form for 2012 gov/form1041 for the current dollar amounts. 1040x form for 2012 Accounting period. 1040x form for 2012   A bankruptcy estate may have a fiscal year. 1040x form for 2012 However, this period cannot be longer than 12 months. 1040x form for 2012 Change of accounting period. 1040x form for 2012   The bankruptcy estate may change its accounting period (tax year) once without IRS approval. 1040x form for 2012 This rule allows the bankruptcy trustee to close the estate's tax year early, before the expected termination of the bankruptcy estate. 1040x form for 2012 The trustee can then file a return for the first short tax year to get a quick determination of the estate's tax liability. 1040x form for 2012 Employer identification number. 1040x form for 2012   The trustee or debtor-in-possession must obtain an EIN for a bankruptcy estate. 1040x form for 2012 The trustee or debtor-in-possession uses this EIN on all tax returns filed for the bankruptcy estate with the IRS, including estimated tax returns. 1040x form for 2012    The social security number of the individual debtor cannot be used as the EIN for the bankruptcy estate. 1040x form for 2012   Obtain an EIN for a bankruptcy estate by applying: Online by clicking on the EIN link at www. 1040x form for 2012 irs. 1040x form for 2012 gov/businesses/small. 1040x form for 2012 The EIN is issued immediately once the application information is validated. 1040x form for 2012 By telephone at 1-800-829-4933 from 7:00 a. 1040x form for 2012 m. 1040x form for 2012 to 7:00 p. 1040x form for 2012 m. 1040x form for 2012 in the trustee's or debtor-in-possession's local time zone. 1040x form for 2012 Assistance provided to callers from Alaska and Hawaii will be based on the hours of operation in the Pacific time zone, or By mailing or faxing Form SS-4, Application for Employer Identification Number. 1040x form for 2012   If the trustee or debtor-in-possession has not received the bankruptcy estate's EIN by the time the return is due, write “Applied for” and the date you applied in the space for the EIN. 1040x form for 2012 For more details, see Pub. 1040x form for 2012 583, Starting a Business and Keeping Records. 1040x form for 2012   Trustees representing ten or more bankruptcy estates (other than estates that will be filing employment or excise tax returns) may request a series or block of EINs. 1040x form for 2012 Figuring tax due. 1040x form for 2012   The bankruptcy estate figures its taxable income the same way an individual figures taxable income. 1040x form for 2012 However, the estate uses the tax rates for a married individual filing separately to calculate the tax on its taxable income. 1040x form for 2012 The estate is entitled to one personal exemption and may either itemize deductions or take the basic standard deduction for a married individual filing a separate return. 1040x form for 2012 The estate cannot take the higher standard deduction allowed for married persons filing separately who are 65 or older or blind. 1040x form for 2012 Tax rate schedule. 1040x form for 2012 The tax on income for bankruptcy estates is calculated using the tax rate schedule for Married Individuals Filing Separately not the Estates and Trusts tax rate schedule. 1040x form for 2012 When to file. 1040x form for 2012   Calendar year bankruptcy estates must file Form 1041 by April 15th. 1040x form for 2012 Fiscal year bankruptcy estates must file on or before the 15th day of the 4th month following the close of its tax year. 1040x form for 2012 For example, an estate that has a tax year that ends on June 30th must file Form 1041 by October 15th of the tax year. 1040x form for 2012 If the due date falls on a Saturday, Sunday, or legal holiday, file on the next business day. 1040x form for 2012 Note. 1040x form for 2012 The bankruptcy estate is allowed an automatic 6-month extension of time to file the bankruptcy estate tax return upon filing the required application, Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns. 1040x form for 2012 Transmittal for Form 1040. 1040x form for 2012   Form 1041 is used as a transmittal for Form 1040. 1040x form for 2012 If a return is required, the trustee or debtor-in-possession must complete the identification area at the top of Form 1041 and indicate the chapter under which the bankruptcy estate filed, either chapter 7 or chapter 11. 1040x form for 2012   Prepare the bankruptcy estate's return by completing Form 1040. 1040x form for 2012 In the top margin of Form 1040, write “Attachment to Form 1041 —DO NOT DETACH. 1040x form for 2012 ” Then, attach Form 1040 to the Form 1041 transmittal. 1040x form for 2012 Enter the tax and payment amounts on lines 23 through 29 of Form 1041, then sign and date the return. 1040x form for 2012 An example of a bankruptcy estate's tax return is prepared below. 1040x form for 2012 Note. 1040x form for 2012 The filing of the bankruptcy estate's tax return does not relieve a debtor from the requirement to file his or her individual tax return on Form 1040. 1040x form for 2012 Payment of Tax Due Payment methods. 1040x form for 2012   Payment of tax due may be made by check or money order or by credit or debit card. 1040x form for 2012 For information on how to make payments electronically by credit or debit card, go to irs. 1040x form for 2012 gov/e-pay. 1040x form for 2012      Payments may also be made electronically using the Electronic Federal Tax Payment System (EFTPS), a free tax payment system that allows you to make payments online or by phone. 1040x form for 2012 To enroll in EFTPS, go to eftps. 1040x form for 2012 gov or call 1-800-555-4477. 1040x form for 2012 For more information see Publication 966, Electronic Federal Tax Payment System: A Guide to Getting Started. 1040x form for 2012 Payment voucher – Form 1041-V. 1040x form for 2012   Form 1041-V accompanies payments made by check or money order for Form 1041. 1040x form for 2012 The voucher includes information about the bankruptcy estate, including the name of the bankruptcy estate, trustee, EIN, and amount due. 1040x form for 2012 Using Form 1041-V assists the IRS in processing the payment more accurately and efficiently. 1040x form for 2012 We recommend the use of Form 1041-V; however, there is no penalty if the voucher is not used. 1040x form for 2012 Estimated tax – Form 1041-ES. 1040x form for 2012   In most cases, the trustee or debtor-in-possession must pay any required estimated tax due for the bankruptcy estate. 1040x form for 2012 See the Form 1041-ES Instructions for information on the minimum threshold amount required for filing Form 1041-ES, paying the estimated tax, and exceptions to filing. 1040x form for 2012 Employment Taxes The trustee or debtor-in-possession must withhold income and social security taxes and file employment tax returns for any wages paid by the trustee or debtor, including wage claims paid as administrative expenses. 1040x form for 2012 Until these employment taxes are deposited as required by the IRC, they should be set aside in a separate bank account to ensure that funds are available to satisfy the liability. 1040x form for 2012 If the employment taxes are not paid as required, the trustee may be held personally liable for payment of the taxes. 1040x form for 2012   See Publication 15, (Circular E), Employer's Tax Guide, for details on employer tax responsibilities. 1040x form for 2012 Also see IRS Notice 931, Deposit Requirements for Employment Taxes, for details on the deposit rules, including the requirement that federal employment tax deposits be made by electronic funds transfer. 1040x form for 2012 The trustee also has a duty to prepare and file Forms W-2, Wage and Tax Statement, for wage claims paid by the trustee, regardless of whether the claims accrued before or during bankruptcy. 1040x form for 2012 If the debtor fails to prepare and file Forms W-2 for wages paid before bankruptcy, the trustee should instruct the employees to file a Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. 1040x form for 2012 , with their individual income tax returns. 1040x form for 2012 Tax Return Example – Form 1041 This publication is not revised annually. 1040x form for 2012 Future changes to the forms and their instructions may not be reflected in this example. 1040x form for 2012 Note. 1040x form for 2012 The following return was prepared for tax year 2011. 1040x form for 2012 In 2011, the threshold filing amount for a bankruptcy estate was $9,500 (the sum of the $3,700 personal exemption plus the $5,800 standard deduction for married individuals filing separately). 1040x form for 2012 Facts and circumstances. 1040x form for 2012   On December 15, 2010, Thomas Smith filed a bankruptcy petition under chapter 7. 1040x form for 2012 Joan Black was appointed trustee to administer the bankruptcy estate and to distribute the assets. 1040x form for 2012   The estate received the following assets from Mr. 1040x form for 2012 Smith: A $100,000 certificate of deposit, Commercial rental real estate with a fair market value (FMV) of $280,000, and His personal residence with an FMV of $200,000. 1040x form for 2012   Also, the estate received a $251,500 capital loss carryover. 1040x form for 2012   Mr. 1040x form for 2012 Smith's bankruptcy case was closed on December 31, 2011. 1040x form for 2012 During 2011, Mr. 1040x form for 2012 Smith was relieved of $70,000 of debt by the bankruptcy court. 1040x form for 2012 The estate chose a calendar year as its tax year. 1040x form for 2012 Joan, the trustee, reviews the estate's transactions and reports the taxable events on the estate's final return. 1040x form for 2012 Schedule B (Form 1040). 1040x form for 2012    The certificate of deposit earned $5,500 of interest during 2011. 1040x form for 2012 Joan reports this interest on Schedule B. 1040x form for 2012 She completes this schedule and enters the result on Form 1040. 1040x form for 2012 Form 4562. 1040x form for 2012   Joan enters the depreciation allowed on Form 4562. 1040x form for 2012 She completes the form and enters the result on Schedule E. 1040x form for 2012 Schedule E (Form 1040). 1040x form for 2012   The commercial real estate was rented through the date of sale. 1040x form for 2012 Joan reports the income and expenses on Schedule E. 1040x form for 2012 She enters the net income on Form 1040. 1040x form for 2012 Form 4797. 1040x form for 2012   The commercial real estate was sold on July 1, 2011, for $280,000. 1040x form for 2012 The property was purchased in 2001 at a cost of $250,000. 1040x form for 2012 The total depreciation allowable as of the date of sale was $120,000. 1040x form for 2012 Additionally, $25,000 of selling expenses were incurred. 1040x form for 2012 Joan reports the gain or loss from the sale on Form 4797. 1040x form for 2012 She completes the form and enters the gain on Schedule D (Form 1040). 1040x form for 2012   Mr. 1040x form for 2012 Smith's former residence was sold on September 30, 2011. 1040x form for 2012 The sale price was $200,000, the selling expenses were $20,000, and his adjusted basis was $130,000. 1040x form for 2012 This sale is excluded from gross income under IRC section 121. 1040x form for 2012 Note. 1040x form for 2012 Gains from the sale of personal residences are excluded from gross income up to $250,000 under IRC section 121 ($500,000 for married couples filing a joint return). 1040x form for 2012 Bankruptcy estates succeed to this exclusion at the commencement of the case. 1040x form for 2012 See Regulation section 1. 1040x form for 2012 1398-3. 1040x form for 2012 Schedule D (Form 1040). 1040x form for 2012   Joan completes Schedule D, taking into account the $250,000 capital loss carryover from 2010 ($251,500 transferred to the estate minus $1,500 used on the estate's 2010 return). 1040x form for 2012 She enters the results on Form 1040. 1040x form for 2012 Form 1040, page 1. 1040x form for 2012   Joan completes page 1 of the Form 1040 and enters the adjusted gross income on the first line of Form 1040, page 2. 1040x form for 2012 Schedule A (Form 1040). 1040x form for 2012   During 2011, the estate paid mortgage interest and real property tax on Mr. 1040x form for 2012 Smith's former residence. 1040x form for 2012 It also paid income tax to the state. 1040x form for 2012 Joan enters the mortgage interest, real estate tax, and income tax on Schedule A. 1040x form for 2012 Also, she reports the bankruptcy estate's administrative expenses as a miscellaneous deduction not subject to the 2% floor on miscellaneous itemized deductions. 1040x form for 2012 She completes the Schedule A and enters the result on page 2 of Form 1040. 1040x form for 2012 Form 1040, page 2. 1040x form for 2012   Joan determines the estate's taxable income and figures its tax using the tax rate schedule for married filing separately. 1040x form for 2012 She then enters the estate's estimated tax payments and figures the amount the estate still owes. 1040x form for 2012 Form 982. 1040x form for 2012   Joan completes the Schedule D Tax Worksheet to figure the capital loss carryover. 1040x form for 2012 Because $70,000 of debt was canceled, Joan must reduce the tax attributes of the estate by the amount of the canceled debt. 1040x form for 2012 See Debt Cancellation, later. 1040x form for 2012 After the bankruptcy case ends, Mr. 1040x form for 2012 Smith will assume the estate's tax attributes. 1040x form for 2012 Mr. 1040x form for 2012 Smith will assume a capital loss carryover of $53,500 ($123,500 carryover minus the $70,000 attribute reduction) for use in preparation of his individual tax return (Form 1040). 1040x form for 2012 Note. 1040x form for 2012 If the bankruptcy estate had continued, the capital loss carryover would be available to the bankruptcy estate for the 2012 tax year. 1040x form for 2012 Form 1041. 1040x form for 2012   Joan enters the total tax, estimated tax payments, and tax due from Form 1040 on Form 1041. 1040x form for 2012 She completes the identification area at the top of Form 1041, then signs and dates the return as the trustee on behalf of the bankruptcy estate. 1040x form for 2012 This image is too large to be displayed in the current screen. 1040x form for 2012 Please click the link to view the image. 1040x form for 2012 Sample Form 1040 - page 1 This image is too large to be displayed in the current screen. 1040x form for 2012 Please click the link to view the image. 1040x form for 2012 Sample Form 1040 - page 2 This image is too large to be displayed in the current screen. 1040x form for 2012 Please click the link to view the image. 1040x form for 2012 Sample Schedule A This image is too large to be displayed in the current screen. 1040x form for 2012 Please click the link to view the image. 1040x form for 2012 Sample Schedule B This image is too large to be displayed in the current screen. 1040x form for 2012 Please click the link to view the image. 1040x form for 2012 Sample Schedule D This image is too large to be displayed in the current screen. 1040x form for 2012 Please click the link to view the image. 1040x form for 2012 Sample Schedule E This image is too large to be displayed in the current screen. 1040x form for 2012 Please click the link to view the image. 1040x form for 2012 Sample Form 4797 - page 1 This image is too large to be displayed in the current screen. 1040x form for 2012 Please click the link to view the image. 1040x form for 2012 Sample Form 2119 This image is too large to be displayed in the current screen. 1040x form for 2012 Please click the link to view the image. 1040x form for 2012 Sample Form 4797 - page 2 This image is too large to be displayed in the current screen. 1040x form for 2012 Please click the link to view the image. 1040x form for 2012 Sample Form 4562 This image is too large to be displayed in the current screen. 1040x form for 2012 Please click the link to view the image. 1040x form for 2012 Sample Capital Loss Carryover Worksheet This image is too large to be displayed in the current screen. 1040x form for 2012 Please click the link to view the image. 1040x form for 2012 Sample Form 982 Capital Loss Carryover Worksheet—Lines 6 and 14 Use this worksheet to figure your capital loss carryovers from 2010 to 2011 if your 2010 Schedule D, line 21, is a loss and (a) that loss is a smaller loss than the loss on your 2010 Schedule D, line 16, or (b) the amount on your 2010 Form 1040, line 41 (or your 2010 Form 1040NR, line 38, if applicable) is less than zero. 1040x form for 2012 Otherwise, you do not have any carryovers. 1040x form for 2012 1. 1040x form for 2012 Enter the amount from your 2010 Form 1040, line 41, or Form 1040NR, line 38. 1040x form for 2012 If a loss, enclose the amount in parentheses 1. 1040x form for 2012 19,880   2. 1040x form for 2012 Enter the loss from your 2010 Schedule D, line 21, as a positive amount 2. 1040x form for 2012 1,500   3. 1040x form for 2012 Combine lines 1 and 2. 1040x form for 2012 If zero or less, enter -0- 3. 1040x form for 2012 21,380   4. 1040x form for 2012 Enter the smaller of line 2 or line 3 4. 1040x form for 2012 1,500     If line 7 of your 2010 Schedule D is a loss, go to line 5; otherwise, enter -0- on line 5 and go to line 9. 1040x form for 2012       5. 1040x form for 2012 Enter the loss from your 2010 Schedule D, line 7, as a positive amount 5. 1040x form for 2012 0   6. 1040x form for 2012 Enter any gain from your 2010 Schedule D, line 15. 1040x form for 2012 If a loss, enter -0- 6. 1040x form for 2012         7. 1040x form for 2012 Add lines 4 and 6 7. 1040x form for 2012 1,500   8. 1040x form for 2012 Short-term capital loss carryover for 2011. 1040x form for 2012 Subtract line 7 from line 5. 1040x form for 2012 If zero or less, enter -0-. 1040x form for 2012 If more than zero, also enter this amount on Schedule D, line 6 8. 1040x form for 2012 0     If line 15 of your 2010 Schedule D is a loss, go to line 9; otherwise, skip lines 9 through 13. 1040x form for 2012       9. 1040x form for 2012 Enter the loss from your 2010 Schedule D, line 15, as a positive amount 9. 1040x form for 2012 251,500   10. 1040x form for 2012 Enter any gain from your 2010 Schedule D, line 7. 1040x form for 2012 If a loss, enter -0- 10. 1040x form for 2012 0       11. 1040x form for 2012 Subtract line 5 from line 4. 1040x form for 2012 If zero or less, enter -0- 11. 1040x form for 2012 1,500       12. 1040x form for 2012 Add lines 10 and 11 12. 1040x form for 2012 1,500   13. 1040x form for 2012 Long-term capital loss carryover for 2011. 1040x form for 2012 Subtract line 12 from line 9. 1040x form for 2012 If zero or less, enter -0-. 1040x form for 2012 If more than zero, also enter this amount on Schedule D, line 14 13. 1040x form for 2012 250,000                       Partnerships and Corporations Filing Requirements A separate taxable estate is not created when a partnership or corporation files a bankruptcy petition and their tax return filing requirements do not change. 1040x form for 2012 The debtor-in-possession, court appointed trustee, assignee, or receiver must file the entity's income tax returns on Form 1065, Form 1120 or, Form 1120S. 1040x form for 2012 In cases where a trustee or receiver is not appointed, the debtor-in-possession continues business operations and remains in possession of the business' property during the bankruptcy proceeding. 1040x form for 2012 The debtor-in-possession, rather than the general partner of a partnership or corporate officer of a corporation, assumes the fiduciary responsibility to file the business' tax returns. 1040x form for 2012 Partnerships The filing requirements for a partnership in a bankruptcy proceeding do not change. 1040x form for 2012 However, the responsibility to file the required returns becomes that of the court appointed trustee, receiver, or debtor-in-possession. 1040x form for 2012 A partnership's debt that is canceled as a result of the bankruptcy proceeding is not included in the partnership's income. 1040x form for 2012 However, It may or may not be included in the individual partners' income. 1040x form for 2012 See Partnerships, below under Debt Cancellation. 1040x form for 2012 Corporations The filing requirements for a corporation in a bankruptcy proceeding also do not change. 1040x form for 2012 A bankruptcy trustee, receiver, or debtor-in-possession, having possession of or holding title to substantially all of the property or business operations of the debtor corporation, must file the debtor's corporate income tax return for the tax year. 1040x form for 2012 The following discussion only highlights bankruptcy tax rules applying to corporations. 1040x form for 2012 The complex details of corporate bankruptcy reorganizations are beyond the scope of this publication. 1040x form for 2012 Therefore, you may wish to seek the help of a professional tax advisor. 1040x form for 2012 See Corporations under Debt Cancellation for information about a corporation's debt canceled in a bankruptcy proceeding. 1040x form for 2012 Tax-Free Reorganizations The tax-free reorganization provisions of the Internal Revenue Code allow a corporation to transfer all or part of its assets to another corporation in a bankruptcy under title 11 of the United States Code or in a similar case. 1040x form for 2012 However, under the reorganization plan, the stock or securities of the corporation to which the assets are transferred must be distributed in a transaction that qualifies under IRC section 354, 355, or 356. 1040x form for 2012 A “similar case” includes a receivership, foreclosure, or other similar proceeding in a federal or state court. 1040x form for 2012 In these cases, any party to the reorganization must be under the jurisdiction of the court and the transfer of assets under the plan of reorganization must be approved by the court. 1040x form for 2012 In a receivership, foreclosure, or similar proceeding before a federal or state agency involving certain financial institutions, the agency is treated as a court. 1040x form for 2012 Generally, IRC section 354 provides that no gain or loss is recognized if a corporation's stock is exchanged solely for stock or securities in a corporation that is a party to the reorganization under a qualifying reorganization plan. 1040x form for 2012 In this case, shareholders in the bankrupt corporation would recognize no gain or loss if they exchange their stock solely for stock or securities of the corporation acquiring the bankrupt corporation's assets. 1040x form for 2012 IRC section 355 generally provides that no gain or loss is recognized by a shareholder if a corporation distributes solely stock or securities of another corporation that the distributing corporation controls immediately before the distribution. 1040x form for 2012 IRC section 356 allows tax-free exchanges in situations that would qualify under IRC section 354 or 355, except that other property or money, in addition to the permitted stock or securities, is received by the shareholder. 1040x form for 2012 In this situation, gain is recognized by the shareholder, but only to the extent of the money and the FMV of the other property received. 1040x form for 2012 No loss is recognized in this situation. 1040x form for 2012 Exemption from tax return filing A trustee, receiver, or assignee of a corporation in bankruptcy, receivership, or in the process of dissolving, may apply to the IRS for relief from filing federal income tax returns for the corporation. 1040x form for 2012 To qualify, the corporation must have ceased business operations and have no assets nor income for the tax year. 1040x form for 2012 The exemption request must be submitted to the local IRS Insolvency Office handling the case. 1040x form for 2012 The request to the IRS must include the name, address, and EIN of the corporation and a statement of the facts (with any supporting documents) showing why the debtor needs relief from the filing requirements. 1040x form for 2012 The request must also include the following statement: “I hereby request relief from filing federal income tax returns for tax years ending _____ for the above-named corporation and declare under penalties of perjury that to the best of my knowledge and belief the information contained herein is correct. 1040x form for 2012 ” The statement must be signed by the trustee, receiver or assignee. 1040x form for 2012 The statement must also include notice of appointment to act on behalf of the corporation (this is not required for bankruptcy trustees or debtors-in-possession). 1040x form for 2012 The IRS will act on your request within 90 days. 1040x form for 2012 Disclosure of return information to trustee. 1040x form for 2012   Upon written request, current and earlier returns of the debtor are open to inspection by or disclosure to the trustee or receiver. 1040x form for 2012 However, in bankruptcy cases other than those of individuals filing under chapter 7 or 11, such as a corporate bankruptcy, the IRS must find that the trustee has a material interest that will be affected by information on the return. 1040x form for 2012 Material interest is generally defined as a financial or monetary interest. 1040x form for 2012 Material interest is not limited to the trustee's responsibility to file a return on behalf of the bankruptcy estate. 1040x form for 2012 Receiverships Court-established receiverships sometimes arise in connection with bankruptcies. 1040x form for 2012 Certain court-established receiverships should be treated as qualified settlement funds ("QSFs") for purposes of IRC section 468B and the underlying Treasury Regulations. 1040x form for 2012 QSFs are required to file an annual income tax return, Form 1120-SF, U. 1040x form for 2012 S. 1040x form for 2012 Income Tax Return for Settlement Funds. 1040x form for 2012 More information about QSFs may be found in Treasury Regulation sections 1. 1040x form for 2012 468B-1 through -5. 1040x form for 2012 Determination of Tax The determination of the proper amount of tax due for a tax year begins with the bankruptcy estate's filing of Form 1041, and the individual debtor's filing of Form 1040, or for bankrupt entities filing Forms 1065, 1120, or 1120S. 1040x form for 2012 After a return is filed, the IRS will either accept the return as filed or select the return for examination. 1040x form for 2012 Under examination the IRS may redetermine the tax liability shown on the return. 1040x form for 2012 If the bankruptcy estate or debtor disagrees with the redetermined tax due, the tax as redetermined by the IRS may be contested in the bankruptcy court, or Tax Court, as applicable. 1040x form for 2012 See Court Jurisdiction over Tax Matters, later. 1040x form for 2012 Prompt Determination Requests Pursuant to Rev. 1040x form for 2012 Proc. 1040x form for 2012 2006-24, 2006-22 I. 1040x form for 2012 R. 1040x form for 2012 B. 1040x form for 2012 943, www. 1040x form for 2012 irs. 1040x form for 2012 gov/irb/2006-22_IRB/ar12, as modified by Announcement 2011-77, www. 1040x form for 2012 irs. 1040x form for 2012 gov/irb/2011-51_IRB/ar13, the bankruptcy trustee may request a determination of any unpaid tax liability incurred by the bankruptcy estate during the administration of the case, by filing a tax return and a request for such determination with the IRS. 1040x form for 2012 Unless the return is fraudulent or contains a material misrepresentation, the estate, trustee, debtor, and any successor to the debtor are discharged from liability upon payment of the tax: As determined by the IRS, As determined by the bankruptcy court, after completion of the IRS examination, or As shown on the return, if the IRS does not: Notify the trustee within 60 days after the request for determination that the return has been selected for examination, or Complete the examination and notify the trustee of any tax due within 180 days after the request (or any additional time permitted by the bankruptcy court). 1040x form for 2012 Making the request for determination. 1040x form for 2012   As detailed in Rev. 1040x form for 2012 Proc. 1040x form for 2012 2006-24, as modified by Announcement 2011-77, to request a prompt determination of any unpaid tax liability of the estate, the trustee must file a signed written request, in duplicate, with the Internal Revenue Service, Centralized Insolvency Operation, P. 1040x form for 2012 O. 1040x form for 2012 Box 7346, Philadelphia, PA 19101–7346 (marked “Request for Prompt Determination”). 1040x form for 2012   The request must be submitted in duplicate and must be executed under penalties of perjury. 1040x form for 2012 In addition, the trustee must submit along with the request an exact copy of the return(s) filed by the trustee with the IRS for each completed tax period. 1040x form for 2012 The request must contain the following information: A statement indicating that it is a Request for Prompt Determination of Tax Liability, specifying the type of return and tax period for each return being filed. 1040x form for 2012 The name and location of the office where the return was filed. 1040x form for 2012 The name of the debtor. 1040x form for 2012 Debtor's social security number, TIN, or EIN. 1040x form for 2012 Type of bankruptcy estate. 1040x form for 2012 Bankruptcy case number. 1040x form for 2012 Court where the bankruptcy case is pending. 1040x form for 2012   The copy of the return(s) submitted with the request must be an exact copy of a valid return. 1040x form for 2012 A request for prompt determination will be considered incomplete and returned to the trustee if it is filed with a copy of a document that does not qualify as a valid return. 1040x form for 2012    To qualify as valid, a return must meet certain criteria, including a signature under penalties of perjury. 1040x form for 2012 A document filed by the trustee with the jurat stricken, deleted, or modified will not qualify as a valid return. 1040x form for 2012 Examination of return. 1040x form for 2012   The IRS will notify the trustee within 60 days from receipt of the request whether the return filed by the trustee has been selected for examination or has been accepted as filed. 1040x form for 2012 If the return is selected for examination, it will be examined as soon as possible. 1040x form for 2012 The IRS will notify the trustee of any tax due within 180 days from receipt of the application or within any additional time permitted by the bankruptcy court. 1040x form for 2012   If a prompt determination request is incomplete, all the documents received by the IRS will be returned to the trustee by the assigned Field Insolvency Office with an explanation identifying the missing item(s) and instructions to re-file the request once corrected. 1040x form for 2012   Once corrected, the request must be filed with the IRS at the Field Insolvency Office address specified in the correspondence accompanying the returned incomplete request. 1040x form for 2012   In the case of an incomplete request submitted with a copy of an invalid return document, the trustee must file a valid original return with the appropriate IRS office and submit a copy of that return with the corrected request when the request is re-filed. 1040x form for 2012 Note. 1040x form for 2012 An incomplete request includes those submitted with a copy of a return form, the original of which does not qualify as a valid return. 1040x form for 2012   The 60-day period to notify the trustee whether the return is accepted as filed or has been selected for examination does not begin to run until a complete request package is recei