File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

1040x Tax Forms

Income Tax 1040ezAmended 1040 EzWww Irs Gov 1040x InstructionsTax Return For 2012Freetaxes ComOnline 1040xFiling 2012 TaxesState Income Tax AddressTurbotax Free State FileHrblock LoginTax Amendment FormH R Block 2011 Free Filing1040x Amended Tax FormFiling Back TaxH And R Free TaxH&r Block Online1040ez File On LineTax Planning Us 1040ez1040 IrsFiling Back Taxes On Turbotax2012 Tax Return InstructionsHow To Fill Out Amended Tax FormAmended Federal Tax ReturnTax Forms2012 Irs Income Tax FormsForm 1040ez1080 Ez FormIncome Tax Forms 1040File Free State Taxes OnlyTurbotax 1040ezState Taxes Free FileStates Without Income TaxEfile 2012 Tax Return Free1040ez Tax InstructionsPrint Free 1040ez Tax FormFree EfileHow To File Amended Tax Return TurbotaxSearch Free Tax UsaHow To Amend TaxesState Tax Returns Free

1040x Tax Forms

1040x tax forms 14. 1040x tax forms   Sale of Property Table of Contents Reminder Introduction Useful Items - You may want to see: Sales and TradesWhat Is a Sale or Trade? How To Figure Gain or Loss Nontaxable Trades Transfers Between Spouses Related Party Transactions Capital Gains and LossesCapital or Ordinary Gain or Loss Capital Assets and Noncapital Assets Holding Period Nonbusiness Bad Debts Wash Sales Rollover of Gain From Publicly Traded Securities Reminder Foreign income. 1040x tax forms  If you are a U. 1040x tax forms S. 1040x tax forms citizen who sells property located outside the United States, you must report all gains and losses from the sale of that property on your tax return unless it is exempt by U. 1040x tax forms S. 1040x tax forms law. 1040x tax forms This is true whether you reside inside or outside the United States and whether or not you receive a Form 1099 from the payer. 1040x tax forms Introduction This chapter discusses the tax consequences of selling or trading investment property. 1040x tax forms It explains the following. 1040x tax forms What a sale or trade is. 1040x tax forms Figuring gain or loss. 1040x tax forms Nontaxable trades. 1040x tax forms Related party transactions. 1040x tax forms Capital gains or losses. 1040x tax forms Capital assets and noncapital assets. 1040x tax forms Holding period. 1040x tax forms Rollover of gain from publicly traded securities. 1040x tax forms Other property transactions. 1040x tax forms   Certain transfers of property are not discussed here. 1040x tax forms They are discussed in other IRS publications. 1040x tax forms These include the following. 1040x tax forms Sales of a main home, covered in chapter 15. 1040x tax forms Installment sales, covered in Publication 537, Installment Sales. 1040x tax forms Transactions involving business property, covered in Publication 544, Sales and Other Dispositions of Assets. 1040x tax forms Dispositions of an interest in a passive activity, covered in Publication 925, Passive Activity and At-Risk Rules. 1040x tax forms    Publication 550, Investment Income and Expenses (Including Capital Gains and Losses), provides a more detailed discussion about sales and trades of investment property. 1040x tax forms Publication 550 includes information about the rules covering nonbusiness bad debts, straddles, section 1256 contracts, puts and calls, commodity futures, short sales, and wash sales. 1040x tax forms It also discusses investment-related expenses. 1040x tax forms Useful Items - You may want to see: Publication 550 Investment Income and Expenses Form (and Instructions) Schedule D (Form 1040) Capital Gains and Losses 8949 Sales and Other Dispositions of Capital Assets 8824 Like-Kind Exchanges Sales and Trades If you sold property such as stocks, bonds, or certain commodities through a broker during the year, you should receive, for each sale, a Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, or substitute statement, from the broker. 1040x tax forms Generally, you should receive the statement by February 15 of the next year. 1040x tax forms It will show the gross proceeds from the sale. 1040x tax forms If you sold a covered security in 2013, your 1099-B (or substitute statement) will show your basis. 1040x tax forms Generally, a covered security is a security you acquired after 2010, with certain exceptions. 1040x tax forms See the Instructions for Form 8949. 1040x tax forms The IRS will also get a copy of Form 1099-B from the broker. 1040x tax forms Use Form 1099-B (or substitute statement received from your broker) to complete Form 8949. 1040x tax forms What Is a Sale or Trade? This section explains what is a sale or trade. 1040x tax forms It also explains certain transactions and events that are treated as sales or trades. 1040x tax forms A sale is generally a transfer of property for money or a mortgage, note, or other promise to pay money. 1040x tax forms A trade is a transfer of property for other property or services and may be taxed in the same way as a sale. 1040x tax forms Sale and purchase. 1040x tax forms   Ordinarily, a transaction is not a trade when you voluntarily sell property for cash and immediately buy similar property to replace it. 1040x tax forms The sale and purchase are two separate transactions. 1040x tax forms But see Like-kind exchanges under Nontaxable Trades, later. 1040x tax forms Redemption of stock. 1040x tax forms   A redemption of stock is treated as a sale or trade and is subject to the capital gain or loss provisions unless the redemption is a dividend or other distribution on stock. 1040x tax forms Dividend versus sale or trade. 1040x tax forms   Whether a redemption is treated as a sale, trade, dividend, or other distribution depends on the circumstances in each case. 1040x tax forms Both direct and indirect ownership of stock will be considered. 1040x tax forms The redemption is treated as a sale or trade of stock if: The redemption is not essentially equivalent to a dividend (see chapter 8), There is a substantially disproportionate redemption of stock, There is a complete redemption of all the stock of the corporation owned by the shareholder, or The redemption is a distribution in partial liquidation of a corporation. 1040x tax forms Redemption or retirement of bonds. 1040x tax forms   A redemption or retirement of bonds or notes at their maturity is generally treated as a sale or trade. 1040x tax forms   In addition, a significant modification of a bond is treated as a trade of the original bond for a new bond. 1040x tax forms For details, see Regulations section 1. 1040x tax forms 1001-3. 1040x tax forms Surrender of stock. 1040x tax forms   A surrender of stock by a dominant shareholder who retains ownership of more than half of the corporation's voting shares is treated as a contribution to capital rather than as an immediate loss deductible from taxable income. 1040x tax forms The surrendering shareholder must reallocate his or her basis in the surrendered shares to the shares he or she retains. 1040x tax forms Worthless securities. 1040x tax forms    Stocks, stock rights, and bonds (other than those held for sale by a securities dealer) that became completely worthless during the tax year are treated as though they were sold on the last day of the tax year. 1040x tax forms This affects whether your capital loss is long term or short term. 1040x tax forms See Holding Period , later. 1040x tax forms   Worthless securities also include securities that you abandon after March 12, 2008. 1040x tax forms To abandon a security, you must permanently surrender and relinquish all rights in the security and receive no consideration in exchange for it. 1040x tax forms All the facts and circumstances determine whether the transaction is properly characterized as an abandonment or other type of transaction, such as an actual sale or exchange, contribution to capital, dividend, or gift. 1040x tax forms    If you are a cash basis taxpayer and make payments on a negotiable promissory note that you issued for stock that became worthless, you can deduct these payments as losses in the years you actually make the payments. 1040x tax forms Do not deduct them in the year the stock became worthless. 1040x tax forms How to report loss. 1040x tax forms    Report worthless securities in Part I or Part II, whichever applies, of Form 8949. 1040x tax forms In column (a), enter “Worthless. 1040x tax forms ”    Report your worthless securities transactions on Form 8949 with the correct box checked for these transactions. 1040x tax forms See Form 8949 and the Instructions for Form 8949. 1040x tax forms For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. 1040x tax forms See also Schedule D (Form 1040), Form 8949, and their separate instructions. 1040x tax forms Filing a claim for refund. 1040x tax forms   If you do not claim a loss for a worthless security on your original return for the year it becomes worthless, you can file a claim for a credit or refund due to the loss. 1040x tax forms You must use Form 1040X, Amended U. 1040x tax forms S. 1040x tax forms Individual Income Tax Return, to amend your return for the year the security became worthless. 1040x tax forms You must file it within 7 years from the date your original return for that year had to be filed, or 2 years from the date you paid the tax, whichever is later. 1040x tax forms For more information about filing a claim, see Amended Returns and Claims for Refund in chapter 1. 1040x tax forms How To Figure Gain or Loss You figure gain or loss on a sale or trade of property by comparing the amount you realize with the adjusted basis of the property. 1040x tax forms Gain. 1040x tax forms   If the amount you realize from a sale or trade is more than the adjusted basis of the property you transfer, the difference is a gain. 1040x tax forms Loss. 1040x tax forms   If the adjusted basis of the property you transfer is more than the amount you realize, the difference is a loss. 1040x tax forms Adjusted basis. 1040x tax forms   The adjusted basis of property is your original cost or other original basis properly adjusted (increased or decreased) for certain items. 1040x tax forms See chapter 13 for more information about determining the adjusted basis of property. 1040x tax forms Amount realized. 1040x tax forms   The amount you realize from a sale or trade of property is everything you receive for the property minus your expenses of sale (such as redemption fees, sales commissions, sales charges, or exit fees). 1040x tax forms Amount realized includes the money you receive plus the fair market value of any property or services you receive. 1040x tax forms If you received a note or other debt instrument for the property, see How To Figure Gain or Loss in chapter 4 of Publication 550 to figure the amount realized. 1040x tax forms If you finance the buyer's purchase of your property and the debt instrument does not provide for adequate stated interest, the unstated interest that you must report as ordinary income will reduce the amount realized from the sale. 1040x tax forms For more information, see Publication 537. 1040x tax forms Fair market value. 1040x tax forms   Fair market value is the price at which the property would change hands between a buyer and a seller, neither being forced to buy or sell and both having reasonable knowledge of all the relevant facts. 1040x tax forms Example. 1040x tax forms You trade A Company stock with an adjusted basis of $7,000 for B Company stock with a fair market value of $10,000, which is your amount realized. 1040x tax forms Your gain is $3,000 ($10,000 − $7,000). 1040x tax forms Debt paid off. 1040x tax forms    A debt against the property, or against you, that is paid off as a part of the transaction, or that is assumed by the buyer, must be included in the amount realized. 1040x tax forms This is true even if neither you nor the buyer is personally liable for the debt. 1040x tax forms For example, if you sell or trade property that is subject to a nonrecourse loan, the amount you realize generally includes the full amount of the note assumed by the buyer even if the amount of the note is more than the fair market value of the property. 1040x tax forms Example. 1040x tax forms You sell stock that you had pledged as security for a bank loan of $8,000. 1040x tax forms Your basis in the stock is $6,000. 1040x tax forms The buyer pays off your bank loan and pays you $20,000 in cash. 1040x tax forms The amount realized is $28,000 ($20,000 + $8,000). 1040x tax forms Your gain is $22,000 ($28,000 − $6,000). 1040x tax forms Payment of cash. 1040x tax forms   If you trade property and cash for other property, the amount you realize is the fair market value of the property you receive. 1040x tax forms Determine your gain or loss by subtracting the cash you pay plus the adjusted basis of the property you trade in from the amount you realize. 1040x tax forms If the result is a positive number, it is a gain. 1040x tax forms If the result is a negative number, it is a loss. 1040x tax forms No gain or loss. 1040x tax forms   You may have to use a basis for figuring gain that is different from the basis used for figuring loss. 1040x tax forms In this case, you may have neither a gain nor a loss. 1040x tax forms See Basis Other Than Cost in chapter 13. 1040x tax forms Nontaxable Trades This section discusses trades that generally do not result in a taxable gain or deductible loss. 1040x tax forms For more information on nontaxable trades, see chapter 1 of Publication 544. 1040x tax forms Like-kind exchanges. 1040x tax forms   If you trade business or investment property for other business or investment property of a like kind, you do not pay tax on any gain or deduct any loss until you sell or dispose of the property you receive. 1040x tax forms To be nontaxable, a trade must meet all six of the following conditions. 1040x tax forms The property must be business or investment property. 1040x tax forms You must hold both the property you trade and the property you receive for productive use in your trade or business or for investment. 1040x tax forms Neither property may be property used for personal purposes, such as your home or family car. 1040x tax forms The property must not be held primarily for sale. 1040x tax forms The property you trade and the property you receive must not be property you sell to customers, such as merchandise. 1040x tax forms The property must not be stocks, bonds, notes, choses in action, certificates of trust or beneficial interest, or other securities or evidences of indebtedness or interest, including partnership interests. 1040x tax forms However, see Special rules for mutual ditch, reservoir, or irrigation company stock, in chapter 4 of Publication 550 for an exception. 1040x tax forms Also, you can have a nontaxable trade of corporate stocks under a different rule, as discussed later. 1040x tax forms There must be a trade of like property. 1040x tax forms The trade of real estate for real estate, or personal property for similar personal property, is a trade of like property. 1040x tax forms The trade of an apartment house for a store building, or a panel truck for a pickup truck, is a trade of like property. 1040x tax forms The trade of a piece of machinery for a store building is not a trade of like property. 1040x tax forms Real property located in the United States and real property located outside the United States are not like property. 1040x tax forms Also, personal property used predominantly within the United States and personal property used predominantly outside the United States are not like property. 1040x tax forms The property to be received must be identified in writing within 45 days after the date you transfer the property given up in the trade. 1040x tax forms The property to be received must be received by the earlier of: The 180th day after the date on which you transfer the property given up in the trade, or The due date, including extensions, for your tax return for the year in which the transfer of the property given up occurs. 1040x tax forms    If you trade property with a related party in a like-kind exchange, a special rule may apply. 1040x tax forms See Related Party Transactions , later in this chapter. 1040x tax forms Also, see chapter 1 of Publication 544 for more information on exchanges of business property and special rules for exchanges using qualified intermediaries or involving multiple properties. 1040x tax forms Partly nontaxable exchange. 1040x tax forms   If you receive money or unlike property in addition to like property, and the above six conditions are met, you have a partly nontaxable trade. 1040x tax forms You are taxed on any gain you realize, but only up to the amount of the money and the fair market value of the unlike property you receive. 1040x tax forms You cannot deduct a loss. 1040x tax forms Like property and unlike property transferred. 1040x tax forms   If you give up unlike property in addition to the like property, you must recognize gain or loss on the unlike property you give up. 1040x tax forms The gain or loss is the difference between the adjusted basis of the unlike property and its fair market value. 1040x tax forms Like property and money transferred. 1040x tax forms   If all of the above conditions (1) – (6) are met, you have a nontaxable trade even if you pay money in addition to the like property. 1040x tax forms Basis of property received. 1040x tax forms   To figure the basis of the property received, see Nontaxable Exchanges in chapter 13. 1040x tax forms How to report. 1040x tax forms   You must report the trade of like property on Form 8824. 1040x tax forms If you figure a recognized gain or loss on Form 8824, report it on Schedule D (Form 1040), or on Form 4797, Sales of Business Property, whichever applies. 1040x tax forms See the instructions for Line 22 in the Instructions for Form 8824. 1040x tax forms   For information on using Form 4797, see chapter 4 of Publication 544. 1040x tax forms Corporate stocks. 1040x tax forms   The following trades of corporate stocks generally do not result in a taxable gain or a deductible loss. 1040x tax forms Corporate reorganizations. 1040x tax forms   In some instances, a company will give you common stock for preferred stock, preferred stock for common stock, or stock in one corporation for stock in another corporation. 1040x tax forms If this is a result of a merger, recapitalization, transfer to a controlled corporation, bankruptcy, corporate division, corporate acquisition, or other corporate reorganization, you do not recognize gain or loss. 1040x tax forms Stock for stock of the same corporation. 1040x tax forms   You can exchange common stock for common stock or preferred stock for preferred stock in the same corporation without having a recognized gain or loss. 1040x tax forms This is true for a trade between two stockholders as well as a trade between a stockholder and the corporation. 1040x tax forms Convertible stocks and bonds. 1040x tax forms   You generally will not have a recognized gain or loss if you convert bonds into stock or preferred stock into common stock of the same corporation according to a conversion privilege in the terms of the bond or the preferred stock certificate. 1040x tax forms Property for stock of a controlled corporation. 1040x tax forms   If you transfer property to a corporation solely in exchange for stock in that corporation, and immediately after the trade you are in control of the corporation, you ordinarily will not recognize a gain or loss. 1040x tax forms This rule applies both to individuals and to groups who transfer property to a corporation. 1040x tax forms It does not apply if the corporation is an investment company. 1040x tax forms   For this purpose, to be in control of a corporation, you or your group of transferors must own, immediately after the exchange, at least 80% of the total combined voting power of all classes of stock entitled to vote and at least 80% of the outstanding shares of each class of nonvoting stock of the corporation. 1040x tax forms   If this provision applies to you, you may have to attach to your return a complete statement of all facts pertinent to the exchange. 1040x tax forms For details, see Regulations section 1. 1040x tax forms 351-3. 1040x tax forms Additional information. 1040x tax forms   For more information on trades of stock, see Nontaxable Trades in chapter 4 of Publication 550. 1040x tax forms Insurance policies and annuities. 1040x tax forms   You will not have a recognized gain or loss if the insured or annuitant is the same under both contracts and you trade: A life insurance contract for another life insurance contract or for an endowment or annuity contract or for a qualified long-term care insurance contract, An endowment contract for another endowment contract that provides for regular payments beginning at a date no later than the beginning date under the old contract or for an annuity contract or for a qualified long-term insurance contract, An annuity contract for annuity contract or for a qualified long-term care insurance contract, or A qualified long-term care insurance contract for a qualified long-term care insurance contract. 1040x tax forms   You also may not have to recognize gain or loss on an exchange of a portion of an annuity contract for another annuity contract. 1040x tax forms For transfers completed before October 24, 2011, see Revenue Ruling 2003-76 in Internal Revenue Bulletin 2003-33 and Revenue Procedure 2008-24 in Internal Revenue Bulletin 2008-13. 1040x tax forms Revenue Ruling 2003-76 is available at www. 1040x tax forms irs. 1040x tax forms gov/irb/2003-33_IRB/ar11. 1040x tax forms html. 1040x tax forms Revenue Procedure 2008-24 is available at www. 1040x tax forms irs. 1040x tax forms gov/irb/2008-13_IRB/ar13. 1040x tax forms html. 1040x tax forms For transfers completed on or after October 24, 2011, see Revenue Ruling 2003-76, above, and Revenue Procedure 2011-38, in Internal Revenue Bulletin 2011-30. 1040x tax forms Revenue Procedure 2011-38 is available at www. 1040x tax forms irs. 1040x tax forms gov/irb/2011-30_IRB/ar09. 1040x tax forms html. 1040x tax forms   For tax years beginning after December 31, 2010, amounts received as an annuity for a period of 10 years or more, or for the lives of one or more individuals, under any portion of an annuity, endowment, or life insurance contract, are treated as a separate contract and are considered partial annuities. 1040x tax forms A portion of an annuity, endowment, or life insurance contract may be annuitized, provided that the annuitization period is for 10 years or more or for the lives of one or more individuals. 1040x tax forms The investment in the contract is allocated between the part of the contract from which amounts are received as an annuity and the part of the contract from which amounts are not received as an annuity. 1040x tax forms   Exchanges of contracts not included in this list, such as an annuity contract for an endowment contract, or an annuity or endowment contract for a life insurance contract, are taxable. 1040x tax forms Demutualization of life insurance companies. 1040x tax forms   If you received stock in exchange for your equity interest as a policyholder or an annuitant, you generally will not have a recognized gain or loss. 1040x tax forms See Demutualization of Life Insurance Companies in Publication 550. 1040x tax forms U. 1040x tax forms S. 1040x tax forms Treasury notes or bonds. 1040x tax forms   You can trade certain issues of U. 1040x tax forms S. 1040x tax forms Treasury obligations for other issues designated by the Secretary of the Treasury, with no gain or loss recognized on the trade. 1040x tax forms See Savings bonds traded in chapter 1 of Publication 550 for more information. 1040x tax forms Transfers Between Spouses Generally, no gain or loss is recognized on a transfer of property from an individual to (or in trust for the benefit of) a spouse, or if incident to a divorce, a former spouse. 1040x tax forms This nonrecognition rule does not apply in the following situations. 1040x tax forms The recipient spouse or former spouse is a nonresident alien. 1040x tax forms Property is transferred in trust and liability exceeds basis. 1040x tax forms Gain must be recognized to the extent the amount of the liabilities assumed by the trust, plus any liabilities on the property, exceed the adjusted basis of the property. 1040x tax forms For other situations, see Transfers Between Spouses in chapter 4 of Publication 550. 1040x tax forms Any transfer of property to a spouse or former spouse on which gain or loss is not recognized is treated by the recipient as a gift and is not considered a sale or exchange. 1040x tax forms The recipient's basis in the property will be the same as the adjusted basis of the giver immediately before the transfer. 1040x tax forms This carryover basis rule applies whether the adjusted basis of the transferred property is less than, equal to, or greater than either its fair market value at the time of transfer or any consideration paid by the recipient. 1040x tax forms This rule applies for purposes of determining loss as well as gain. 1040x tax forms Any gain recognized on a transfer in trust increases the basis. 1040x tax forms A transfer of property is incident to a divorce if the transfer occurs within 1 year after the date on which the marriage ends, or if the transfer is related to the ending of the marriage. 1040x tax forms Related Party Transactions Special rules apply to the sale or trade of property between related parties. 1040x tax forms Gain on sale or trade of depreciable property. 1040x tax forms   Your gain from the sale or trade of property to a related party may be ordinary income, rather than capital gain, if the property can be depreciated by the party receiving it. 1040x tax forms See chapter 3 of Publication 544 for more information. 1040x tax forms Like-kind exchanges. 1040x tax forms   Generally, if you trade business or investment property for other business or investment property of a like kind, no gain or loss is recognized. 1040x tax forms See Like-kind exchanges , earlier, under Nontaxable Trades. 1040x tax forms   This rule also applies to trades of property between related parties, defined next under Losses on sales or trades of property. 1040x tax forms However, if either you or the related party disposes of the like property within 2 years after the trade, you both must report any gain or loss not recognized on the original trade on your return filed for the year in which the later disposition occurs. 1040x tax forms See Related Party Transactions in chapter 4 of Publication 550 for exceptions. 1040x tax forms Losses on sales or trades of property. 1040x tax forms   You cannot deduct a loss on the sale or trade of property, other than a distribution in complete liquidation of a corporation, if the transaction is directly or indirectly between you and the following related parties. 1040x tax forms Members of your family. 1040x tax forms This includes only your brothers and sisters, half-brothers and half-sisters, spouse, ancestors (parents, grandparents, etc. 1040x tax forms ), and lineal descendants (children, grandchildren, etc. 1040x tax forms ). 1040x tax forms A partnership in which you directly or indirectly own more than 50% of the capital interest or the profits interest. 1040x tax forms A corporation in which you directly or indirectly own more than 50% in value of the outstanding stock. 1040x tax forms (See Constructive ownership of stock , later. 1040x tax forms ) A tax-exempt charitable or educational organization directly or indirectly controlled, in any manner or by any method, by you or by a member of your family, whether or not this control is legally enforceable. 1040x tax forms   In addition, a loss on the sale or trade of property is not deductible if the transaction is directly or indirectly between the following related parties. 1040x tax forms A grantor and fiduciary, or the fiduciary and beneficiary, of any trust. 1040x tax forms Fiduciaries of two different trusts, or the fiduciary and beneficiary of two different trusts, if the same person is the grantor of both trusts. 1040x tax forms A trust fiduciary and a corporation of which more than 50% in value of the outstanding stock is directly or indirectly owned by or for the trust, or by or for the grantor of the trust. 1040x tax forms A corporation and a partnership if the same persons own more than 50% in value of the outstanding stock of the corporation and more than 50% of the capital interest, or the profits interest, in the partnership. 1040x tax forms Two S corporations if the same persons own more than 50% in value of the outstanding stock of each corporation. 1040x tax forms Two corporations, one of which is an S corporation, if the same persons own more than 50% in value of the outstanding stock of each corporation. 1040x tax forms An executor and a beneficiary of an estate (except in the case of a sale or trade to satisfy a pecuniary bequest). 1040x tax forms Two corporations that are members of the same controlled group. 1040x tax forms (Under certain conditions, however, these losses are not disallowed but must be deferred. 1040x tax forms ) Two partnerships if the same persons own, directly or indirectly, more than 50% of the capital interests or the profit interests in both partnerships. 1040x tax forms Multiple property sales or trades. 1040x tax forms   If you sell or trade to a related party a number of blocks of stock or pieces of property in a lump sum, you must figure the gain or loss separately for each block of stock or piece of property. 1040x tax forms The gain on each item may be taxable. 1040x tax forms However, you cannot deduct the loss on any item. 1040x tax forms Also, you cannot reduce gains from the sales of any of these items by losses on the sales of any of the other items. 1040x tax forms Indirect transactions. 1040x tax forms   You cannot deduct your loss on the sale of stock through your broker if, under a prearranged plan, a related party buys the same stock you had owned. 1040x tax forms This does not apply to a trade between related parties through an exchange that is purely coincidental and is not prearranged. 1040x tax forms Constructive ownership of stock. 1040x tax forms   In determining whether a person directly or indirectly owns any of the outstanding stock of a corporation, the following rules apply. 1040x tax forms Rule 1. 1040x tax forms   Stock directly or indirectly owned by or for a corporation, partnership, estate, or trust is considered owned proportionately by or for its shareholders, partners, or beneficiaries. 1040x tax forms Rule 2. 1040x tax forms   An individual is considered to own the stock directly or indirectly owned by or for his or her family. 1040x tax forms Family includes only brothers and sisters, half-brothers and half-sisters, spouse, ancestors, and lineal descendants. 1040x tax forms Rule 3. 1040x tax forms   An individual owning, other than by applying rule 2, any stock in a corporation is considered to own the stock directly or indirectly owned by or for his or her partner. 1040x tax forms Rule 4. 1040x tax forms   When applying rule 1, 2, or 3, stock constructively owned by a person under rule 1 is treated as actually owned by that person. 1040x tax forms But stock constructively owned by an individual under rule 2 or rule 3 is not treated as owned by that individual for again applying either rule 2 or rule 3 to make another person the constructive owner of the stock. 1040x tax forms Property received from a related party. 1040x tax forms    If you sell or trade at a gain property you acquired from a related party, you recognize the gain only to the extent it is more than the loss previously disallowed to the related party. 1040x tax forms This rule applies only if you are the original transferee and you acquired the property by purchase or exchange. 1040x tax forms This rule does not apply if the related party's loss was disallowed because of the wash sale rules described in chapter 4 of Publication 550 under Wash Sales. 1040x tax forms   If you sell or trade at a loss property you acquired from a related party, you cannot recognize the loss that was not allowed to the related party. 1040x tax forms Example 1. 1040x tax forms Your brother sells you stock for $7,600. 1040x tax forms His cost basis is $10,000. 1040x tax forms Your brother cannot deduct the loss of $2,400. 1040x tax forms Later, you sell the same stock to an unrelated party for $10,500, realizing a gain of $2,900. 1040x tax forms Your reportable gain is $500 (the $2,900 gain minus the $2,400 loss not allowed to your brother). 1040x tax forms Example 2. 1040x tax forms If, in Example 1, you sold the stock for $6,900 instead of $10,500, your recognized loss is only $700 (your $7,600 basis minus $6,900). 1040x tax forms You cannot deduct the loss that was not allowed to your brother. 1040x tax forms Capital Gains and Losses This section discusses the tax treatment of gains and losses from different types of investment transactions. 1040x tax forms Character of gain or loss. 1040x tax forms   You need to classify your gains and losses as either ordinary or capital gains or losses. 1040x tax forms You then need to classify your capital gains and losses as either short term or long term. 1040x tax forms If you have long-term gains and losses, you must identify your 28% rate gains and losses. 1040x tax forms If you have a net capital gain, you must also identify any unrecaptured section 1250 gain. 1040x tax forms   The correct classification and identification helps you figure the limit on capital losses and the correct tax on capital gains. 1040x tax forms Reporting capital gains and losses is explained in chapter 16. 1040x tax forms Capital or Ordinary Gain or Loss If you have a taxable gain or a deductible loss from a transaction, it may be either a capital gain or loss or an ordinary gain or loss, depending on the circumstances. 1040x tax forms Generally, a sale or trade of a capital asset (defined next) results in a capital gain or loss. 1040x tax forms A sale or trade of a noncapital asset generally results in ordinary gain or loss. 1040x tax forms Depending on the circumstances, a gain or loss on a sale or trade of property used in a trade or business may be treated as either capital or ordinary, as explained in Publication 544. 1040x tax forms In some situations, part of your gain or loss may be a capital gain or loss and part may be an ordinary gain or loss. 1040x tax forms Capital Assets and Noncapital Assets For the most part, everything you own and use for personal purposes, pleasure, or investment is a capital asset. 1040x tax forms Some examples are: Stocks or bonds held in your personal account, A house owned and used by you and your family, Household furnishings, A car used for pleasure or commuting, Coin or stamp collections, Gems and jewelry, and Gold, silver, or any other metal. 1040x tax forms Any property you own is a capital asset, except the following noncapital assets. 1040x tax forms Property held mainly for sale to customers or property that will physically become a part of the merchandise for sale to customers. 1040x tax forms For an exception, see Capital Asset Treatment for Self-Created Musical Works , later. 1040x tax forms Depreciable property used in your trade or business, even if fully depreciated. 1040x tax forms Real property used in your trade or business. 1040x tax forms A copyright, a literary, musical, or artistic composition, a letter or memorandum, or similar property that is: Created by your personal efforts, Prepared or produced for you (in the case of a letter, memorandum, or similar property), or Acquired under circumstances (for example, by gift) entitling you to the basis of the person who created the property or for whom it was prepared or produced. 1040x tax forms For an exception to this rule, see Capital Asset Treatment for Self-Created Musical Works , later. 1040x tax forms Accounts or notes receivable acquired in the ordinary course of a trade or business for services rendered or from the sale of property described in (1). 1040x tax forms U. 1040x tax forms S. 1040x tax forms Government publications that you received from the government free or for less than the normal sales price, or that you acquired under circumstances entitling you to the basis of someone who received the publications free or for less than the normal sales price. 1040x tax forms Certain commodities derivative financial instruments held by commodities derivatives dealers. 1040x tax forms Hedging transactions, but only if the transaction is clearly identified as a hedging transaction before the close of the day on which it was acquired, originated, or entered into. 1040x tax forms Supplies of a type you regularly use or consume in the ordinary course of your trade or business. 1040x tax forms Investment Property Investment property is a capital asset. 1040x tax forms Any gain or loss from its sale or trade is generally a capital gain or loss. 1040x tax forms Gold, silver, stamps, coins, gems, etc. 1040x tax forms   These are capital assets except when they are held for sale by a dealer. 1040x tax forms Any gain or loss you have from their sale or trade generally is a capital gain or loss. 1040x tax forms Stocks, stock rights, and bonds. 1040x tax forms   All of these (including stock received as a dividend) are capital assets except when held for sale by a securities dealer. 1040x tax forms However, if you own small business stock, see Losses on Section 1244 (Small Business) Stock , later, and Losses on Small Business Investment Company Stock, in chapter 4 of Publication 550. 1040x tax forms Personal Use Property Property held for personal use only, rather than for investment, is a capital asset, and you must report a gain from its sale as a capital gain. 1040x tax forms However, you cannot deduct a loss from selling personal use property. 1040x tax forms Capital Asset Treatment for Self-Created Musical Works You can elect to treat musical compositions and copyrights in musical works as capital assets when you sell or exchange them if: Your personal efforts created the property, or You acquired the property under circumstances (for example, by gift) entitling you to the basis of the person who created the property or for whom it was prepared or produced. 1040x tax forms You must make a separate election for each musical composition (or copyright in a musical work) sold or exchanged during the tax year. 1040x tax forms You must make the election on or before the due date (including extensions) of the income tax return for the tax year of the sale or exchange. 1040x tax forms You must make the election on Form 8949 by treating the sale or exchange as the sale or exchange of a capital asset, according to Form 8949, Schedule D (Form 1040), and their separate instructions. 1040x tax forms For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. 1040x tax forms See also Schedule D (Form 1040), Form 8949, and their separate instructions. 1040x tax forms You can revoke the election if you have IRS approval. 1040x tax forms To get IRS approval, you must submit a request for a letter ruling under the appropriate IRS revenue procedure. 1040x tax forms See, for example, Rev. 1040x tax forms Proc. 1040x tax forms 2013-1, corrected by Announcement 2013–9, and amplified and modified by Rev. 1040x tax forms Proc. 1040x tax forms 2013–32, available at www. 1040x tax forms irs. 1040x tax forms gov/irb/2013-01_IRB/ar06. 1040x tax forms html. 1040x tax forms Alternatively, you are granted an automatic 6-month extension from the due date of your income tax return (excluding extensions) to revoke the election, provided you timely file your income tax return, and within this 6-month extension period, you file Form 1040X that treats the sale or exchange as the sale or exchange of property that is not a capital asset. 1040x tax forms Discounted Debt Instruments Treat your gain or loss on the sale, redemption, or retirement of a bond or other debt instrument originally issued at a discount or bought at a discount as capital gain or loss, except as explained in the following discussions. 1040x tax forms Short-term government obligations. 1040x tax forms   Treat gains on short-term federal, state, or local government obligations (other than tax-exempt obligations) as ordinary income up to your ratable share of the acquisition discount. 1040x tax forms This treatment applies to obligations with a fixed maturity date not more than 1 year from the date of issue. 1040x tax forms Acquisition discount is the stated redemption price at maturity minus your basis in the obligation. 1040x tax forms   However, do not treat these gains as income to the extent you previously included the discount in income. 1040x tax forms See Discount on Short-Term Obligations in chapter 1 of Publication 550. 1040x tax forms Short-term nongovernment obligations. 1040x tax forms   Treat gains on short-term nongovernment obligations as ordinary income up to your ratable share of original issue discount (OID). 1040x tax forms This treatment applies to obligations with a fixed maturity date of not more than 1 year from the date of issue. 1040x tax forms   However, to the extent you previously included the discount in income, you do not have to include it in income again. 1040x tax forms See Discount on Short-Term Obligations in chapter 1 of Publication 550. 1040x tax forms Tax-exempt state and local government bonds. 1040x tax forms   If these bonds were originally issued at a discount before September 4, 1982, or you acquired them before March 2, 1984, treat your part of OID as tax-exempt interest. 1040x tax forms To figure your gain or loss on the sale or trade of these bonds, reduce the amount realized by your part of OID. 1040x tax forms   If the bonds were issued after September 3, 1982, and acquired after March 1, 1984, increase the adjusted basis by your part of OID to figure gain or loss. 1040x tax forms For more information on the basis of these bonds, see Discounted Debt Instruments in chapter 4 of Publication 550. 1040x tax forms   Any gain from market discount is usually taxable on disposition or redemption of tax-exempt bonds. 1040x tax forms If you bought the bonds before May 1, 1993, the gain from market discount is capital gain. 1040x tax forms If you bought the bonds after April 30, 1993, the gain is ordinary income. 1040x tax forms   You figure the market discount by subtracting the price you paid for the bond from the sum of the original issue price of the bond and the amount of accumulated OID from the date of issue that represented interest to any earlier holders. 1040x tax forms For more information, see Market Discount Bonds in chapter 1 of Publication 550. 1040x tax forms    A loss on the sale or other disposition of a tax-exempt state or local government bond is deductible as a capital loss. 1040x tax forms Redeemed before maturity. 1040x tax forms   If a state or local bond issued before June 9, 1980, is redeemed before it matures, the OID is not taxable to you. 1040x tax forms   If a state or local bond issued after June 8, 1980, is redeemed before it matures, the part of OID earned while you hold the bond is not taxable to you. 1040x tax forms However, you must report the unearned part of OID as a capital gain. 1040x tax forms Example. 1040x tax forms On July 2, 2002, the date of issue, you bought a 20-year, 6% municipal bond for $800. 1040x tax forms The face amount of the bond was $1,000. 1040x tax forms The $200 discount was OID. 1040x tax forms At the time the bond was issued, the issuer had no intention of redeeming it before it matured. 1040x tax forms The bond was callable at its face amount beginning 10 years after the issue date. 1040x tax forms The issuer redeemed the bond at the end of 11 years (July 2, 2013) for its face amount of $1,000 plus accrued annual interest of $60. 1040x tax forms The OID earned during the time you held the bond, $73, is not taxable. 1040x tax forms The $60 accrued annual interest also is not taxable. 1040x tax forms However, you must report the unearned part of OID ($127) as a capital gain. 1040x tax forms Long-term debt instruments issued after 1954 and before May 28, 1969 (or before July 2, 1982, if a government instrument). 1040x tax forms   If you sell, trade, or redeem for a gain one of these debt instruments, the part of your gain that is not more than your ratable share of the OID at the time of the sale or redemption is ordinary income. 1040x tax forms The rest of the gain is capital gain. 1040x tax forms If, however, there was an intention to call the debt instrument before maturity, all of your gain that is not more than the entire OID is treated as ordinary income at the time of the sale. 1040x tax forms This treatment of taxable gain also applies to corporate instruments issued after May 27, 1969, under a written commitment that was binding on May 27, 1969, and at all times thereafter. 1040x tax forms Long-term debt instruments issued after May 27, 1969 (or after July 1, 1982, if a government instrument). 1040x tax forms   If you hold one of these debt instruments, you must include a part of OID in your gross income each year you own the instrument. 1040x tax forms Your basis in that debt instrument is increased by the amount of OID that you have included in your gross income. 1040x tax forms See Original Issue Discount (OID) in chapter 7 for information about OID that you must report on your tax return. 1040x tax forms   If you sell or trade the debt instrument before maturity, your gain is a capital gain. 1040x tax forms However, if at the time the instrument was originally issued there was an intention to call it before its maturity, your gain generally is ordinary income to the extent of the entire OID reduced by any amounts of OID previously includible in your income. 1040x tax forms In this case, the rest of the gain is capital gain. 1040x tax forms Market discount bonds. 1040x tax forms   If the debt instrument has market discount and you chose to include the discount in income as it accrued, increase your basis in the debt instrument by the accrued discount to figure capital gain or loss on its disposition. 1040x tax forms If you did not choose to include the discount in income as it accrued, you must report gain as ordinary interest income up to the instrument's accrued market discount. 1040x tax forms The rest of the gain is capital gain. 1040x tax forms See Market Discount Bonds in chapter 1 of Publication 550. 1040x tax forms   A different rule applies to market discount bonds issued before July 19, 1984, and purchased by you before May 1, 1993. 1040x tax forms See Market discount bonds under Discounted Debt Instruments in chapter 4 of Publication 550. 1040x tax forms Retirement of debt instrument. 1040x tax forms   Any amount you receive on the retirement of a debt instrument is treated in the same way as if you had sold or traded that instrument. 1040x tax forms Notes of individuals. 1040x tax forms   If you hold an obligation of an individual issued with OID after March 1, 1984, you generally must include the OID in your income currently, and your gain or loss on its sale or retirement is generally capital gain or loss. 1040x tax forms An exception to this treatment applies if the obligation is a loan between individuals and all the following requirements are met. 1040x tax forms The lender is not in the business of lending money. 1040x tax forms The amount of the loan, plus the amount of any outstanding prior loans, is $10,000 or less. 1040x tax forms Avoiding federal tax is not one of the principal purposes of the loan. 1040x tax forms   If the exception applies, or the obligation was issued before March 2, 1984, you do not include the OID in your income currently. 1040x tax forms When you sell or redeem the obligation, the part of your gain that is not more than your accrued share of OID at that time is ordinary income. 1040x tax forms The rest of the gain, if any, is capital gain. 1040x tax forms Any loss on the sale or redemption is capital loss. 1040x tax forms Deposit in Insolvent or Bankrupt Financial Institution If you lose money you have on deposit in a bank, credit union, or other financial institution that becomes insolvent or bankrupt, you may be able to deduct your loss in one of three ways. 1040x tax forms Ordinary loss. 1040x tax forms Casualty loss. 1040x tax forms Nonbusiness bad debt (short-term capital loss). 1040x tax forms  For more information, see Deposit in Insolvent or Bankrupt Financial Institution, in chapter 4 of Publication 550. 1040x tax forms Sale of Annuity The part of any gain on the sale of an annuity contract before its maturity date that is based on interest accumulated on the contract is ordinary income. 1040x tax forms Losses on Section 1244 (Small Business) Stock You can deduct as an ordinary loss, rather than as a capital loss, your loss on the sale, trade, or worthlessness of section 1244 stock. 1040x tax forms Report the loss on Form 4797, line 10. 1040x tax forms Any gain on section 1244 stock is a capital gain if the stock is a capital asset in your hands. 1040x tax forms Report the gain on Form 8949. 1040x tax forms See Losses on Section 1244 (Small Business) Stock in chapter 4 of Publication 550. 1040x tax forms For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. 1040x tax forms See also Schedule D (Form 1040), Form 8949, and their separate instructions. 1040x tax forms Holding Period If you sold or traded investment property, you must determine your holding period for the property. 1040x tax forms Your holding period determines whether any capital gain or loss was a short-term or long-term capital gain or loss. 1040x tax forms Long-term or short-term. 1040x tax forms   If you hold investment property more than 1 year, any capital gain or loss is a long-term capital gain or loss. 1040x tax forms If you hold the property 1 year or less, any capital gain or loss is a short-term capital gain or loss. 1040x tax forms   To determine how long you held the investment property, begin counting on the date after the day you acquired the property. 1040x tax forms The day you disposed of the property is part of your holding period. 1040x tax forms Example. 1040x tax forms If you bought investment property on February 6, 2012, and sold it on February 6, 2013, your holding period is not more than 1 year and you have a short-term capital gain or loss. 1040x tax forms If you sold it on February 7, 2013, your holding period is more than 1 year and you will have a long-term capital gain or loss. 1040x tax forms Securities traded on established market. 1040x tax forms   For securities traded on an established securities market, your holding period begins the day after the trade date you bought the securities, and ends on the trade date you sold them. 1040x tax forms    Do not confuse the trade date with the settlement date, which is the date by which the stock must be delivered and payment must be made. 1040x tax forms Example. 1040x tax forms You are a cash method, calendar year taxpayer. 1040x tax forms You sold stock at a gain on December 30, 2013. 1040x tax forms According to the rules of the stock exchange, the sale was closed by delivery of the stock 4 trading days after the sale, on January 6, 2014. 1040x tax forms You received payment of the sales price on that same day. 1040x tax forms Report your gain on your 2013 return, even though you received the payment in 2014. 1040x tax forms The gain is long term or short term depending on whether you held the stock more than 1 year. 1040x tax forms Your holding period ended on December 30. 1040x tax forms If you had sold the stock at a loss, you would also report it on your 2013 return. 1040x tax forms U. 1040x tax forms S. 1040x tax forms Treasury notes and bonds. 1040x tax forms   The holding period of U. 1040x tax forms S. 1040x tax forms Treasury notes and bonds sold at auction on the basis of yield starts the day after the Secretary of the Treasury, through news releases, gives notification of acceptance to successful bidders. 1040x tax forms The holding period of U. 1040x tax forms S. 1040x tax forms Treasury notes and bonds sold through an offering on a subscription basis at a specified yield starts the day after the subscription is submitted. 1040x tax forms Automatic investment service. 1040x tax forms   In determining your holding period for shares bought by the bank or other agent, full shares are considered bought first and any fractional shares are considered bought last. 1040x tax forms Your holding period starts on the day after the bank's purchase date. 1040x tax forms If a share was bought over more than one purchase date, your holding period for that share is a split holding period. 1040x tax forms A part of the share is considered to have been bought on each date that stock was bought by the bank with the proceeds of available funds. 1040x tax forms Nontaxable trades. 1040x tax forms   If you acquire investment property in a trade for other investment property and your basis for the new property is determined, in whole or in part, by your basis in the old property, your holding period for the new property begins on the day following the date you acquired the old property. 1040x tax forms Property received as a gift. 1040x tax forms   If you receive a gift of property and your basis is determined by the donor's adjusted basis, your holding period is considered to have started on the same day the donor's holding period started. 1040x tax forms   If your basis is determined by the fair market value of the property, your holding period starts on the day after the date of the gift. 1040x tax forms Inherited property. 1040x tax forms   Generally, if you inherited investment property, your capital gain or loss on any later disposition of that property is long-term capital gain or loss. 1040x tax forms This is true regardless of how long you actually held the property. 1040x tax forms However, if you inherited property from someone who died in 2010, see the information below. 1040x tax forms Inherited property from someone who died in 2010. 1040x tax forms   If you inherit investment property from a decedent who died in 2010, and the executor of the decedent's estate made the election to file Form 8939, refer to the information provided by the executor or see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, to determine your holding period. 1040x tax forms Real property bought. 1040x tax forms   To figure how long you have held real property bought under an unconditional contract, begin counting on the day after you received title to it or on the day after you took possession of it and assumed the burdens and privileges of ownership, whichever happened first. 1040x tax forms However, taking delivery or possession of real property under an option agreement is not enough to start the holding period. 1040x tax forms The holding period cannot start until there is an actual contract of sale. 1040x tax forms The holding period of the seller cannot end before that time. 1040x tax forms Real property repossessed. 1040x tax forms   If you sell real property but keep a security interest in it, and then later repossess the property under the terms of the sales contract, your holding period for a later sale includes the period you held the property before the original sale and the period after the repossession. 1040x tax forms Your holding period does not include the time between the original sale and the repossession. 1040x tax forms That is, it does not include the period during which the first buyer held the property. 1040x tax forms Stock dividends. 1040x tax forms   The holding period for stock you received as a taxable stock dividend begins on the date of distribution. 1040x tax forms   The holding period for new stock you received as a nontaxable stock dividend begins on the same day as the holding period of the old stock. 1040x tax forms This rule also applies to stock acquired in a “spin-off,” which is a distribution of stock or securities in a controlled corporation. 1040x tax forms Nontaxable stock rights. 1040x tax forms   Your holding period for nontaxable stock rights begins on the same day as the holding period of the underlying stock. 1040x tax forms The holding period for stock acquired through the exercise of stock rights begins on the date the right was exercised. 1040x tax forms Nonbusiness Bad Debts If someone owes you money that you cannot collect, you have a bad debt. 1040x tax forms You may be able to deduct the amount owed to you when you figure your tax for the year the debt becomes worthless. 1040x tax forms Generally, nonbusiness bad debts are bad debts that did not come from operating your trade or business, and are deductible as short-term capital losses. 1040x tax forms To be deductible, nonbusiness bad debts must be totally worthless. 1040x tax forms You cannot deduct a partly worthless nonbusiness debt. 1040x tax forms Genuine debt required. 1040x tax forms   A debt must be genuine for you to deduct a loss. 1040x tax forms A debt is genuine if it arises from a debtor-creditor relationship based on a valid and enforceable obligation to repay a fixed or determinable sum of money. 1040x tax forms Basis in bad debt required. 1040x tax forms    To deduct a bad debt, you must have a basis in it—that is, you must have already included the amount in your income or loaned out your cash. 1040x tax forms For example, you cannot claim a bad debt deduction for court-ordered child support not paid to you by your former spouse. 1040x tax forms If you are a cash method taxpayer (as most individuals are), you generally cannot take a bad debt deduction for unpaid salaries, wages, rents, fees, interest, dividends, and similar items. 1040x tax forms When deductible. 1040x tax forms   You can take a bad debt deduction only in the year the debt becomes worthless. 1040x tax forms You do not have to wait until a debt is due to determine whether it is worthless. 1040x tax forms A debt becomes worthless when there is no longer any chance that the amount owed will be paid. 1040x tax forms   It is not necessary to go to court if you can show that a judgment from the court would be uncollectible. 1040x tax forms You must only show that you have taken reasonable steps to collect the debt. 1040x tax forms Bankruptcy of your debtor is generally good evidence of the worthlessness of at least a part of an unsecured and unpreferred debt. 1040x tax forms How to report bad debts. 1040x tax forms    Deduct nonbusiness bad debts as short-term capital losses on Form 8949. 1040x tax forms    Make sure you report your bad debt(s) (and any other short-term transactions for which you did not receive a Form 1099-B) on Form 8949, Part I, with box C checked. 1040x tax forms    For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. 1040x tax forms See also Schedule D (Form 1040), Form 8949, and their separate instructions. 1040x tax forms   For each bad debt, attach a statement to your return that contains: A description of the debt, including the amount, and the date it became due, The name of the debtor, and any business or family relationship between you and the debtor, The efforts you made to collect the debt, and Why you decided the debt was worthless. 1040x tax forms For example, you could show that the borrower has declared bankruptcy, or that legal action to collect would probably not result in payment of any part of the debt. 1040x tax forms Filing a claim for refund. 1040x tax forms    If you do not deduct a bad debt on your original return for the year it becomes worthless, you can file a claim for a credit or refund due to the bad debt. 1040x tax forms To do this, use Form 1040X to amend your return for the year the debt became worthless. 1040x tax forms You must file it within 7 years from the date your original return for that year had to be filed, or 2 years from the date you paid the tax, whichever is later. 1040x tax forms For more information about filing a claim, see Amended Returns and Claims for Refund in chapter 1. 1040x tax forms Additional information. 1040x tax forms   For more information, see Nonbusiness Bad Debts in Publication 550. 1040x tax forms For information on business bad debts, see chapter 10 of Publication 535, Business Expenses. 1040x tax forms Wash Sales You cannot deduct losses from sales or trades of stock or securities in a wash sale. 1040x tax forms A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you: Buy substantially identical stock or securities, Acquire substantially identical stock or securities in a fully taxable trade, Acquire a contract or option to buy substantially identical stock or securities, or Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA. 1040x tax forms If your loss was disallowed because of the wash sale rules, add the disallowed loss to the cost of the new stock or securities (except in (4) above). 1040x tax forms The result is your basis in the new stock or securities. 1040x tax forms This adjustment postpones the loss deduction until the disposition of the new stock or securities. 1040x tax forms Your holding period for the new stock or securities includes the holding period of the stock or securities sold. 1040x tax forms For more information, see Wash Sales, in chapter 4 of Publication 550. 1040x tax forms Rollover of Gain From Publicly Traded Securities You may qualify for a tax-free rollover of certain gains from the sale of publicly traded securities. 1040x tax forms This means that if you buy certain replacement property and make the choice described in this section, you postpone part or all of your gain. 1040x tax forms You postpone the gain by adjusting the basis of the replacement property as described in Basis of replacement property , later. 1040x tax forms This postpones your gain until the year you dispose of the replacement property. 1040x tax forms You qualify to make this choice if you meet all the following tests. 1040x tax forms You sell publicly traded securities at a gain. 1040x tax forms Publicly traded securities are securities traded on an established securities market. 1040x tax forms Your gain from the sale is a capital gain. 1040x tax forms During the 60-day period beginning on the date of the sale, you buy replacement property. 1040x tax forms This replacement property must be either common stock of, or a partnership interest in a specialized small business investment company (SSBIC). 1040x tax forms This is any partnership or corporation licensed by the Small Business Administration under section 301(d) of the Small Business Investment Act of 1958, as in effect on May 13, 1993. 1040x tax forms Amount of gain recognized. 1040x tax forms   If you make the choice described in this section, you must recognize gain only up to the following amount. 1040x tax forms The amount realized on the sale, minus The cost of any common stock or partnership interest in an SSBIC that you bought during the 60-day period beginning on the date of sale (and did not previously take into account on an earlier sale of publicly traded securities). 1040x tax forms  If this amount is less than the amount of your gain, you can postpone the rest of your gain, subject to the limit described next. 1040x tax forms If this amount is equal to or more than the amount of your gain, you must recognize the full amount of your gain. 1040x tax forms Limit on gain postponed. 1040x tax forms   The amount of gain you can postpone each year is limited to the smaller of: $50,000 ($25,000 if you are married and file a separate return), or $500,000 ($250,000 if you are married and file a separate return), minus the amount of gain you postponed for all earlier years. 1040x tax forms Basis of replacement property. 1040x tax forms   You must subtract the amount of postponed gain from the basis of your replacement property. 1040x tax forms How to report and postpone gain. 1040x tax forms    See How to report and postpone gain under Rollover of Gain From Publicly Traded Securities in chapter 4 of Publication 550 for details. 1040x tax forms Prev  Up  Next   Home   More Online Publications
Español

Rural Utilities Service

The Department of Agriculture's Rural Utilities Service provides funding, through grants, loans, loan guarantees, and payments, for the development of rural utilities infrastructure such as water, waste management, power and telecommunications.

Contact the Agency or Department

Website: Rural Utilities Service

Contact In-Person: Find an Office in Your State

Address: USDA Rural Development, Room 4051-S
1400 Independence Ave SW

Washington, DC 20250-1510

Phone Number: (202) 720-9540

TTY: (800) 877-8339 (Federal Relay Service)

Parent Agency

The 1040x Tax Forms

1040x tax forms Publication 3 - Introductory Material Table of Contents What's New Reminders IntroductionOrdering forms and publications. 1040x tax forms Tax questions. 1040x tax forms Useful Items - You may want to see: What's New Earned income credit. 1040x tax forms  The maximum income you can earn and still claim the earned income credit has increased. 1040x tax forms You may be able to take the earned income credit if you earned less than $46,227 ($51,567 for married filing jointly) if you have three or more qualifying children; $43,038 ($48,378 for married filing jointly) if you have two qualifying children; $37,870 ($43,210 for married filing jointly) if you have one qualifying child; and $14,340 ($19,680 for married filing jointly) if you do not have any qualifying children. 1040x tax forms See Earned Income Credit , later, under Credits. 1040x tax forms Standard mileage rate. 1040x tax forms  The standard mileage rate for the cost of operating your car for business use in 2013 is 56. 1040x tax forms 5 cents a mile. 1040x tax forms The standard mileage rate for operating your car during 2013 to get medical care or to move is 24 cents a mile. 1040x tax forms The standard mileage rate for charitable use of your vehicle is 14 cents a mile. 1040x tax forms Filing status for same-sex married couples. 1040x tax forms  If you have a same-sex spouse whom you legally married in a state (or foreign country) that recognizes same-sex marriage, you and your spouse generally must use the married filing jointly or married filing separately filing status on your 2013 return, even if you and your spouse now live in a state (or foreign country) that does not recognize same-sex marriage. 1040x tax forms See Filing Returns , later. 1040x tax forms Reminders Change of address. 1040x tax forms  If you change your mailing address, be sure to notify the Internal Revenue Service (IRS) using Form 8822, Change of Address. 1040x tax forms Mail it to the Internal Revenue Service Center for your old address. 1040x tax forms (Addresses for the Service Centers are on the back of the form. 1040x tax forms ) Use Form 8822-B, Change of Address or Responsible Party—Business, if you are changing a business address. 1040x tax forms Third party designee. 1040x tax forms  You can check the “Yes” box in the Third Party Designee area of your return to authorize the IRS to discuss your return with your preparer, a friend, a family member, or any other person you choose. 1040x tax forms This allows the IRS to call the person you identified as your designee to answer any questions that may arise during the processing of your tax return. 1040x tax forms It also allows your designee to perform certain actions. 1040x tax forms See your income tax instructions for details. 1040x tax forms Future developments. 1040x tax forms  For the latest information about developments related to Publication 3, such as legislation enacted after it was published, go to www. 1040x tax forms irs. 1040x tax forms gov/pub3. 1040x tax forms Photographs of missing children. 1040x tax forms  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. 1040x tax forms Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. 1040x tax forms You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. 1040x tax forms Introduction This publication covers the special tax situations of active members of the U. 1040x tax forms S. 1040x tax forms Armed Forces. 1040x tax forms It does not cover military pensions or veterans' benefits or give the basic tax rules that apply to all taxpayers. 1040x tax forms For information on military pensions or veterans' benefits, see Publication 525, Taxable and Nontaxable Income. 1040x tax forms If you need the basic tax rules or information on another subject not covered here, you can check our other free publications. 1040x tax forms See Publication 910, IRS Guide to Free Tax Services, for a list and descriptions of the different tax publications. 1040x tax forms For federal tax purposes, the U. 1040x tax forms S. 1040x tax forms Armed Forces includes commissioned officers, warrant officers, and enlisted personnel in all regular and reserve units under control of the Secretaries of the Defense, Army, Navy, and Air Force. 1040x tax forms The U. 1040x tax forms S. 1040x tax forms Armed Forces also includes the Coast Guard. 1040x tax forms It does not include the U. 1040x tax forms S. 1040x tax forms Merchant Marine or the American Red Cross. 1040x tax forms Members serving in an area designated or treated as a combat zone are granted special tax benefits. 1040x tax forms In the event an area ceases to be a combat zone, the IRS will do its best to notify you. 1040x tax forms Many of the relief provisions will end at that time. 1040x tax forms Comments and suggestions. 1040x tax forms   We welcome your comments about this publication and your suggestions for future editions. 1040x tax forms   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. 1040x tax forms NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. 1040x tax forms Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 1040x tax forms   You can send your comments from www. 1040x tax forms irs. 1040x tax forms gov/formspubs. 1040x tax forms Click on “More Information” and then on “Comment on Tax Forms and Publications. 1040x tax forms ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. 1040x tax forms Ordering forms and publications. 1040x tax forms   Visit www. 1040x tax forms irs. 1040x tax forms gov/formspubs to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. 1040x tax forms Internal Revenue Service 1201 N. 1040x tax forms Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. 1040x tax forms   If you have a tax question, check the information available on IRS. 1040x tax forms gov or call 1-800-829-1040. 1040x tax forms We cannot answer tax questions sent to either of the above addresses. 1040x tax forms Useful Items - You may want to see: Publication 54 Tax Guide for U. 1040x tax forms S. 1040x tax forms Citizens and Resident Aliens Abroad 463 Travel, Entertainment, Gift, and Car Expenses 501 Exemptions, Standard Deduction, and Filing Information 503 Child and Dependent Care Expenses 505 Tax Withholding and Estimated Tax 516 U. 1040x tax forms S. 1040x tax forms Government Civilian Employees Stationed Abroad 519 U. 1040x tax forms S. 1040x tax forms Tax Guide for Aliens 521 Moving Expenses 523 Selling Your Home 525 Taxable and Nontaxable Income 527 Residential Rental Property 529 Miscellaneous Deductions 559 Survivors, Executors, and Administrators 590 Individual Retirement Arrangements (IRAs) 596 Earned Income Credit (EIC) 970 Tax Benefits for Education 3920 Tax Relief for Victims of Terrorist Attacks Form (and Instructions) 1040X Amended U. 1040x tax forms S. 1040x tax forms Individual Income Tax Return 1310 Statement of Person Claiming Refund Due a Deceased Taxpayer 2848 Power of Attorney and Declaration of Representative 3903 Moving Expenses 4868 Application for Automatic Extension of Time To File U. 1040x tax forms S. 1040x tax forms Individual Income Tax Return 8822 Change of Address 8822-B Change of Address or Responsible Party—Business 9465 Installment Agreement Request See How To Get Tax Help near the end of this publication, for information about getting IRS publications and forms. 1040x tax forms Prev  Up  Next   Home   More Online Publications