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2011 Irs Tax Forms

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2011 Irs Tax Forms

2011 irs tax forms 3. 2011 irs tax forms   Filing Information for Individuals in Certain U. 2011 irs tax forms S. 2011 irs tax forms Possessions Table of Contents American SamoaWhere To Get Forms and Information Which Returns To File Special Rules for American Samoa Double Taxation The Commonwealth of Puerto RicoWhere To Get Forms and Information Which Returns To File Special Rules for Puerto Rico Double Taxation The Commonwealth of the Northern Mariana IslandsWhere To Get Forms and Information Which Return To File Special Rules for the CNMI Double Taxation GuamWhere To Get Forms and Information Which Return To File Special Rules for Guam Double Taxation The U. 2011 irs tax forms S. 2011 irs tax forms Virgin IslandsWhere To Get Forms and Information Which Return To File Special Rules for the USVI Double Taxation If you have income from American Samoa, the CNMI, Guam, Puerto Rico, or the USVI, you may have to file a tax return with the tax department of that possession. 2011 irs tax forms Or, you may have to file two annual tax returns, one with the possession's tax department and the other with the U. 2011 irs tax forms S. 2011 irs tax forms Internal Revenue Service. 2011 irs tax forms This chapter covers the general rules for filing returns in the five possessions. 2011 irs tax forms You must first determine if you are a bona fide resident of the relevant possession. 2011 irs tax forms See chapter 1 for a discussion of the requirements you must meet. 2011 irs tax forms You should ask for forms and advice about the filing of possession tax returns from that possession's tax department, not the Internal Revenue Service. 2011 irs tax forms Contact information is listed in this chapter under the heading for each possession. 2011 irs tax forms American Samoa American Samoa has its own separate and independent tax system. 2011 irs tax forms Although its tax laws are modeled on the U. 2011 irs tax forms S. 2011 irs tax forms Internal Revenue Code, there are certain differences. 2011 irs tax forms Where To Get Forms and Information Requests for advice about matters connected with Samoan taxation should be sent to: American Samoa Government Tax Office  Executive Office Building First Floor Pago Pago, AS 96799 The phone number is (684) 633-4181. 2011 irs tax forms The fax number is (684) 633-1513. 2011 irs tax forms You can get forms and publications at www. 2011 irs tax forms americansamoa. 2011 irs tax forms gov. 2011 irs tax forms The addresses and phone numbers listed above are subject to change. 2011 irs tax forms Which Returns To File Your residency status and your source of income with regard to American Samoa determine whether you file your return and pay your tax to American Samoa, to the United States, or to both. 2011 irs tax forms In addition to the information below that is categorized by residency status, the Special Rules for American Samoa section (later) contains important information for determining the correct forms to file. 2011 irs tax forms Bona Fide Resident of American Samoa Bona fide residents of American Samoa are generally exempt from U. 2011 irs tax forms S. 2011 irs tax forms tax on their American Samoa source income. 2011 irs tax forms U. 2011 irs tax forms S. 2011 irs tax forms citizen or resident alien. 2011 irs tax forms   If you are a U. 2011 irs tax forms S. 2011 irs tax forms citizen or resident alien and a bona fide resident of American Samoa during the entire tax year, you generally must file the following returns. 2011 irs tax forms An American Samoa tax return reporting your gross income from worldwide sources. 2011 irs tax forms If you report non-American Samoa source income on your American Samoa tax return, you can claim a credit against your American Samoa tax liability for income taxes paid on that income to the United States, a foreign country, or another possession. 2011 irs tax forms A U. 2011 irs tax forms S. 2011 irs tax forms tax return reporting income from worldwide sources, but excluding income from sources within American Samoa. 2011 irs tax forms However, amounts received for services performed as an employee of the United States or any of its agencies cannot be excluded (see U. 2011 irs tax forms S. 2011 irs tax forms Government employees under Special Rules for American Samoa, later). 2011 irs tax forms To exclude American Samoa source income, attach a completed Form 4563 to your U. 2011 irs tax forms S. 2011 irs tax forms tax return (see Form 4563 for more information). 2011 irs tax forms If you are excluding American Samoa source income on your U. 2011 irs tax forms S. 2011 irs tax forms tax return, you will not be allowed any deductions from gross income or credits against tax that are directly or indirectly allocable to the exempt income. 2011 irs tax forms For more information, see Special Rules for Completing Your U. 2011 irs tax forms S. 2011 irs tax forms Tax Return in chapter 4. 2011 irs tax forms Nonresident alien. 2011 irs tax forms   If you are a bona fide resident of American Samoa during the entire tax year, but a nonresident alien of the United States, you generally must file the following returns. 2011 irs tax forms An American Samoa tax return reporting worldwide income. 2011 irs tax forms A U. 2011 irs tax forms S. 2011 irs tax forms tax return (Form 1040, U. 2011 irs tax forms S. 2011 irs tax forms Individual Income Tax Return) reporting income from worldwide sources, but excluding American Samoa source income other than amounts for services performed as an employee of the United States or any of its agencies. 2011 irs tax forms For more information, see U. 2011 irs tax forms S. 2011 irs tax forms Government employees under Special Rules for American Samoa, later. 2011 irs tax forms To exclude income from sources within American Samoa, attach a completed Form 4563 to your U. 2011 irs tax forms S. 2011 irs tax forms tax return (see Form 4563 , below, for more information). 2011 irs tax forms For all other tax purposes, however, you will be treated as a nonresident alien individual. 2011 irs tax forms For example, you are not allowed the standard deduction, you cannot file a joint return, and you are not allowed a deduction for a dependent unless that person is a citizen or national of the United States. 2011 irs tax forms There are also limitations on what deductions and credits are allowed. 2011 irs tax forms See Publication 519 for more information. 2011 irs tax forms Form 4563. 2011 irs tax forms   If you must file a U. 2011 irs tax forms S. 2011 irs tax forms income tax return and you qualify to exclude any of your income from American Samoa, claim the exclusion by completing Form 4563 and attaching it to your Form 1040. 2011 irs tax forms Form 4563 cannot be filed by itself. 2011 irs tax forms There is an example of a filled-in Form 4563 in chapter 5. 2011 irs tax forms   If you are a bona fide resident of American Samoa during the entire tax year and you are not including a check or a money order, send your U. 2011 irs tax forms S. 2011 irs tax forms tax return and all attachments (including Form 4563) to: Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. 2011 irs tax forms S. 2011 irs tax forms tax return and all attachments (including Form 4563) to: Internal Revenue Service P. 2011 irs tax forms O. 2011 irs tax forms Box 1303 Charlotte, NC 28201-1303 USA   Send your American Samoa tax return and all attachments to the address given under Where To Get Forms and Information , earlier. 2011 irs tax forms Self-employment tax. 2011 irs tax forms   If you are not required to file a U. 2011 irs tax forms S. 2011 irs tax forms tax return but have income that is effectively connected with a trade or business in American Samoa, you must file Form 1040-SS with the United States. 2011 irs tax forms On this form you will report your self-employment income to the United States and, if necessary, pay self-employment tax on that income. 2011 irs tax forms Additional Medicare Tax. 2011 irs tax forms   Beginning in 2013, you may be required to pay Additional Medicare Tax. 2011 irs tax forms Also, you may need to report Additional Medicare Tax withheld by your employer. 2011 irs tax forms For more information see Additional Medicare Tax under Special Rules for Completing Your U. 2011 irs tax forms S. 2011 irs tax forms Tax Return in chapter 4. 2011 irs tax forms Net Investment Income Tax. 2011 irs tax forms   Beginning in 2013, the Net Investment Income Tax (NIIT) is 3. 2011 irs tax forms 8 percent of the lesser of an individual’s net investment income or the excess of the individual’s modified adjusted gross income over a specified threshold amount. 2011 irs tax forms The NIIT will apply to a bona fide resident of American Samoa if a taxpayer has modified adjusted gross income from sources outside of American Samoa that exceeds a specified threshold amount, e. 2011 irs tax forms g. 2011 irs tax forms , $200,000 for single filers. 2011 irs tax forms The NIIT does not apply to any individual who is a nonresident alien with respect to the United States. 2011 irs tax forms See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information on the NIIT. 2011 irs tax forms Estimated tax payments. 2011 irs tax forms   To see if you are required to make payments of estimated income tax, self-employment tax, Additional Medicare Tax, and/or Net Investment Income Tax to the IRS, get Form 1040-ES, Estimated Tax for Individuals. 2011 irs tax forms   To pay by check or money order, send your payment with the Form 1040-ES payment voucher to: Internal Revenue Service P. 2011 irs tax forms O. 2011 irs tax forms Box 1300 Charlotte, NC 28201-1300 USA   To get information on paying electronically (by credit or debit card, or through the Electronic Federal Tax Payment System (EFTPS)), go to www. 2011 irs tax forms irs. 2011 irs tax forms gov/e-pay. 2011 irs tax forms   For information on making estimated income tax payments to American Samoa, see Where To Get Forms and Information , earlier. 2011 irs tax forms Not a Bona Fide Resident of American Samoa An individual who is not a bona fide resident of American Samoa for the tax year generally files both U. 2011 irs tax forms S. 2011 irs tax forms and American Samoa tax returns, and claims a foreign tax credit on the U. 2011 irs tax forms S. 2011 irs tax forms return for taxes paid to American Samoa. 2011 irs tax forms U. 2011 irs tax forms S. 2011 irs tax forms citizen or resident alien. 2011 irs tax forms   If you are a U. 2011 irs tax forms S. 2011 irs tax forms citizen or resident alien but not a bona fide resident of American Samoa during the entire tax year, you generally must file the following returns. 2011 irs tax forms An American Samoa tax return reporting only your income from sources within American Samoa. 2011 irs tax forms Wages for services performed in American Samoa, whether for a private employer, the U. 2011 irs tax forms S. 2011 irs tax forms Government, or otherwise, is income from sources within American Samoa. 2011 irs tax forms A U. 2011 irs tax forms S. 2011 irs tax forms tax return reporting your income from worldwide sources. 2011 irs tax forms You can take a credit against your U. 2011 irs tax forms S. 2011 irs tax forms tax liability if you paid income taxes to American Samoa (or other possession or foreign country) and reported income from those sources on your U. 2011 irs tax forms S. 2011 irs tax forms tax return. 2011 irs tax forms De minimis exception to determining source of income. 2011 irs tax forms   In certain situations you will not have income from a possession. 2011 irs tax forms See De minimis exception under Compensation for Labor or Personal Services in chapter 2. 2011 irs tax forms Nonresident alien. 2011 irs tax forms   If you are a nonresident alien of the United States who does not qualify as a bona fide resident of American Samoa for the entire tax year, you generally must file the following returns. 2011 irs tax forms An American Samoa tax return reporting only your income from sources within American Samoa. 2011 irs tax forms In this situation, wages for services performed in American Samoa, whether for a private employer, the U. 2011 irs tax forms S. 2011 irs tax forms Government, or otherwise, is income from sources within American Samoa. 2011 irs tax forms A U. 2011 irs tax forms S. 2011 irs tax forms tax return (Form 1040NR, U. 2011 irs tax forms S. 2011 irs tax forms Nonresident Alien Income Tax Return) reporting U. 2011 irs tax forms S. 2011 irs tax forms source income according to the rules for a nonresident alien. 2011 irs tax forms See the Instructions for Form 1040NR. 2011 irs tax forms   If you are not a bona fide resident of American Samoa during the entire tax year, and you are not including a check or a money order, send your U. 2011 irs tax forms S. 2011 irs tax forms tax return and all attachments to: Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. 2011 irs tax forms S. 2011 irs tax forms tax return and all attachments to: Internal Revenue Service P. 2011 irs tax forms O. 2011 irs tax forms Box 1303 Charlotte, NC 28201-1303 USA   Send your American Samoa tax return and all attachments to the address given under Where To Get Forms and Information , earlier. 2011 irs tax forms Special Rules for American Samoa Some special rules apply to certain types of income and employment connected with American Samoa. 2011 irs tax forms U. 2011 irs tax forms S. 2011 irs tax forms Armed Forces. 2011 irs tax forms   Bona fide residents of American Samoa include military personnel whose official home of record is American Samoa. 2011 irs tax forms Civilian spouse of active duty member of the U. 2011 irs tax forms S. 2011 irs tax forms Armed Forces. 2011 irs tax forms   If, under the rule discussed at the beginning of chapter 1 (see Special rule for civilian spouse of active duty member of the U. 2011 irs tax forms S. 2011 irs tax forms Armed Forces ), your tax residence is American Samoa, follow the guidance in the section for bona fide residents under Which Returns To File, earlier. 2011 irs tax forms However, if your tax residence is one of the 50 states or the District of Columbia and your only income from American Samoa is from wages, salaries, tips, or self-employment, you will be taxed on your worldwide income and file only a U. 2011 irs tax forms S. 2011 irs tax forms tax return (Form 1040) and a state and/or local tax return, if required. 2011 irs tax forms If you have income from American Samoa other than wages, salaries, tips, or self-employment that is considered to be sourced in that possession (see Table 2-1), contact the local tax administration for guidance. 2011 irs tax forms U. 2011 irs tax forms S. 2011 irs tax forms Government employees. 2011 irs tax forms   If you are employed in American Samoa by the U. 2011 irs tax forms S. 2011 irs tax forms Government or any of its agencies, you are subject to tax by American Samoa on your pay from the government. 2011 irs tax forms Whether you are subject to tax by American Samoa on your non-American Samoa source income depends on your status in American Samoa as a bona fide resident. 2011 irs tax forms   Wages and salaries paid to employees of the U. 2011 irs tax forms S. 2011 irs tax forms Government and its agencies are also subject to U. 2011 irs tax forms S. 2011 irs tax forms federal income tax. 2011 irs tax forms These payments do not qualify for the exclusion of income from sources within American Samoa, discussed earlier. 2011 irs tax forms   For tax years ending after April 9, 2008, wages and salaries paid to bona fide residents by the Government of American Samoa can be excluded on the U. 2011 irs tax forms S. 2011 irs tax forms tax return. 2011 irs tax forms   If you report government wages on both your U. 2011 irs tax forms S. 2011 irs tax forms and American Samoa tax returns, you can take a credit on your U. 2011 irs tax forms S. 2011 irs tax forms tax return for income taxes paid or accrued to American Samoa. 2011 irs tax forms Figure the credit on Form 1116, and attach that form to your U. 2011 irs tax forms S. 2011 irs tax forms tax return, Form 1040. 2011 irs tax forms Show your wages paid for services performed in American Samoa on Form 1116, line 1a, enter “American Samoa” on line g, and check box b above Part I. 2011 irs tax forms Moving expense deduction. 2011 irs tax forms   Generally, expenses of a move to American Samoa are directly attributable to American Samoa wages, salaries, and other earned income. 2011 irs tax forms Likewise, the expenses of a move back to the United States are generally attributable to U. 2011 irs tax forms S. 2011 irs tax forms earned income. 2011 irs tax forms   If your move was to American Samoa, report your deduction for moving expenses as follows. 2011 irs tax forms If you are a bona fide resident in the tax year of your move, enter your deductible expenses on your American Samoa tax return. 2011 irs tax forms If you are not a bona fide resident, enter your deductible expenses on both your American Samoa and U. 2011 irs tax forms S. 2011 irs tax forms tax returns. 2011 irs tax forms Also, for purposes of a tax credit against your U. 2011 irs tax forms S. 2011 irs tax forms tax liability, reduce your American Samoa “general category income” on Form 1116, line 1a, by entering the deductible moving expenses on line 2. 2011 irs tax forms   If your move was to the United States, complete Form 3903, Moving Expenses, and enter the deductible amount on Form 1040, line 26. 2011 irs tax forms Double Taxation A mutual agreement procedure exists to settle cases of double taxation between the United States and American Samoa. 2011 irs tax forms See Double Taxation in chapter 4. 2011 irs tax forms The Commonwealth of Puerto Rico The Commonwealth of Puerto Rico has its own separate and independent tax system. 2011 irs tax forms Although it is modeled after the U. 2011 irs tax forms S. 2011 irs tax forms system, there are differences in law and tax rates. 2011 irs tax forms Where To Get Forms and Information Requests for information about the filing of Puerto Rico tax returns should be addressed to: Departamento de Hacienda Negociado de Asistencia Contributiva  P. 2011 irs tax forms O. 2011 irs tax forms Box 9024140 San Juan, Puerto Rico 00902-4140 The phone numbers are (787) 721-8051 and (787) 721-7198. 2011 irs tax forms    To obtain Puerto Rico tax forms, contact the Forms and Publications Division Office at the above address or call (787) 722-0216, option #7. 2011 irs tax forms You can access the Hacienda website at www. 2011 irs tax forms hacienda. 2011 irs tax forms gobierno. 2011 irs tax forms pr or email your questions about Puerto Rico taxes to InfoServ@hacienda. 2011 irs tax forms gobierno. 2011 irs tax forms pr. 2011 irs tax forms The addresses and phone numbers listed above are subject to change. 2011 irs tax forms Which Returns To File Generally, you will file returns with both Puerto Rico and the United States. 2011 irs tax forms The income reported on each return depends on your residency status in Puerto Rico. 2011 irs tax forms To determine if you are a bona fide resident of Puerto Rico, see the information in chapter 1. 2011 irs tax forms Bona Fide Resident of Puerto Rico Bona fide residents of Puerto Rico will generally pay tax to Puerto Rico on their worldwide income. 2011 irs tax forms U. 2011 irs tax forms S. 2011 irs tax forms citizen or resident alien. 2011 irs tax forms   If you are a U. 2011 irs tax forms S. 2011 irs tax forms citizen or resident alien and also a bona fide resident of Puerto Rico during the entire tax year, you generally must file the following returns. 2011 irs tax forms A Puerto Rico tax return reporting income from worldwide sources. 2011 irs tax forms If you report U. 2011 irs tax forms S. 2011 irs tax forms source income on your Puerto Rico tax return, you can claim a credit against your Puerto Rico tax, up to the amount allowable, for income taxes paid to the United States. 2011 irs tax forms A U. 2011 irs tax forms S. 2011 irs tax forms tax return reporting income from worldwide sources, but excluding Puerto Rico source income. 2011 irs tax forms However, see U. 2011 irs tax forms S. 2011 irs tax forms Government employees under Special Rules for Puerto Rico, later, for an exception. 2011 irs tax forms If you are excluding Puerto Rico income on your U. 2011 irs tax forms S. 2011 irs tax forms tax return, you will not be allowed any deductions or credits that are directly or indirectly allocable to exempt income. 2011 irs tax forms For more information, see Special Rules for Completing Your U. 2011 irs tax forms S. 2011 irs tax forms Tax Return in chapter 4. 2011 irs tax forms If all of your income is from Puerto Rico sources, you are not required to file a U. 2011 irs tax forms S. 2011 irs tax forms tax return. 2011 irs tax forms However, if you have self-employment income, see Self-employment tax , later. 2011 irs tax forms U. 2011 irs tax forms S. 2011 irs tax forms citizen only. 2011 irs tax forms   If you are a U. 2011 irs tax forms S. 2011 irs tax forms citizen, you may also qualify under these rules if you have been a bona fide resident of Puerto Rico for at least 2 years before moving from Puerto Rico. 2011 irs tax forms In this case, you can exclude your income derived from sources within Puerto Rico (but not wages and salaries received as an employee of the U. 2011 irs tax forms S. 2011 irs tax forms Government or its agencies) that you earned before the date you changed your residence. 2011 irs tax forms For more information, see Puerto Rico under Year of Moving From a Possession in chapter 1. 2011 irs tax forms Nonresident alien. 2011 irs tax forms   If you are a bona fide resident of Puerto Rico during the entire tax year, but a nonresident alien of the United States, you generally must file the following returns. 2011 irs tax forms A Puerto Rico tax return reporting income from worldwide sources. 2011 irs tax forms If you report U. 2011 irs tax forms S. 2011 irs tax forms source income on your Puerto Rico tax return, you can claim a credit against your Puerto Rico tax, up to the amount allowable, for income taxes paid to the United States. 2011 irs tax forms A U. 2011 irs tax forms S. 2011 irs tax forms tax return (Form 1040) reporting income from worldwide sources, but excluding Puerto Rico source income (other than amounts for services performed as an employee of the United States or any of its agencies). 2011 irs tax forms For tax purposes other than reporting income, however, you will be treated as a nonresident alien individual. 2011 irs tax forms For example, you are not allowed the standard deduction, you cannot file a joint return, and you are not allowed a deduction for a dependent unless that person is a citizen or national of the United States. 2011 irs tax forms There are also limitations on what deductions and credits are allowed. 2011 irs tax forms See Publication 519 for more information. 2011 irs tax forms Self-employment tax. 2011 irs tax forms   If you have no U. 2011 irs tax forms S. 2011 irs tax forms filing requirement but have income that is effectively connected with a trade or business in Puerto Rico, you must file Form 1040-SS or Form 1040-PR with the United States to report your self-employment income and, if necessary, pay self-employment tax. 2011 irs tax forms Additional Medicare Tax. 2011 irs tax forms   Beginning in 2013, you may be required to pay Additional Medicare Tax. 2011 irs tax forms Also, you may need to report Additional Medicare Tax withheld by your employer. 2011 irs tax forms For more information see Additional Medicare Tax under Special Rules for Completing Your U. 2011 irs tax forms S. 2011 irs tax forms Tax Return in chapter 4. 2011 irs tax forms Net Investment Income Tax. 2011 irs tax forms   Beginning in 2013, the Net Investment Income Tax (NIIT) is 3. 2011 irs tax forms 8 percent of the lesser of an individual’s net investment income or the excess of the individual’s modified adjusted gross income over a specified threshold amount. 2011 irs tax forms The NIIT will apply to a bona fide resident of Puerto Rico if a taxpayer has modified adjusted gross income from sources outside of Puerto Rico that exceeds a specified threshold amount, e. 2011 irs tax forms g. 2011 irs tax forms , $200,000 for single filers. 2011 irs tax forms The NIIT does not apply to any individual who is a nonresident alien with respect to the United States. 2011 irs tax forms See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information on the NIIT. 2011 irs tax forms Estimated tax payments. 2011 irs tax forms   To see if you are required to make payments of estimated income tax, self-employment tax, Additional Medicare Tax, and/or Net Investment Income Tax to the IRS, get Form 1040-ES (or Form 1040-ES(PR)). 2011 irs tax forms   To pay by check or money order, send your payment with the Form 1040-ES (or Form 1040-ES(PR)) payment voucher to: Internal Revenue Service P. 2011 irs tax forms O. 2011 irs tax forms Box 1300 Charlotte, NC 28201-1300 USA   To get information on paying electronically (by credit or debit card, or through the Electronic Federal Tax Payment System (EFTPS)), go to www. 2011 irs tax forms irs. 2011 irs tax forms gov/e-pay. 2011 irs tax forms   For information on making estimated income tax payments to Hacienda, see Where To Get Forms and Information , earlier. 2011 irs tax forms Not a Bona Fide Resident of Puerto Rico An individual who is not a bona fide resident of Puerto Rico for the tax year generally files tax returns with both Puerto Rico and the United States. 2011 irs tax forms U. 2011 irs tax forms S. 2011 irs tax forms citizen or resident alien. 2011 irs tax forms   If you are a U. 2011 irs tax forms S. 2011 irs tax forms citizen or resident alien but not a bona fide resident of Puerto Rico during the entire tax year, you generally must file the following returns. 2011 irs tax forms A Puerto Rico tax return reporting only your income from Puerto Rico sources. 2011 irs tax forms Wages for services performed in Puerto Rico, whether for a private employer, the U. 2011 irs tax forms S. 2011 irs tax forms Government, or otherwise, is income from Puerto Rico sources. 2011 irs tax forms A U. 2011 irs tax forms S. 2011 irs tax forms tax return reporting income from worldwide sources. 2011 irs tax forms Generally, you can claim a foreign tax credit for income taxes paid to Puerto Rico on the Puerto Rico income that is not exempt from U. 2011 irs tax forms S. 2011 irs tax forms taxes (see chapter 4 for more information). 2011 irs tax forms Nonresident alien. 2011 irs tax forms   If you are a nonresident alien of the United States who does not qualify as a bona fide resident of Puerto Rico for the entire tax year, you generally must file the following returns. 2011 irs tax forms A Puerto Rico tax return reporting only your income from Puerto Rico sources. 2011 irs tax forms Wages for services performed in Puerto Rico, whether for a private employer, the U. 2011 irs tax forms S. 2011 irs tax forms Government, or otherwise, is income from Puerto Rico sources. 2011 irs tax forms A U. 2011 irs tax forms S. 2011 irs tax forms tax return (Form 1040NR) according to the rules for a nonresident alien. 2011 irs tax forms See the Instructions for Form 1040NR. 2011 irs tax forms De minimis exception to determining source of income. 2011 irs tax forms   In certain situations you will not have income from a possession. 2011 irs tax forms See De minimis exception under Compensation for Labor or Personal Services in chapter 2. 2011 irs tax forms Use the addresses listed below to file your U. 2011 irs tax forms S. 2011 irs tax forms and Puerto Rico income tax returns. 2011 irs tax forms If you are not including a check or a money order, send your U. 2011 irs tax forms S. 2011 irs tax forms tax return and all attachments to: Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA If you are including a check or a money order, send your U. 2011 irs tax forms S. 2011 irs tax forms tax return and all attachments to: Internal Revenue Service P. 2011 irs tax forms O. 2011 irs tax forms Box 1303 Charlotte, NC 28201-1303 USA If you request a refund on your Puerto Rico return, send your Puerto Rico tax return and all attachments to: Departamento de Hacienda P. 2011 irs tax forms O. 2011 irs tax forms Box 50072 San Juan, PR 00902-6272 Send all other Puerto Rico tax returns, with all attachments, to: Departamento de Hacienda P. 2011 irs tax forms O. 2011 irs tax forms Box 9022501 San Juan, PR 00902-2501 Special Rules for Puerto Rico In addition to the general rules given earlier for filing U. 2011 irs tax forms S. 2011 irs tax forms and Puerto Rico tax returns, there are some special rules that apply to certain individuals and types of income. 2011 irs tax forms U. 2011 irs tax forms S. 2011 irs tax forms Government employees. 2011 irs tax forms   Wages and cost-of-living allowances paid by the U. 2011 irs tax forms S. 2011 irs tax forms Government (or one of its agencies) for working in Puerto Rico are subject to Puerto Rico tax. 2011 irs tax forms However, the cost-of-living allowances are excluded from Puerto Rico gross income up to the amount exempt from U. 2011 irs tax forms S. 2011 irs tax forms tax. 2011 irs tax forms In order to claim this exclusion, you must: Include with your Puerto Rico tax return evidence to show the amount received during the year, and Be in full compliance with your Puerto Rico tax responsibilities. 2011 irs tax forms   These wages are also subject to U. 2011 irs tax forms S. 2011 irs tax forms tax, but the cost-of-living allowances are excludable. 2011 irs tax forms A foreign tax credit is available in order to avoid double taxation. 2011 irs tax forms U. 2011 irs tax forms S. 2011 irs tax forms Armed Forces. 2011 irs tax forms   Bona fide residents of Puerto Rico include military personnel whose official home of record is Puerto Rico. 2011 irs tax forms Civilian spouse of active duty member of the U. 2011 irs tax forms S. 2011 irs tax forms Armed Forces. 2011 irs tax forms   If, under the rule discussed at the beginning of chapter 1 (see Special rule for civilian spouse of active duty member of the U. 2011 irs tax forms S. 2011 irs tax forms Armed Forces ), your tax residence is Puerto Rico, follow the guidance in the section for bona fide residents under Which Returns To File, earlier. 2011 irs tax forms However, if your tax residence is one of the 50 states or the District of Columbia and your only income from Puerto Rico is from wages, salaries, tips, or self-employment, you will be taxed on your worldwide income and file only a U. 2011 irs tax forms S. 2011 irs tax forms tax return (Form 1040) and a state and/or local tax return, if required. 2011 irs tax forms If you have income from Puerto Rico other than wages, salaries, tips, or self-employment that is considered to be sourced in that possession (see Table 2-1 ), contact the Hacienda for guidance. 2011 irs tax forms Income from sources outside Puerto Rico and the United States. 2011 irs tax forms   If you are a U. 2011 irs tax forms S. 2011 irs tax forms citizen and bona fide resident of Puerto Rico and you have income from sources outside both Puerto Rico and the United States, that income is treated as foreign source income under both tax systems. 2011 irs tax forms In addition to your Puerto Rico and U. 2011 irs tax forms S. 2011 irs tax forms tax returns, you may also have to file a return with the country or possession from which your outside income was derived. 2011 irs tax forms To avoid double taxation, a foreign tax credit is generally available for either the U. 2011 irs tax forms S. 2011 irs tax forms or Puerto Rico return. 2011 irs tax forms Example. 2011 irs tax forms Thomas Red is a bona fide resident of Puerto Rico and a U. 2011 irs tax forms S. 2011 irs tax forms citizen. 2011 irs tax forms He traveled to the Dominican Republic and worked in the construction industry for 1 month. 2011 irs tax forms His wages were $20,000. 2011 irs tax forms Because the wages were earned outside Puerto Rico and outside the United States, Thomas must file a tax return with Puerto Rico and the United States. 2011 irs tax forms He may also have to file a tax return with the Dominican Republic. 2011 irs tax forms Moving expense deduction. 2011 irs tax forms   Generally, expenses of a move to Puerto Rico are directly attributable to wages, salaries, and other earned income from Puerto Rico. 2011 irs tax forms Likewise, the expenses of a move back to the United States are generally attributable to U. 2011 irs tax forms S. 2011 irs tax forms earned income. 2011 irs tax forms   If your move was to Puerto Rico, report your deduction for moving expenses as follows. 2011 irs tax forms If you are a bona fide resident in the tax year of your move, enter your deductible expenses on your Puerto Rico tax return. 2011 irs tax forms If you are not a bona fide resident, enter your deductible expenses on both your Puerto Rico and U. 2011 irs tax forms S. 2011 irs tax forms tax returns. 2011 irs tax forms Also, for purposes of a tax credit against your U. 2011 irs tax forms S. 2011 irs tax forms tax liability, reduce your Puerto Rico “general category income” on Form 1116, line 1a, by entering the deductible moving expenses on line 2. 2011 irs tax forms   If your move was to the United States, complete Form 3903 and enter the deductible amount on Form 1040, line 26. 2011 irs tax forms Additional child tax credit. 2011 irs tax forms   If you are not required to file a U. 2011 irs tax forms S. 2011 irs tax forms income tax return, this credit is available only if you meet all three of the following conditions. 2011 irs tax forms You were a bona fide resident of Puerto Rico during the entire tax year. 2011 irs tax forms Social security and Medicare taxes were withheld from your wages or you paid self-employment tax. 2011 irs tax forms You had three or more qualifying children. 2011 irs tax forms (For the definition of a qualifying child, see the instructions for Form 1040-PR or Form 1040-SS. 2011 irs tax forms ) If your income exceeds certain levels, you may be disqualified from receiving this credit. 2011 irs tax forms Use Form 1040-PR or Form 1040-SS to claim the additional child tax credit. 2011 irs tax forms Advice about possible tax benefits under the Puerto Rico investment incentive programs is available from the Puerto Rico tax authorities. 2011 irs tax forms Double Taxation A mutual agreement procedure exists to settle cases of double taxation between the United States and the Commonwealth of Puerto Rico. 2011 irs tax forms See Double Taxation in chapter 4. 2011 irs tax forms The Commonwealth of the Northern Mariana Islands The Commonwealth of the Northern Mariana Islands (CNMI) has its own tax system based partly on the same tax laws and tax rates that apply to the United States and partly on local taxes imposed by the CNMI government. 2011 irs tax forms Where To Get Forms and Information Requests for advice about CNMI residency and tax matters should be addressed to: Commonwealth of the Northern Mariana Islands  Division of Revenue and Taxation P. 2011 irs tax forms O. 2011 irs tax forms Box 5234 CHRB Dandan Commercial Center First Floor Rm #8  Saipan, MP 96950 You can order forms and publications by calling (670) 664-1000. 2011 irs tax forms You can order forms and publications through the fax at (670) 664-1015. 2011 irs tax forms You can get forms and publications at www. 2011 irs tax forms cnmidof. 2011 irs tax forms net. 2011 irs tax forms The addresses and phone numbers listed above are subject to change. 2011 irs tax forms Which Return To File In general, all individuals with income from the CNMI will file only one return, either to the CNMI or to the United States. 2011 irs tax forms Your residency status with regard to the CNMI determines which return you will file. 2011 irs tax forms Be sure to check the Special Rules for the CNMI , later, for additional information about filing your tax return. 2011 irs tax forms Bona Fide Resident of the CNMI If you are a U. 2011 irs tax forms S. 2011 irs tax forms citizen, resident alien, or nonresident alien and a bona fide resident of the CNMI during the entire tax year, file your income tax return with the CNMI. 2011 irs tax forms Include income from worldwide sources on your CNMI return. 2011 irs tax forms In determining your total tax payments, include all income tax withheld by either the CNMI or the United States, any credit for an overpayment of income tax to either the CNMI or the United States, and any payments of estimated tax to either the CNMI or the United States. 2011 irs tax forms Pay any balance of tax due with your tax return. 2011 irs tax forms Generally, if you properly file your return with, and fully pay your income tax to, the CNMI, then you are not liable for filing an income tax return with, or for paying tax to, the United States for the tax year. 2011 irs tax forms However, if you were self-employed in 2013, see Self-employment tax , later. 2011 irs tax forms Example. 2011 irs tax forms David Gold was a bona fide resident of the CNMI for 2013. 2011 irs tax forms He received wages of $30,000 paid by a private employer in the CNMI and dividends of $4,000 from U. 2011 irs tax forms S. 2011 irs tax forms corporations that carry on business mainly in the United States. 2011 irs tax forms He must file a 2013 income tax return with the CNMI Division of Revenue and Taxation. 2011 irs tax forms He reports his total income of $34,000 on the CNMI return. 2011 irs tax forms   If you are a bona fide resident of the CNMI for the entire tax year, send your return and all attachments to the Division of Revenue and Taxation at the address given earlier. 2011 irs tax forms U. 2011 irs tax forms S. 2011 irs tax forms Citizen or Resident Alien (Other Than a Bona Fide Resident of the CNMI) If you have income from sources within the CNMI and are a U. 2011 irs tax forms S. 2011 irs tax forms citizen or resident alien, but you are not a bona fide resident of the CNMI during the entire tax year, file your income tax return with the United States. 2011 irs tax forms Include income from worldwide sources on your U. 2011 irs tax forms S. 2011 irs tax forms return. 2011 irs tax forms In determining your total tax payments, include all income tax withheld by either the United States or the CNMI, any credit for an overpayment of income tax to either the United States or the CNMI, and any payments of estimated tax to either the United States or the CNMI. 2011 irs tax forms Pay any balance of tax due with your tax return. 2011 irs tax forms Note. 2011 irs tax forms You may also need to complete Form 5074. 2011 irs tax forms You are not liable for filing an income tax return with, or for paying tax to, the CNMI for the tax year. 2011 irs tax forms Form 5074. 2011 irs tax forms   If you file a U. 2011 irs tax forms S. 2011 irs tax forms income tax return, attach a completed Form 5074 if you (and your spouse if filing a joint return) have: Adjusted gross income of $50,000 or more for the tax year, and Gross income of $5,000 or more from sources within the CNMI. 2011 irs tax forms   The United States and the CNMI use this form to divide your income taxes. 2011 irs tax forms   There is an example of a filled-in Form 5074 in chapter 5. 2011 irs tax forms De minimis exception to determining source of income. 2011 irs tax forms   In certain situations you will not have income from a possession. 2011 irs tax forms See De minimis exception under Compensation for Labor or Personal Services in chapter 2. 2011 irs tax forms Citizen or resident alien of the United States but not a bona fide resident of the CNMI. 2011 irs tax forms   If you are a citizen or resident alien of the United States but not a bona fide resident of the CNMI during the entire tax year and you are not including a check or a money order, send your return and all attachments to: Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. 2011 irs tax forms S. 2011 irs tax forms tax return and all attachments to: Internal Revenue Service P. 2011 irs tax forms O. 2011 irs tax forms Box 1303 Charlotte, NC 28201-1303 USA Nonresident Alien (Other Than a Bona Fide Resident of the CNMI) If you are a nonresident alien of the United States who does not qualify as a bona fide resident of the CNMI for the entire tax year, you generally must file the following returns. 2011 irs tax forms A CNMI tax return reporting only your income from sources within the CNMI. 2011 irs tax forms In this situation, wages for services performed in the CNMI, whether for a private employer, the U. 2011 irs tax forms S. 2011 irs tax forms Government, or otherwise, is income from sources within the CNMI. 2011 irs tax forms A U. 2011 irs tax forms S. 2011 irs tax forms tax return (Form 1040NR) reporting U. 2011 irs tax forms S. 2011 irs tax forms source income according to the rules for a nonresident alien. 2011 irs tax forms See the instructions for Form 1040NR. 2011 irs tax forms If you are not a bona fide resident of the CNMI during the entire tax year and you are not including a check or a money order, send your U. 2011 irs tax forms S. 2011 irs tax forms tax return and all attachments to: Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA If you are including a check or a money order, send your U. 2011 irs tax forms S. 2011 irs tax forms tax return and all attachments to:  Internal Revenue Service P. 2011 irs tax forms O. 2011 irs tax forms Box 1303 Charlotte, NC 28201-1303 USA Send your CNMI tax return and all attachments to:  Department of Finance Division of Revenue and Taxation Commonwealth of the Northern Mariana Islands P. 2011 irs tax forms O. 2011 irs tax forms Box 5234 CHRB Saipan, MP 96950 Citizen of the CNMI If you are a citizen of the CNMI (meaning that you were born or naturalized in the CNMI) but not otherwise a U. 2011 irs tax forms S. 2011 irs tax forms citizen or a U. 2011 irs tax forms S. 2011 irs tax forms resident alien during the tax year, file your income tax return with the CNMI. 2011 irs tax forms Include income from worldwide sources on your CNMI return. 2011 irs tax forms Take into account tax withheld by both jurisdictions in determining if there is tax overdue or an overpayment. 2011 irs tax forms Pay any balance of tax due with your tax return. 2011 irs tax forms Send your return and all attachments to:   Department of Finance Division of Revenue and Taxation Commonwealth of the Northern Mariana Islands P. 2011 irs tax forms O. 2011 irs tax forms Box 5234 CHRB Saipan, MP 96950 Special Rules for the CNMI Special rules apply to certain types of income, employment, and filing status. 2011 irs tax forms Joint return. 2011 irs tax forms   If you file a joint return, file your return (and pay the tax) with the jurisdiction where the spouse who has the greater adjusted gross income (AGI) would have to file if you were filing separately. 2011 irs tax forms If the spouse with the greater AGI is a bona fide resident of the CNMI during the entire tax year, file the joint return with the CNMI. 2011 irs tax forms If the spouse with the greater AGI is a U. 2011 irs tax forms S. 2011 irs tax forms citizen or resident alien but not a bona fide resident of the CNMI during the entire tax year, file your joint return with the United States. 2011 irs tax forms For this purpose, income is determined without regard to community property laws. 2011 irs tax forms Example. 2011 irs tax forms Marsha Blue, a U. 2011 irs tax forms S. 2011 irs tax forms citizen, was a resident of the United States, and her spouse, a citizen of the CNMI, was a bona fide resident of the CNMI during the entire tax year. 2011 irs tax forms Marsha earned $65,000 as a computer programmer in the United States. 2011 irs tax forms Her spouse earned $20,000 as an artist in the CNMI. 2011 irs tax forms Marsha and her spouse will file a joint return. 2011 irs tax forms Because Marsha has the greater AGI, she and her spouse must file their return with the United States and report the entire $85,000 on that return. 2011 irs tax forms U. 2011 irs tax forms S. 2011 irs tax forms Armed Forces. 2011 irs tax forms   If you are a member of the U. 2011 irs tax forms S. 2011 irs tax forms Armed Forces who qualified as a bona fide resident of the CNMI in a prior tax year, your absence from the CNMI solely in compliance with military orders will not change your bona fide residency. 2011 irs tax forms If you did not qualify as a bona fide resident of the CNMI in a prior tax year, your presence in the CNMI solely in compliance with military orders will not qualify you as a bona fide resident of the CNMI. 2011 irs tax forms Civilian spouse of active duty member of the U. 2011 irs tax forms S. 2011 irs tax forms Armed Forces. 2011 irs tax forms   If, under the rule discussed at the beginning of chapter 1 (see Special rule for civilian spouse of active duty member of the U. 2011 irs tax forms S. 2011 irs tax forms Armed Forces ), your tax residence is the CNMI, follow the guidance in the section for bona fide residents under Which Return To File, earlier. 2011 irs tax forms However, if your tax residence is one of the 50 states or the District of Columbia and your only income from the CNMI is from wages, salaries, tips, or self-employment, you will be taxed on your worldwide income and file only a U. 2011 irs tax forms S. 2011 irs tax forms tax return (Form 1040) and a state and/or local tax return, if required. 2011 irs tax forms If you have income from the CNMI other than wages, salaries, tips, or self-employment that is considered to be sourced in that possession (see Table 2-1), you may need to file Form 5074 with your U. 2011 irs tax forms S. 2011 irs tax forms tax return. 2011 irs tax forms Moving expense deduction. 2011 irs tax forms   Generally, expenses of a move to the CNMI are directly attributable to wages, salaries, and other earned income from the CNMI. 2011 irs tax forms Likewise, the expenses of a move back to the United States are generally attributable to U. 2011 irs tax forms S. 2011 irs tax forms earned income. 2011 irs tax forms   If your move was to the CNMI, report your deduction for moving expenses as follows. 2011 irs tax forms If you are a bona fide resident in the tax year of your move, enter your deductible expenses on your CNMI tax return. 2011 irs tax forms If you are not a bona fide resident, enter your deductible expenses on Form 3903 and enter the deductible amount on Form 1040, line 26, and on Form 5074, line 20. 2011 irs tax forms   If your move was to the United States, complete Form 3903 and enter the deductible amount on Form 1040, line 26. 2011 irs tax forms Foreign tax credit. 2011 irs tax forms   Under the filing rules explained earlier, individuals with CNMI source income normally will not claim a foreign tax credit on a U. 2011 irs tax forms S. 2011 irs tax forms income tax return for tax paid to the CNMI. 2011 irs tax forms Self-employment tax. 2011 irs tax forms   If you have no U. 2011 irs tax forms S. 2011 irs tax forms filing requirement, but have income that is effectively connected with a trade or business in the CNMI, you must file Form 1040-SS with the United States to report your self-employment income and, if necessary, pay self-employment tax. 2011 irs tax forms Additional Medicare Tax. 2011 irs tax forms   Beginning in 2013, you may be required to pay Additional Medicare Tax. 2011 irs tax forms Also, you may need to report Additional Medicare Tax withheld by your employer. 2011 irs tax forms For more information see Additional Medicare Tax under Special Rules for Completing Your U. 2011 irs tax forms S. 2011 irs tax forms Tax Return in chapter 4. 2011 irs tax forms Estimated tax payments. 2011 irs tax forms   To see if you are required to make payments of estimated income tax, self-employment tax, and/or Additional Medicare Tax to the IRS, get Form 1040-ES. 2011 irs tax forms Payment of estimated tax. 2011 irs tax forms   If you must pay estimated tax, make your payment to the jurisdiction where you would file your income tax return if your tax year were to end on the date your first estimated tax payment is due. 2011 irs tax forms Generally, you should make the rest of your quarterly payments of estimated tax to the jurisdiction where you made your first payment of estimated tax. 2011 irs tax forms However, estimated tax payments to either jurisdiction will be treated as payments to the jurisdiction with which you file the tax return. 2011 irs tax forms   If you make a joint payment of estimated tax, make your payment to the jurisdiction where the spouse who has the greater estimated AGI would have to pay (if a separate payment were made). 2011 irs tax forms For this purpose, income is determined without regard to community property laws. 2011 irs tax forms Early payment. 2011 irs tax forms   If you make your first payment of estimated tax early, follow the rules given earlier to determine where to send it. 2011 irs tax forms If you send it to the wrong jurisdiction, make all later payments to the jurisdiction to which the first payment should have been sent. 2011 irs tax forms   To pay by check or money order, send your payment with the Form 1040-ES payment voucher to:  Internal Revenue Service P. 2011 irs tax forms O. 2011 irs tax forms Box 1300 Charlotte, NC 28201-1300 USA   To get information on paying electronically (by credit or debit card, or through the Electronic Federal Tax Payment System (EFTPS)), go to www. 2011 irs tax forms irs. 2011 irs tax forms gov/e-pay. 2011 irs tax forms   For information on making estimated income tax payments to the CNMI, see Where To Get Forms and Information , earlier. 2011 irs tax forms Double Taxation A mutual agreement procedure exists to settle cases of double taxation between the United States and the CNMI. 2011 irs tax forms See Double Taxation in chapter 4. 2011 irs tax forms Guam Guam has its own tax system based on the same tax laws and tax rates that apply in the United States. 2011 irs tax forms Where To Get Forms and Information Requests for advice about Guam residency and tax matters should be addressed to: Department of Revenue and Taxation Government of Guam P. 2011 irs tax forms O. 2011 irs tax forms Box 23607 GMF, GU 96921 You can order forms and publications by calling (671) 635-1840 or (671) 635-1841. 2011 irs tax forms You can order forms and publications through the fax at (671) 633-2643. 2011 irs tax forms You can get forms and publications at www. 2011 irs tax forms guamtax. 2011 irs tax forms com. 2011 irs tax forms The addresses and phone numbers listed above are subject to change. 2011 irs tax forms Which Return To File Bona fide residents of Guam are subject to special U. 2011 irs tax forms S. 2011 irs tax forms tax rules. 2011 irs tax forms In general, all individuals with income from Guam will file only one return—either to Guam or the United States. 2011 irs tax forms Bona Fide Resident of Guam If you are a bona fide resident of Guam during the entire tax year, file your return with Guam. 2011 irs tax forms This applies to all bona fide residents who are citizens, resident aliens, or nonresident aliens of the United States. 2011 irs tax forms Include income from worldwide sources on your Guam return. 2011 irs tax forms In determining your total tax payments, include all income tax withheld by either Guam or the United States, any credit for an overpayment of income tax to either Guam or the United States, and any payments of estimated tax to either Guam or the United States. 2011 irs tax forms Pay any balance of tax due with your tax return. 2011 irs tax forms Generally, if you properly file your return with, and fully pay your income tax to, Guam, then you are not liable for filing an income tax return with, or for paying tax to, the United States. 2011 irs tax forms However, if you were self-employed in 2013, see Self-employment tax , later. 2011 irs tax forms Example. 2011 irs tax forms Gary Barker was a bona fide resident of Guam for 2013. 2011 irs tax forms He received wages of $25,000 paid by a private employer in Guam and dividends of $2,000 from U. 2011 irs tax forms S. 2011 irs tax forms corporations that carry on business mainly in the United States. 2011 irs tax forms He must file a 2013 income tax return with the Government of Guam. 2011 irs tax forms He reports his total income of $27,000 on the Guam return. 2011 irs tax forms If you are a bona fide resident of Guam for the entire tax year, send your return and all attachments to:  Department of Revenue and Taxation Government of Guam P. 2011 irs tax forms O. 2011 irs tax forms Box 23607 GMF, GU 96921 U. 2011 irs tax forms S. 2011 irs tax forms Citizen or Resident Alien (Other Than a Bona Fide Resident of Guam) If you have income from sources within Guam and are a U. 2011 irs tax forms S. 2011 irs tax forms citizen or resident alien, but you are not a bona fide resident of Guam during the entire tax year, file your income tax return with the United States. 2011 irs tax forms Include income from worldwide sources on your U. 2011 irs tax forms S. 2011 irs tax forms return. 2011 irs tax forms In determining your total tax payments, include all income tax withheld by either the United States or Guam, any credit for an overpayment of income tax to either the United States or Guam, and any payments of estimated tax to either the United States or Guam. 2011 irs tax forms Pay any balance of tax due with your tax return. 2011 irs tax forms You may also need to complete Form 5074. 2011 irs tax forms You are not liable for filing an income tax return with, or for paying tax to, Guam for the tax year. 2011 irs tax forms Form 5074. 2011 irs tax forms   If you file a U. 2011 irs tax forms S. 2011 irs tax forms income tax return, attach a completed Form 5074 if you (and your spouse if filing a joint return) have: Adjusted gross income of $50,000 or more for the tax year, and Gross income of $5,000 or more from sources within Guam. 2011 irs tax forms   The United States and Guam use this form to divide your income taxes. 2011 irs tax forms   See the Illustrated Example of Form 5074 in chapter 5. 2011 irs tax forms De minimis exception to determining source of income. 2011 irs tax forms   In certain situations you will not have income from a possession. 2011 irs tax forms See De minimis exception under Compensation for Labor or Personal Services in chapter 2. 2011 irs tax forms   If you are a citizen or resident alien of the United States but not a bona fide resident of Guam during the entire tax year and you are not including a check or money order, send your U. 2011 irs tax forms S. 2011 irs tax forms tax return and all attachments (including Form 5074) to:  Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. 2011 irs tax forms S. 2011 irs tax forms tax return and all attachments (including Form 5074) to:  Internal Revenue Service P. 2011 irs tax forms O. 2011 irs tax forms Box 1303 Charlotte, NC 28201-1303 USA Nonresident Alien (Other Than a Bona Fide Resident of Guam) If you are a nonresident alien of the United States who does not qualify as a bona fide resident of Guam for the entire tax year, you generally must file the following returns. 2011 irs tax forms A Guam tax return reporting only your income from sources within Guam. 2011 irs tax forms In this situation, wages for services performed in Guam, whether for a private employer, the U. 2011 irs tax forms S. 2011 irs tax forms Government, or otherwise, is income from sources within Guam. 2011 irs tax forms A U. 2011 irs tax forms S. 2011 irs tax forms tax return (Form 1040NR) reporting U. 2011 irs tax forms S. 2011 irs tax forms source income according to the rules for a nonresident alien. 2011 irs tax forms See the instructions for Form 1040NR. 2011 irs tax forms If you are not a bona fide resident of Guam during the entire tax year and you are not including a check or money order, send your U. 2011 irs tax forms S. 2011 irs tax forms tax return and all attachments to:  Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA If you are including a check or a money order, send your U. 2011 irs tax forms S. 2011 irs tax forms tax return and all attachments to:  Internal Revenue Service P. 2011 irs tax forms O. 2011 irs tax forms Box 1303 Charlotte, NC 28201-1303 USA Send your Guam tax return and all attachments to:   Department of Revenue and Taxation P. 2011 irs tax forms O. 2011 irs tax forms Box 23607 GMF, GU 96921 Citizen of Guam If you are a citizen of Guam (meaning that you were born or naturalized in Guam) but not otherwise a U. 2011 irs tax forms S. 2011 irs tax forms citizen or a U. 2011 irs tax forms S. 2011 irs tax forms resident alien during the tax year, file your income tax return with Guam. 2011 irs tax forms Include income from worldwide sources on your Guam return. 2011 irs tax forms Take into account tax withheld by both jurisdictions in determining if there is tax overdue or an overpayment. 2011 irs tax forms Pay any balance of tax due with your tax return. 2011 irs tax forms If you are a citizen of Guam, send your return and all attachments to:  Department of Revenue and Taxation Government of Guam P. 2011 irs tax forms O. 2011 irs tax forms Box 23607 GMF, GU 96921 Special Rules for Guam Special rules apply to certain types of income, employment, and filing status. 2011 irs tax forms Joint return. 2011 irs tax forms   If you file a joint return, you should file your return (and pay the tax) with the jurisdiction where the spouse who has the greater adjusted gross income (AGI) would have to file if you were filing separately. 2011 irs tax forms If the spouse with the greater AGI is a bona fide resident of Guam during the entire tax year, file the joint return with Guam. 2011 irs tax forms If the spouse with the greater AGI is a U. 2011 irs tax forms S. 2011 irs tax forms citizen or resident alien but not a bona fide resident of Guam during the entire tax year, file the joint return with the United States. 2011 irs tax forms For this purpose, income is determined without regard to community property laws. 2011 irs tax forms Example. 2011 irs tax forms Bill Whiting, a U. 2011 irs tax forms S. 2011 irs tax forms citizen, was a resident of the United States, and his spouse, a citizen of Guam, was a bona fide resident of Guam during the entire tax year. 2011 irs tax forms Bill earned $45,000 as an engineer in the United States. 2011 irs tax forms His spouse earned $15,000 as a teacher in Guam. 2011 irs tax forms Bill and his spouse will file a joint return. 2011 irs tax forms Because Bill has the greater AGI, he and his spouse must file their return with the United States and report the entire $60,000 on that return. 2011 irs tax forms U. 2011 irs tax forms S. 2011 irs tax forms Armed Forces. 2011 irs tax forms   If you are a member of the U. 2011 irs tax forms S. 2011 irs tax forms Armed Forces who qualified as a bona fide resident of Guam in a prior tax year, your absence from Guam solely in compliance with military orders will not change your bona fide residency. 2011 irs tax forms If you did not qualify as a bona fide resident of Guam in a prior tax year, your presence in Guam solely in compliance with military orders will not qualify you as a bona fide resident of Guam. 2011 irs tax forms Civilian spouse of active duty member of the U. 2011 irs tax forms S. 2011 irs tax forms Armed Forces. 2011 irs tax forms   If, under the rule discussed at the beginning of chapter 1 (see Special rule for civilian spouse of active duty member of the U. 2011 irs tax forms S. 2011 irs tax forms Armed Forces ), your tax residence is Guam, follow the guidance in the section for bona fide residents under Which Return To File, earlier. 2011 irs tax forms However, if your tax residence is one of the 50 states or the District of Columbia and your only income from Guam is from wages, salaries, tips, or self-employment, you will be taxed on your worldwide income and file only a U. 2011 irs tax forms S. 2011 irs tax forms tax return (Form 1040) and a state and/or local tax return, if required. 2011 irs tax forms If you have income from Guam other than wages, salaries, tips, or self-employment that is considered to be sourced in that possession (see Table 2-1), you may need to file Form 5074 with your U. 2011 irs tax forms S. 2011 irs tax forms tax return. 2011 irs tax forms Moving expense deduction. 2011 irs tax forms   Generally, expenses of a move to Guam are directly attributable to wages, salaries, and other earned income from Guam. 2011 irs tax forms Likewise, the expenses of a move back to the United States are generally attributable to U. 2011 irs tax forms S. 2011 irs tax forms earned income. 2011 irs tax forms   If your move was to Guam, report your deduction for moving expenses as follows. 2011 irs tax forms If you are a bona fide resident in the tax year of your move, enter your deductible expenses on your Guam tax return. 2011 irs tax forms If you are not a bona fide resident, enter your deductible expenses on Form 3903 and enter the deductible amount on Form 1040, line 26, and on Form 5074, line 20. 2011 irs tax forms   If your move was to the United States, complete Form 3903 and enter the deductible amount on Form 1040, line 26. 2011 irs tax forms Foreign tax credit. 2011 irs tax forms   Under the filing rules explained earlier, individuals with Guam source income normally will not claim a foreign tax credit on a U. 2011 irs tax forms S. 2011 irs tax forms income tax return for tax paid to Guam. 2011 irs tax forms Self-employment tax. 2011 irs tax forms   If you have no U. 2011 irs tax forms S. 2011 irs tax forms filing requirement, but have income that is effectively connected with a trade or business in Guam, you must file Form 1040-SS with the United States to report your self-employment income and, if necessary, pay self-employment tax. 2011 irs tax forms Additional Medicare Tax. 2011 irs tax forms   Beginning in 2013, you may be required to pay Additional Medicare Tax. 2011 irs tax forms Also, you may need to report Additional Medicare Tax withheld by your employer. 2011 irs tax forms For more information see Additional Medicare Tax under Special Rules for Completing Your U. 2011 irs tax forms S. 2011 irs tax forms Tax Return in chapter 4. 2011 irs tax forms Estimated tax payments. 2011 irs tax forms   To see if you are required to make payments of estimated income tax, self-employment tax, and/or Additional Medicare Tax, to the IRS, get Form 1040-ES. 2011 irs tax forms Payment of estimated tax. 2011 irs tax forms   If you must pay estimated tax, make your payment to the jurisdiction where you would file your income tax return if your tax year were to end on the date your first estimated tax payment is due. 2011 irs tax forms Generally, you should make the rest of your quarterly payments of estimated tax to the jurisdiction where you made your first payment of estimated tax. 2011 irs tax forms However, estimated tax payments to either jurisdiction will be treated as payments to the jurisdiction with which you file the tax return. 2011 irs tax forms   If you make a joint payment of estimated tax, make your payment to the jurisdiction where the spouse who has the greater estimated AGI would have to pay (if a separate payment were made). 2011 irs tax forms For this purpose, income is determined without regard to community property laws. 2011 irs tax forms Early payment. 2011 irs tax forms   If you make your first payment of estimated tax early, follow the rules given earlier to determine where to send it. 2011 irs tax forms If you send it to the wrong jurisdiction, make all later payments to the jurisdiction to which the first payment should have been sent. 2011 irs tax forms   To pay by check or money order, send your payment with the Form 1040-ES payment voucher to:  Department of Revenue and Taxation Government of Guam P. 2011 irs tax forms O. 2011 irs tax forms Box 23607 GMF, GU 96921   To get information on paying electronically (by credit or debit card, or through the Electronic Federal Tax Payment System (EFTPS)), go to www. 2011 irs tax forms irs. 2011 irs tax forms gov/e-pay. 2011 irs tax forms   For information on making estimated income tax payments to the Department of Revenue and Taxation, see Where To Get Forms and Information , earlier. 2011 irs tax forms Double Taxation A mutual agreement procedure exists to settle cases of double taxation between the United States and Guam. 2011 irs tax forms See Double Taxation in chapter 4. 2011 irs tax forms The U. 2011 irs tax forms S. 2011 irs tax forms Virgin Islands The U. 2011 irs tax forms S. 2011 irs tax forms Virgin Islands has its own tax system based on the same tax laws and tax rates that apply in the United States. 2011 irs tax forms An important factor in USVI taxation is whether, during the entire tax year, you are a bona fide resident of the USVI. 2011 irs tax forms Where To Get Forms and Information For information about filing your U. 2011 irs tax forms S. 2011 irs tax forms Virgin Islands tax return or about Form 1040INFO, in St. 2011 irs tax forms Thomas contact : Bureau of Internal Revenue  6115 Estate Smith Bay  St. 2011 irs tax forms Thomas, VI 00802 You can order forms and publications by calling (340) 715-1040. 2011 irs tax forms You can order forms and publications through the fax at (340) 774-2672. 2011 irs tax forms For information about filing your U. 2011 irs tax forms S. 2011 irs tax forms Virgin Islands tax return or about Form 1040INFO, in St. 2011 irs tax forms Croix contact : Bureau of Internal Revenue  4008 Estate Diamond- Plot 7B Christiansted, V. 2011 irs tax forms I. 2011 irs tax forms 00820–4421 You can order forms and publications by calling (340) 773-1040. 2011 irs tax forms You can order forms and publications through the fax at (340) 773-1006. 2011 irs tax forms You can access the USVI website at www. 2011 irs tax forms viirb. 2011 irs tax forms com. 2011 irs tax forms The addresses and phone numbers listed above are subject to change. 2011 irs tax forms Which Return To File In general, bona fide residents of the USVI pay taxes only to the USVI. 2011 irs tax forms U. 2011 irs tax forms S. 2011 irs tax forms citizens or resident aliens (but not bona fide residents of the USVI) with USVI source income pay a portion of the tax to each jurisdiction. 2011 irs tax forms Bona Fide Resident of the USVI File your tax return with the USVI if you are a U. 2011 irs tax forms S. 2011 irs tax forms citizen, resident alien, or nonresident alien and a bona fide resident of the USVI during the entire tax year. 2011 irs tax forms Include your worldwide income on your USVI return. 2011 irs tax forms In determining your total tax payments, take into account all income tax withheld by either the USVI or the United States, any credit for an overpayment of income tax to either the USVI or the United States, and any payments of estimated tax to either the USVI or the United States. 2011 irs tax forms Pay any balance of tax due with your tax return. 2011 irs tax forms Filing this return with the USVI generally also starts the statute of limitations on assessment of your U. 2011 irs tax forms S. 2011 irs tax forms income tax. 2011 irs tax forms You generally do not have to file with the United States for any tax year in which you are a bona fide resident of the USVI during the entire tax year, provided you report and pay tax on your income from all sources to the USVI and identify the source(s) of the income on the return. 2011 irs tax forms However, if you have self-employment income, you may be required to file Form 1040-SS with the United States. 2011 irs tax forms For more information, see Self-employment tax under Special Rules for the USVI, later. 2011 irs tax forms Form 1040INFO. 2011 irs tax forms   If you are a bona fide resident of the USVI and have non-USVI source income, you must also file Virgin Islands Form 1040INFO, Non-Virgin Islands Source Income of Virgin Islands Residents, with the Virgin Islands Bureau of Internal Revenue. 2011 irs tax forms Attach Form 1040INFO to your USVI tax return before filing. 2011 irs tax forms You can get Form 1040INFO by contacting the address or website given earlier. 2011 irs tax forms   If you are a bona fide resident of the USVI for the entire tax year, file your return and all attachments with the Virgin Islands Bureau of Internal Revenue at:  USVI Bureau of Internal Revenue 6115 Estate Smith Bay St. 2011 irs tax forms Thomas, VI 00802 U. 2011 irs tax forms S. 2011 irs tax forms Citizen or Resident Alien (Other Than a Bona Fide Resident of the USVI) If you are a U. 2011 irs tax forms S. 2011 irs tax forms citizen or resident alien but not a bona fide resident of the USVI during the entire tax year, you must file your original Form 1040 with the United States and an identical copy of that return with the USVI if you have: Income from sources in the USVI, or Income effectively connected with the conduct of a trade or business in the USVI. 2011 irs tax forms File your original Form 1040 with the United States and file a signed copy of the U. 2011 irs tax forms S. 2011 irs tax forms return (including all attachments, forms, and schedules) with the Virgin Islands Bureau of Internal Revenue by the due date for filing Form 1040. 2011 irs tax forms Use Form 8689 to figure the amount of tax you must pay to the USVI. 2011 irs tax forms Form 8689. 2011 irs tax forms   Complete this form and attach it to both the return you file with the United States and the copy you file with the USVI. 2011 irs tax forms Figure the amount of tax you must pay to the USVI as follows:      Total tax on  U. 2011 irs tax forms S. 2011 irs tax forms return (after certain adjustments) × USVI AGI Worldwide AGI     Pay any tax due to the USVI when you file your return with the Virgin Islands Bureau of Internal Revenue. 2011 irs tax forms To receive credit on your U. 2011 irs tax forms S. 2011 irs tax forms return for taxes paid to the USVI, include the amounts from Form 8689, lines 40 and 45, in the total on Form 1040, line 72. 2011 irs tax forms On the dotted line next to line 72, enter “Form 8689” and show the amounts. 2011 irs tax forms   See the illustrated example in chapter 5. 2011 irs tax forms De minimis exception to determining source of income. 2011 irs tax forms   In certain situations you will not have income from a possession. 2011 irs tax forms See De minimis exception under Compensation for Labor or Personal Services in chapter 2. 2011 irs tax forms   If you are not a bona fide resident of the USVI during the entire tax year, but you have USVI source income, and you are not including a check or a money order, file Form 1040 and all attachments (including Form 8689) with the:  Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. 2011 irs tax forms S. 2011 irs tax forms tax return and all attachments (including Form 8689) to:  Internal Revenue Service P. 2011 irs tax forms O. 2011 irs tax forms Box 1303 Charlotte, NC 28201-1303 USA   File a copy of your U. 2011 irs tax forms S. 2011 irs tax forms Form 1040 with the Virgin Islands Bureau of Internal Revenue at:  USVI Bureau of Internal Revenue 6115 Estate Smith Bay St. 2011 irs tax forms Thomas, VI 00802 Nonresident Alien (Other Than a Bona Fide Resident of the USVI) If you are a nonresident alien of the United States who does not qualify as a bona fide resident of the USVI for the entire tax year, you generally must file the following returns. 2011 irs tax forms A USVI tax return reporting only your income from sources within the USVI. 2011 irs tax forms In this situation, wages for services performed in the USVI, whether for a private employer, the U. 2011 irs tax forms S. 2011 irs tax forms Government, or otherwise, is income from sources within the USVI. 2011 irs tax forms A U. 2011 irs tax forms S. 2011 irs tax forms tax return (Form 1040NR) reporting U. 2011 irs tax forms S. 2011 irs tax forms source income according to the rules for a nonresident alien. 2011 irs tax forms See the instructions for Form 1040NR. 2011 irs tax forms   If you are not a bona fide resident of the USVI during the entire tax year, and you are not including a check or a money order, send your U. 2011 irs tax forms S. 2011 irs tax forms tax return and all attachments (including Form 8689) to:  Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. 2011 irs tax forms S. 2011 irs tax forms tax return and all attachments (including Form 8689) to:  Internal Revenue Service P. 2011 irs tax forms O. 2011 irs tax forms Box 1303 Charlotte, NC 28201-1303  USA   Send your USVI tax return and all attachments to:  Bureau of Internal Revenue 6115 Estate Smith Bay St. 2011 irs tax forms Thomas, VI 00802 Special Rules for the USVI There are some special rules for certain types of income, employment, and filing status. 2011 irs tax forms Joint return. 2011 irs tax forms   If you file a joint return, you should file your return (and pay the tax) with the jurisdiction where the spouse who has the greater adjusted gross income (AGI) would have to file if you were filing separately. 2011 irs tax forms If the spouse with the greater AGI is a bona fide resident of the USVI during the entire tax year, file the joint return with the USVI. 2011 irs tax forms If the spouse with the greater AGI is a U. 2011 irs tax forms S. 2011 irs tax forms citizen or resident alien of the United States but not a bona fide resident of the USVI during the entire tax year, file the joint return with the United States. 2011 irs tax forms For this purpose, income is determined without regard to community property laws. 2011 irs tax forms Example. 2011 irs tax forms Marge Birch, a U. 2011 irs tax forms S. 2011 irs tax forms citizen, was a resident of the United States, and her spouse, a citizen of the USVI, was a bona fide resident of the USVI during the entire tax year. 2011 irs tax forms Marge earned $55,000 as an architect in the United States. 2011 irs tax forms Her spouse earned $30,000 as a librarian in the USVI. 2011 irs tax forms Marge and her spouse will file a joint return. 2011 irs tax forms Because Marge has the greater AGI, she and her spouse must file their return with the United States and report the entire $85,000 on that return. 2011 irs tax forms U. 2011 irs tax forms S. 2011 irs tax forms Armed Forces. 2011 irs tax forms   If you are a member of the U. 2011 irs tax forms S. 2011 irs tax forms Armed Forces who qualified as a bona fide resident of the U. 2011 irs tax forms S. 2011 irs tax forms Virgin Islands in a prior tax year, your absence from the U. 2011 irs tax forms S. 2011 irs tax forms Virgin Islands solely in compliance with military orders will not change your bona fide residency. 2011 irs tax forms If you did not qualify as a bona fide resident of the U. 2011 irs tax forms S. 2011 irs tax forms Virgin Islands in a prior tax year, your presence in the U. 2011 irs tax forms S. 2011 irs tax forms Virgin Islands solely in compliance with military orders will not qualify you as a bona fide resident of the U. 2011 irs tax forms S. 2011 irs tax forms Virgin Islands. 2011 irs tax forms Civilian spouse of active duty member of the U. 2011 irs tax forms S. 2011 irs tax forms Armed Forces. 2011 irs tax forms   If, under the rule discussed at the beginning of chapter 1 (see Special rule for civilian spouse of active duty member of the U. 2011 irs tax forms S. 2011 irs tax forms Armed Forces ), your tax residence is the USVI, follow the guidance in the section for bona fide residents under Which Return To File, earlier. 2011 irs tax forms However, if your tax residence is one of the 50 states or the District of Columbia and your only income from the USVI is from wages, salaries, tips, or self-employment, you will be taxed on your worldwide income and file only a U. 2011 irs tax forms S. 2011 irs tax forms tax return (Form 1040) and a state and/or local tax return, if required. 2011 irs tax forms If you have income from the USVI other than wages, salaries, tips, or self-employment that is considered to be sourced in that possession (see Table 2-1), you may need to file Form 8689 with your U. 2011 irs tax forms S. 2011 irs tax forms tax return. 2011 irs tax forms In this case, follow the guidance under U. 2011 irs tax forms S. 2011 irs tax forms Citizen or Resident Alien (Other Than a Bona Fide Resident of the USVI ), earlier. 2011 irs tax forms Moving expense deduction. 2011 irs tax forms   Generally, expenses of a move to the USVI are directly attributable to wages, salaries, and other earned income from the USVI. 2011 irs tax forms Likewise, the expenses of a move back to the United States are generally attributable to U. 2011 irs tax forms S. 2011 irs tax forms earned income. 2011 irs tax forms   If your move was to the USVI, report your deduction for moving expenses as follows. 2011 irs tax forms If you are a bona fide resident in the tax year of your move, enter your deductible expenses on your USVI tax return. 2011 irs tax forms If you are not a bona fide resident, enter your deductible expenses on Form 3903 and enter the deductible amount on Form 1040, line 26, and on Form 8689, line 20. 2011 irs tax forms   If your move was to the United States, complete Form 3903 and enter the deductible amount on Form 1040, line 26. 2011 irs tax forms Foreign tax credit. 2011 irs tax forms   Under the filing rules explained earlier, individuals with USVI source income normally will not claim a foreign tax credit on a U. 2011 irs tax forms S. 2011 irs tax forms income tax return for tax paid to the USVI. 2011 irs tax forms However, individuals other than bona fide residents of the USVI may claim a direct credit for such tax (see Form 8689 earlier in this section). 2011 irs tax forms Self-employment tax. 2011 irs tax forms   If you have no U. 2011 irs tax forms S. 2011 irs tax forms filing requirement, but have income that is effectively connected with a trade or business in the USVI, you must file Form 1040-SS with the United States to report your self-employment income and, if necessary, pay self-employment tax. 2011 irs tax forms Additional Medicare Tax. 2011 irs tax forms   Beginning in 2013, you may be required to pay Additional Medicare Tax. 2011 irs tax forms Also, you may need to report Additional Medicare Tax withheld by your employer. 2011 irs tax forms For more information see Additional Medicare Tax under Special Rules for Completing Your U. 2011 irs tax forms S. 2011 irs tax forms Tax Return in chapter 4. 2011 irs tax forms Estimated tax payments. 2011 irs tax forms   To see if you are required to make payments of estimated income tax, self-employment tax, and/or Additional Medicare Tax, to the IRS, get Form 1040-ES. 2011 irs tax forms   To pay by check or money order, send your payment with the Form 1040-ES payment voucher to:  Virgin Islands Bureau of Internal Revenue 6115 Estate Smith Bay St. 2011 irs tax forms Thomas, VI 00802   To get information on paying electronically (by credit or debit card, or through the Electronic Federal Tax Payment System (EFTPS)), go to www. 2011 irs tax forms irs. 2011 irs tax forms gov/e-pay. 2011 irs tax forms   For information on making estimated income tax payments to the Bureau of Internal Revenue, see Where To Get Forms and Information , earlier. 2011 irs tax forms Extension of time to file. 2011 irs tax forms   You can get an automatic 6-month extension of time to file your tax return. 2011 irs tax forms See Extension of Time To File in chapter 4. 2011 irs tax forms Bona fide residents of the USVI during the entire tax year must file a paper Form 4868 with the Virgin Islands Bureau of Internal Revenue. 2011 irs tax forms Nonresidents of the USVI should file separate extension requests with the IRS and the Virgin Islands Bureau of Internal Revenue and make any payments due to the respective jurisdictions. 2011 irs tax forms However, the Virgin Islands Bureau of Internal Revenue will honor an extension request that is timely filed with the IRS. 2011 irs tax forms Double Taxation A mutual agreement procedure exists to settle cases of double taxation between the United States and the U. 2011 irs tax forms S. 2011 irs tax forms Virgin Islands. 2011 irs tax forms See Double Taxation in chapter 4. 2011 irs tax forms Prev  Up  Next   Home   More Online Publications
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The 2011 Irs Tax Forms

2011 irs tax forms 13. 2011 irs tax forms   Basis of Property Table of Contents Introduction Useful Items - You may want to see: Cost BasisReal Property Adjusted BasisIncreases to Basis Decreases to Basis Basis Other Than CostProperty Received for Services Taxable Exchanges Involuntary Conversions Nontaxable Exchanges Property Transferred From a Spouse Property Received as a Gift Inherited Property Property Changed From Personal to Business or Rental Use Stocks and Bonds Introduction This chapter discusses how to figure your basis in property. 2011 irs tax forms It is divided into the following sections. 2011 irs tax forms Cost basis. 2011 irs tax forms Adjusted basis. 2011 irs tax forms Basis other than cost. 2011 irs tax forms Your basis is the amount of your investment in property for tax purposes. 2011 irs tax forms Use the basis to figure gain or loss on the sale, exchange, or other disposition of property. 2011 irs tax forms Also use it to figure deductions for depreciation, amortization, depletion, and casualty losses. 2011 irs tax forms If you use property for both business or investment purposes and for personal purposes, you must allocate the basis based on the use. 2011 irs tax forms Only the basis allocated to the business or investment use of the property can be depreciated. 2011 irs tax forms Your original basis in property is adjusted (increased or decreased) by certain events. 2011 irs tax forms For example, if you make improvements to the property, increase your basis. 2011 irs tax forms If you take deductions for depreciation or casualty losses, or claim certain credits, reduce your basis. 2011 irs tax forms Keep accurate records of all items that affect the basis of your property. 2011 irs tax forms For more information on keeping records, see chapter 1. 2011 irs tax forms Useful Items - You may want to see: Publication 15-B Employer's Tax Guide to Fringe Benefits 525 Taxable and Nontaxable Income 535 Business Expenses 537 Installment Sales 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 551 Basis of Assets 946 How To Depreciate Property Cost Basis The basis of property you buy is usually its cost. 2011 irs tax forms The cost is the amount you pay in cash, debt obligations, other property, or services. 2011 irs tax forms Your cost also includes amounts you pay for the following items: Sales tax, Freight, Installation and testing, Excise taxes, Legal and accounting fees (when they must be capitalized), Revenue stamps, Recording fees, and Real estate taxes (if you assume liability for the seller). 2011 irs tax forms In addition, the basis of real estate and business assets may include other items. 2011 irs tax forms Loans with low or no interest. 2011 irs tax forms    If you buy property on a time-payment plan that charges little or no interest, the basis of your property is your stated purchase price minus any amount considered to be unstated interest. 2011 irs tax forms You generally have unstated interest if your interest rate is less than the applicable federal rate. 2011 irs tax forms   For more information, see Unstated Interest and Original Issue Discount (OID) in Publication 537. 2011 irs tax forms Real Property Real property, also called real estate, is land and generally anything built on, growing on, or attached to land. 2011 irs tax forms If you buy real property, certain fees and other expenses you pay are part of your cost basis in the property. 2011 irs tax forms Lump sum purchase. 2011 irs tax forms   If you buy buildings and the land on which they stand for a lump sum, allocate the cost basis among the land and the buildings. 2011 irs tax forms Allocate the cost basis according to the respective fair market values (FMVs) of the land and buildings at the time of purchase. 2011 irs tax forms Figure the basis of each asset by multiplying the lump sum by a fraction. 2011 irs tax forms The numerator is the FMV of that asset and the denominator is the FMV of the whole property at the time of purchase. 2011 irs tax forms    If you are not certain of the FMVs of the land and buildings, you can allocate the basis according to their assessed values for real estate tax purposes. 2011 irs tax forms Fair market value (FMV). 2011 irs tax forms   FMV is the price at which the property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the necessary facts. 2011 irs tax forms Sales of similar property on or about the same date may be helpful in figuring the FMV of the property. 2011 irs tax forms Assumption of mortgage. 2011 irs tax forms   If you buy property and assume (or buy the property subject to) an existing mortgage on the property, your basis includes the amount you pay for the property plus the amount to be paid on the mortgage. 2011 irs tax forms Settlement costs. 2011 irs tax forms   Your basis includes the settlement fees and closing costs you paid for buying the property. 2011 irs tax forms (A fee for buying property is a cost that must be paid even if you buy the property for cash. 2011 irs tax forms ) Do not include fees and costs for getting a loan on the property in your basis. 2011 irs tax forms   The following are some of the settlement fees or closing costs you can include in the basis of your property. 2011 irs tax forms Abstract fees (abstract of title fees). 2011 irs tax forms Charges for installing utility services. 2011 irs tax forms Legal fees (including fees for the title search and preparation of the sales contract and deed). 2011 irs tax forms Recording fees. 2011 irs tax forms Survey fees. 2011 irs tax forms Transfer taxes. 2011 irs tax forms Owner's title insurance. 2011 irs tax forms Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions. 2011 irs tax forms   Settlement costs do not include amounts placed in escrow for the future payment of items such as taxes and insurance. 2011 irs tax forms   The following are some of the settlement fees and closing costs you cannot include in the basis of property. 2011 irs tax forms Casualty insurance premiums. 2011 irs tax forms Rent for occupancy of the property before closing. 2011 irs tax forms Charges for utilities or other services related to occupancy of the property before closing. 2011 irs tax forms Charges connected with getting a loan, such as points (discount points, loan origination fees), mortgage insurance premiums, loan assumption fees, cost of a credit report, and fees for an appraisal required by a lender. 2011 irs tax forms Fees for refinancing a mortgage. 2011 irs tax forms Real estate taxes. 2011 irs tax forms   If you pay real estate taxes the seller owed on real property you bought, and the seller did not reimburse you, treat those taxes as part of your basis. 2011 irs tax forms You cannot deduct them as an expense. 2011 irs tax forms    If you reimburse the seller for taxes the seller paid for you, you can usually deduct that amount as an expense in the year of purchase. 2011 irs tax forms Do not include that amount in the basis of your property. 2011 irs tax forms If you did not reimburse the seller, you must reduce your basis by the amount of those taxes. 2011 irs tax forms Points. 2011 irs tax forms   If you pay points to get a loan (including a mortgage, second mortgage, line of credit, or a home equity loan), do not add the points to the basis of the related property. 2011 irs tax forms Generally, you deduct the points over the term of the loan. 2011 irs tax forms For more information on how to deduct points, see chapter 23. 2011 irs tax forms Points on home mortgage. 2011 irs tax forms   Special rules may apply to points you and the seller pay when you get a mortgage to buy your main home. 2011 irs tax forms If certain requirements are met, you can deduct the points in full for the year in which they are paid. 2011 irs tax forms Reduce the basis of your home by any seller-paid points. 2011 irs tax forms Adjusted Basis Before figuring gain or loss on a sale, exchange, or other disposition of property or figuring allowable depreciation, depletion, or amortization, you must usually make certain adjustments (increases and decreases) to the cost basis or basis other than cost (discussed later) of the property. 2011 irs tax forms The result is the adjusted basis. 2011 irs tax forms Increases to Basis Increase the basis of any property by all items properly added to a capital account. 2011 irs tax forms Examples of items that increase basis are shown in Table 13-1. 2011 irs tax forms These include the items discussed below. 2011 irs tax forms Improvements. 2011 irs tax forms   Add to your basis in property the cost of improvements having a useful life of more than 1 year, that increase the value of the property, lengthen its life, or adapt it to a different use. 2011 irs tax forms For example, improvements include putting a recreation room in your unfinished basement, adding another bathroom or bedroom, putting up a fence, putting in new plumbing or wiring, installing a new roof, or paving your driveway. 2011 irs tax forms Assessments for local improvements. 2011 irs tax forms   Add to the basis of property assessments for improvements such as streets and sidewalks if they increase the value of the property assessed. 2011 irs tax forms Do not deduct them as taxes. 2011 irs tax forms However, you can deduct as taxes assessments for maintenance or repairs, or for meeting interest charges related to the improvements. 2011 irs tax forms Example. 2011 irs tax forms Your city changes the street in front of your store into an enclosed pedestrian mall and assesses you and other affected property owners for the cost of the conversion. 2011 irs tax forms Add the assessment to your property's basis. 2011 irs tax forms In this example, the assessment is a depreciable asset. 2011 irs tax forms Decreases to Basis Decrease the basis of any property by all items that represent a return of capital for the period during which you held the property. 2011 irs tax forms Examples of items that decrease basis are shown in Table 13-1. 2011 irs tax forms These include the items discussed below. 2011 irs tax forms Table 13-1. 2011 irs tax forms Examples of Adjustments to Basis Increases to Basis Decreases to Basis • Capital improvements: • Exclusion from income of   Putting an addition on your home subsidies for energy conservation   Replacing an entire roof measures   Paving your driveway     Installing central air conditioning • Casualty or theft loss deductions   Rewiring your home and insurance reimbursements       • Assessments for local improvements:     Water connections     Extending utility service lines to the property • Postponed gain from the sale of a home   Sidewalks • Alternative motor vehicle credit  (Form 8910)   Roads       • Alternative fuel vehicle refueling     property credit (Form 8911)           • Residential energy credits (Form 5695)       • Casualty losses: • Depreciation and section 179 deduction   Restoring damaged property     • Nontaxable corporate distributions • Legal fees:     Cost of defending and perfecting a title • Certain canceled debt excluded from   Fees for getting a reduction of an assessment income     • Zoning costs • Easements           • Adoption tax benefits Casualty and theft losses. 2011 irs tax forms   If you have a casualty or theft loss, decrease the basis in your property by any insurance proceeds or other reimbursement and by any deductible loss not covered by insurance. 2011 irs tax forms    You must increase your basis in the property by the amount you spend on repairs that restore the property to its pre-casualty condition. 2011 irs tax forms   For more information on casualty and theft losses, see chapter 25. 2011 irs tax forms Depreciation and section 179 deduction. 2011 irs tax forms   Decrease the basis of your qualifying business property by any section 179 deduction you take and the depreciation you deducted, or could have deducted (including any special depreciation allowance), on your tax returns under the method of depreciation you selected. 2011 irs tax forms   For more information about depreciation and the section 179 deduction, see Publication 946 and the Instructions for Form 4562. 2011 irs tax forms Example. 2011 irs tax forms You owned a duplex used as rental property that cost you $40,000, of which $35,000 was allocated to the building and $5,000 to the land. 2011 irs tax forms You added an improvement to the duplex that cost $10,000. 2011 irs tax forms In February last year, the duplex was damaged by fire. 2011 irs tax forms Up to that time, you had been allowed depreciation of $23,000. 2011 irs tax forms You sold some salvaged material for $1,300 and collected $19,700 from your insurance company. 2011 irs tax forms You deducted a casualty loss of $1,000 on your income tax return for last year. 2011 irs tax forms You spent $19,000 of the insurance proceeds for restoration of the duplex, which was completed this year. 2011 irs tax forms You must use the duplex's adjusted basis after the restoration to determine depreciation for the rest of the property's recovery period. 2011 irs tax forms Figure the adjusted basis of the duplex as follows: Original cost of duplex $35,000 Addition to duplex 10,000 Total cost of duplex $45,000 Minus: Depreciation 23,000 Adjusted basis before casualty $22,000 Minus: Insurance proceeds $19,700     Deducted casualty loss 1,000     Salvage proceeds 1,300 22,000 Adjusted basis after casualty $-0- Add: Cost of restoring duplex 19,000 Adjusted basis after restoration $19,000 Note. 2011 irs tax forms Your basis in the land is its original cost of $5,000. 2011 irs tax forms Easements. 2011 irs tax forms   The amount you receive for granting an easement is generally considered to be proceeds from the sale of an interest in real property. 2011 irs tax forms It reduces the basis of the affected part of the property. 2011 irs tax forms If the amount received is more than the basis of the part of the property affected by the easement, reduce your basis in that part to zero and treat the excess as a recognized gain. 2011 irs tax forms   If the gain is on a capital asset, see chapter 16 for information about how to report it. 2011 irs tax forms If the gain is on property used in a trade or business, see Publication 544 for information about how to report it. 2011 irs tax forms Exclusion of subsidies for energy conservation measures. 2011 irs tax forms   You can exclude from gross income any subsidy you received from a public utility company for the purchase or installation of an energy conservation measure for a dwelling unit. 2011 irs tax forms Reduce the basis of the property for which you received the subsidy by the excluded amount. 2011 irs tax forms For more information about this subsidy, see chapter 12. 2011 irs tax forms Postponed gain from sale of home. 2011 irs tax forms    If you postponed gain from the sale of your main home under rules in effect before May 7, 1997, you must reduce the basis of the home you acquired as a replacement by the amount of the postponed gain. 2011 irs tax forms For more information on the rules for the sale of a home, see chapter 15. 2011 irs tax forms Basis Other Than Cost There are many times when you cannot use cost as basis. 2011 irs tax forms In these cases, the fair market value or the adjusted basis of the property can be used. 2011 irs tax forms Fair market value (FMV) and adjusted basis were discussed earlier. 2011 irs tax forms Property Received for Services If you receive property for your services, include the FMV of the property in income. 2011 irs tax forms The amount you include in income becomes your basis. 2011 irs tax forms If the services were performed for a price agreed on beforehand, it will be accepted as the FMV of the property if there is no evidence to the contrary. 2011 irs tax forms Restricted property. 2011 irs tax forms   If you receive property for your services and the property is subject to certain restrictions, your basis in the property is its FMV when it becomes substantially vested. 2011 irs tax forms However, this rule does not apply if you make an election to include in income the FMV of the property at the time it is transferred to you, less any amount you paid for it. 2011 irs tax forms Property is substantially vested when it is transferable or when it is not subject to a substantial risk of forfeiture (you do not have a good chance of losing it). 2011 irs tax forms For more information, see Restricted Property in Publication 525. 2011 irs tax forms Bargain purchases. 2011 irs tax forms   A bargain purchase is a purchase of an item for less than its FMV. 2011 irs tax forms If, as compensation for services, you buy goods or other property at less than FMV, include the difference between the purchase price and the property's FMV in your income. 2011 irs tax forms Your basis in the property is its FMV (your purchase price plus the amount you include in income). 2011 irs tax forms   If the difference between your purchase price and the FMV is a qualified employee discount, do not include the difference in income. 2011 irs tax forms However, your basis in the property is still its FMV. 2011 irs tax forms See Employee Discounts in Publication 15-B. 2011 irs tax forms Taxable Exchanges A taxable exchange is one in which the gain is taxable or the loss is deductible. 2011 irs tax forms A taxable gain or deductible loss also is known as a recognized gain or loss. 2011 irs tax forms If you receive property in exchange for other property in a taxable exchange, the basis of the property you receive is usually its FMV at the time of the exchange. 2011 irs tax forms Involuntary Conversions If you receive replacement property as a result of an involuntary conversion, such as a casualty, theft, or condemnation, figure the basis of the replacement property using the basis of the converted property. 2011 irs tax forms Similar or related property. 2011 irs tax forms   If you receive replacement property similar or related in service or use to the converted property, the replacement property's basis is the same as the converted property's basis on the date of the conversion, with the following adjustments. 2011 irs tax forms Decrease the basis by the following. 2011 irs tax forms Any loss you recognize on the involuntary conversion. 2011 irs tax forms Any money you receive that you do not spend on similar property. 2011 irs tax forms Increase the basis by the following. 2011 irs tax forms Any gain you recognize on the involuntary conversion. 2011 irs tax forms Any cost of acquiring the replacement property. 2011 irs tax forms Money or property not similar or related. 2011 irs tax forms    If you receive money or property not similar or related in service or use to the converted property, and you buy replacement property similar or related in service or use to the converted property, the basis of the replacement property is its cost decreased by the gain not recognized on the conversion. 2011 irs tax forms Example. 2011 irs tax forms The state condemned your property. 2011 irs tax forms The adjusted basis of the property was $26,000 and the state paid you $31,000 for it. 2011 irs tax forms You realized a gain of $5,000 ($31,000 − $26,000). 2011 irs tax forms You bought replacement property similar in use to the converted property for $29,000. 2011 irs tax forms You recognize a gain of $2,000 ($31,000 − $29,000), the unspent part of the payment from the state. 2011 irs tax forms Your unrecognized gain is $3,000, the difference between the $5,000 realized gain and the $2,000 recognized gain. 2011 irs tax forms The basis of the replacement property is figured as follows: Cost of replacement property $29,000 Minus: Gain not recognized 3,000 Basis of replacement property $26,000 Allocating the basis. 2011 irs tax forms   If you buy more than one piece of replacement property, allocate your basis among the properties based on their respective costs. 2011 irs tax forms Basis for depreciation. 2011 irs tax forms   Special rules apply in determining and depreciating the basis of MACRS property acquired in an involuntary conversion. 2011 irs tax forms For information, see What Is the Basis of Your Depreciable Property? in chapter 1 of Publication 946. 2011 irs tax forms Nontaxable Exchanges A nontaxable exchange is an exchange in which you are not taxed on any gain and you cannot deduct any loss. 2011 irs tax forms If you receive property in a nontaxable exchange, its basis is generally the same as the basis of the property you transferred. 2011 irs tax forms See Nontaxable Trades in chapter 14. 2011 irs tax forms Like-Kind Exchanges The exchange of property for the same kind of property is the most common type of nontaxable exchange. 2011 irs tax forms To qualify as a like-kind exchange, the property traded and the property received must be both of the following. 2011 irs tax forms Qualifying property. 2011 irs tax forms Like-kind property. 2011 irs tax forms The basis of the property you receive is generally the same as the adjusted basis of the property you gave up. 2011 irs tax forms If you trade property in a like-kind exchange and also pay money, the basis of the property received is the adjusted basis of the property you gave up increased by the money you paid. 2011 irs tax forms Qualifying property. 2011 irs tax forms   In a like-kind exchange, you must hold for investment or for productive use in your trade or business both the property you give up and the property you receive. 2011 irs tax forms Like-kind property. 2011 irs tax forms   There must be an exchange of like-kind property. 2011 irs tax forms Like-kind properties are properties of the same nature or character, even if they differ in grade or quality. 2011 irs tax forms The exchange of real estate for real estate and personal property for similar personal property are exchanges of like-kind property. 2011 irs tax forms Example. 2011 irs tax forms You trade in an old truck used in your business with an adjusted basis of $1,700 for a new one costing $6,800. 2011 irs tax forms The dealer allows you $2,000 on the old truck, and you pay $4,800. 2011 irs tax forms This is a like-kind exchange. 2011 irs tax forms The basis of the new truck is $6,500 (the adjusted basis of the old one, $1,700, plus the amount you paid, $4,800). 2011 irs tax forms If you sell your old truck to a third party for $2,000 instead of trading it in and then buy a new one from the dealer, you have a taxable gain of $300 on the sale (the $2,000 sale price minus the $1,700 adjusted basis). 2011 irs tax forms The basis of the new truck is the price you pay the dealer. 2011 irs tax forms Partially nontaxable exchanges. 2011 irs tax forms   A partially nontaxable exchange is an exchange in which you receive unlike property or money in addition to like-kind property. 2011 irs tax forms The basis of the property you receive is the same as the adjusted basis of the property you gave up, with the following adjustments. 2011 irs tax forms Decrease the basis by the following amounts. 2011 irs tax forms Any money you receive. 2011 irs tax forms Any loss you recognize on the exchange. 2011 irs tax forms Increase the basis by the following amounts. 2011 irs tax forms Any additional costs you incur. 2011 irs tax forms Any gain you recognize on the exchange. 2011 irs tax forms If the other party to the exchange assumes your liabilities, treat the debt assumption as money you received in the exchange. 2011 irs tax forms Allocation of basis. 2011 irs tax forms   If you receive like-kind and unlike properties in the exchange, allocate the basis first to the unlike property, other than money, up to its FMV on the date of the exchange. 2011 irs tax forms The rest is the basis of the like-kind property. 2011 irs tax forms More information. 2011 irs tax forms   See Like-Kind Exchanges in chapter 1 of Publication 544 for more information. 2011 irs tax forms Basis for depreciation. 2011 irs tax forms   Special rules apply in determining and depreciating the basis of MACRS property acquired in a like-kind exchange. 2011 irs tax forms For information, see What Is the Basis of Your Depreciable Property? in chapter 1 of Publication 946. 2011 irs tax forms Property Transferred From a Spouse The basis of property transferred to you or transferred in trust for your benefit by your spouse is the same as your spouse's adjusted basis. 2011 irs tax forms The same rule applies to a transfer by your former spouse that is incident to divorce. 2011 irs tax forms However, for property transferred in trust, adjust your basis for any gain recognized by your spouse or former spouse if the liabilities assumed, plus the liabilities to which the property is subject, are more than the adjusted basis of the property transferred. 2011 irs tax forms If the property transferred to you is a series E, series EE, or series I U. 2011 irs tax forms S. 2011 irs tax forms savings bond, the transferor must include in income the interest accrued to the date of transfer. 2011 irs tax forms Your basis in the bond immediately after the transfer is equal to the transferor's basis increased by the interest income includible in the transferor's income. 2011 irs tax forms For more information on these bonds, see chapter 7. 2011 irs tax forms At the time of the transfer, the transferor must give you the records needed to determine the adjusted basis and holding period of the property as of the date of the transfer. 2011 irs tax forms For more information about the transfer of property from a spouse, see chapter 14. 2011 irs tax forms Property Received as a Gift To figure the basis of property you receive as a gift, you must know its adjusted basis to the donor just before it was given to you, its FMV at the time it was given to you, and any gift tax paid on it. 2011 irs tax forms FMV less than donor's adjusted basis. 2011 irs tax forms   If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property. 2011 irs tax forms Your basis for figuring gain is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you held the property. 2011 irs tax forms Your basis for figuring loss is its FMV when you received the gift plus or minus any required adjustments to basis while you held the property. 2011 irs tax forms See Adjusted Basis , earlier. 2011 irs tax forms Example. 2011 irs tax forms You received an acre of land as a gift. 2011 irs tax forms At the time of the gift, the land had an FMV of $8,000. 2011 irs tax forms The donor's adjusted basis was $10,000. 2011 irs tax forms After you received the property, no events occurred to increase or decrease your basis. 2011 irs tax forms If you later sell the property for $12,000, you will have a $2,000 gain because you must use the donor's adjusted basis at the time of the gift ($10,000) as your basis to figure gain. 2011 irs tax forms If you sell the property for $7,000, you will have a $1,000 loss because you must use the FMV at the time of the gift ($8,000) as your basis to figure loss. 2011 irs tax forms If the sales price is between $8,000 and $10,000, you have neither gain nor loss. 2011 irs tax forms Business property. 2011 irs tax forms   If you hold the gift as business property, your basis for figuring any depreciation, depletion, or amortization deductions is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you hold the property. 2011 irs tax forms FMV equal to or greater than donor's adjusted basis. 2011 irs tax forms   If the FMV of the property is equal to or greater than the donor's adjusted basis, your basis is the donor's adjusted basis at the time you received the gift. 2011 irs tax forms Increase your basis by all or part of any gift tax paid, depending on the date of the gift, explained later. 2011 irs tax forms   Also, for figuring gain or loss from a sale or other disposition or for figuring depreciation, depletion, or amortization deductions on business property, you must increase or decrease your basis (the donor's adjusted basis) by any required adjustments to basis while you held the property. 2011 irs tax forms See Adjusted Basis , earlier. 2011 irs tax forms   If you received a gift during the tax year, increase your basis in the gift (the donor's adjusted basis) by the part of the gift tax paid on it due to the net increase in value of the gift. 2011 irs tax forms Figure the increase by multiplying the gift tax paid by a fraction. 2011 irs tax forms The numerator of the fraction is the net increase in value of the gift and the denominator is the amount of the gift. 2011 irs tax forms   The net increase in value of the gift is the FMV of the gift minus the donor's adjusted basis. 2011 irs tax forms The amount of the gift is its value for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. 2011 irs tax forms Example. 2011 irs tax forms In 2013, you received a gift of property from your mother that had an FMV of $50,000. 2011 irs tax forms Her adjusted basis was $20,000. 2011 irs tax forms The amount of the gift for gift tax purposes was $36,000 ($50,000 minus the $14,000 annual exclusion). 2011 irs tax forms She paid a gift tax of $7,320 on the property. 2011 irs tax forms Your basis is $26,076, figured as follows: Fair market value $50,000 Minus: Adjusted basis −20,000 Net increase in value $30,000     Gift tax paid $7,320 Multiplied by ($30,000 ÷ $36,000) × . 2011 irs tax forms 83 Gift tax due to net increase in value $6,076 Adjusted basis of property to your mother +20,000 Your basis in the property $26,076 Note. 2011 irs tax forms If you received a gift before 1977, your basis in the gift (the donor's adjusted basis) includes any gift tax paid on it. 2011 irs tax forms However, your basis cannot exceed the FMV of the gift at the time it was given to you. 2011 irs tax forms Inherited Property Your basis in property you inherited from a decedent, who died before January 1, 2010, or after December 31, 2010, is generally one of the following: The FMV of the property at the date of the decedent's death. 2011 irs tax forms The FMV on the alternate valuation date if the personal representative for the estate elects to use alternate valuation. 2011 irs tax forms The value under the special-use valuation method for real property used in farming or a closely held business if elected for estate tax purposes. 2011 irs tax forms The decedent's adjusted basis in land to the extent of the value excluded from the decedent's taxable estate as a qualified conservation easement. 2011 irs tax forms If a federal estate tax return does not have to be filed, your basis in the inherited property is its appraised value at the date of death for state inheritance or transmission taxes. 2011 irs tax forms For more information, see the instructions to Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return. 2011 irs tax forms Property inherited from a decedent who died in 2010. 2011 irs tax forms   If you inherited property from a decedent who died in 2010, special rules may apply. 2011 irs tax forms For more information, see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010. 2011 irs tax forms Community property. 2011 irs tax forms   In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), husband and wife are each usually considered to own half the community property. 2011 irs tax forms When either spouse dies, the total value of the community property, even the part belonging to the surviving spouse, generally becomes the basis of the entire property. 2011 irs tax forms For this rule to apply, at least half the value of the community property interest must be includible in the decedent's gross estate, whether or not the estate must file a return. 2011 irs tax forms Example. 2011 irs tax forms You and your spouse owned community property that had a basis of $80,000. 2011 irs tax forms When your spouse died, half the FMV of the community interest was includible in your spouse's estate. 2011 irs tax forms The FMV of the community interest was $100,000. 2011 irs tax forms The basis of your half of the property after the death of your spouse is $50,000 (half of the $100,000 FMV). 2011 irs tax forms The basis of the other half to your spouse's heirs is also $50,000. 2011 irs tax forms For more information about community property, see Publication 555, Community Property. 2011 irs tax forms Property Changed From Personal to Business or Rental Use If you hold property for personal use and then change it to business use or use it to produce rent, you can begin to depreciate the property at the time of the change. 2011 irs tax forms To do so, you must figure its basis for depreciation at the time of the change. 2011 irs tax forms An example of changing property held for personal use to business or rental use would be renting out your former personal residence. 2011 irs tax forms Basis for depreciation. 2011 irs tax forms   The basis for depreciation is the lesser of the following amounts. 2011 irs tax forms The FMV of the property on the date of the change. 2011 irs tax forms Your adjusted basis on the date of the change. 2011 irs tax forms Example. 2011 irs tax forms Several years ago, you paid $160,000 to have your house built on a lot that cost $25,000. 2011 irs tax forms You paid $20,000 for permanent improvements to the house and claimed a $2,000 casualty loss deduction for damage to the house before changing the property to rental use last year. 2011 irs tax forms Because land is not depreciable, you include only the cost of the house when figuring the basis for depreciation. 2011 irs tax forms Your adjusted basis in the house when you changed its use was $178,000 ($160,000 + $20,000 − $2,000). 2011 irs tax forms On the same date, your property had an FMV of $180,000, of which $15,000 was for the land and $165,000 was for the house. 2011 irs tax forms The basis for figuring depreciation on the house is its FMV on the date of the change ($165,000) because it is less than your adjusted basis ($178,000). 2011 irs tax forms Sale of property. 2011 irs tax forms   If you later sell or dispose of property changed to business or rental use, the basis you use will depend on whether you are figuring gain or loss. 2011 irs tax forms Gain. 2011 irs tax forms   The basis for figuring a gain is your adjusted basis in the property when you sell the property. 2011 irs tax forms Example. 2011 irs tax forms Assume the same facts as in the previous example except that you sell the property at a gain after being allowed depreciation deductions of $37,500. 2011 irs tax forms Your adjusted basis for figuring gain is $165,500 ($178,000 + $25,000 (land) − $37,500). 2011 irs tax forms Loss. 2011 irs tax forms   Figure the basis for a loss starting with the smaller of your adjusted basis or the FMV of the property at the time of the change to business or rental use. 2011 irs tax forms Then make adjustments (increases and decreases) for the period after the change in the property's use, as discussed earlier under Adjusted Basis . 2011 irs tax forms Example. 2011 irs tax forms Assume the same facts as in the previous example, except that you sell the property at a loss after being allowed depreciation deductions of $37,500. 2011 irs tax forms In this case, you would start with the FMV on the date of the change to rental use ($180,000), because it is less than the adjusted basis of $203,000 ($178,000 + $25,000 (land)) on that date. 2011 irs tax forms Reduce that amount ($180,000) by the depreciation deductions ($37,500). 2011 irs tax forms The basis for loss is $142,500 ($180,000 − $37,500). 2011 irs tax forms Stocks and Bonds The basis of stocks or bonds you buy generally is the purchase price plus any costs of purchase, such as commissions and recording or transfer fees. 2011 irs tax forms If you get stocks or bonds other than by purchase, your basis is usually determined by the FMV or the previous owner's adjusted basis, as discussed earlier. 2011 irs tax forms You must adjust the basis of stocks for certain events that occur after purchase. 2011 irs tax forms For example, if you receive additional stock from nontaxable stock dividends or stock splits, reduce your basis for each share of stock by dividing the adjusted basis of the old stock by the number of shares of old and new stock. 2011 irs tax forms This rule applies only when the additional stock received is identical to the stock held. 2011 irs tax forms Also reduce your basis when you receive nontaxable distributions. 2011 irs tax forms They are a return of capital. 2011 irs tax forms Example. 2011 irs tax forms In 2011 you bought 100 shares of XYZ stock for $1,000 or $10 a share. 2011 irs tax forms In 2012 you bought 100 shares of XYZ stock for $1,600 or $16 a share. 2011 irs tax forms In 2013 XYZ declared a 2-for-1 stock split. 2011 irs tax forms You now have 200 shares of stock with a basis of $5 a share and 200 shares with a basis of $8 a share. 2011 irs tax forms Other basis. 2011 irs tax forms   There are other ways to figure the basis of stocks or bonds depending on how you acquired them. 2011 irs tax forms For detailed information, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. 2011 irs tax forms Identifying stocks or bonds sold. 2011 irs tax forms   If you can adequately identify the shares of stock or the bonds you sold, their basis is the cost or other basis of the particular shares of stocks or bonds. 2011 irs tax forms If you buy and sell securities at various times in varying quantities and you cannot adequately identify the shares you sell, the basis of the securities you sell is the basis of the securities you acquired first. 2011 irs tax forms For more information about identifying securities you sell, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. 2011 irs tax forms Mutual fund shares. 2011 irs tax forms   If you sell mutual fund shares you acquired at various times and prices and left on deposit in an account kept by a custodian or agent, you can elect to use an average basis. 2011 irs tax forms For more information, see Publication 550. 2011 irs tax forms Bond premium. 2011 irs tax forms   If you buy a taxable bond at a premium and elect to amortize the premium, reduce the basis of the bond by the amortized premium you deduct each year. 2011 irs tax forms See Bond Premium Amortization in chapter 3 of Publication 550 for more information. 2011 irs tax forms Although you cannot deduct the premium on a tax-exempt bond, you must amortize the premium each year and reduce your basis in the bond by the amortized amount. 2011 irs tax forms Original issue discount (OID) on debt instruments. 2011 irs tax forms   You must increase your basis in an OID debt instrument by the OID you include in income for that instrument. 2011 irs tax forms See Original Issue Discount (OID) in chapter 7 and Publication 1212, Guide To Original Issue Discount (OID) Instruments. 2011 irs tax forms Tax-exempt obligations. 2011 irs tax forms    OID on tax-exempt obligations is generally not taxable. 2011 irs tax forms However, when you dispose of a tax-exempt obligation issued after September 3, 1982, and acquired after March 1, 1984, you must accrue OID on the obligation to determine its adjusted basis. 2011 irs tax forms The accrued OID is added to the basis of the obligation to determine your gain or loss. 2011 irs tax forms See chapter 4 of Publication 550. 2011 irs tax forms Prev  Up  Next   Home   More Online Publications