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2012 Tax Software Downloads

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2012 Tax Software Downloads

2012 tax software downloads Publication 547 - Main Content Table of Contents CasualtyFamily pet. 2012 tax software downloads Progressive deterioration. 2012 tax software downloads Special Procedure for Damage From Corrosive Drywall Theft Loss on Deposits Proof of Loss Figuring a LossGain from reimbursement. 2012 tax software downloads Business or income-producing property. 2012 tax software downloads Loss of inventory. 2012 tax software downloads Leased property. 2012 tax software downloads Exception for personal-use real property. 2012 tax software downloads Decrease in Fair Market Value Adjusted Basis Insurance and Other Reimbursements Deduction Limits2% Rule $100 Rule 10% Rule Figuring the Deduction Figuring a GainPostponement of Gain When To Report Gains and LossesLoss on deposits. 2012 tax software downloads Lessee's loss. 2012 tax software downloads Disaster Area LossesDisaster loss to inventory. 2012 tax software downloads Main home in disaster area. 2012 tax software downloads Unsafe home. 2012 tax software downloads Time limit for making choice. 2012 tax software downloads Revoking your choice. 2012 tax software downloads Figuring the loss deduction. 2012 tax software downloads How to report the loss on Form 1040X. 2012 tax software downloads Records. 2012 tax software downloads Need a copy of your tax return for the preceding year? Postponed Tax Deadlines Contacting the Federal Emergency Management Agency (FEMA) How To Report Gains and LossesProperty held 1 year or less. 2012 tax software downloads Property held more than 1 year. 2012 tax software downloads Depreciable property. 2012 tax software downloads Adjustments to Basis If Deductions Are More Than Income How To Get Tax HelpLow Income Taxpayer Clinics Casualty A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. 2012 tax software downloads A sudden event is one that is swift, not gradual or progressive. 2012 tax software downloads An unexpected event is one that is ordinarily unanticipated and unintended. 2012 tax software downloads An unusual event is one that is not a day-to-day occurrence and that is not typical of the activity in which you were engaged. 2012 tax software downloads Generally, casualty losses are deductible during the taxable year that the loss occurred. 2012 tax software downloads See Table 3, later. 2012 tax software downloads Deductible losses. 2012 tax software downloads   Deductible casualty losses can result from a number of different causes, including the following. 2012 tax software downloads Car accidents (but see Nondeductible losses , next, for exceptions). 2012 tax software downloads Earthquakes. 2012 tax software downloads Fires (but see Nondeductible losses , next, for exceptions). 2012 tax software downloads Floods. 2012 tax software downloads Government-ordered demolition or relocation of a home that is unsafe to use because of a disaster as discussed under Disaster Area Losses , later. 2012 tax software downloads Mine cave-ins. 2012 tax software downloads Shipwrecks. 2012 tax software downloads Sonic booms. 2012 tax software downloads Storms, including hurricanes and tornadoes. 2012 tax software downloads Terrorist attacks. 2012 tax software downloads Vandalism. 2012 tax software downloads Volcanic eruptions. 2012 tax software downloads Nondeductible losses. 2012 tax software downloads   A casualty loss is not deductible if the damage or destruction is caused by the following. 2012 tax software downloads Accidentally breaking articles such as glassware or china under normal conditions. 2012 tax software downloads A family pet (explained below). 2012 tax software downloads A fire if you willfully set it, or pay someone else to set it. 2012 tax software downloads A car accident if your willful negligence or willful act caused it. 2012 tax software downloads The same is true if the willful act or willful negligence of someone acting for you caused the accident. 2012 tax software downloads Progressive deterioration (explained below). 2012 tax software downloads However, see Special Procedure for Damage From Corrosive Drywall , later. 2012 tax software downloads Family pet. 2012 tax software downloads   Loss of property due to damage by a family pet is not deductible as a casualty loss unless the requirements discussed earlier under Casualty are met. 2012 tax software downloads Example. 2012 tax software downloads Your antique oriental rug was damaged by your new puppy before it was housebroken. 2012 tax software downloads Because the damage was not unexpected and unusual, the loss is not deductible as a casualty loss. 2012 tax software downloads Progressive deterioration. 2012 tax software downloads   Loss of property due to progressive deterioration is not deductible as a casualty loss. 2012 tax software downloads This is because the damage results from a steadily operating cause or a normal process, rather than from a sudden event. 2012 tax software downloads The following are examples of damage due to progressive deterioration. 2012 tax software downloads The steady weakening of a building due to normal wind and weather conditions. 2012 tax software downloads The deterioration and damage to a water heater that bursts. 2012 tax software downloads However, the rust and water damage to rugs and drapes caused by the bursting of a water heater does qualify as a casualty. 2012 tax software downloads Most losses of property caused by droughts. 2012 tax software downloads To be deductible, a drought-related loss generally must be incurred in a trade or business or in a transaction entered into for profit. 2012 tax software downloads Termite or moth damage. 2012 tax software downloads The damage or destruction of trees, shrubs, or other plants by a fungus, disease, insects, worms, or similar pests. 2012 tax software downloads However, a sudden destruction due to an unexpected or unusual infestation of beetles or other insects may result in a casualty loss. 2012 tax software downloads Special Procedure for Damage From Corrosive Drywall Under a special procedure, you can deduct the amounts you paid to repair damage to your home and household appliances due to corrosive drywall. 2012 tax software downloads Under this procedure, you treat the amounts paid for repairs as a casualty loss in the year of payment. 2012 tax software downloads For example, amounts you paid for repairs in 2013 are deductible on your 2013 tax return and amounts you paid for repairs in 2012 are deductible on your 2012 tax return. 2012 tax software downloads Note. 2012 tax software downloads If you paid for any repairs before 2013 and you choose to follow this special procedure, you can amend your return for the earlier year by filing Form 1040X, Amended U. 2012 tax software downloads S. 2012 tax software downloads Individual Income Tax Return, and attaching a completed Form 4684 for the appropriate year. 2012 tax software downloads Form 4684 for the appropriate year can be found at IRS. 2012 tax software downloads gov. 2012 tax software downloads Generally, Form 1040X must be filed within 3 years after the date the original return was filed or within 2 years after the date the tax was paid, whichever is later. 2012 tax software downloads Corrosive drywall. 2012 tax software downloads   For purposes of this special procedure, “corrosive drywall” means drywall that is identified as problem drywall under the two-step identification method published by the Consumer Product Safety Commission (CPSC) and the Department of Housing and Urban Development (HUD) in their interim guidance dated January 28, 2010, as revised by the CPSC and HUD. 2012 tax software downloads The revised identification guidance and remediation guidelines are available at www. 2012 tax software downloads cpsc. 2012 tax software downloads gov/Safety-Education/Safety-Education-Centers/Drywall. 2012 tax software downloads Special instructions for completing Form 4684. 2012 tax software downloads   If you choose to follow this special procedure, complete Form 4684, Section A, according to the instructions below. 2012 tax software downloads The IRS will not challenge your treatment of damage resulting from corrosive drywall as a casualty loss if you determine and report the loss as explained below. 2012 tax software downloads Top margin of Form 4684. 2012 tax software downloads   Enter “Revenue Procedure 2010-36”. 2012 tax software downloads Line 1. 2012 tax software downloads   Enter the information required by the line 1 instructions. 2012 tax software downloads Line 2. 2012 tax software downloads   Skip this line. 2012 tax software downloads Line 3. 2012 tax software downloads   Enter the amount of insurance or other reimbursements you received (including through litigation). 2012 tax software downloads If none, enter -0-. 2012 tax software downloads Lines 4–7. 2012 tax software downloads   Skip these lines. 2012 tax software downloads Line 8. 2012 tax software downloads   Enter the amount you paid to repair the damage to your home and household appliances due to corrosive drywall. 2012 tax software downloads Enter only the amounts you paid to restore your home to the condition existing immediately before the damage. 2012 tax software downloads Do not enter any amounts you paid for improvements or additions that increased the value of your home above its pre-loss value. 2012 tax software downloads If you replaced a household appliance instead of repairing it, enter the lesser of: The current cost to replace the original appliance, or The basis of the original appliance (generally its cost). 2012 tax software downloads Line 9. 2012 tax software downloads   If line 8 is more than line 3, do one of the following. 2012 tax software downloads If you have a pending claim for reimbursement (or you intend to pursue reimbursement), enter 75% of the difference between lines 3 and 8. 2012 tax software downloads If item (1) does not apply to you, enter the full amount of the difference between lines 3 and 8. 2012 tax software downloads If line 8 is less than or equal to line 3, you cannot claim a casualty loss deduction using this special procedure. 2012 tax software downloads    If you have a pending claim for reimbursement (or you intend to pursue reimbursement), you may have income or an additional deduction in a later tax year depending on the actual amount of reimbursement received. 2012 tax software downloads See Reimbursement Received After Deducting Loss, later. 2012 tax software downloads Lines 10–18. 2012 tax software downloads   Complete these lines according to the Instructions for Form 4684. 2012 tax software downloads Choosing not to follow this special procedure. 2012 tax software downloads   If you choose not to follow this special procedure, you are subject to all of the provisions that apply to the deductibility of casualty losses, and you must complete lines 1–9 according to the Instructions for Form 4684. 2012 tax software downloads This means, for example, that you must establish that the damage, destruction, or loss of property resulted from an identifiable event as defined earlier under Casualty . 2012 tax software downloads Furthermore, you must have proof that shows the following. 2012 tax software downloads The loss is properly deductible in the tax year you claimed it and not in some other year. 2012 tax software downloads See When To Report Gains and Losses , later. 2012 tax software downloads The amount of the claimed loss. 2012 tax software downloads See Proof of Loss , later. 2012 tax software downloads No claim for reimbursement of any portion of the loss exists for which there is a reasonable prospect of recovery. 2012 tax software downloads See When To Report Gains and Losses , later. 2012 tax software downloads Theft A theft is the taking and removing of money or property with the intent to deprive the owner of it. 2012 tax software downloads The taking of property must be illegal under the law of the state where it occurred and it must have been done with criminal intent. 2012 tax software downloads You do not need to show a conviction for theft. 2012 tax software downloads Theft includes the taking of money or property by the following means. 2012 tax software downloads Blackmail. 2012 tax software downloads Burglary. 2012 tax software downloads Embezzlement. 2012 tax software downloads Extortion. 2012 tax software downloads Kidnapping for ransom. 2012 tax software downloads Larceny. 2012 tax software downloads Robbery. 2012 tax software downloads The taking of money or property through fraud or misrepresentation is theft if it is illegal under state or local law. 2012 tax software downloads Decline in market value of stock. 2012 tax software downloads   You cannot deduct as a theft loss the decline in market value of stock acquired on the open market for investment if the decline is caused by disclosure of accounting fraud or other illegal misconduct by the officers or directors of the corporation that issued the stock. 2012 tax software downloads However, you can deduct as a capital loss the loss you sustain when you sell or exchange the stock or the stock becomes completely worthless. 2012 tax software downloads You report a capital loss on Schedule D (Form 1040). 2012 tax software downloads For more information about stock sales, worthless stock, and capital losses, see chapter 4 of Publication 550. 2012 tax software downloads Mislaid or lost property. 2012 tax software downloads    The simple disappearance of money or property is not a theft. 2012 tax software downloads However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. 2012 tax software downloads Sudden, unexpected, and unusual events were defined earlier under Casualty . 2012 tax software downloads Example. 2012 tax software downloads A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. 2012 tax software downloads The diamond falls from the ring and is never found. 2012 tax software downloads The loss of the diamond is a casualty. 2012 tax software downloads Losses from Ponzi-type investment schemes. 2012 tax software downloads   The IRS has issued the following guidance to assist taxpayers who are victims of losses from Ponzi-type investment schemes: Revenue Ruling 2009-9, 2009-14 I. 2012 tax software downloads R. 2012 tax software downloads B. 2012 tax software downloads 735 (available at www. 2012 tax software downloads irs. 2012 tax software downloads gov/irb/2009-14_IRB/ar07. 2012 tax software downloads html). 2012 tax software downloads Revenue Procedure 2009-20, 2009-14 I. 2012 tax software downloads R. 2012 tax software downloads B. 2012 tax software downloads 749 (available at www. 2012 tax software downloads irs. 2012 tax software downloads gov/irb/2009-14_IRB/ar11. 2012 tax software downloads html). 2012 tax software downloads Revenue Procedure 2011-58, 2011-50 I. 2012 tax software downloads R. 2012 tax software downloads B. 2012 tax software downloads 847 (available at www. 2012 tax software downloads irs. 2012 tax software downloads gov/irb/2011-50_IRB/ar11. 2012 tax software downloads html). 2012 tax software downloads If you qualify to use Revenue Procedure 2009-20, as modified by Revenue Procedure 2011-58, and you choose to follow the procedures in the guidance, first fill out Section C of Form 4684 to determine the amount to enter on Section B, line 28. 2012 tax software downloads Skip lines 19 to 27, but you must fill out Section B, lines 29 to 39, as appropriate. 2012 tax software downloads Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. 2012 tax software downloads You do not need to complete Appendix A. 2012 tax software downloads For more information, see the above revenue ruling and revenue procedures, and the Instructions for Form 4684. 2012 tax software downloads   If you choose not to use the procedures in Revenue Procedure 2009-20, as modified by Revenue Procedure 2011-58, you may claim your theft loss by filling out Section B, lines 19 to 39, as appropriate. 2012 tax software downloads Loss on Deposits A loss on deposits can occur when a bank, credit union, or other financial institution becomes insolvent or bankrupt. 2012 tax software downloads If you incurred this type of loss, you can choose one of the following ways to deduct the loss. 2012 tax software downloads As a casualty loss. 2012 tax software downloads As an ordinary loss. 2012 tax software downloads As a nonbusiness bad debt. 2012 tax software downloads Casualty loss or ordinary loss. 2012 tax software downloads   You can choose to deduct a loss on deposits as a casualty loss or as an ordinary loss for any year in which you can reasonably estimate how much of your deposits you have lost in an insolvent or bankrupt financial institution. 2012 tax software downloads The choice generally is made on the return you file for that year and applies to all your losses on deposits for the year in that particular financial institution. 2012 tax software downloads If you treat the loss as a casualty or ordinary loss, you cannot treat the same amount of the loss as a nonbusiness bad debt when it actually becomes worthless. 2012 tax software downloads However, you can take a nonbusiness bad debt deduction for any amount of loss that is more than the estimated amount you deducted as a casualty or ordinary loss. 2012 tax software downloads Once you make the choice, you cannot change it without permission from the Internal Revenue Service. 2012 tax software downloads   If you claim an ordinary loss, report it as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. 2012 tax software downloads The maximum amount you can claim is $20,000 ($10,000 if you are married filing separately) reduced by any expected state insurance proceeds. 2012 tax software downloads Your loss is subject to the 2%-of-adjusted-gross-income limit. 2012 tax software downloads You cannot choose to claim an ordinary loss if any part of the deposit is federally insured. 2012 tax software downloads Nonbusiness bad debt. 2012 tax software downloads   If you do not choose to deduct the loss as a casualty loss or as an ordinary loss, you must wait until the year the actual loss is determined and deduct the loss as a nonbusiness bad debt in that year. 2012 tax software downloads How to report. 2012 tax software downloads   The kind of deduction you choose for your loss on deposits determines how you report your loss. 2012 tax software downloads See Table 1. 2012 tax software downloads More information. 2012 tax software downloads   For more information, see Special Treatment for Losses on Deposits in Insolvent or Bankrupt Financial Institutions in the Instructions for Form 4684. 2012 tax software downloads Deducted loss recovered. 2012 tax software downloads   If you recover an amount you deducted as a loss in an earlier year, you may have to include the amount recovered in your income for the year of recovery. 2012 tax software downloads If any part of the original deduction did not reduce your tax in the earlier year, you do not have to include that part of the recovery in your income. 2012 tax software downloads For more information, see Recoveries in Publication 525. 2012 tax software downloads Proof of Loss To deduct a casualty or theft loss, you must be able to show that there was a casualty or theft. 2012 tax software downloads You also must be able to support the amount you take as a deduction. 2012 tax software downloads Casualty loss proof. 2012 tax software downloads   For a casualty loss, you should be able to show all of the following. 2012 tax software downloads The type of casualty (car accident, fire, storm, etc. 2012 tax software downloads ) and when it occurred. 2012 tax software downloads That the loss was a direct result of the casualty. 2012 tax software downloads That you were the owner of the property, or if you leased the property from someone else, that you were contractually liable to the owner for the damage. 2012 tax software downloads Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. 2012 tax software downloads Theft loss proof. 2012 tax software downloads   For a theft loss, you should be able to show all of the following. 2012 tax software downloads When you discovered that your property was missing. 2012 tax software downloads That your property was stolen. 2012 tax software downloads That you were the owner of the property. 2012 tax software downloads Whether a claim for reimbursement exists for which there is a reasonable expectation of recovery. 2012 tax software downloads    It is important that you have records that will prove your deduction. 2012 tax software downloads If you do not have the actual records to support your deduction, you can use other satisfactory evidence to support it. 2012 tax software downloads Figuring a Loss To determine your deduction for a casualty or theft loss, you must first figure your loss. 2012 tax software downloads Table 1. 2012 tax software downloads Reporting Loss on Deposits IF you choose to report the loss as a(n). 2012 tax software downloads . 2012 tax software downloads . 2012 tax software downloads   THEN report it on. 2012 tax software downloads . 2012 tax software downloads . 2012 tax software downloads casualty loss   Form 4684 and Schedule A  (Form 1040). 2012 tax software downloads ordinary loss   Schedule A (Form 1040). 2012 tax software downloads nonbusiness bad debt   Form 8949 and Schedule D (Form 1040). 2012 tax software downloads Amount of loss. 2012 tax software downloads   Figure the amount of your loss using the following steps. 2012 tax software downloads Determine your adjusted basis in the property before the casualty or theft. 2012 tax software downloads Determine the decrease in fair market value (FMV) of the property as a result of the casualty or theft. 2012 tax software downloads From the smaller of the amounts you determined in (1) and (2), subtract any insurance or other reimbursement you received or expect to receive. 2012 tax software downloads For personal-use property and property used in performing services as an employee, apply the deduction limits, discussed later, to determine the amount of your deductible loss. 2012 tax software downloads Gain from reimbursement. 2012 tax software downloads   If your reimbursement is more than your adjusted basis in the property, you have a gain. 2012 tax software downloads This is true even if the decrease in the FMV of the property is smaller than your adjusted basis. 2012 tax software downloads If you have a gain, you may have to pay tax on it, or you may be able to postpone reporting the gain. 2012 tax software downloads See Figuring a Gain , later. 2012 tax software downloads Business or income-producing property. 2012 tax software downloads   If you have business or income-producing property, such as rental property, and it is stolen or completely destroyed, the decrease in FMV is not considered. 2012 tax software downloads Your loss is figured as follows:   Your adjusted basis in the property     MINUS     Any salvage value     MINUS     Any insurance or other reimbursement you  receive or expect to receive   Loss of inventory. 2012 tax software downloads   There are two ways you can deduct a casualty or theft loss of inventory, including items you hold for sale to customers. 2012 tax software downloads   One way is to deduct the loss through the increase in the cost of goods sold by properly reporting your opening and closing inventories. 2012 tax software downloads Do not claim this loss again as a casualty or theft loss. 2012 tax software downloads If you take the loss through the increase in the cost of goods sold, include any insurance or other reimbursement you receive for the loss in gross income. 2012 tax software downloads   The other way is to deduct the loss separately. 2012 tax software downloads If you deduct it separately, eliminate the affected inventory items from the cost of goods sold by making a downward adjustment to opening inventory or purchases. 2012 tax software downloads Reduce the loss by the reimbursement you received. 2012 tax software downloads Do not include the reimbursement in gross income. 2012 tax software downloads If you do not receive the reimbursement by the end of the year, you may not claim a loss to the extent you have a reasonable prospect of recovery. 2012 tax software downloads Leased property. 2012 tax software downloads   If you are liable for casualty damage to property you lease, your loss is the amount you must pay to repair the property minus any insurance or other reimbursement you receive or expect to receive. 2012 tax software downloads Separate computations. 2012 tax software downloads   Generally, if a single casualty or theft involves more than one item of property, you must figure the loss on each item separately. 2012 tax software downloads Then combine the losses to determine the total loss from that casualty or theft. 2012 tax software downloads Exception for personal-use real property. 2012 tax software downloads   In figuring a casualty loss on personal-use real property, the entire property (including any improvements, such as buildings, trees, and shrubs) is treated as one item. 2012 tax software downloads Figure the loss using the smaller of the following. 2012 tax software downloads The decrease in FMV of the entire property. 2012 tax software downloads The adjusted basis of the entire property. 2012 tax software downloads   See Real property under Figuring the Deduction, later. 2012 tax software downloads Decrease in Fair Market Value Fair market value (FMV) is the price for which you could sell your property to a willing buyer when neither of you has to sell or buy and both of you know all the relevant facts. 2012 tax software downloads The decrease in FMV used to figure the amount of a casualty or theft loss is the difference between the property's fair market value immediately before and immediately after the casualty or theft. 2012 tax software downloads FMV of stolen property. 2012 tax software downloads   The FMV of property immediately after a theft is considered to be zero because you no longer have the property. 2012 tax software downloads Example. 2012 tax software downloads Several years ago, you purchased silver dollars at face value for $150. 2012 tax software downloads This is your adjusted basis in the property. 2012 tax software downloads Your silver dollars were stolen this year. 2012 tax software downloads The FMV of the coins was $1,000 just before they were stolen, and insurance did not cover them. 2012 tax software downloads Your theft loss is $150. 2012 tax software downloads Recovered stolen property. 2012 tax software downloads   Recovered stolen property is your property that was stolen and later returned to you. 2012 tax software downloads If you recovered property after you had already taken a theft loss deduction, you must refigure your loss using the smaller of the property's adjusted basis (explained later) or the decrease in FMV from the time just before it was stolen until the time it was recovered. 2012 tax software downloads Use this amount to refigure your total loss for the year in which the loss was deducted. 2012 tax software downloads   If your refigured loss is less than the loss you deducted, you generally have to report the difference as income in the recovery year. 2012 tax software downloads But report the difference only up to the amount of the loss that reduced your tax. 2012 tax software downloads For more information on the amount to report, see Recoveries in Publication 525. 2012 tax software downloads Figuring Decrease in FMV — Items To Consider To figure the decrease in FMV because of a casualty or theft, you generally need a competent appraisal. 2012 tax software downloads However, other measures also can be used to establish certain decreases. 2012 tax software downloads See Appraisal and Cost of cleaning up or making repairs , next. 2012 tax software downloads Appraisal. 2012 tax software downloads   An appraisal to determine the difference between the FMV of the property immediately before a casualty or theft and immediately afterwards should be made by a competent appraiser. 2012 tax software downloads The appraiser must recognize the effects of any general market decline that may occur along with the casualty. 2012 tax software downloads This information is needed to limit any deduction to the actual loss resulting from damage to the property. 2012 tax software downloads   Several factors are important in evaluating the accuracy of an appraisal, including the following. 2012 tax software downloads The appraiser's familiarity with your property before and after the casualty or theft. 2012 tax software downloads The appraiser's knowledge of sales of comparable property in the area. 2012 tax software downloads The appraiser's knowledge of conditions in the area of the casualty. 2012 tax software downloads The appraiser's method of appraisal. 2012 tax software downloads You may be able to use an appraisal that you used to get a federal loan (or a federal loan guarantee) as the result of a federally declared disaster to establish the amount of your disaster loss. 2012 tax software downloads For more information on disasters, see Disaster Area Losses, later. 2012 tax software downloads Cost of cleaning up or making repairs. 2012 tax software downloads   The cost of repairing damaged property is not part of a casualty loss. 2012 tax software downloads Neither is the cost of cleaning up after a casualty. 2012 tax software downloads But you can use the cost of cleaning up or of making repairs after a casualty as a measure of the decrease in FMV if you meet all the following conditions. 2012 tax software downloads The repairs are actually made. 2012 tax software downloads The repairs are necessary to bring the property back to its condition before the casualty. 2012 tax software downloads The amount spent for repairs is not excessive. 2012 tax software downloads The repairs take care of the damage only. 2012 tax software downloads The value of the property after the repairs is not, due to the repairs, more than the value of the property before the casualty. 2012 tax software downloads Landscaping. 2012 tax software downloads   The cost of restoring landscaping to its original condition after a casualty may indicate the decrease in FMV. 2012 tax software downloads You may be able to measure your loss by what you spend on the following. 2012 tax software downloads Removing destroyed or damaged trees and shrubs, minus any salvage you receive. 2012 tax software downloads Pruning and other measures taken to preserve damaged trees and shrubs. 2012 tax software downloads Replanting necessary to restore the property to its approximate value before the casualty. 2012 tax software downloads Car value. 2012 tax software downloads   Books issued by various automobile organizations that list your car may be useful in figuring the value of your car. 2012 tax software downloads You can use the books' retail values and modify them by factors such as the mileage and condition of your car to figure its value. 2012 tax software downloads The prices are not official, but they may be useful in determining value and suggesting relative prices for comparison with current sales and offerings in your area. 2012 tax software downloads If your car is not listed in the books, determine its value from other sources. 2012 tax software downloads A dealer's offer for your car as a trade-in on a new car is not usually a measure of its true value. 2012 tax software downloads Figuring Decrease in FMV — Items Not To Consider You generally should not consider the following items when attempting to establish the decrease in FMV of your property. 2012 tax software downloads Cost of protection. 2012 tax software downloads   The cost of protecting your property against a casualty or theft is not part of a casualty or theft loss. 2012 tax software downloads The amount you spend on insurance or to board up your house against a storm is not part of your loss. 2012 tax software downloads If the property is business property, these expenses are deductible as business expenses. 2012 tax software downloads   If you make permanent improvements to your property to protect it against a casualty or theft, add the cost of these improvements to your basis in the property. 2012 tax software downloads An example would be the cost of a dike to prevent flooding. 2012 tax software downloads Exception. 2012 tax software downloads   You cannot increase your basis in the property by, or deduct as a business expense, any expenditures you made with respect to qualified disaster mitigation payments (discussed later under Disaster Area Losses ). 2012 tax software downloads Related expenses. 2012 tax software downloads   The incidental expenses due to a casualty or theft, such as expenses for the treatment of personal injuries, for temporary housing, or for a rental car, are not part of your casualty or theft loss. 2012 tax software downloads However, they may be deductible as business expenses if the damaged or stolen property is business property. 2012 tax software downloads Replacement cost. 2012 tax software downloads   The cost of replacing stolen or destroyed property is not part of a casualty or theft loss. 2012 tax software downloads Example. 2012 tax software downloads You bought a new chair 4 years ago for $300. 2012 tax software downloads In April, a fire destroyed the chair. 2012 tax software downloads You estimate that it would cost $500 to replace it. 2012 tax software downloads If you had sold the chair before the fire, you estimate that you could have received only $100 for it because it was 4 years old. 2012 tax software downloads The chair was not insured. 2012 tax software downloads Your loss is $100, the FMV of the chair before the fire. 2012 tax software downloads It is not $500, the replacement cost. 2012 tax software downloads Sentimental value. 2012 tax software downloads   Do not consider sentimental value when determining your loss. 2012 tax software downloads If a family portrait, heirloom, or keepsake is damaged, destroyed, or stolen, you must base your loss on its FMV, as limited by your adjusted basis in the property. 2012 tax software downloads Decline in market value of property in or near casualty area. 2012 tax software downloads   A decrease in the value of your property because it is in or near an area that suffered a casualty, or that might again suffer a casualty, is not to be taken into consideration. 2012 tax software downloads You have a loss only for actual casualty damage to your property. 2012 tax software downloads However, if your home is in a federally declared disaster area, see Disaster Area Losses , later. 2012 tax software downloads Costs of photographs and appraisals. 2012 tax software downloads   Photographs taken after a casualty will be helpful in establishing the condition and value of the property after it was damaged. 2012 tax software downloads Photographs showing the condition of the property after it was repaired, restored, or replaced may also be helpful. 2012 tax software downloads   Appraisals are used to figure the decrease in FMV because of a casualty or theft. 2012 tax software downloads See Appraisal , earlier, under Figuring Decrease in FMV — Items To Consider, for information about appraisals. 2012 tax software downloads   The costs of photographs and appraisals used as evidence of the value and condition of property damaged as a result of a casualty are not a part of the loss. 2012 tax software downloads They are expenses in determining your tax liability. 2012 tax software downloads You can claim these costs as a miscellaneous itemized deduction subject to the 2%-of-adjusted-gross-income limit on Schedule A (Form 1040). 2012 tax software downloads Adjusted Basis The measure of your investment in the property you own is its basis. 2012 tax software downloads For property you buy, your basis is usually its cost to you. 2012 tax software downloads For property you acquire in some other way, such as inheriting it, receiving it as a gift, or getting it in a nontaxable exchange, you must figure your basis in another way, as explained in Publication 551. 2012 tax software downloads If you inherited the property from someone who died in 2010 and the executor of the decedent's estate made the election to file Form 8939, refer to the information provided by the executor or see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010. 2012 tax software downloads Adjustments to basis. 2012 tax software downloads    While you own the property, various events may take place that change your basis. 2012 tax software downloads Some events, such as additions or permanent improvements to the property, increase basis. 2012 tax software downloads Others, such as earlier casualty losses and depreciation deductions, decrease basis. 2012 tax software downloads When you add the increases to the basis and subtract the decreases from the basis, the result is your adjusted basis. 2012 tax software downloads See Publication 551 for more information on figuring the basis of your property. 2012 tax software downloads Insurance and Other Reimbursements If you receive an insurance or other type of reimbursement, you must subtract the reimbursement when you figure your loss. 2012 tax software downloads You do not have a casualty or theft loss to the extent you are reimbursed. 2012 tax software downloads If you expect to be reimbursed for part or all of your loss, you must subtract the expected reimbursement when you figure your loss. 2012 tax software downloads You must reduce your loss even if you do not receive payment until a later tax year. 2012 tax software downloads See Reimbursement Received After Deducting Loss , later. 2012 tax software downloads Failure to file a claim for reimbursement. 2012 tax software downloads   If your property is covered by insurance, you must file a timely insurance claim for reimbursement of your loss. 2012 tax software downloads Otherwise, you cannot deduct this loss as a casualty or theft. 2012 tax software downloads The portion of the loss usually not covered by insurance (for example, a deductible) is not subject to this rule. 2012 tax software downloads Example. 2012 tax software downloads You have a car insurance policy with a $1,000 deductible. 2012 tax software downloads Because your insurance did not cover the first $1,000 of an auto collision, the $1,000 would be deductible (subject to the $100 and 10% rules, discussed later). 2012 tax software downloads This is true, even if you do not file an insurance claim, because your insurance policy would never have reimbursed you for the deductible. 2012 tax software downloads Types of Reimbursements The most common type of reimbursement is an insurance payment for your stolen or damaged property. 2012 tax software downloads Other types of reimbursements are discussed next. 2012 tax software downloads Also see the Instructions for Form 4684. 2012 tax software downloads Employer's emergency disaster fund. 2012 tax software downloads   If you receive money from your employer's emergency disaster fund and you must use that money to rehabilitate or replace property on which you are claiming a casualty loss deduction, you must take that money into consideration in computing the casualty loss deduction. 2012 tax software downloads Take into consideration only the amount you used to replace your destroyed or damaged property. 2012 tax software downloads Example. 2012 tax software downloads Your home was extensively damaged by a tornado. 2012 tax software downloads Your loss after reimbursement from your insurance company was $10,000. 2012 tax software downloads Your employer set up a disaster relief fund for its employees. 2012 tax software downloads Employees receiving money from the fund had to use it to rehabilitate or replace their damaged or destroyed property. 2012 tax software downloads You received $4,000 from the fund and spent the entire amount on repairs to your home. 2012 tax software downloads In figuring your casualty loss, you must reduce your unreimbursed loss ($10,000) by the $4,000 you received from your employer's fund. 2012 tax software downloads Your casualty loss before applying the deduction limits (discussed later) is $6,000. 2012 tax software downloads Cash gifts. 2012 tax software downloads   If you receive excludable cash gifts as a disaster victim and there are no limits on how you can use the money, you do not reduce your casualty loss by these excludable cash gifts. 2012 tax software downloads This applies even if you use the money to pay for repairs to property damaged in the disaster. 2012 tax software downloads Example. 2012 tax software downloads Your home was damaged by a hurricane. 2012 tax software downloads Relatives and neighbors made cash gifts to you that were excludable from your income. 2012 tax software downloads You used part of the cash gifts to pay for repairs to your home. 2012 tax software downloads There were no limits or restrictions on how you could use the cash gifts. 2012 tax software downloads It was an excludable gift, so the money you received and used to pay for repairs to your home does not reduce your casualty loss on the damaged home. 2012 tax software downloads Insurance payments for living expenses. 2012 tax software downloads   You do not reduce your casualty loss by insurance payments you receive to cover living expenses in either of the following situations. 2012 tax software downloads You lose the use of your main home because of a casualty. 2012 tax software downloads Government authorities do not allow you access to your main home because of a casualty or threat of one. 2012 tax software downloads Inclusion in income. 2012 tax software downloads   If these insurance payments are more than the temporary increase in your living expenses, you must include the excess in your income. 2012 tax software downloads Report this amount on Form 1040, line 21. 2012 tax software downloads However, if the casualty occurs in a federally declared disaster area, none of the insurance payments are taxable. 2012 tax software downloads See Qualified disaster relief payments , later, under Disaster Area Losses. 2012 tax software downloads   A temporary increase in your living expenses is the difference between the actual living expenses you and your family incurred during the period you could not use your home and your normal living expenses for that period. 2012 tax software downloads Actual living expenses are the reasonable and necessary expenses incurred because of the loss of your main home. 2012 tax software downloads Generally, these expenses include the amounts you pay for the following. 2012 tax software downloads Renting suitable housing. 2012 tax software downloads Transportation. 2012 tax software downloads Food. 2012 tax software downloads Utilities. 2012 tax software downloads Miscellaneous services. 2012 tax software downloads Normal living expenses consist of these same expenses that you would have incurred but did not because of the casualty or the threat of one. 2012 tax software downloads Example. 2012 tax software downloads As a result of a fire, you vacated your apartment for a month and moved to a motel. 2012 tax software downloads You normally pay $525 a month for rent. 2012 tax software downloads None was charged for the month the apartment was vacated. 2012 tax software downloads Your motel rent for this month was $1,200. 2012 tax software downloads You normally pay $200 a month for food. 2012 tax software downloads Your food expenses for the month you lived in the motel were $400. 2012 tax software downloads You received $1,100 from your insurance company to cover your living expenses. 2012 tax software downloads You determine the payment you must include in income as follows. 2012 tax software downloads 1. 2012 tax software downloads Insurance payment for living expenses $1,100 2. 2012 tax software downloads Actual expenses during the month you are unable to use your home because of the fire $1,600   3. 2012 tax software downloads Normal living expenses 725   4. 2012 tax software downloads Temporary increase in living expenses: Subtract line 3  from line 2 875 5. 2012 tax software downloads Amount of payment includible in income: Subtract line 4 from line 1 $ 225 Tax year of inclusion. 2012 tax software downloads   You include the taxable part of the insurance payment in income for the year you regain the use of your main home or, if later, for the year you receive the taxable part of the insurance payment. 2012 tax software downloads Example. 2012 tax software downloads Your main home was destroyed by a tornado in August 2011. 2012 tax software downloads You regained use of your home in November 2012. 2012 tax software downloads The insurance payments you received in 2011 and 2012 were $1,500 more than the temporary increase in your living expenses during those years. 2012 tax software downloads You include this amount in income on your 2012 Form 1040. 2012 tax software downloads If, in 2013, you receive further payments to cover the living expenses you had in 2011 and 2012, you must include those payments in income on your 2013 Form 1040. 2012 tax software downloads Disaster relief. 2012 tax software downloads   Food, medical supplies, and other forms of assistance you receive do not reduce your casualty loss, unless they are replacements for lost or destroyed property. 2012 tax software downloads Table 2. 2012 tax software downloads Deduction Limit Rules for Personal-Use and Employee Property       $100 Rule 10% Rule 2% Rule General Application You must reduce each casualty or theft loss by $100 when figuring your deduction. 2012 tax software downloads Apply this rule to personal-use property after you have figured the amount of your loss. 2012 tax software downloads You must reduce your total casualty or theft loss by 10% of your adjusted gross income. 2012 tax software downloads Apply this rule to personal-use property after you reduce each loss by $100 (the $100 rule). 2012 tax software downloads You must reduce your total casualty or theft loss by 2% of your adjusted gross income. 2012 tax software downloads Apply this rule to property you used in performing services as an employee after you have figured the amount of your loss and added it to your job expenses and most other miscellaneous itemized deductions. 2012 tax software downloads Single Event Apply this rule only once, even if many pieces of property are affected. 2012 tax software downloads Apply this rule only once, even if many pieces of property are affected. 2012 tax software downloads Apply this rule only once, even if many pieces of property are affected. 2012 tax software downloads More Than One Event Apply to the loss from each event. 2012 tax software downloads Apply to the total of all your losses from all events. 2012 tax software downloads Apply to the total of all your losses from all events. 2012 tax software downloads More Than One Person— With Loss From the   Same Event  (other than a married couple  filing jointly) Apply separately to each person. 2012 tax software downloads Apply separately to each person. 2012 tax software downloads Apply separately to each person. 2012 tax software downloads Married Couple—  With Loss From the  Same Event Filing Joint Return Apply as if you were one person. 2012 tax software downloads Apply as if you were one person. 2012 tax software downloads Apply as if you were one person. 2012 tax software downloads Filing Separate Return Apply separately to each spouse. 2012 tax software downloads Apply separately to each spouse. 2012 tax software downloads Apply separately to each spouse. 2012 tax software downloads More Than One Owner (other than a married couple filing jointly) Apply separately to each owner of jointly owned property. 2012 tax software downloads Apply separately to each owner of jointly owned property. 2012 tax software downloads Apply separately to each owner of jointly owned property. 2012 tax software downloads    Qualified disaster relief payments you receive for expenses you incurred as a result of a federally declared disaster, are not taxable income to you. 2012 tax software downloads For more information, see Qualified disaster relief payments under Disaster Area Losses, later. 2012 tax software downloads   Disaster unemployment assistance payments are unemployment benefits that are taxable. 2012 tax software downloads   Generally, disaster relief grants received under the Robert T. 2012 tax software downloads Stafford Disaster Relief and Emergency Assistance Act are not included in your income. 2012 tax software downloads See Federal disaster relief grants , later, under Disaster Area Losses. 2012 tax software downloads Loan proceeds. 2012 tax software downloads   Do not reduce your casualty loss by loan proceeds you use to rehabilitate or replace property on which you are claiming a casualty loss deduction. 2012 tax software downloads If you have a federal loan that is canceled (forgiven), see Federal loan canceled , later, under Disaster Area Losses. 2012 tax software downloads Reimbursement Received After Deducting Loss If you figured your casualty or theft loss using the amount of your expected reimbursement, you may have to adjust your tax return for the tax year in which you get your actual reimbursement. 2012 tax software downloads This section explains the adjustment you may have to make. 2012 tax software downloads Actual reimbursement less than expected. 2012 tax software downloads   If you later receive less reimbursement than you expected, include that difference as a loss with your other losses (if any) on your return for the year in which you can reasonably expect no more reimbursement. 2012 tax software downloads Example. 2012 tax software downloads Your personal car had a FMV of $2,000 when it was destroyed in a collision with another car in 2012. 2012 tax software downloads The accident was due to the negligence of the other driver. 2012 tax software downloads At the end of 2012, there was a reasonable prospect that the owner of the other car would reimburse you in full. 2012 tax software downloads You did not have a deductible loss in 2012. 2012 tax software downloads In January 2013, the court awards you a judgment of $2,000. 2012 tax software downloads However, in July it becomes apparent that you will be unable to collect any amount from the other driver. 2012 tax software downloads Since this is your only casualty or theft loss, you can deduct the loss in 2013 that is figured by applying the Deduction Limits (discussed later). 2012 tax software downloads Actual reimbursement more than expected. 2012 tax software downloads   If you later receive more reimbursement than you expected, after you have claimed a deduction for the loss, you may have to include the extra reimbursement in your income for the year you receive it. 2012 tax software downloads However, if any part of the original deduction did not reduce your tax for the earlier year, do not include that part of the reimbursement in your income. 2012 tax software downloads You do not refigure your tax for the year you claimed the deduction. 2012 tax software downloads See Recoveries in Publication 525 to find out how much extra reimbursement to include in income. 2012 tax software downloads Example. 2012 tax software downloads In 2012, a hurricane destroyed your motorboat. 2012 tax software downloads Your loss was $3,000, and you estimated that your insurance would cover $2,500 of it. 2012 tax software downloads You did not itemize deductions on your 2012 return, so you could not deduct the loss. 2012 tax software downloads When the insurance company reimburses you for the loss, you do not report any of the reimbursement as income. 2012 tax software downloads This is true even if it is for the full $3,000 because you did not deduct the loss on your 2012 return. 2012 tax software downloads The loss did not reduce your tax. 2012 tax software downloads    If the total of all the reimbursements you receive is more than your adjusted basis in the destroyed or stolen property, you will have a gain on the casualty or theft. 2012 tax software downloads If you have already taken a deduction for a loss and you receive the reimbursement in a later year, you may have to include the gain in your income for the later year. 2012 tax software downloads Include the gain as ordinary income up to the amount of your deduction that reduced your tax for the earlier year. 2012 tax software downloads You may be able to postpone reporting any remaining gain as explained under Postponement of Gain, later. 2012 tax software downloads Actual reimbursement same as expected. 2012 tax software downloads   If you receive exactly the reimbursement you expected to receive, you do not have to include any of the reimbursement in your income and you cannot deduct any additional loss. 2012 tax software downloads Example. 2012 tax software downloads In December 2013, you had a collision while driving your personal car. 2012 tax software downloads Repairs to the car cost $950. 2012 tax software downloads You had $100 deductible collision insurance. 2012 tax software downloads Your insurance company agreed to reimburse you for the rest of the damage. 2012 tax software downloads Because you expected a reimbursement from the insurance company, you did not have a casualty loss deduction in 2013. 2012 tax software downloads Due to the $100 rule, you cannot deduct the $100 you paid as the deductible. 2012 tax software downloads When you receive the $850 from the insurance company in 2014, do not report it as income. 2012 tax software downloads Deduction Limits After you have figured your casualty or theft loss, you must figure how much of the loss you can deduct. 2012 tax software downloads The deduction for casualty and theft losses of employee property and personal-use property is limited. 2012 tax software downloads A loss on employee property is subject to the 2% rule, discussed next. 2012 tax software downloads With certain exceptions, a loss on property you own for your personal use is subject to the $100 and 10% rules, discussed later. 2012 tax software downloads The 2%, $100, and 10% rules are also summarized in Table 2 . 2012 tax software downloads Losses on business property (other than employee property) and income-producing property are not subject to these rules. 2012 tax software downloads However, if your casualty or theft loss involved a home you used for business or rented out, your deductible loss may be limited. 2012 tax software downloads See the Instructions for Form 4684, Section B. 2012 tax software downloads If the casualty or theft loss involved property used in a passive activity, see Form 8582, Passive Activity Loss Limitations, and its instructions. 2012 tax software downloads 2% Rule The casualty and theft loss deduction for employee property, when added to your job expenses and most other miscellaneous itemized deductions on Schedule A (Form 1040) or Form 1040NR, Schedule A, must be reduced by 2% of your adjusted gross income. 2012 tax software downloads Employee property is property used in performing services as an employee. 2012 tax software downloads $100 Rule After you have figured your casualty or theft loss on personal-use property, as discussed earlier, you must reduce that loss by $100. 2012 tax software downloads This reduction applies to each total casualty or theft loss. 2012 tax software downloads It does not matter how many pieces of property are involved in an event. 2012 tax software downloads Only a single $100 reduction applies. 2012 tax software downloads Example. 2012 tax software downloads You have $750 deductible collision insurance on your car. 2012 tax software downloads The car is damaged in a collision. 2012 tax software downloads The insurance company pays you for the damage minus the $750 deductible. 2012 tax software downloads The amount of the casualty loss is based solely on the deductible. 2012 tax software downloads The casualty loss is $650 ($750 − $100) because the first $100 of a casualty loss on personal-use property is not deductible. 2012 tax software downloads Single event. 2012 tax software downloads   Generally, events closely related in origin cause a single casualty. 2012 tax software downloads It is a single casualty when the damage is from two or more closely related causes, such as wind and flood damage caused by the same storm. 2012 tax software downloads A single casualty may also damage two or more pieces of property, such as a hailstorm that damages both your home and your car parked in your driveway. 2012 tax software downloads Example 1. 2012 tax software downloads A thunderstorm destroyed your pleasure boat. 2012 tax software downloads You also lost some boating equipment in the storm. 2012 tax software downloads Your loss was $5,000 on the boat and $1,200 on the equipment. 2012 tax software downloads Your insurance company reimbursed you $4,500 for the damage to your boat. 2012 tax software downloads You had no insurance coverage on the equipment. 2012 tax software downloads Your casualty loss is from a single event and the $100 rule applies once. 2012 tax software downloads Figure your loss before applying the 10% rule (discussed later) as follows. 2012 tax software downloads     Boat Equipment 1. 2012 tax software downloads Loss $5,000 $1,200 2. 2012 tax software downloads Subtract insurance 4,500 -0- 3. 2012 tax software downloads Loss after reimbursement $ 500 $1,200 4. 2012 tax software downloads Total loss $1,700 5. 2012 tax software downloads Subtract $100 100 6. 2012 tax software downloads Loss before 10% rule $1,600 Example 2. 2012 tax software downloads Thieves broke into your home in January and stole a ring and a fur coat. 2012 tax software downloads You had a loss of $200 on the ring and $700 on the coat. 2012 tax software downloads This is a single theft. 2012 tax software downloads The $100 rule applies to the total $900 loss. 2012 tax software downloads Example 3. 2012 tax software downloads In September, hurricane winds blew the roof off your home. 2012 tax software downloads Flood waters caused by the hurricane further damaged your home and destroyed your furniture and personal car. 2012 tax software downloads This is considered a single casualty. 2012 tax software downloads The $100 rule is applied to your total loss from the flood waters and the wind. 2012 tax software downloads More than one loss. 2012 tax software downloads   If you have more than one casualty or theft loss during your tax year, you must reduce each loss by $100. 2012 tax software downloads Example. 2012 tax software downloads Your family car was damaged in an accident in January. 2012 tax software downloads Your loss after the insurance reimbursement was $75. 2012 tax software downloads In February, your car was damaged in another accident. 2012 tax software downloads This time your loss after the insurance reimbursement was $90. 2012 tax software downloads Apply the $100 rule to each separate casualty loss. 2012 tax software downloads Since neither accident resulted in a loss of over $100, you are not entitled to any deduction for these accidents. 2012 tax software downloads More than one person. 2012 tax software downloads   If two or more individuals (other than a husband and wife filing a joint return) have losses from the same casualty or theft, the $100 rule applies separately to each individual. 2012 tax software downloads Example. 2012 tax software downloads A fire damaged your house and also damaged the personal property of your house guest. 2012 tax software downloads You must reduce your loss by $100. 2012 tax software downloads Your house guest must reduce his or her loss by $100. 2012 tax software downloads Married taxpayers. 2012 tax software downloads   If you and your spouse file a joint return, you are treated as one individual in applying the $100 rule. 2012 tax software downloads It does not matter whether you own the property jointly or separately. 2012 tax software downloads   If you and your spouse have a casualty or theft loss and you file separate returns, each of you must reduce your loss by $100. 2012 tax software downloads This is true even if you own the property jointly. 2012 tax software downloads If one spouse owns the property, only that spouse can figure a loss deduction on a separate return. 2012 tax software downloads   If the casualty or theft loss is on property you own as tenants by the entirety, each of you can figure your deduction on only one-half of the loss on separate returns. 2012 tax software downloads Neither of you can figure your deduction on the entire loss on a separate return. 2012 tax software downloads Each of you must reduce the loss by $100. 2012 tax software downloads More than one owner. 2012 tax software downloads   If two or more individuals (other than a husband and wife filing a joint return) have a loss on property jointly owned, the $100 rule applies separately to each. 2012 tax software downloads For example, if two sisters live together in a home they own jointly and they have a casualty loss on the home, the $100 rule applies separately to each sister. 2012 tax software downloads 10% Rule You must reduce the total of all your casualty or theft losses on personal-use property by 10% of your adjusted gross income. 2012 tax software downloads Apply this rule after you reduce each loss by $100. 2012 tax software downloads For more information, see the Form 4684 instructions. 2012 tax software downloads If you have both gains and losses from casualties or thefts, see Gains and losses , later in this discussion. 2012 tax software downloads Example. 2012 tax software downloads In June, you discovered that your house had been burglarized. 2012 tax software downloads Your loss after insurance reimbursement was $2,000. 2012 tax software downloads Your adjusted gross income for the year you discovered the theft is $29,500. 2012 tax software downloads Figure your theft loss as follows. 2012 tax software downloads 1. 2012 tax software downloads Loss after insurance $2,000 2. 2012 tax software downloads Subtract $100 100 3. 2012 tax software downloads Loss after $100 rule $1,900 4. 2012 tax software downloads Subtract 10% of $29,500 AGI $2,950 5. 2012 tax software downloads Theft loss deduction $-0- You do not have a theft loss deduction because your loss ($1,900) is less than 10% of your adjusted gross income ($2,950). 2012 tax software downloads More than one loss. 2012 tax software downloads   If you have more than one casualty or theft loss during your tax year, reduce each loss by any reimbursement and by $100. 2012 tax software downloads Then you must reduce the total of all your losses by 10% of your adjusted gross income. 2012 tax software downloads Example. 2012 tax software downloads In March, you had a car accident that totally destroyed your car. 2012 tax software downloads You did not have collision insurance on your car, so you did not receive any insurance reimbursement. 2012 tax software downloads Your loss on the car was $1,800. 2012 tax software downloads In November, a fire damaged your basement and totally destroyed the furniture, washer, dryer, and other items you had stored there. 2012 tax software downloads Your loss on the basement items after reimbursement was $2,100. 2012 tax software downloads Your adjusted gross income for the year that the accident and fire occurred is $25,000. 2012 tax software downloads You figure your casualty loss deduction as follows. 2012 tax software downloads     Car Basement 1. 2012 tax software downloads Loss $1,800 $2,100 2. 2012 tax software downloads Subtract $100 per incident 100 100 3. 2012 tax software downloads Loss after $100 rule $1,700 $2,000 4. 2012 tax software downloads Total loss $3,700 5. 2012 tax software downloads Subtract 10% of $25,000 AGI 2,500 6. 2012 tax software downloads Casualty loss deduction $1,200 Married taxpayers. 2012 tax software downloads   If you and your spouse file a joint return, you are treated as one individual in applying the 10% rule. 2012 tax software downloads It does not matter if you own the property jointly or separately. 2012 tax software downloads   If you file separate returns, the 10% rule applies to each return on which a loss is claimed. 2012 tax software downloads More than one owner. 2012 tax software downloads   If two or more individuals (other than husband and wife filing a joint return) have a loss on property that is owned jointly, the 10% rule applies separately to each. 2012 tax software downloads Gains and losses. 2012 tax software downloads   If you have casualty or theft gains as well as losses to personal-use property, you must compare your total gains to your total losses. 2012 tax software downloads Do this after you have reduced each loss by any reimbursements and by $100 but before you have reduced the losses by 10% of your adjusted gross income. 2012 tax software downloads Casualty or theft gains do not include gains you choose to postpone. 2012 tax software downloads See Postponement of Gain, later. 2012 tax software downloads Losses more than gains. 2012 tax software downloads   If your losses are more than your recognized gains, subtract your gains from your losses and reduce the result by 10% of your adjusted gross income. 2012 tax software downloads The rest, if any, is your deductible loss from personal-use property. 2012 tax software downloads Example. 2012 tax software downloads Your theft loss after reducing it by reimbursements and by $100 is $2,700. 2012 tax software downloads Your casualty gain is $700. 2012 tax software downloads Your loss is more than your gain, so you must reduce your $2,000 net loss ($2,700 − $700) by 10% of your adjusted gross income. 2012 tax software downloads Gains more than losses. 2012 tax software downloads   If your recognized gains are more than your losses, subtract your losses from your gains. 2012 tax software downloads The difference is treated as a capital gain and must be reported on Schedule D (Form 1040). 2012 tax software downloads The 10% rule does not apply to your gains. 2012 tax software downloads Example. 2012 tax software downloads Your theft loss is $600 after reducing it by reimbursements and by $100. 2012 tax software downloads Your casualty gain is $1,600. 2012 tax software downloads Because your gain is more than your loss, you must report the $1,000 net gain ($1,600 − $600) on Schedule D (Form 1040). 2012 tax software downloads More information. 2012 tax software downloads   For information on how to figure recognized gains, see Figuring a Gain , later. 2012 tax software downloads Figuring the Deduction Generally, you must figure your loss separately for each item stolen, damaged, or destroyed. 2012 tax software downloads However, a special rule applies to real property you own for personal use. 2012 tax software downloads Real property. 2012 tax software downloads   In figuring a loss to real estate you own for personal use, all improvements (such as buildings and ornamental trees and the land containing the improvements) are considered together. 2012 tax software downloads Example 1. 2012 tax software downloads In June, a fire destroyed your lakeside cottage, which cost $144,800 (including $14,500 for the land) several years ago. 2012 tax software downloads (Your land was not damaged. 2012 tax software downloads ) This was your only casualty or theft loss for the year. 2012 tax software downloads The FMV of the property immediately before the fire was $180,000 ($145,000 for the cottage and $35,000 for the land). 2012 tax software downloads The FMV immediately after the fire was $35,000 (value of the land). 2012 tax software downloads You collected $130,000 from the insurance company. 2012 tax software downloads Your adjusted gross income for the year the fire occurred is $80,000. 2012 tax software downloads Your deduction for the casualty loss is $6,700, figured in the following manner. 2012 tax software downloads 1. 2012 tax software downloads Adjusted basis of the entire property (cost in this example) $144,800 2. 2012 tax software downloads FMV of entire property  before fire $180,000 3. 2012 tax software downloads FMV of entire property after fire 35,000 4. 2012 tax software downloads Decrease in FMV of entire property (line 2 − line 3) $145,000 5. 2012 tax software downloads Loss (smaller of line 1 or line 4) $144,800 6. 2012 tax software downloads Subtract insurance 130,000 7. 2012 tax software downloads Loss after reimbursement $14,800 8. 2012 tax software downloads Subtract $100 100 9. 2012 tax software downloads Loss after $100 rule $14,700 10. 2012 tax software downloads Subtract 10% of $80,000 AGI 8,000 11. 2012 tax software downloads Casualty loss deduction $ 6,700 Example 2. 2012 tax software downloads You bought your home a few years ago. 2012 tax software downloads You paid $150,000 ($10,000 for the land and $140,000 for the house). 2012 tax software downloads You also spent an additional $2,000 for landscaping. 2012 tax software downloads This year a fire destroyed your home. 2012 tax software downloads The fire also damaged the shrubbery and trees in your yard. 2012 tax software downloads The fire was your only casualty or theft loss this year. 2012 tax software downloads Competent appraisers valued the property as a whole at $175,000 before the fire, but only $50,000 after the fire. 2012 tax software downloads Shortly after the fire, the insurance company paid you $95,000 for the loss. 2012 tax software downloads Your adjusted gross income for this year is $70,000. 2012 tax software downloads You figure your casualty loss deduction as follows. 2012 tax software downloads 1. 2012 tax software downloads Adjusted basis of the entire property (cost of land, building, and landscaping) $152,000 2. 2012 tax software downloads FMV of entire property  before fire $175,000 3. 2012 tax software downloads FMV of entire property after fire 50,000 4. 2012 tax software downloads Decrease in FMV of entire property (line 2 − line 3) $125,000 5. 2012 tax software downloads Loss (smaller of line 1 or line 4) $125,000 6. 2012 tax software downloads Subtract insurance 95,000 7. 2012 tax software downloads Loss after reimbursement $30,000 8. 2012 tax software downloads Subtract $100 100 9. 2012 tax software downloads Loss after $100 rule $29,900 10. 2012 tax software downloads Subtract 10% of $70,000 AGI 7,000 11. 2012 tax software downloads Casualty loss deduction $ 22,900 Personal property. 2012 tax software downloads   Personal property is any property that is not real property. 2012 tax software downloads If your personal property is stolen or is damaged or destroyed by a casualty, you must figure your loss separately for each item of property. 2012 tax software downloads Then combine these separate losses to figure the total loss. 2012 tax software downloads Reduce the total loss by $100 and 10% of your adjusted gross income to figure the loss deduction. 2012 tax software downloads Example 1. 2012 tax software downloads In August, a storm destroyed your pleasure boat, which cost $18,500. 2012 tax software downloads This was your only casualty or theft loss for the year. 2012 tax software downloads Its FMV immediately before the storm was $17,000. 2012 tax software downloads You had no insurance, but were able to salvage the motor of the boat and sell it for $200. 2012 tax software downloads Your adjusted gross income for the year the casualty occurred is $70,000. 2012 tax software downloads Although the motor was sold separately, it is part of the boat and not a separate item of property. 2012 tax software downloads You figure your casualty loss deduction as follows. 2012 tax software downloads 1. 2012 tax software downloads Adjusted basis (cost in this example) $18,500 2. 2012 tax software downloads FMV before storm $17,000 3. 2012 tax software downloads FMV after storm 200 4. 2012 tax software downloads Decrease in FMV  (line 2 − line 3) $16,800 5. 2012 tax software downloads Loss (smaller of line 1 or line 4) $16,800 6. 2012 tax software downloads Subtract insurance -0- 7. 2012 tax software downloads Loss after reimbursement $16,800 8. 2012 tax software downloads Subtract $100 100 9. 2012 tax software downloads Loss after $100 rule $16,700 10. 2012 tax software downloads Subtract 10% of $70,000 AGI 7,000 11. 2012 tax software downloads Casualty loss deduction $ 9,700 Example 2. 2012 tax software downloads In June, you were involved in an auto accident that totally destroyed your personal car and your antique pocket watch. 2012 tax software downloads You had bought the car for $30,000. 2012 tax software downloads The FMV of the car just before the accident was $17,500. 2012 tax software downloads Its FMV just after the accident was $180 (scrap value). 2012 tax software downloads Your insurance company reimbursed you $16,000. 2012 tax software downloads Your watch was not insured. 2012 tax software downloads You had purchased it for $250. 2012 tax software downloads Its FMV just before the accident was $500. 2012 tax software downloads Your adjusted gross income for the year the accident occurred is $97,000. 2012 tax software downloads Your casualty loss deduction is zero, figured as follows. 2012 tax software downloads     Car Watch 1. 2012 tax software downloads Adjusted basis (cost) $30,000 $250 2. 2012 tax software downloads FMV before accident $17,500 $500 3. 2012 tax software downloads FMV after accident 180 -0- 4. 2012 tax software downloads Decrease in FMV (line 2 − line 3) $17,320 $500 5. 2012 tax software downloads Loss (smaller of line 1 or line 4) $17,320 $250 6. 2012 tax software downloads Subtract insurance 16,000 -0- 7. 2012 tax software downloads Loss after reimbursement $1,320 $250 8. 2012 tax software downloads Total loss $1,570 9. 2012 tax software downloads Subtract $100 100 10. 2012 tax software downloads Loss after $100 rule $1,470 11. 2012 tax software downloads Subtract 10% of $97,000 AGI 9,700 12. 2012 tax software downloads Casualty loss deduction $ -0- Both real and personal properties. 2012 tax software downloads   When a casualty involves both real and personal properties, you must figure the loss separately for each type of property. 2012 tax software downloads However, you apply a single $100 reduction to the total loss. 2012 tax software downloads Then, you apply the 10% rule to figure the casualty loss deduction. 2012 tax software downloads Example. 2012 tax software downloads In July, a hurricane damaged your home, which cost you $164,000 including land. 2012 tax software downloads The FMV of the property (both building and land) immediately before the storm was $170,000 and its FMV immediately after the storm was $100,000. 2012 tax software downloads Your household furnishings were also damaged. 2012 tax software downloads You separately figured the loss on each damaged household item and arrived at a total loss of $600. 2012 tax software downloads You collected $50,000 from the insurance company for the damage to your home, but your household furnishings were not insured. 2012 tax software downloads Your adjusted gross income for the year the hurricane occurred is $65,000. 2012 tax software downloads You figure your casualty loss deduction from the hurricane in the following manner. 2012 tax software downloads 1. 2012 tax software downloads Adjusted basis of real property (cost in this example) $164,000 2. 2012 tax software downloads FMV of real property before hurricane $170,000 3. 2012 tax software downloads FMV of real property after hurricane 100,000 4. 2012 tax software downloads Decrease in FMV of real property (line 2 − line 3) $70,000 5. 2012 tax software downloads Loss on real property (smaller of line 1 or line 4) $70,000 6. 2012 tax software downloads Subtract insurance 50,000 7. 2012 tax software downloads Loss on real property after reimbursement $20,000 8. 2012 tax software downloads Loss on furnishings $600 9. 2012 tax software downloads Subtract insurance -0- 10. 2012 tax software downloads Loss on furnishings after reimbursement $600 11. 2012 tax software downloads Total loss (line 7 plus line 10) $20,600 12. 2012 tax software downloads Subtract $100 100 13. 2012 tax software downloads Loss after $100 rule $20,500 14. 2012 tax software downloads Subtract 10% of $65,000 AGI 6,500 15. 2012 tax software downloads Casualty loss deduction $14,000 Property used partly for business and partly for personal purposes. 2012 tax software downloads   When property is used partly for personal purposes and partly for business or income-producing purposes, the casualty or theft loss deduction must be figured separately for the personal-use portion and for the business or income-producing portion. 2012 tax software downloads You must figure each loss separately because the losses attributed to these two uses are figured in two different ways. 2012 tax software downloads When figuring each loss, allocate the total cost or basis, the FMV before and after the casualty or theft loss, and the insurance or other reimbursement between the business and personal use of the property. 2012 tax software downloads The $100 rule and the 10% rule apply only to the casualty or theft loss on the personal-use portion of the property. 2012 tax software downloads Example. 2012 tax software downloads You own a building that you constructed on leased land. 2012 tax software downloads You use half of the building for your business and you live in the other half. 2012 tax software downloads The cost of the building was $400,000. 2012 tax software downloads You made no further improvements or additions to it. 2012 tax software downloads A flood in March damaged the entire building. 2012 tax software downloads The FMV of the building was $380,000 immediately before the flood and $320,000 afterwards. 2012 tax software downloads Your insurance company reimbursed you $40,000 for the flood damage. 2012 tax software downloads Depreciation on the business part of the building before the flood totaled $24,000. 2012 tax software downloads Your adjusted gross income for the year the flood occurred is $125,000. 2012 tax software downloads You have a deductible business casualty loss of $10,000. 2012 tax software downloads You do not have a deductible personal casualty loss because of the 10% rule. 2012 tax software downloads You figure your loss as follows. 2012 tax software downloads     Business   Personal     Part   Part 1. 2012 tax software downloads Cost (total $400,000) $200,000   $200,000 2. 2012 tax software downloads Subtract depreciation 24,000   -0- 3. 2012 tax software downloads Adjusted basis $176,000   $200,000 4. 2012 tax software downloads FMV before flood (total $380,000) $190,000   $190,000 5. 2012 tax software downloads FMV after flood (total $320,000) 160,000   160,000 6. 2012 tax software downloads Decrease in FMV  (line 4 − line 5) $30,000   $30,000 7. 2012 tax software downloads Loss (smaller of line 3 or line 6) $30,000   $30,000 8. 2012 tax software downloads Subtract insurance 20,000   20,000 9. 2012 tax software downloads Loss after reimbursement $10,000   $10,000 10. 2012 tax software downloads Subtract $100 on personal-use property -0-   100 11. 2012 tax software downloads Loss after $100 rule $10,000   $9,900 12. 2012 tax software downloads Subtract 10% of $125,000 AGI on personal-use property -0-   12,500 13. 2012 tax software downloads Deductible business loss $10,000     14. 2012 tax software downloads Deductible personal loss $-0- Figuring a Gain If you receive an insurance payment or other reimbursement that is more than your adjusted basis in the destroyed, damaged, or stolen property, you have a gain from the casualty or theft. 2012 tax software downloads Your gain is figured as follows. 2012 tax software downloads The amount you receive (discussed next), minus Your adjusted basis in the property at the time of the casualty or theft. 2012 tax software downloads See Adjusted Basis , earlier, for information on adjusted basis. 2012 tax software downloads Even if the decrease in FMV of your property is smaller than the adjusted basis of your property, use your adjusted basis to figure the gain. 2012 tax software downloads Amount you receive. 2012 tax software downloads   The amount you receive includes any money plus the value of any property you receive minus any expenses you have in obtaining reimbursement. 2012 tax software downloads It also includes any reimbursement used to pay off a mortgage or other lien on the damaged, destroyed, or stolen property. 2012 tax software downloads Example. 2012 tax software downloads A hurricane destroyed your personal residence and the insurance company awarded you $145,000. 2012 tax software downloads You received $140,000 in cash. 2012 tax software downloads The remaining $5,000 was paid directly to the holder of a mortgage on the property. 2012 tax software downloads The amount you received includes the $5,000 reimbursement paid on the mortgage. 2012 tax software downloads Main home destroyed. 2012 tax software downloads   If you have a gain because your main home was destroyed, you generally can exclude the gain from your income as if you had sold or exchanged your home. 2012 tax software downloads You may be able to exclude up to $250,000 of the gain (up to $500,000 if married filing jointly). 2012 tax software downloads To exclude a gain, you generally must have owned and lived in the property as your main home for at least 2 years during the 5-year period ending on the date it was destroyed. 2012 tax software downloads For information on this exclusion, see Publication 523. 2012 tax software downloads If your gain is more than the amount you can exclude, but you buy replacement property, you may be able to postpone reporting the excess gain. 2012 tax software downloads See Postponement of Gain , later. 2012 tax software downloads Reporting a gain. 2012 tax software downloads   You generally must report your gain as income in the year you receive the reimbursement. 2012 tax software downloads However, you do not have to report your gain if you meet certain requirements and choose to postpone reporting the gain according to the rules explained under Postponement of Gain, next. 2012 tax software downloads   For information on how to report a gain, see How To Report Gains and Losses , later. 2012 tax software downloads    If you have a casualty or theft gain on personal-use property that you choose to postpone reporting (as explained next) and you also have another casualty or theft loss on personal-use property, do not consider the gain you are postponing when figuring your casualty or theft loss deduction. 2012 tax software downloads See 10% Rule under Deduction Limits, earlier. 2012 tax software downloads Postponement of Gain Do not report a gain if you receive reimbursement in the form of property similar or related in service or use to the destroyed or stolen property. 2012 tax software downloads Your basis in the new property is generally the same as your adjusted basis in the property it replaces. 2012 tax software downloads You must ordinarily report the gain on your stolen or destroyed property if you receive money or unlike property as reimbursement. 2012 tax software downloads However, you can choose to postpone reporting the gain if you purchase property that is similar or related in service or use to the stolen or destroyed property within a specified replacement period, discussed later. 2012 tax software downloads You also can choose to postpone reporting the gain if you purchase a controlling interest (at least 80%) in a corporation owning property that is similar or related in service or use to the property. 2012 tax software downloads See Controlling interest in a corporation , later. 2012 tax software downloads If you have a gain on damaged property, you can postpone reporting the gain if you spend the reimbursement to restore the property. 2012 tax software downloads To postpone reporting all the gain, the cost of your replacement property must be at least as much as the reimbursement you receive. 2012 tax software downloads If the cost of the replacement property is less than the reimbursement, you must include the gain in your income up to the amount of the unspent reimbursement. 2012 tax software downloads Example. 2012 tax software downloads In 1970, you bought an oceanfront cottage for your personal use at a cost of $18,000. 2012 tax software downloads You made no further improvements or additions to it. 2012 tax software downloads When a storm destroyed the cottage this January, the cottage was worth $250,000. 2012 tax software downloads You received $146,000 from the insurance company in March. 2012 tax software downloads You had a gain of $128,000 ($146,000 − $18,000). 2012 tax software downloads You spent $144,000 to rebuild the cottage. 2012 tax software downloads Since this is less than the insurance proceeds received, you must include $2,000 ($146,000 − $144,000) in your income. 2012 tax software downloads Buying replacement property from a related person. 2012 tax software downloads   You cannot postpone reporting a gain from a casualty or theft if you buy the replacement property from a related person (discussed later). 2012 tax software downloads This rule applies to the following taxpayers. 2012 tax software downloads C corporations. 2012 tax software downloads Partnerships in which more than 50% of the capital or profits interests is owned by C corporations. 2012 tax software downloads All others (including individuals, partnerships — other than those in (2) — and S corporations) if the total realized gain for the tax year on all destroyed or stolen properties on which there are realized gains is more than $100,000. 2012 tax software downloads For casualties and thefts described in (3) above, gains cannot be offset by any losses when determining whether the total gain is more than $100,000. 2012 tax software downloads If the property is owned by a partnership, the $100,000 limit applies to the partnership and each partner. 2012 tax software downloads If the property is owned by an S corporation, the $100,000 limit applies to the S corporation and each shareholder. 2012 tax software downloads Exception. 2012 tax software downloads   This rule does not apply if the related person acquired the property from an unrelated person within the period of time allowed for replacing the destroyed or stolen property. 2012 tax software downloads Related persons. 2012 tax software downloads   Under this rule, related persons include, for example, a parent and child, a brother and sister, a corporation and an individual who owns more than 50% of its outstanding stock, and two partnerships in which the same C corporations own more than 50% of the capital or profits interests. 2012 tax software downloads For more information on related persons, see Nondeductible Loss under Sales and Exchanges Between Related Persons in chapter 2 of Publication 544. 2012 tax software downloads Death of a taxpayer. 2012 tax software downloads   If a taxpayer dies after having a gain but before buying replacement property, the gain must be reported for the year in which the decedent realized the gain. 2012 tax software downloads The executor of the estate or the person succeeding to the funds from the casualty or theft cannot postpone reporting the gain by buying replacement property. 2012 tax software downloads Replacement Property You must buy replacement property for the specific purpose of replacing your destroyed or stolen property. 2012 tax software downloads Property you acquire as a gift or inheritance does not qualify. 2012 tax software downloads You do not have to use the same funds you receive as
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Filing Information For Estate & Gift Taxes

Filing Estate and Gift Tax Returns
Where to File and Contact Information for Estate and Gift Tax

Gift Tax
The gift tax applies to the transfer by gift of any property.

Estate Tax
Estate tax may apply to your taxable estate at your death.

Estate and Gift Taxes
General information on when these taxes apply and when they do not.

Forms and Publications - Estate and Gift Tax
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The 2012 Tax Software Downloads

2012 tax software downloads Publication 535 - Introductory Material Table of Contents IntroductionOrdering forms and publications. 2012 tax software downloads Tax questions. 2012 tax software downloads Future Developments What's New for 2013 What's New for 2014 Reminders Introduction This publication discusses common business expenses and explains what is and is not deductible. 2012 tax software downloads The general rules for deducting business expenses are discussed in the opening chapter. 2012 tax software downloads The chapters that follow cover specific expenses and list other publications and forms you may need. 2012 tax software downloads Comments and suggestions. 2012 tax software downloads   We welcome your comments about this publication and your suggestions for future editions. 2012 tax software downloads   You can send your comments to: Internal Revenue Service Tax Forms and Publications SE:W:CAR:MP:TFP 1111 Constitution Ave. 2012 tax software downloads NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. 2012 tax software downloads Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 2012 tax software downloads   You can send us comments from www. 2012 tax software downloads irs. 2012 tax software downloads gov/formspubs/. 2012 tax software downloads Click on “More Information” and then on “Give us feedback. 2012 tax software downloads ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax publications. 2012 tax software downloads Ordering forms and publications. 2012 tax software downloads   Visit www. 2012 tax software downloads irs. 2012 tax software downloads gov/formspubs/ to download forms and publications, call 1-800-829-3676, or write to the address below and receive a response within 10 days after your request is received. 2012 tax software downloads Internal Revenue Service 1201 N. 2012 tax software downloads Mitsubishi Motorway Bloomington, IL 61705-6613 We cannot answer tax questions sent to either the “Comments and suggestions” or “Ordering forms and publications” address. 2012 tax software downloads Tax questions. 2012 tax software downloads   If you have a tax-related question, please go to Help With Tax Questions on IRS. 2012 tax software downloads gov. 2012 tax software downloads If you've looked around our site and still didn't find the answer to your general tax question, please call our toll-free tax assistance line at 1-800-829-1040 for individual tax questions or 1-800-829-4933 for business tax questions. 2012 tax software downloads Future Developments For the latest information about developments related to Publication 535, such as legislation enacted after it was published, go to www. 2012 tax software downloads irs. 2012 tax software downloads gov/pub535. 2012 tax software downloads What's New for 2013 The following items highlight some changes in the tax law for 2013. 2012 tax software downloads Optional safe harbor method to determine the business use of a home deduction. 2012 tax software downloads  Beginning in 2013, you can use the optional safe harbor method to determine the deduction for the business use of your home. 2012 tax software downloads For more information, see chapter 1. 2012 tax software downloads Standard mileage rate. 2012 tax software downloads  Beginning in 2013, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck for each mile of business use is 56. 2012 tax software downloads 5 cents per mile. 2012 tax software downloads For more information, see chapter 11. 2012 tax software downloads Additional Medicare Tax. 2012 tax software downloads  Beginning in 2013, a 0. 2012 tax software downloads 9% Additional Medicare Tax applies to Medicare wages, railroad retirement (RRTA) compensation, and self-employment income that are more than: $125,000 if married filing separately, $250,000 if married filing jointly, or $200,000 if single, head of household, or qualifying widow(er) with dependent child. 2012 tax software downloads Medicare wages and self-employment income are combined to determine if your income exceeds the threshold. 2012 tax software downloads RRTA compensation should be separately compared to the threshold. 2012 tax software downloads For more information, see chapter 5 or visit www. 2012 tax software downloads irs. 2012 tax software downloads gov and enter the following words in the search box: Additional Medicare Tax. 2012 tax software downloads Retiree drug subsidy. 2012 tax software downloads  Beginning in 2013, sponsors of certain qualified retiree prescription drug plans must account for the subsidy received by reducing the amount of qualified retiree prescription drug plans expense by the subsidy received (taking into account the taxpayer's accounting method). 2012 tax software downloads For more information, visit www. 2012 tax software downloads irs. 2012 tax software downloads gov and enter the following words in the search box: Retiree drug subsidy. 2012 tax software downloads What's New for 2014 The following item highlights a change in the tax law for 2014. 2012 tax software downloads Standard mileage rate. 2012 tax software downloads  Beginning in 2014, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck for each mile of business use is 56 cents per mile. 2012 tax software downloads Film and television productions costs. 2012 tax software downloads  The election to expense film and television production costs does not apply to productions that begin in 2014. 2012 tax software downloads For more information, see chapter 7. 2012 tax software downloads Reminders The following reminders and other items may help you file your tax return. 2012 tax software downloads IRS e-file (Electronic Filing) You can file your tax returns electronically using an IRS e-file option. 2012 tax software downloads The benefits of IRS e-file include faster refunds, increased accuracy, and acknowledgment of IRS receipt of your return. 2012 tax software downloads You can use one of the following IRS e-file options. 2012 tax software downloads Use an authorized IRS e-file provider. 2012 tax software downloads Use a personal computer. 2012 tax software downloads Visit a Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) site. 2012 tax software downloads For details on these fast filing methods, see your income tax package. 2012 tax software downloads Form 1099 MISC. 2012 tax software downloads  File Form 1099-MISC, Miscellaneous Income, for each person to whom you have paid during the year in the course of your trade or business at least $600 in rents, services (including parts and materials), prizes and awards, other income payments, medical and health care payments, and crop insurance proceeds. 2012 tax software downloads See the Instructions for Form 1099-MISC for more information and additional reporting requirements. 2012 tax software downloads Photographs of missing children. 2012 tax software downloads  The Internal Revenue Service is a proud partner with the National Center for Missing & Exploited Children. 2012 tax software downloads Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. 2012 tax software downloads You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) (24-hours a day, 7 days a week) if you recognize a child. 2012 tax software downloads Prev  Up  Next   Home   More Online Publications