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2013 State Income Tax Form

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2013 State Income Tax Form

2013 state income tax form Internal Revenue Bulletin:  2009-36  September 8, 2009  Rev. 2013 state income tax form Proc. 2013 state income tax form 2009-37 Table of Contents SECTION 1. 2013 state income tax form PURPOSE SECTION 2. 2013 state income tax form BACKGROUND SECTION 3. 2013 state income tax form SCOPE SECTION 4. 2013 state income tax form ELECTION PROCEDURES SECTION 5. 2013 state income tax form REQUIRED INFORMATION STATEMENT SECTION 6. 2013 state income tax form EFFECTIVE DATE SECTION 7. 2013 state income tax form TRANSITION RULE SECTION 8. 2013 state income tax form PAPERWORK REDUCTION ACT DRAFTING INFORMATION SECTION 1. 2013 state income tax form PURPOSE . 2013 state income tax form 01 This revenue procedure provides the exclusive procedures for taxpayers to make an election to defer recognizing discharge of indebtedness income (“COD income”) under § 108(i) of the Internal Revenue Code. 2013 state income tax form . 2013 state income tax form 02 This revenue procedure also requires taxpayers making the § 108(i) election to provide additional information on returns beginning with the taxable year following the taxable year for which the taxpayer makes the election. 2013 state income tax form This revenue procedure describes the time and manner of providing this additional information. 2013 state income tax form . 2013 state income tax form 03 The Internal Revenue Service and Treasury Department intend to issue additional guidance under § 108(i) that may include regulations addressing matters in this revenue procedure. 2013 state income tax form Taxpayers should be aware that these regulations may be retroactive. 2013 state income tax form See § 7805(b)(2). 2013 state income tax form This revenue procedure may be modified to provide procedures consistent with additional guidance. 2013 state income tax form SECTION 2. 2013 state income tax form BACKGROUND . 2013 state income tax form 01 Section 108(i), Generally. 2013 state income tax form Section 108(i) was added to the Code by § 1231 of the American Recovery and Reinvestment Tax Act of 2009, Pub. 2013 state income tax form L. 2013 state income tax form No. 2013 state income tax form 111-5, 123 Stat. 2013 state income tax form 338. 2013 state income tax form In general, § 108(i) provides that, at the election of a taxpayer, COD income realized in connection with a reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument is includible in gross income ratably over a 5-taxable-year inclusion period, beginning with the taxpayer’s fourth or fifth taxable year following the taxable year of the reacquisition. 2013 state income tax form Generally, if a taxpayer makes a § 108(i) election and reacquires (or is treated as reacquiring) the applicable debt instrument generating the COD income for a new debt instrument with original issue discount (“OID”), then interest deductions for this OID also are deferred, as provided in § 108(i)(2). 2013 state income tax form The OID deferral rule, however, does not apply if the amount of OID is less than a de minimis amount, as determined under § 1273(a)(3) and § 1. 2013 state income tax form 1273-1(d) of the Income Tax Regulations. 2013 state income tax form The OID deferral rule in § 108(i)(2) applies at the entity level for a pass-through entity. 2013 state income tax form For example, a partnership (and therefore its partners) may not deduct currently the OID described in § 108(i)(2)(A)(i). 2013 state income tax form A taxpayer must take into account any item of income or deduction deferred under § 108(i), and not previously taken into account, in the taxable year in which certain events occur (such as the liquidation of the taxpayer and upon other events specified in administrative guidance). 2013 state income tax form See § 108(i)(5)(D). 2013 state income tax form The rule regarding acceleration of deferred COD income and OID deductions also applies in the case of certain dispositions by persons holding ownership interests in pass-through entities. 2013 state income tax form Section 108(i)(5)(D)(ii). 2013 state income tax form For purposes of § 108(i), regulated investment companies (as defined in § 851(a)) and real estate investment trusts (as defined in § 856(a)) are not pass-through entities. 2013 state income tax form . 2013 state income tax form 02 Applicable Debt Instrument. 2013 state income tax form Section 108(i)(3)(A) defines the term “applicable debt instrument” to mean any debt instrument issued by a C corporation or by any other person in connection with the conduct of a trade or business by that person. 2013 state income tax form The term “debt instrument” means any bond, debenture, note, certificate, or any other instrument or contractual arrangement constituting indebtedness within the meaning of § 1275(a)(1). 2013 state income tax form Section 108(i)(3)(B). 2013 state income tax form For purposes of § 108(i), in the case of an intercompany obligation (as defined in § 1. 2013 state income tax form 1502-13(g)(2)(ii)), an applicable debt instrument includes only an instrument for which COD income is realized upon the instrument’s deemed satisfaction under § 1. 2013 state income tax form 1502-13(g)(5). 2013 state income tax form . 2013 state income tax form 03 Reacquisition. 2013 state income tax form Section 108(i)(4)(A) defines the term “reacquisition” to mean, with respect to any applicable debt instrument, any acquisition of the debt instrument by the debtor that issued (or is otherwise the obligor under) the debt instrument, or a person related to the debtor under § 108(e)(4). 2013 state income tax form The term “acquisition” includes an acquisition of the debt instrument for cash or other property, the exchange of the debt instrument for another debt instrument (including an exchange resulting from a modification of the debt instrument), the exchange of the debt instrument for corporate stock or a partnership interest, the contribution of the debt instrument to capital, and the complete forgiveness of the indebtedness by the holder of the debt instrument. 2013 state income tax form See § 108(i)(4)(B). 2013 state income tax form The term “acquisition” also includes an indirect acquisition within the meaning of § 1. 2013 state income tax form 108-2(c) if a direct acquisition of the debt instrument would qualify for an election under § 108(i). 2013 state income tax form For example, if a corporation acquires debt of a partnership that the partnership issued in connection with its trade or business, and the partnership and corporation become related within six months of the corporation’s acquisition of the debt, the indirect acquisition is an acquisition for which an election under § 108(i) may be made. 2013 state income tax form . 2013 state income tax form 04 General Requirements for the Section 108(i) Election. 2013 state income tax form Section 108(i)(5)(B) provides, in general, that a taxpayer makes the § 108(i) election by including a statement that clearly identifies the applicable debt instrument with the return of tax imposed for the taxable year in which the reacquisition of the instrument occurs. 2013 state income tax form (For purposes of this revenue procedure, a return of tax or income tax return includes an information return, and a taxpayer includes a person that files an information return. 2013 state income tax form ) The statement must include the amount of income to which § 108(i)(1) applies and other information the Service may prescribe. 2013 state income tax form Once made, a § 108(i) election is irrevocable and, except as provided in section 7 of this revenue procedure, may not be modified. 2013 state income tax form . 2013 state income tax form 05 Section 108(i) Elections Made by Pass-through Entities. 2013 state income tax form In the case of COD income realized by a pass-through entity from the reacquisition of an applicable debt instrument, the pass-through entity makes the § 108(i) election. 2013 state income tax form Section 108(i)(5)(B)(iii). 2013 state income tax form . 2013 state income tax form 06 Additional Information on Subsequent Years’ Returns. 2013 state income tax form Section 108(i)(7) authorizes the Service to issue guidance necessary or appropriate for applying § 108(i), including requiring reporting the election and other information on returns of tax for subsequent taxable years. 2013 state income tax form . 2013 state income tax form 07 Exclusivity. 2013 state income tax form Section 108(i)(5)(C) provides that if a taxpayer elects to apply § 108(i) to an applicable debt instrument, § 108(a)(1)(A), (B), (C), and (D) do not apply to COD income deferred under § 108(i). 2013 state income tax form . 2013 state income tax form 08 Allocation of Deferred COD Income on Partnership Indebtedness. 2013 state income tax form Section 4. 2013 state income tax form 04(3) of this revenue procedure describes how a partnership may elect under § 108(i) to defer a portion of the COD income realized from the reacquisition of an applicable debt instrument. 2013 state income tax form If a partnership elects to defer all or any portion of COD income realized from the reacquisition of an applicable debt instrument, all of the COD income with respect to that debt instrument, without regard to § 108(i), is allocated to the partners in the partnership immediately before the reacquisition in the manner in which the income would be included in the distributive shares of these partners under § 704 and the regulations thereunder, including § 1. 2013 state income tax form 704-1(b)(2)(iii). 2013 state income tax form Each partner’s share of this COD income is the partner’s COD income amount (“COD income amount”). 2013 state income tax form The partner’s COD income amount that is deferred under § 108(i) is the partner’s deferred amount (“deferred amount”). 2013 state income tax form The partner’s COD income amount that is not deferred and is included in the partner’s distributive share of partnership income for the taxable year of the partnership in which the reacquisition occurs is the partner’s included amount (“included amount”). 2013 state income tax form . 2013 state income tax form 09 Partner’s Deferred § 752 Amount. 2013 state income tax form A decrease in a partner’s share of a partnership liability resulting from the reacquisition of an applicable debt instrument that is not treated as a current distribution of money to the partner under § 752 by reason of § 108(i)(6) is the partner’s deferred § 752 amount (“deferred § 752 amount”). 2013 state income tax form A partner’s deferred § 752 amount may not exceed the lesser of (i) the partner’s deferred amount or (ii) gain that the partner would recognize in the year of reacquisition under § 731 as a result of the reacquisition absent § 108(i)(6). 2013 state income tax form To determine the amount of gain the partner would recognize under clause (ii) of the preceding sentence, the amount of any deemed distribution of money under § 752(b) resulting from the decrease in the partner’s share of a reacquired applicable debt instrument that is treated as an advance or draw of money under § 1. 2013 state income tax form 731-1(a)(1)(ii) is determined as if no COD income resulting from the reacquisition of the applicable debt instrument is deferred under § 108(i). 2013 state income tax form See Rev. 2013 state income tax form Rul. 2013 state income tax form 92-97, 1992-2 C. 2013 state income tax form B. 2013 state income tax form 124, and Rev. 2013 state income tax form Rul. 2013 state income tax form 94-4, 1994-1 C. 2013 state income tax form B. 2013 state income tax form 195. 2013 state income tax form A partner’s deferred § 752 amount is treated as a distribution of money to the partner under § 752 at the same time, and to the extent remaining in the same amount, as the partner recognizes the COD income deferred under § 108(i). 2013 state income tax form . 2013 state income tax form 10 Allocation of Deferred COD Income on S Corporation Indebtedness. 2013 state income tax form For purposes of § 108(i), an S corporation’s COD income deferred under § 108(i) is shared pro rata only among those shareholders that are shareholders of the S corporation immediately before the reacquisition transaction. 2013 state income tax form . 2013 state income tax form 11 Deferred COD Income, Earnings and Profits, and Alternative Minimum Taxable Income. 2013 state income tax form (1) In general. 2013 state income tax form The Service and Treasury Department intend to issue regulations regarding the computation of a corporation’s earnings and profits with respect to COD income and OID deductions that are deferred under § 108(i). 2013 state income tax form These regulations generally will provide that deferred COD income increases earnings and profits in the taxable year that it is realized and not in the taxable year or years that the deferred COD income is includible in gross income. 2013 state income tax form OID deductions deferred under § 108(i) generally will decrease earnings and profits in the taxable year or years in which the deduction would be allowed without regard to § 108(i). 2013 state income tax form COD income and OID deductions that are deferred increase or decrease adjusted current earnings under § 56(g)(4) in the taxable year or years that the income or deduction is includible or deductible in determining taxable income. 2013 state income tax form See § 1. 2013 state income tax form 56(g)-1(c)(1). 2013 state income tax form (2) Exceptions for certain special status corporations. 2013 state income tax form The Service and Treasury Department intend to issue regulations providing that in the case of regulated investment companies and real estate investment trusts, COD income deferred under § 108(i) generally increases earnings and profits in the taxable year or years in which the deferred COD income is includible in gross income and not in the year that the deferred COD income is realized. 2013 state income tax form OID deductions deferred under § 108(i) generally decrease earnings and profits in the taxable year or years that the deferred OID deductions are deductible. 2013 state income tax form . 2013 state income tax form 12 Extension of Time to Make Election. 2013 state income tax form Under § 301. 2013 state income tax form 9100-1 of the Procedure and Administration Regulations, the Service may grant an extension of time to make a regulatory election. 2013 state income tax form An election is a regulatory election if the due date is prescribed by regulation or other published guidance of general applicability. 2013 state income tax form Section 301. 2013 state income tax form 9100-2(a) provides an automatic 12-month extension from the due date for making certain regulatory elections. 2013 state income tax form SECTION 3. 2013 state income tax form SCOPE This revenue procedure applies to taxpayers that realize COD income from a reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument, as provided in § 108(i). 2013 state income tax form SECTION 4. 2013 state income tax form ELECTION PROCEDURES . 2013 state income tax form 01 In General. 2013 state income tax form (1) A taxpayer within the scope of this revenue procedure makes the § 108(i) election by— (a) Attaching a statement meeting the requirements of section 4. 2013 state income tax form 05 of this revenue procedure to the taxpayer’s timely filed (including extensions) original federal income tax return for the taxable year in which the reacquisition of the applicable debt instrument occurs, and (b) If applicable, satisfying the additional requirements of section 4. 2013 state income tax form 07, 4. 2013 state income tax form 08, 4. 2013 state income tax form 09, or 4. 2013 state income tax form 10 of this revenue procedure. 2013 state income tax form (2) The Service grants an automatic extension of 12 months from the due date prescribed in section 4. 2013 state income tax form 01(1)(a) of this revenue procedure for making the § 108(i) election. 2013 state income tax form The rules that apply to an automatic extension under § 301. 2013 state income tax form 9100-2(a) apply to this automatic extension. 2013 state income tax form . 2013 state income tax form 02 Section 108(i) Elections Made by Members of Consolidated Groups. 2013 state income tax form The common parent of a consolidated group makes the § 108(i) election on behalf of all members of the group. 2013 state income tax form See § 1. 2013 state income tax form 1502-77(a). 2013 state income tax form . 2013 state income tax form 03 Aggregation Rule. 2013 state income tax form A taxpayer within the scope of this revenue procedure may treat two or more applicable debt instruments that are part of the same issue and that are reacquired during the same taxable year as one applicable debt instrument for purposes of this revenue procedure. 2013 state income tax form A pass-through entity may not treat two or more applicable debt instruments as one applicable debt instrument under this section 4. 2013 state income tax form 03 if the owners and their ownership interests in the pass-through entity immediately prior to the reacquisition of each applicable debt instrument are not identical. 2013 state income tax form . 2013 state income tax form 04 Partial Elections. 2013 state income tax form (1) A taxpayer within the scope of this revenue procedure may make an election for any portion of COD income realized from the reacquisition of any applicable debt instrument. 2013 state income tax form Thus, for example, if a taxpayer realizes $100 of COD income from the reacquisition of an applicable debt instrument, the taxpayer may elect under § 108(i)(1) to defer only $40 of the $100 of COD income. 2013 state income tax form The taxpayer may exclude from income the portion of COD income that the taxpayer does not elect to defer under § 108(i) ($60 in this example) under § 108(a)(1)(A), (B), (C), or (D), if applicable. 2013 state income tax form (2) A taxpayer is not required to make an election for the same portion of COD income arising from each applicable debt instrument that it reacquires, but may make an election for different portions of COD income arising from different applicable debt instruments (whether or not part of the same issue). 2013 state income tax form Thus, for example, if a taxpayer realizes $100 of COD income from the reacquisition of an applicable debt instrument (Instrument A) and $100 of COD income from the reacquisition of a different applicable debt instrument (Instrument B), the taxpayer may elect to defer all or a portion of the COD income associated with Instrument A and none or a different portion of the COD income associated with Instrument B. 2013 state income tax form (3) A partnership that elects to defer less than all of the COD income realized from the reacquisition of an applicable debt instrument may determine, in any manner, the portion, if any, of a partner’s COD income amount that is the partner’s deferred amount and the portion, if any, of a partner’s COD income amount that is the partner’s included amount. 2013 state income tax form Thus, for example, one partner’s deferred amount may be zero while another partner’s deferred amount may equal that partner’s COD income amount (or any portion thereof). 2013 state income tax form A partner may exclude from income the partner’s included amount under § 108(a)(1)(A), (B), (C), or (D), if applicable. 2013 state income tax form The provisions of this section 4. 2013 state income tax form 04(3) apply for purposes of § 108(i) only and are not intended as an interpretation of or a change to existing law under § 704. 2013 state income tax form . 2013 state income tax form 05 Contents of Election Statement. 2013 state income tax form A statement meets the requirements of this section 4. 2013 state income tax form 05 if the statement— (1) Label. 2013 state income tax form States “Section 108(i) Election” across the top. 2013 state income tax form (2) Required information. 2013 state income tax form Provides, for each applicable debt instrument the reacquisition of which generates COD income that the taxpayer is electing to defer under § 108(i)— (a) The name and taxpayer identification numbers, if any, of the issuer or issuers of the applicable debt instrument; (b) A general description of the applicable debt instrument (including the issue and maturity dates) and, in the case of any person other than a C corporation, a general description of the person’s trade or business to which the applicable debt instrument is connected; (c) A general description of the reacquisition transaction or transactions generating the COD income (including the date(s) of the transaction(s)); (d) The total amount of COD income for the applicable debt instrument that results from the reacquisition (in the case of a partnership, the aggregate of the partners’ COD income amounts) and a general description of the manner in which this amount is calculated; (e) The amount of COD income for the applicable debt instrument that the taxpayer is electing to defer under § 108(i); (f) In the case of a partnership, a list of partners that have a deferred amount, their identifying information and each partner’s deferred amount; and in the case of an S corporation, a list of shareholders with COD income deferred under § 108(i), their identifying information and each shareholder’s share of the S corporation’s deferred COD income; and (g) In cases in which a new debt instrument is issued or deemed issued in exchange for the applicable debt instrument (including exchanges under § 108(e)(4), § 108(i)(2)(B), and § 1. 2013 state income tax form 1001-3), the issuer’s name, the issuer’s taxpayer identification number, if any, a general description of the new debt instrument and whether the new debt instrument has OID, and if the new debt instrument has OID, a schedule of the OID that the issuer expects to accrue each taxable year on the instrument and the amount of OID that the issuer expects to defer under § 108(i)(2) each taxable year. 2013 state income tax form . 2013 state income tax form 06 Supplemental information. 2013 state income tax form The statement described in section 4. 2013 state income tax form 05 of this revenue procedure may specify for each applicable debt instrument an amount greater than the amount identified in section 4. 2013 state income tax form 05(2)(e) of this revenue procedure that the taxpayer elects to defer under § 108(i) in the event the Service subsequently concludes that the taxpayer understated the amount of COD income described in section 4. 2013 state income tax form 05(2)(d) of this revenue procedure. 2013 state income tax form This additional amount of COD income the taxpayer elects to defer may be described as the entire additional COD income, or as a percentage of any additional COD income. 2013 state income tax form If the taxpayer is a partnership, the partnership must specify each partner’s share of the partnership’s additional COD income that would be deferred (the partner’s additional deferred amount), which the partnership may describe for each partner as the partner’s entire share of the partnership’s additional COD income or as a percentage of the partner’s share of the partnership’s additional COD income. 2013 state income tax form If the taxpayer is an S corporation, the S corporation must specify each shareholder’s share of the S corporation’s additional COD income that would be deferred, which the S corporation may describe for each shareholder as the shareholder’s entire share of the S corporation’s additional COD income or as a percentage of the shareholder’s share of the S corporation’s additional COD income. 2013 state income tax form In the case of partnerships and S corporations, the additional COD income and the portion of additional COD income that would be deferred are allocated or determined as provided in sections 2. 2013 state income tax form 08, 2. 2013 state income tax form 10 and, if applicable, 4. 2013 state income tax form 04(3) of this revenue procedure, respectively, as if the additional COD income was realized. 2013 state income tax form . 2013 state income tax form 07 Additional Requirements for Certain Partnerships Making a § 108(i) Election. 2013 state income tax form The rules of this section 4. 2013 state income tax form 07 apply to partnerships other than partnerships described in section 4. 2013 state income tax form 10 of this revenue procedure. 2013 state income tax form (1) Information filing on Schedule K-1 (Form 1065 and Form 1065-B). 2013 state income tax form For the taxable year in which the § 108(i) election is made, the partnership must report on the Schedule K-1 (Form 1065 or Form 1065-B), Partner’s Share of Income, Deductions, Credits, etc. 2013 state income tax form , in the manner specified in the instructions to the forms, for each partner § 108(i) information on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made. 2013 state income tax form Partnerships reporting § 108(i) information on the 2008 Schedule K-1 (Form 1065 or Form 1065-B) must report for each partner on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made: (a) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(1) or § 108(i)(5)(D)(i) or (ii), in box 11 (“other income”) using code F for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (b) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii) or § 108(i)(5)(D)(i) or (ii), in box 13 (“other deductions”) using code W for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (c) The partner’s deferred amount that has not been included in income in the current or prior taxable years, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (d) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (e) The partner’s deferred § 752 amount that is treated as a distribution of money to the partner under § 752 in the current taxable year, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); and (f) The partner’s deferred § 752 amount remaining as of the end of the current taxable year, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B). 2013 state income tax form (2) Election information statement provided to partners. 2013 state income tax form The partnership must attach to the Schedule K-1 (Form 1065 or Form 1065-B) provided to each partner for the taxable year in which the § 108(i) election is made a statement satisfying the requirements of this section 4. 2013 state income tax form 07(2). 2013 state income tax form The partnership should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each partner must retain that partner’s statement, in their respective books and records. 2013 state income tax form A statement meets the requirements of this section 4. 2013 state income tax form 07(2) if the statement— (a) Label. 2013 state income tax form States “Section 108(i) Election Information Statement for Partners” across the top. 2013 state income tax form (b) Required information. 2013 state income tax form Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies— (i) The partner’s COD income amount, the partner’s deferred amount, and the partner’s included amount; (ii) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iii) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (iv) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); (v) The partner’s share of each liability of the partnership described in section 4. 2013 state income tax form 05(2)(g) of this revenue procedure; (vi) The partner’s share of the decrease in the partnership liability that results from the reacquisition of the applicable debt instrument; (vii) The partner’s share of the decrease in the partnership liability that results from the reacquisition of the applicable debt instrument that is treated as a distribution of money to the partner under § 752 in the current taxable year; (viii) The partner’s deferred § 752 amount as described in section 2. 2013 state income tax form 09 of this revenue procedure; (ix) The partner’s additional deferred amount as described in section 4. 2013 state income tax form 06 of this revenue procedure; and (x) The date of the reacquisition transaction generating the COD income. 2013 state income tax form (c) If a partner fails to provide the written statement required by section 4. 2013 state income tax form 07(3) of this revenue procedure, the partnership must indicate that the amounts described in section 4. 2013 state income tax form 07(2)(b)(vii) and (viii) of this revenue procedure cannot be calculated because the partner did not provide the information necessary to report these amounts. 2013 state income tax form (3) Partner reporting requirements. 2013 state income tax form The partnership must make reasonable efforts prior to making a § 108(i) election to secure from each partner with a deferred amount for which it does not have the information necessary to compute the partner’s basis in its partnership interest (and its deferred § 752 amount as described in section 2. 2013 state income tax form 09 of this revenue procedure) a written statement signed under penalties of perjury that includes this information. 2013 state income tax form Each partner with a deferred amount must provide this written statement to the partnership within 30 days of the date of request by the partnership. 2013 state income tax form A partner’s failure to comply with this reporting requirement does not invalidate the partnership’s election under § 108(i) for an applicable debt instrument only if the partnership makes reasonable efforts before making the § 108(i) election to obtain the written statement from the partner and otherwise complies with the requirements of section 4 of this revenue procedure. 2013 state income tax form If a partner provides its written statement under this section 4. 2013 state income tax form 07(3) after the partnership has provided to the partner the Section 108(i) Election Information Statement for Partners, the partnership must provide to the partner a revised Section 108(i) Election Information Statement for Partners reporting the information required under section 4. 2013 state income tax form 07(2)(b)(vii) and (viii) of this revenue procedure and report the partner’s deferred § 752 amount on the partner’s Schedule K-1 (Form 1065 or Form 1065-B) in subsequent taxable years. 2013 state income tax form . 2013 state income tax form 08 Additional Requirements for an S Corporation Making a § 108(i) Election. 2013 state income tax form (1) Information filing on Schedule K-1 (Form 1120S). 2013 state income tax form For the taxable year in which the § 108(i) election is made, the S corporation must report on the Schedule K-1 (Form 1120S), Shareholder’s Share of Income, Deductions, Credits, etc. 2013 state income tax form , in the manner specified in the instructions to the forms, for each shareholder § 108(i) information on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made. 2013 state income tax form S corporations reporting § 108(i) information on the 2008 Schedule K-1 (Form 1120S) must report for each shareholder, on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made, the shareholder’s share of the S corporation’s: (a) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(1) or § 108(i)(5)(D)(i) or (ii), in box 10 (“other income”) using code E; (b) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii), or § 108(i)(5)(D)(i) or (ii), in box 12 (“other deductions”) using code S; (c) COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years, in box 17 (“other information”) using code T; and (d) OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years, in box 17 (“other information”) using code T. 2013 state income tax form (2) Election information statement provided to shareholders. 2013 state income tax form The S corporation must attach to the Schedule K-1 (Form 1120S) provided to each shareholder for the taxable year in which the § 108(i) election is made, a statement satisfying the requirements of this section 4. 2013 state income tax form 08(2). 2013 state income tax form The S corporation should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each shareholder must retain that shareholder’s statement, in their respective books and records. 2013 state income tax form A statement meets the requirements of this section 4. 2013 state income tax form 08(2) if the statement— (a) Label. 2013 state income tax form States “Section 108(i) Election Information Statement for Shareholders” across the top. 2013 state income tax form (b) Required information. 2013 state income tax form Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies, the shareholder’s share of the S corporation’s— (i) COD income that the S corporation elects to defer under § 108(i); (ii) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iii) OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (iv) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); and (v) Additional COD income that would be deferred as described in section 4. 2013 state income tax form 06 of this revenue procedure. 2013 state income tax form . 2013 state income tax form 09 Section 108(i) Elections Made on Behalf of Certain Foreign Corporations. 2013 state income tax form The controlling domestic shareholder(s) (or common parent of the controlling domestic shareholder(s), if applicable) of a controlled foreign corporation or a noncontrolled § 902 corporation not otherwise required to file a return of tax may make the § 108(i) election on behalf of the foreign corporation by satisfying the requirements of § 1. 2013 state income tax form 964-1(c)(3). 2013 state income tax form Each controlling domestic shareholder must attach a statement identifying the foreign corporation and satisfying the requirements of section 4. 2013 state income tax form 05 of this revenue procedure and, if applicable, section 4. 2013 state income tax form 06 of this revenue procedure, to its federal income tax return for the taxable year ending within or with the taxable year of the foreign corporation for which the § 108(i) election is made. 2013 state income tax form . 2013 state income tax form 10 Section 108(i) Elections Made By Certain Foreign Partnerships. 2013 state income tax form The rules of this section 4. 2013 state income tax form 10 apply to a foreign partnership making a § 108(i) election that is not otherwise required to file a federal partnership return (“nonfiling foreign partnership”). 2013 state income tax form See § 1. 2013 state income tax form 6031(a)-1(b). 2013 state income tax form (1) A nonfiling foreign partnership making the election must attach a statement satisfying the requirements of section 4. 2013 state income tax form 05 of this revenue procedure and, if applicable, section 4. 2013 state income tax form 06 of this revenue procedure, to a partnership return satisfying the requirements of § 1. 2013 state income tax form 6031(a)-1(b)(5) it files with the Service. 2013 state income tax form In addition, a nonfiling foreign partnership must include in the information required in section 4. 2013 state income tax form 05(2)(d) and (e) of this revenue procedure the aggregate amounts for all partners as well as the aggregate amounts for all U. 2013 state income tax form S. 2013 state income tax form persons (as defined in § 7701(a)(30)) and controlled foreign corporation(s) that are partners with deferred amounts in the nonfiling foreign partnership (“affected partners”). 2013 state income tax form (2) The nonfiling foreign partnership must make the election, in accordance with § 1. 2013 state income tax form 6031(a)-1(b)(5), by the date provided in section 4. 2013 state income tax form 01(1)(a) of this revenue procedure, as if it had a filing obligation for the taxable year in which the reacquisition of the applicable debt instrument occurs. 2013 state income tax form (3) For each affected partner, the partnership must file with the Service a Schedule K-1 (Form 1065) and report on the Schedule K-1 (Form 1065) for the affected partner as provided in section 4. 2013 state income tax form 07(1) of this revenue procedure. 2013 state income tax form Except for this § 108(i) information, the partnership need not complete Part III of the Schedule K-1 (Form 1065). 2013 state income tax form The partnership must provide a copy of the respective Schedule K-1 (Form 1065) to each affected partner and must also attach to the Schedule K-1 (Form 1065) provided to each affected partner a statement satisfying the requirements of section 4. 2013 state income tax form 07(2) of this revenue procedure by the date provided in section 4. 2013 state income tax form 01(1)(a) of this revenue procedure. 2013 state income tax form The partnership should not attach any statement described in section 4. 2013 state income tax form 07(2) of this revenue procedure to the Schedules K-1 that are filed with the Service. 2013 state income tax form However, the partnership must retain the statements provided to the affected partners, and each affected partner must retain that partner’s statement, in their respective books and records. 2013 state income tax form (4) The partnership and each affected partner must satisfy the requirements of section 4. 2013 state income tax form 07(3) of this revenue procedure. 2013 state income tax form . 2013 state income tax form 11 Protective § 108(i) Election. 2013 state income tax form (1) In general. 2013 state income tax form A taxpayer may make a protective election under § 108(i) for an applicable debt instrument if the taxpayer concludes that a particular transaction does not result in the realization of COD income, reports the transaction on its federal income tax return in a manner consistent with the taxpayer’s conclusion, and would be within the scope of this revenue procedure if the taxpayer’s conclusion were incorrect. 2013 state income tax form If the Service at any time determines the taxpayer’s conclusion that the particular transaction does not result in the realization of COD income is incorrect, the taxpayer’s protective election is treated as a valid, irrevocable election under § 108(i). 2013 state income tax form Thus, if a taxpayer makes a protective election, the Service subsequently may require the taxpayer to report COD income deferred pursuant to the valid and irrevocable protective election even if the statute of limitations has expired for the year in which the COD income was realized and the protective election was made. 2013 state income tax form A taxpayer makes a protective election by attaching a statement satisfying the requirements of this section 4. 2013 state income tax form 11(1) to the taxpayer’s original federal income tax return within the period described in section 4. 2013 state income tax form 01(1)(a) of this revenue procedure. 2013 state income tax form The taxpayer also must attach the election to its federal income tax return in each of the 8 or 9 taxable years, as applicable, following the taxable year of the election. 2013 state income tax form A statement meets the requirements of this section 4. 2013 state income tax form 11(1) if the statement— (a) States “Section 108(i) Protective Election” across the top; (b) Provides the information required under section 4. 2013 state income tax form 05(2)(a), (b), and (c) of this revenue procedure; (c) Provides that the amounts described in sections 4. 2013 state income tax form 05(2)(d) and (e) of this revenue procedure are zero; and (d) Provides the information described in section 4. 2013 state income tax form 06 of this revenue procedure. 2013 state income tax form (2) Statements provided to shareholders and partners. 2013 state income tax form (a) For each applicable debt instrument, a partnership or S corporation that makes a protective election must attach to the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) it provides each of its partners or shareholders, as the case may be, for the taxable year in which the protective election is made a statement containing the information described in section 4. 2013 state income tax form 11(1)(b) of this revenue procedure (an S corporation need not provide its shareholders with the date(s) of the transaction(s) that would constitute the reacquisition transaction or transactions) and the partner’s or shareholder’s share of the additional COD income that would be deferred as described in section 4. 2013 state income tax form 11(1)(d) of this revenue procedure. 2013 state income tax form (b) The partnership or S corporation should not attach the statements described in this section 4. 2013 state income tax form 11(2) to the Schedules K-1 that are filed with the Service but must retain these statements, and each partner and shareholder must retain that partner’s or shareholder’s statement, in their respective books and records. 2013 state income tax form . 2013 state income tax form 12 Election-Year Reporting by Tiered Pass-Through Entities. 2013 state income tax form (1) A partnership required to file a U. 2013 state income tax form S. 2013 state income tax form partnership return other than under § 1. 2013 state income tax form 6031(a)-1(b)(5), or an S corporation, that receives a Schedule K-1 (Form 1065 or Form 1065-B) reflecting its share of any items listed in section 4. 2013 state income tax form 07(1) of this revenue procedure, must report on the Schedules K-1 (Form 1065, Form 1065-B, or Form 1120S) to its partners or shareholders, as the case may be, each partner’s or shareholder’s share of those items (an S corporation only reports to its shareholders the items described in section 4. 2013 state income tax form 07(1)(a) through (d) of this revenue procedure). 2013 state income tax form (2) If a partnership described in section 4. 2013 state income tax form 12(1) of this revenue procedure receives a statement described in sections 4. 2013 state income tax form 07(2) or 4. 2013 state income tax form 10(3) of this revenue procedure or this section 4. 2013 state income tax form 12(2), it must provide each of its partners a statement containing the partner’s share of each of the items listed on each statement received by the partnership, including the information described in section 4. 2013 state income tax form 07(2)(b)(x) of this revenue procedure. 2013 state income tax form If an S corporation receives a statement described in sections 4. 2013 state income tax form 07(2) or 4. 2013 state income tax form 10(3) of this revenue procedure or this section 4. 2013 state income tax form 12(2), it must provide each of its shareholders a statement containing the shareholder’s share of each of the items listed on each statement received by the S corporation that are described in section 4. 2013 state income tax form 07(2)(b)(i), (ii), (iii), (iv) and (ix) of this revenue procedure. 2013 state income tax form The partnership or S corporation must attach this statement or statements to the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) that it provides to each of its partners or shareholders, as the case may be, for the taxable year of the partnership or S corporation. 2013 state income tax form The partnership or S corporation should not attach these statements to the Schedules K-1 that are filed with the Service but must retain these statements, and each partner and shareholder must retain that partner’s or shareholder’s statement, in their respective books and records. 2013 state income tax form (3) A partnership that receives a statement described in this section 4 identifying its COD income amount with respect to an applicable debt instrument must allocate its COD income amount, without regard to § 108(i), to the partners in the partnership immediately before the reacquisition transaction in the manner in which the income would be included in the distributive shares of these partners under § 704 and the regulations thereunder, including § 1. 2013 state income tax form 704-1(b)(2)(iii). 2013 state income tax form The partnership may determine in any manner the portion, if any, of a partner’s COD income amount that is the partner’s deferred amount and the portion, if any, of a partner’s COD income amount that is the partner’s included amount. 2013 state income tax form No partner’s deferred amount with respect to an applicable debt instrument may exceed its COD income amount with respect to the applicable debt instrument, and the aggregate of deferred amounts of its partners with respect to an applicable debt instrument must equal the partnership’s deferred amount with respect to the applicable debt instrument. 2013 state income tax form The partnership allocates amounts described in section 4. 2013 state income tax form 06 of this revenue procedure under this section 4. 2013 state income tax form 12(3) as if the additional COD income was realized. 2013 state income tax form (4) The deferred § 752 amount for partners in a partnership making a § 108(i) election is calculated only for the partnership’s direct partners. 2013 state income tax form No further adjustment to the deferred § 752 amount is made to reflect the basis or other attributes of partners that are indirect partners in the partnership. 2013 state income tax form (5) If an S corporation receives a statement described in this section 4 identifying its COD income amount, deferred amount, included amount or additional COD income that would be deferred with respect to an applicable debt instrument, these amounts are shared pro rata only among those shareholders that are shareholders in the S corporation immediately before the reacquisition transaction. 2013 state income tax form (6) This paragraph 4. 2013 state income tax form 12(6) provides the rules for Category 1 and Category 2 filers of Form 8865, Return of U. 2013 state income tax form S. 2013 state income tax form Persons With Respect to Certain Foreign Partnerships, as defined in the instructions for Form 8865, if the foreign partnership, for which the Category 1 or Category 2 filer has a filing requirement, receives a Schedule K-1 (Form 1065 or Form 1065-B) reflecting the partnership’s share of any items listed in section 4. 2013 state income tax form 07(1) of this revenue procedure, or a statement described in sections 4. 2013 state income tax form 07(2) or 4. 2013 state income tax form 10(3) of this revenue procedure (because the foreign partnership owns an interest directly or indirectly in another partnership in which an election was made under § 108(i) with respect to that foreign partnership’s distributive share from the other entity). 2013 state income tax form (a) For each partner for whom the Category 1 filer is required to complete a Schedule K-1 (Form 8865) (which includes the Category 1 filer itself), the Category 1 filer must: (i) Include the information described in section 4. 2013 state income tax form 07(1) of this revenue procedure in the Schedule K-1 (Form 8865) that the Category 1 filer files with the Service and completes for the partner; (ii) Produce a statement containing the partner’s share of the items listed on each statement received by the partnership; and (iii) Attach the statement described in section 4. 2013 state income tax form 12(6)(a)(ii) of this revenue procedure to each Schedule K-1 (Form 8865) that it is required to provide to a partner of the foreign partnership. 2013 state income tax form (b) A Category 2 filer must include its share of the information described in section 4. 2013 state income tax form 07(1) on the Schedule K-1 (Form 8865) that it is required to complete. 2013 state income tax form Category 2 filers also must complete a statement containing their share of the items listed on each statement received by the partnership. 2013 state income tax form (c) The Category 1 and Category 2 filers should not attach the statements described in sections 4. 2013 state income tax form 12(6)(a)(ii) and 4. 2013 state income tax form 12(6)(b) of this revenue procedure, respectively, to the Schedules K-1 that are filed with the Service. 2013 state income tax form However, Category 1 filers must retain the statements they complete and each partner must retain its own statement, in their respective books and records. 2013 state income tax form (7) If as a result of § 108(i)(5)(D)(ii), a partner of a partnership described in section 4. 2013 state income tax form 12(1) of this revenue procedure or a shareholder of an S corporation described in section 4. 2013 state income tax form 12(1) of this revenue procedure must recognize items deferred under § 108(i), the partnership or S corporation must report these items on the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) and statements provided to the partner or shareholder pursuant to section 4. 2013 state income tax form 12(1) and (2) of this revenue procedure. 2013 state income tax form Similar rules apply to Category 1 and Category 2 filers (Form 8865) described in section 4. 2013 state income tax form 12(6) of this revenue procedure. 2013 state income tax form (8) The provisions of section 4. 2013 state income tax form 12(2), (3), (5) and (6) of this revenue procedure also apply to a statement received that is described in section 4. 2013 state income tax form 11(2) of this revenue procedure, except that the information that must be provided are those items described in section 4. 2013 state income tax form 11(1)(b) of this revenue procedure (an S corporation need not provide its shareholders with the date(s) of the transaction(s) that would constitute the reacquisition transaction or transactions) and the share of the partner or shareholder in the amounts described in section 4. 2013 state income tax form 11(1)(d) of this revenue procedure. 2013 state income tax form SECTION 5. 2013 state income tax form REQUIRED INFORMATION STATEMENT . 2013 state income tax form 01 Annual Information Statements. 2013 state income tax form Pursuant to § 108(i)(7)(B), a taxpayer that makes an election under § 108(i) (except for a protective election under section 4. 2013 state income tax form 11(1) of this revenue procedure) must attach a statement meeting the requirements of section 5. 2013 state income tax form 02 of this revenue procedure to its federal income tax return for each taxable year beginning with the taxable year following the taxable year for which the taxpayer makes the election and ending with the first taxable year in which all items deferred under § 108(i) have been recognized. 2013 state income tax form . 2013 state income tax form 02 Contents of Statement. 2013 state income tax form A statement meets the requirements of this section 5. 2013 state income tax form 02 if the statement— (1) Label. 2013 state income tax form States “Section 108(i) Information Statement” across the top; (2) Required information. 2013 state income tax form Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies— (a) COD income deferred under § 108(i) that is included in income in the current taxable year under § 108(i)(1); (b) COD income deferred under § 108(i) that is included in income in the current taxable year under § 108(i)(5)(D), including a description and date of the acceleration event described in § 108(i)(5)(D); (c) COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years (in the case of a partnership, the aggregate of the partners’ deferred amounts that have not been included in income in the current or prior taxable years, and in the case of an S corporation, the S corporation’s COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years); (d) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii); (e) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D); and (f) OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years. 2013 state income tax form (3) Election attached. 2013 state income tax form Includes a copy of the election statement described in section 4. 2013 state income tax form 05 of this revenue procedure. 2013 state income tax form . 2013 state income tax form 03 Additional Annual Reporting Requirements for Certain Partnerships. 2013 state income tax form The rules of this section 5. 2013 state income tax form 03 apply to partnerships other than partnerships described in section 5. 2013 state income tax form 05 of this revenue procedure. 2013 state income tax form (1) In general. 2013 state income tax form A partnership that makes an election under § 108(i) (except for a protective election under section 4. 2013 state income tax form 11(1) of this revenue procedure) must attach to its federal income tax returns the statements required under section 5. 2013 state income tax form 01 of this revenue procedure. 2013 state income tax form In addition, for each taxable year in which a statement is required under section 5. 2013 state income tax form 01 of this revenue procedure, the partnership must report on the Schedule K-1 (Form 1065 or Form 1065-B) for each partner § 108(i) information in the manner described in section 4. 2013 state income tax form 07(1) of this revenue procedure. 2013 state income tax form (2) Annual information statements provided to partners. 2013 state income tax form The partnership must attach to the Schedule K-1 (Form 1065) provided to each partner for each taxable year in which a statement is required under section 5. 2013 state income tax form 01 of this revenue procedure, a statement meeting the requirements of this section 5. 2013 state income tax form 03(2). 2013 state income tax form The partnership should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each partner must retain that partner’s statement, in their respective books and records. 2013 state income tax form A statement meets the requirements of this section 5. 2013 state income tax form 03(2) if the statement— (a) Label. 2013 state income tax form States “Section 108(i) Annual Information Statement for Partners” across the top of the statement. 2013 state income tax form (b) Required information. 2013 state income tax form Clearly identifies for each applicable debt instrument to which a § 108(i) election applies— (i) The partner’s deferred amount that has not been included in income as of the end of the prior taxable year; (ii) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(1); (iii) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iv) The partner’s deferred amount that has not been included in income in the current or prior taxable years; (v) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (vi) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii); (vii) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); (viii) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years; and (ix) The partner’s deferred § 752 amount that is treated as a distribution of money to the partner under § 752 in the current taxable year and any remaining deferred § 752 amount. 2013 state income tax form If a partner fails to provide the written statement required by section 4. 2013 state income tax form 07(3) of this revenue procedure, the partnership must indicate that the amounts described in this section 5. 2013 state income tax form 03(2)(b)(ix) cannot be calculated because the partner did not provide the information necessary to report these amounts. 2013 state income tax form . 2013 state income tax form 04 Additional Annual Reporting Requirements for an S Corporation. 2013 state income tax form (1) In general. 2013 state income tax form An S corporation that makes an election under § 108(i) (except for a protective election under section 4. 2013 state income tax form 11(1) of this revenue procedure) must attach to its federal income tax returns the statements required under section 5. 2013 state income tax form 01 of this revenue procedure. 2013 state income tax form In addition, for each taxable year in which a statement is required under section 5. 2013 state income tax form 01 of this revenue procedure, the S corporation must report on the Schedule K-1 (Form 1120S) for each shareholder § 108(i) information in the manner described in section 4. 2013 state income tax form 08(1) of this revenue procedure. 2013 state income tax form (2) Annual information statements provided to shareholders. 2013 state income tax form The S corporation must attach to the Schedule K-1 (Form 1120S) provided to each shareholder for each taxable year in which a statement is required under section 5. 2013 state income tax form 01 of this revenue procedure a statement meeting the requirements of this section 5. 2013 state income tax form 04(2). 2013 state income tax form The S corporation should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each shareholder must retain that shareholder’s statement, in their respective books and records. 2013 state income tax form A statement meets the requirements of this section 5. 2013 state income tax form 04(2) if the statement— (a) Label. 2013 state income tax form States “Section 108(i) Annual Information Statement for Shareholders” across the top; (b) Required information. 2013 state income tax form Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies, the shareholder’s share of the S corporation’s— (i) COD income deferred under § 108(i) that has not been included in income as of the end of the prior taxable year; (ii) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(1); (iii) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iv) COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years; (v) OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (vi) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii); (vii) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); and (viii) OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years. 2013 state income tax form . 2013 state income tax form 05 Additional Annual Reporting Requirements for Certain Foreign Partnerships. 2013 state income tax form (1) The rules of this section 5. 2013 state income tax form 05 apply to nonfiling foreign partnerships. 2013 state income tax form (2) A nonfiling foreign partnership that makes an election under § 108(i) (except for a protective election under section 4. 2013 state income tax form 11(1) of this revenue procedure) must file federal income tax returns with the Service containing the information under § 1. 2013 state income tax form 6031(a)-1(b)(5) for each taxable year in which a statement is required by section 5. 2013 state income tax form 01 of this revenue procedure. 2013 state income tax form (3) The nonfiling foreign partnership must attach to its federal income tax returns the statements required under section 5. 2013 state income tax form 01 of this revenue procedure, but only for that portion of the COD income allocated to affected partners. 2013 state income tax form (4) For each taxable year in which a statement is required under section 5. 2013 state income tax form 01 of this revenue procedure, the nonfiling foreign partnership must provide each affected partner a Schedule K-1 (Form 1065) reporting § 108(i) information in the manner described in section 4. 2013 state income tax form 07(1) of this revenue procedure. 2013 state income tax form Except for this § 108(i) information, the partnership need not complete Part III of the Schedule K-1 (Form 1065). 2013 state income tax form The partnership must provide each affected partner with a copy of the Schedule K-1 (Form 1065) by the date provided in § 1. 2013 state income tax form 6031(b)-1T(b). 2013 state income tax form The partnership must attach the Schedules K-1 (Form 1065) to the federal income tax returns filed with the Service pursuant to section 5. 2013 state income tax form 05(2) of this revenue procedure. 2013 state income tax form (5) For each taxable year for which a statement is required under section 5. 2013 state income tax form 01 of this revenue procedure, the nonfiling foreign partnership must attach to each affected partner’s Schedule K-1 (Form 1065) a statement meeting the requirements of section 5. 2013 state income tax form 03(2) of this revenue procedure. 2013 state income tax form The partnership should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain the statements, and each partner must retain that partner’s statement, in their respective books and records. 2013 state income tax form . 2013 state income tax form 06 Information Statements Made on Behalf of Certain Foreign Corporations. 2013 state income tax form Each controlling domestic shareholder must attach a statement identifying the foreign corporation and meeting the requirements of section 5. 2013 state income tax form 02 of this revenue procedure to the shareholder’s federal income tax return for each taxable year for which a statement is required under section 5. 2013 state income tax form 01 of this revenue procedure. 2013 state income tax form . 2013 state income tax form 07 Additional Annual Reporting Requirements for Tiered Pass-Through Entities. 2013 state income tax form (1) A partnership required to file a U. 2013 state income tax form S. 2013 state income tax form partnership return other than under § 1. 2013 state income tax form 6031(a)-1(b)(5), or an S corporation, that receives a Schedule K-1 (Form 1065 or Form 1065-B) described in the second sentence of section 5. 2013 state income tax form 03(1) of this revenue procedure reflecting its share of any § 108(i) information must report on the Schedules K-1 (Form 1065, Form 1065-B, or Form 1120S) to its partners or shareholders, as the case may be, each partner’s or shareholder’s share of those items (an S corporation only reports to its shareholders the items described in section 4. 2013 state income tax form 07(1)(a) through (d) of this revenue procedure). 2013 state income tax form (2) If a partnership described in section 5. 2013 state income tax form 07(1) of this revenue procedure receives a statement described in sections 5. 2013 state income tax form 03(2) or 5. 2013 state income tax form 05(5) of this revenue procedure or this section 5. 2013 state income tax form 07(2), it must provide each of its partners a statement containing the partner’s share of each of the items listed on each statement received by the partnership. 2013 state income tax form If an S corporation receives a statement described in sections 5. 2013 state income tax form 03(2) or 5. 2013 state income tax form 05(5) of this revenue procedure or this section 5. 2013 state income tax form 07(2), it must provide each of its shareholders a statement containing the shareholder’s share of each of the items listed on each statement received by the S corporation that are described in section 5. 2013 state income tax form 03(2)(b)(i) through (viii) of this revenue procedure. 2013 state income tax form The partnership or S corporation must attach the statement or statements to the Schedule K-1 (Form 1065 or Form 1065-B) or Schedule K-1 (Form 1120S) that is provided to each of its partners or shareholders, as the case may be, for the taxable year of the partnership or S corporation. 2013 state income tax form The partnership or S corporation should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each partner and shareholder must retain that partner’s or shareholder’s statement, in their respective books and records. 2013 state income tax form (3) This paragraph 5. 2013 state income tax form 07(3) provides the rules for persons described in section 4. 2013 state income tax form 12(6) of this revenue procedure if the foreign partnership, for which the Category 1 or 2 filer has a filing requirement, receives a Schedule K-1 (Form 1065 or Form 1065-B) reflecting the partnership’s share of any items described in the second sentence of section 5. 2013 state income tax form 03(1) of this revenue procedure, or a statement described in sections 5. 2013 state income tax form 03(2) or 5. 2013 state income tax form 05(5) of this revenue procedure (because the foreign partnership owns an interest directly or indirectly in another partnership in which an election was made under § 108(i) with respect to that foreign partnership’s distributive share from the other entity). 2013 state income tax form (a) For each partner for whom the Category 1 filer is required to complete a Schedule K-1 (Form 8865) (which includes the Category 1 filer itself), the Category 1 filer must: (i) Include the information described in section 4. 2013 state income tax form 07(1) of this revenue procedure in the Schedule K-1 (Form 8865) that the Category 1 filer files with the Service and completes for the partner; (ii) Produce a statement containing the partner’s share of the items listed on each statement received by the partnership; and (iii) Attach the statement described in section 5. 2013 state income tax form 07(3)(a)(ii) of this revenue procedure to each Schedule K-1 (Form 8865) that it is required to provide to a partner of the foreign partnership. 2013 state income tax form (b) A Category 2 filer must include its share of the information described in section 4. 2013 state income tax form 07(1) on the Schedule K-1 (Form 8865) that it is required to complete. 2013 state income tax form Category 2 filers also must complete a statement containing their share of the items listed on each statement received by the partnership. 2013 state income tax form (c) The Category 1 and Category 2 filers should not attach the statements described in sections 5. 2013 state income tax form 07(3)(a)(ii) and 5. 2013 state income tax form 07(3)(b) of this revenue procedure, respectively, to the Schedules K-1 that are filed with the Service. 2013 state income tax form However, Category 1 filers must retain the statements they complete and each partner must retain its own statement, in their respective books and records. 2013 state income tax form (4) If as a result of § 108(i)(5)(D)(ii), a partner of a partnership described in section 5. 2013 state income tax form 07(1) of this revenue procedure or a shareholder of an S corporation described in section 5. 2013 state income tax form 07(1) of this revenue procedure must recognize items deferred under § 108(i), the partnership or S corporation must report these items on the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) and statements provided to the partner or shareholder pursuant to section 5. 2013 state income tax form 07(1) and (2) of this revenue procedure. 2013 state income tax form Similar rules apply to Category 1 and Category 2 filers (Form 8865) described in section 4. 2013 state income tax form 12(6) of this revenue procedure. 2013 state income tax form SECTION 6. 2013 state income tax form EFFECTIVE DATE This revenue procedure is effective for reacquisitions of applicable debt instruments in taxable years ending after December 31, 2008. 2013 state income tax form SECTION 7. 2013 state income tax form TRANSITION RULE . 2013 state income tax form 01 Noncomplying Election. 2013 state income tax form Except as otherwise provided in this section 7. 2013 state income tax form 01, the Service will treat a § 108(i) election as effective if a taxpayer files an election with the taxpayer’s federal income tax return filed on or before September 16, 2009, using any reasonable procedure to make the election. 2013 state income tax form However, an election that does not comply with section 4 of this revenue procedure will not be effective unless the taxpayer on or before November 16, 2009, files an amended return for the taxable year of the election and complies with the requirements of section 4 of this revenue procedure. 2013 state income tax form . 2013 state income tax form 02 Modification of Election. 2013 state income tax form A taxpayer that files a § 108(i) election on or before September 16, 2009, may modify that election by filing an amended return on or before November 16, 2009 (for example, to modify the amount of COD income the taxpayer elects to defer). 2013 state income tax form To be effective, a modification of an election described in the preceding sentence must satisfy the requirements for an election described in section 4 of this revenue procedure. 2013 state income tax form . 2013 state income tax form 03 Notations. 2013 state income tax form A taxpayer that files the amended return on paper must write “Section 108(i) Election” on the top of the first page. 2013 state income tax form A taxpayer that files the amended return electronically should indicate “Section 108(i) Election” on the return. 2013 state income tax form See Publication 4163, Modernized e-File (MeF) Information for Authorized IRS e-file Providers for Business Returns Tax Year 2008 for more details. 2013 state income tax form SECTION 8. 2013 state income tax form PAPERWORK REDUCTION ACT The collection of information contained in this revenue procedure has been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act (44 U. 2013 state income tax form S. 2013 state income tax form C. 2013 state income tax form 3507) under control number 1545-2147. 2013 state income tax form An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. 2013 state income tax form The collection of information in this revenue procedure is in sections 4, 5 and 7. 2013 state income tax form This information is required to determine the amount of income and deductions a taxpayer elects to defer and to track those amounts until the taxpayer has reported all deferred income and deductions on the taxpayer’s tax return. 2013 state income tax form This information will be used during examination to verify that a taxpayer has correctly deferred income and deductions. 2013 state income tax form The collection of information is required to obtain a benefit. 2013 state income tax form The likely respondents are C corporations, shareholders of S corporations, partners of partnerships, and other individuals engaged in a trade or business, that reacquire applicable debt instruments in 2009 or 2010. 2013 state income tax form The estimated total annual reporting burden is 300,000 hours. 2013 state income tax form The estimated annual burden per respondent varies from 1 to 8 hours, depending on individual circumstances, with an estimated average of 6 hours. 2013 state income tax form The estimated number of respondents is 50,000. 2013 state income tax form Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. 2013 state income tax form Generally, tax returns and return information are confidential, as required by § 6103. 2013 state income tax form DRAFTING INFORMATION The principal authors of this revenue procedure are Megan A. 2013 state income tax form Stoner of the Office of Associate Chief Counsel (Passthroughs & Special Industries) and Craig Wojay of the Office of Associate Chief Counsel (Income Tax & Accounting). 2013 state income tax form For further information regarding this revenue procedure, contact Megan A. 2013 state income tax form Stoner at (202) 622-3070 for questions involving partnerships and S corporations, William E. 2013 state income tax form Blanchard at (202) 622-3950 for questions involving OID, Ronald M. 2013 state income tax form Gootzeit at (202) 622-3860 for questions involving foreign entities, Robert Rhyne at (202) 622-7790 for questions involving earnings and profits and consolidated groups, and Craig Wojay at (202) 622-4920 for questions on § 108(i) generally (not toll-free calls). 2013 state income tax form Prev  Up  Next   Home   More Internal Revenue Bulletins
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Estate and Gift Taxes

Estate Tax
The estate tax is a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death.

Frequently Asked Questions on Estate Taxes
Find some of the more common questions dealing with basic estate tax issues.

Gift Tax
If you give someone money or property during your life, you may be subject to federal gift tax.

Frequently Asked Questions on Gift Taxes
Find some of the more common questions dealing with gift tax issues as well as some examples of how different types of gifts are treated.

Filing Estate and Gift Tax Returns
Learn when to file estate and gift taxes, where to send your returns, and get contact information if you need help.

What's New - Estate and Gift Tax
Stay up to date with the tax law changes related to estate and gift taxes.

References/Related Topics

Page Last Reviewed or Updated: 29-Jan-2014

The 2013 State Income Tax Form

2013 state income tax form 3. 2013 state income tax form   SIMPLE Plans Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: SIMPLE IRA PlanWho Can Set Up a SIMPLE IRA Plan? Who Can Participate in a SIMPLE IRA Plan? How To Set Up a SIMPLE IRA Plan Notification Requirement Contribution Limits When To Deduct Contributions Where To Deduct Contributions Tax Treatment of Contributions Distributions (Withdrawals) More Information on SIMPLE IRA Plans SIMPLE 401(k) Plan Topics - This chapter discusses: SIMPLE IRA plan SIMPLE 401(k) plan Useful Items - You may want to see: Publications 590 Individual Retirement Arrangements (IRAs) 3998 Choosing A Retirement Solution for Your Small Business 4284 SIMPLE IRA Plan Checklist 4334 SIMPLE IRA Plans for Small Businesses Forms (and Instructions) W-2 Wage and Tax Statement 5304-SIMPLE Savings Incentive Match Plan for Employees of Small Employers (SIMPLE)–Not for Use With a Designated Financial Institution 5305-SIMPLE Savings Incentive Match Plan for Employees of Small Employers (SIMPLE)–for Use With a Designated Financial Institution 8880 Credit for Qualified Retirement Savings Contributions 8881 Credit for Small Employer Pension Plan Startup Costs A savings incentive match plan for employees (SIMPLE plan) is a written arrangement that provides you and your employees with a simplified way to make contributions to provide retirement income. 2013 state income tax form Under a SIMPLE plan, employees can choose to make salary reduction contributions to the plan rather than receiving these amounts as part of their regular pay. 2013 state income tax form In addition, you will contribute matching or nonelective contributions. 2013 state income tax form SIMPLE plans can only be maintained on a calendar-year basis. 2013 state income tax form A SIMPLE plan can be set up in either of the following ways. 2013 state income tax form Using SIMPLE IRAs (SIMPLE IRA plan). 2013 state income tax form As part of a 401(k) plan (SIMPLE 401(k) plan). 2013 state income tax form Many financial institutions will help you set up a SIMPLE plan. 2013 state income tax form SIMPLE IRA Plan A SIMPLE IRA plan is a retirement plan that uses SIMPLE IRAs for each eligible employee. 2013 state income tax form Under a SIMPLE IRA plan, a SIMPLE IRA must be set up for each eligible employee. 2013 state income tax form For the definition of an eligible employee, see Who Can Participate in a SIMPLE IRA Plan , later. 2013 state income tax form Who Can Set Up a SIMPLE IRA Plan? You can set up a SIMPLE IRA plan if you meet both the following requirements. 2013 state income tax form You meet the employee limit. 2013 state income tax form You do not maintain another qualified plan unless the other plan is for collective bargaining employees. 2013 state income tax form Employee limit. 2013 state income tax form   You can set up a SIMPLE IRA plan only if you had 100 or fewer employees who received $5,000 or more in compensation from you for the preceding year. 2013 state income tax form Under this rule, you must take into account all employees employed at any time during the calendar year regardless of whether they are eligible to participate. 2013 state income tax form Employees include self-employed individuals who received earned income and leased employees (defined in chapter 1). 2013 state income tax form   Once you set up a SIMPLE IRA plan, you must continue to meet the 100-employee limit each year you maintain the plan. 2013 state income tax form Grace period for employers who cease to meet the 100-employee limit. 2013 state income tax form   If you maintain the SIMPLE IRA plan for at least 1 year and you cease to meet the 100-employee limit in a later year, you will be treated as meeting it for the 2 calendar years immediately following the calendar year for which you last met it. 2013 state income tax form   A different rule applies if you do not meet the 100-employee limit because of an acquisition, disposition, or similar transaction. 2013 state income tax form Under this rule, the SIMPLE IRA plan will be treated as meeting the 100-employee limit for the year of the transaction and the 2 following years if both the following conditions are satisfied. 2013 state income tax form Coverage under the plan has not significantly changed during the grace period. 2013 state income tax form The SIMPLE IRA plan would have continued to qualify after the transaction if you had remained a separate employer. 2013 state income tax form    The grace period for acquisitions, dispositions, and similar transactions also applies if, because of these types of transactions, you do not meet the rules explained under Other qualified plan or Who Can Participate in a SIMPLE IRA Plan, below. 2013 state income tax form Other qualified plan. 2013 state income tax form   The SIMPLE IRA plan generally must be the only retirement plan to which you make contributions, or to which benefits accrue, for service in any year beginning with the year the SIMPLE IRA plan becomes effective. 2013 state income tax form Exception. 2013 state income tax form   If you maintain a qualified plan for collective bargaining employees, you are permitted to maintain a SIMPLE IRA plan for other employees. 2013 state income tax form Who Can Participate in a SIMPLE IRA Plan? Eligible employee. 2013 state income tax form   Any employee who received at least $5,000 in compensation during any 2 years preceding the current calendar year and is reasonably expected to receive at least $5,000 during the current calendar year is eligible to participate. 2013 state income tax form The term “employee” includes a self-employed individual who received earned income. 2013 state income tax form   You can use less restrictive eligibility requirements (but not more restrictive ones) by eliminating or reducing the prior year compensation requirements, the current year compensation requirements, or both. 2013 state income tax form For example, you can allow participation for employees who received at least $3,000 in compensation during any preceding calendar year. 2013 state income tax form However, you cannot impose any other conditions for participating in a SIMPLE IRA plan. 2013 state income tax form Excludable employees. 2013 state income tax form   The following employees do not need to be covered under a SIMPLE IRA plan. 2013 state income tax form Employees who are covered by a union agreement and whose retirement benefits were bargained for in good faith by the employees' union and you. 2013 state income tax form Nonresident alien employees who have received no U. 2013 state income tax form S. 2013 state income tax form source wages, salaries, or other personal services compensation from you. 2013 state income tax form Compensation. 2013 state income tax form   Compensation for employees is the total wages, tips, and other compensation from the employer subject to federal income tax withholding and the amounts paid for domestic service in a private home, local college club, or local chapter of a college fraternity or sorority. 2013 state income tax form Compensation also includes the employee's salary reduction contributions made under this plan and, if applicable, elective deferrals under a section 401(k) plan, a SARSEP, or a section 403(b) annuity contract and compensation deferred under a section 457 plan required to be reported by the employer on Form W-2. 2013 state income tax form If you are self-employed, compensation is your net earnings from self-employment (line 4 of Short Schedule SE or line 6 of Long Schedule SE (Form 1040)) before subtracting any contributions made to the SIMPLE IRA plan for yourself. 2013 state income tax form How To Set Up a SIMPLE IRA Plan You can use Form 5304-SIMPLE or Form 5305-SIMPLE to set up a SIMPLE IRA plan. 2013 state income tax form Each form is a model savings incentive match plan for employees (SIMPLE) plan document. 2013 state income tax form Which form you use depends on whether you select a financial institution or your employees select the institution that will receive the contributions. 2013 state income tax form Use Form 5304-SIMPLE if you allow each plan participant to select the financial institution for receiving his or her SIMPLE IRA plan contributions. 2013 state income tax form Use Form 5305-SIMPLE if you require that all contributions under the SIMPLE IRA plan be deposited initially at a designated financial institution. 2013 state income tax form The SIMPLE IRA plan is adopted when you have completed all appropriate boxes and blanks on the form and you (and the designated financial institution, if any) have signed it. 2013 state income tax form Keep the original form. 2013 state income tax form Do not file it with the IRS. 2013 state income tax form Other uses of the forms. 2013 state income tax form   If you set up a SIMPLE IRA plan using Form 5304-SIMPLE or Form 5305-SIMPLE, you can use the form to satisfy other requirements, including the following. 2013 state income tax form Meeting employer notification requirements for the SIMPLE IRA plan. 2013 state income tax form Form 5304-SIMPLE and Form 5305-SIMPLE contain a Model Notification to Eligible Employees that provides the necessary information to the employee. 2013 state income tax form Maintaining the SIMPLE IRA plan records and proving you set up a SIMPLE IRA plan for employees. 2013 state income tax form Deadline for setting up a SIMPLE IRA plan. 2013 state income tax form   You can set up a SIMPLE IRA plan effective on any date from January 1 through October 1 of a year, provided you did not previously maintain a SIMPLE IRA plan. 2013 state income tax form This requirement does not apply if you are a new employer that comes into existence after October 1 of the year the SIMPLE IRA plan is set up and you set up a SIMPLE IRA plan as soon as administratively feasible after your business comes into existence. 2013 state income tax form If you previously maintained a SIMPLE IRA plan, you can set up a SIMPLE IRA plan effective only on January 1 of a year. 2013 state income tax form A SIMPLE IRA plan cannot have an effective date that is before the date you actually adopt the plan. 2013 state income tax form Setting up a SIMPLE IRA. 2013 state income tax form   SIMPLE IRAs are the individual retirement accounts or annuities into which the contributions are deposited. 2013 state income tax form A SIMPLE IRA must be set up for each eligible employee. 2013 state income tax form Forms 5305-S, SIMPLE Individual Retirement Trust Account, and 5305-SA, SIMPLE Individual Retirement Custodial Account, are model trust and custodial account documents the participant and the trustee (or custodian) can use for this purpose. 2013 state income tax form   A SIMPLE IRA cannot be a Roth IRA. 2013 state income tax form Contributions to a SIMPLE IRA will not affect the amount an individual can contribute to a Roth or traditional IRA. 2013 state income tax form Deadline for setting up a SIMPLE IRA. 2013 state income tax form   A SIMPLE IRA must be set up for an employee before the first date by which a contribution is required to be deposited into the employee's IRA. 2013 state income tax form See Time limits for contributing funds , later, under Contribution Limits. 2013 state income tax form Credit for startup costs. 2013 state income tax form   You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a SIMPLE IRA plan that first became effective in 2013. 2013 state income tax form For more information, see Credit for startup costs under Reminders, earlier. 2013 state income tax form Notification Requirement If you adopt a SIMPLE IRA plan, you must notify each employee of the following information before the beginning of the election period. 2013 state income tax form The employee's opportunity to make or change a salary reduction choice under a SIMPLE IRA plan. 2013 state income tax form Your decision to make either matching contributions or nonelective contributions (discussed later). 2013 state income tax form A summary description provided by the financial institution. 2013 state income tax form Written notice that his or her balance can be transferred without cost or penalty if they use a designated financial institution. 2013 state income tax form Election period. 2013 state income tax form   The election period is generally the 60-day period immediately preceding January 1 of a calendar year (November 2 to December 31 of the preceding calendar year). 2013 state income tax form However, the dates of this period are modified if you set up a SIMPLE IRA plan in mid-year (for example, on July 1) or if the 60-day period falls before the first day an employee becomes eligible to participate in the SIMPLE IRA plan. 2013 state income tax form   A SIMPLE IRA plan can provide longer periods for permitting employees to enter into salary reduction agreements or to modify prior agreements. 2013 state income tax form For example, a SIMPLE IRA plan can provide a 90-day election period instead of the 60-day period. 2013 state income tax form Similarly, in addition to the 60-day period, a SIMPLE IRA plan can provide quarterly election periods during the 30 days before each calendar quarter, other than the first quarter of each year. 2013 state income tax form Contribution Limits Contributions are made up of salary reduction contributions and employer contributions. 2013 state income tax form You, as the employer, must make either matching contributions or nonelective contributions, defined later. 2013 state income tax form No other contributions can be made to the SIMPLE IRA plan. 2013 state income tax form These contributions, which you can deduct, must be made timely. 2013 state income tax form See Time limits for contributing funds , later. 2013 state income tax form Salary reduction contributions. 2013 state income tax form   The amount the employee chooses to have you contribute to a SIMPLE IRA on his or her behalf cannot be more than $12,000 for 2013 and 2014. 2013 state income tax form These contributions must be expressed as a percentage of the employee's compensation unless you permit the employee to express them as a specific dollar amount. 2013 state income tax form You cannot place restrictions on the contribution amount (such as limiting the contribution percentage), except to comply with the $12,000 limit. 2013 state income tax form   If you or an employee participates in any other qualified plan during the year and you or your employee have salary reduction contributions (elective deferrals) under those plans, the salary reduction contributions under a SIMPLE IRA plan also count toward the overall annual limit ($17,500 for 2013 and 2014) on exclusion of salary reduction contributions and other elective deferrals. 2013 state income tax form Catch-up contributions. 2013 state income tax form   A SIMPLE IRA plan can permit participants who are age 50 or over at the end of the calendar year to also make catch-up contributions. 2013 state income tax form The catch-up contribution limit for 2013 and 2014 for SIMPLE IRA plans is $2,500. 2013 state income tax form Salary reduction contributions are not treated as catch-up contributions for 2013 or 2014 until they exceed $12,000. 2013 state income tax form However, the catch-up contribution a participant can make for a year cannot exceed the lesser of the following amounts. 2013 state income tax form The catch-up contribution limit. 2013 state income tax form The excess of the participant's compensation over the salary reduction contributions that are not catch-up contributions. 2013 state income tax form Employer matching contributions. 2013 state income tax form   You are generally required to match each employee's salary reduction contributions on a dollar-for-dollar basis up to 3% of the employee's compensation. 2013 state income tax form This requirement does not apply if you make nonelective contributions as discussed later. 2013 state income tax form Example. 2013 state income tax form In 2013, your employee, John Rose, earned $25,000 and chose to defer 5% of his salary. 2013 state income tax form Your net earnings from self-employment are $40,000, and you choose to contribute 10% of your earnings to your SIMPLE IRA. 2013 state income tax form You make 3% matching contributions. 2013 state income tax form The total contribution you make for John is $2,000, figured as follows. 2013 state income tax form Salary reduction contributions ($25,000 × . 2013 state income tax form 05) $1,250 Employer matching contribution ($25,000 × . 2013 state income tax form 03) 750 Total contributions $2,000     The total contribution you make for yourself is $5,200, figured as follows. 2013 state income tax form Salary reduction contributions ($40,000 × . 2013 state income tax form 10) $4,000 Employer matching contribution ($40,000 × . 2013 state income tax form 03) 1,200 Total contributions $5,200 Lower percentage. 2013 state income tax form   If you choose a matching contribution less than 3%, the percentage must be at least 1%. 2013 state income tax form You must notify the employees of the lower match within a reasonable period of time before the 60-day election period (discussed earlier) for the calendar year. 2013 state income tax form You cannot choose a percentage less than 3% for more than 2 years during the 5-year period that ends with (and includes) the year for which the choice is effective. 2013 state income tax form Nonelective contributions. 2013 state income tax form   Instead of matching contributions, you can choose to make nonelective contributions of 2% of compensation on behalf of each eligible employee who has at least $5,000 (or some lower amount you select) of compensation from you for the year. 2013 state income tax form If you make this choice, you must make nonelective contributions whether or not the employee chooses to make salary reduction contributions. 2013 state income tax form Only $255,000 of the employee's compensation can be taken into account to figure the contribution limit in 2013 ($260,000 in 2014). 2013 state income tax form   If you choose this 2% contribution formula, you must notify the employees within a reasonable period of time before the 60-day election period (discussed earlier) for the calendar year. 2013 state income tax form Example 1. 2013 state income tax form In 2013, your employee, Jane Wood, earned $36,000 and chose to have you contribute 10% of her salary. 2013 state income tax form Your net earnings from self-employment are $50,000, and you choose to contribute 10% of your earnings to your SIMPLE IRA. 2013 state income tax form You make a 2% nonelective contribution. 2013 state income tax form Both of you are under age 50. 2013 state income tax form The total contribution you make for Jane is $4,320, figured as follows. 2013 state income tax form Salary reduction contributions ($36,000 × . 2013 state income tax form 10) $3,600 2% nonelective contributions ($36,000 × . 2013 state income tax form 02) 720 Total contributions $4,320     The total contribution you make for yourself is $6,000, figured as follows. 2013 state income tax form Salary reduction contributions ($50,000 × . 2013 state income tax form 10) $5,000 2% nonelective contributions ($50,000 × . 2013 state income tax form 02) 1,000 Total contributions $6,000 Example 2. 2013 state income tax form Using the same facts as in Example 1, above, the maximum contribution you make for Jane or for yourself if you each earned $75,000 is $13,500, figured as follows. 2013 state income tax form Salary reduction contributions (maximum amount allowed) $12,000 2% nonelective contributions ($75,000 × . 2013 state income tax form 02) 1,500 Total contributions $13,500 Time limits for contributing funds. 2013 state income tax form   You must make the salary reduction contributions to the SIMPLE IRA within 30 days after the end of the month in which the amounts would otherwise have been payable to the employee in cash. 2013 state income tax form You must make matching contributions or nonelective contributions by the due date (including extensions) for filing your federal income tax return for the year. 2013 state income tax form Certain plans subject to Department of Labor rules may have an earlier due date for salary reduction contributions. 2013 state income tax form When To Deduct Contributions You can deduct SIMPLE IRA contributions in the tax year within which the calendar year for which contributions were made ends. 2013 state income tax form You can deduct contributions for a particular tax year if they are made for that tax year and are made by the due date (including extensions) of your federal income tax return for that year. 2013 state income tax form Example 1. 2013 state income tax form Your tax year is the fiscal year ending June 30. 2013 state income tax form Contributions under a SIMPLE IRA plan for the calendar year 2013 (including contributions made in 2013 before July 1, 2013) are deductible in the tax year ending June 30, 2014. 2013 state income tax form Example 2. 2013 state income tax form You are a sole proprietor whose tax year is the calendar year. 2013 state income tax form Contributions under a SIMPLE IRA plan for the calendar year 2013 (including contributions made in 2014 by April 15, 2014) are deductible in the 2013 tax year. 2013 state income tax form Where To Deduct Contributions Deduct the contributions you make for your common-law employees on your tax return. 2013 state income tax form For example, sole proprietors deduct them on Schedule C (Form 1040) or Schedule F (Form 1040); partnerships deduct them on Form 1065; and corporations deduct them on Form 1120 or Form 1120S. 2013 state income tax form Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. 2013 state income tax form (If you are a partner, contributions for yourself are shown on the Schedule K-1 (Form 1065) you receive from the partnership. 2013 state income tax form ) Tax Treatment of Contributions You can deduct your contributions and your employees can exclude these contributions from their gross income. 2013 state income tax form SIMPLE IRA plan contributions are not subject to federal income tax withholding. 2013 state income tax form However, salary reduction contributions are subject to social security, Medicare, and federal unemployment (FUTA) taxes. 2013 state income tax form Matching and nonelective contributions are not subject to these taxes. 2013 state income tax form Reporting on Form W-2. 2013 state income tax form   Do not include SIMPLE IRA plan contributions in the “Wages, tips, other compensation” box of Form W-2. 2013 state income tax form You must, however, include them in the “Social security wages” and “Medicare wages and tips” boxes. 2013 state income tax form You must also include them in box 12. 2013 state income tax form Mark the “Retirement plan” checkbox in box 13. 2013 state income tax form For more information, see the Form W-2 instructions. 2013 state income tax form Distributions (Withdrawals) Distributions from a SIMPLE IRA are subject to IRA rules and generally are includible in income for the year received. 2013 state income tax form Tax-free rollovers can be made from one SIMPLE IRA into another SIMPLE IRA. 2013 state income tax form However, a rollover from a SIMPLE IRA to a non-SIMPLE IRA can be made tax free only after a 2-year participation in the SIMPLE IRA plan. 2013 state income tax form Generally, you or your employee must begin to receive distributions from a SIMPLE IRA by April 1 of the first year after the calendar year in which you or your employee reaches age 70½. 2013 state income tax form Early withdrawals generally are subject to a 10% additional tax. 2013 state income tax form However, the additional tax is increased to 25% if funds are withdrawn within 2 years of beginning participation. 2013 state income tax form More information. 2013 state income tax form   See Publication 590 for information about IRA rules, including those on the tax treatment of distributions, rollovers, required distributions, and income tax withholding. 2013 state income tax form More Information on SIMPLE IRA Plans If you need help to set up or maintain a SIMPLE IRA plan, go to the IRS website and search SIMPLE IRA Plan. 2013 state income tax form SIMPLE 401(k) Plan You can adopt a SIMPLE plan as part of a 401(k) plan if you meet the 100-employee limit as discussed earlier under SIMPLE IRA Plan. 2013 state income tax form A SIMPLE 401(k) plan is a qualified retirement plan and generally must satisfy the rules discussed under Qualification Rules in chapter 4, including the required distribution rules. 2013 state income tax form However, a SIMPLE 401(k) plan is not subject to the nondiscrimination and top-heavy rules discussed in chapter 4 if the plan meets the conditions listed below. 2013 state income tax form Under the plan, an employee can choose to have you make salary reduction contributions for the year to a trust in an amount expressed as a percentage of the employee's compensation, but not more than $12,000 for 2013 and 2014. 2013 state income tax form If permitted under the plan, an employee who is age 50 or over can also make a catch-up contribution of up to $2,500 for 2013 and 2014. 2013 state income tax form See Catch-up contributions , earlier under Contribution Limits. 2013 state income tax form You must make either: Matching contributions up to 3% of compensation for the year, or Nonelective contributions of 2% of compensation on behalf of each eligible employee who has at least $5,000 of compensation from you for the year. 2013 state income tax form No other contributions can be made to the trust. 2013 state income tax form No contributions are made, and no benefits accrue, for services during the year under any other qualified retirement plan sponsored by you on behalf of any employee eligible to participate in the SIMPLE 401(k) plan. 2013 state income tax form The employee's rights to any contributions are nonforfeitable. 2013 state income tax form No more than $255,000 of the employee's compensation can be taken into account in figuring matching contributions and nonelective contributions in 2013 ($260,000 in 2014). 2013 state income tax form Compensation is defined earlier in this chapter. 2013 state income tax form Employee notification. 2013 state income tax form   The notification requirement that applies to SIMPLE IRA plans also applies to SIMPLE 401(k) plans. 2013 state income tax form See Notification Requirement in this chapter. 2013 state income tax form Credit for startup costs. 2013 state income tax form   You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a SIMPLE 401(k) plan that first became effective in 2013. 2013 state income tax form For more information, see Credit for startup costs under Reminders, earlier. 2013 state income tax form Note on Forms. 2013 state income tax form   Please note that Forms 5304-SIMPLE and 5305-SIMPLE can not be used to establish a SIMPLE 401(k) plan. 2013 state income tax form To set up a SIMPLE 401(k) plan, see Adopting a Written Plan in chapter 4. 2013 state income tax form Prev  Up  Next   Home   More Online Publications