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Amend 2010 Tax

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Amend 2010 Tax

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

The Internal Revenue Code provides for dollar limitations on benefits and contributions under qualified retirement plans. IRC Section 415 requires the limits to be adjusted annually for cost-of-living increases. The IRS announced on October 31, 2013 cost-of-living adjustments applicable to dollar limitations for pension plans and other items for tax year 2014.

Please see our COLA Increases Table for prior years' dollar limitations and Internal Revenue Code references.


 

  2014 2013

2012

IRAs

IRA Contribution Limit 5,500 5,500 $5,000
IRA Catch-Up Contributions 1,000 1,000 1,000

IRA AGI Deduction Phase-out Starting at

Joint Return 96,000 95,000 92,000
Single or Head of Household 60,000 59,000 58,000

SEP

SEP Minimum Compensation 550 550 550
SEP Maximum Contribution 52,000 51,000 50,000
SEP Maximum Compensation 260,000 255,000 250,000

SIMPLE Plans

SIMPLE Maximum Contributions 12,000 12,000 11,500
Catch-up Contributions 2,500 2,500 2,500

401(k), 403(b), Profit-Sharing Plans, etc.

Annual Compensation 260,000 255,000 250,000
Elective Deferrals 17,500 17,500 17,000
Catch-up Contributions 5,500 5,500 5,500
Defined Contribution Limits 52,000 51,000 50,000
ESOP Limits 1,050,000
210,000

1,035,000

205,000

1,015,000

200,000

Other

HCE Threshold 115,000 115,000 115,000
Defined Benefit Limits 210,000 205,000 200,000
Key Employee 170,000 165,000 165,000
457 Elective Deferrals 17,500 17,500 17,000
Control Employee (board member or officer) 105,000 100,000 100,000
Control Employee (compensation-based) 210,000 205,000 205,000
Taxable Wage Base 117,000 113,700 110,100

 

Page Last Reviewed or Updated: 08-Nov-2013

The Amend 2010 Tax

Amend 2010 tax Publication 915 - Main Content Table of Contents Are Any of Your Benefits Taxable?Worksheet A. Amend 2010 tax Exemption from withholding. Amend 2010 tax How To Report Your Benefits How Much Is Taxable?Examples Lump-Sum ElectionExample Deductions Related to Your BenefitsRepayments More Than Gross Benefits Worksheets AppendixForm SSA-1099, Social Security Benefit Statement 2013 Form SSA-1042S, Social Security Benefit Statement 2013 (Nonresident Aliens) Form RRB-1099, Payments by the Railroad Retirement Board 2013 Form RRB-1042S, Payments by the Railroad Retirement Board 2013 (Nonresident Aliens) How To Get Tax HelpLow Income Taxpayer Clinics Are Any of Your Benefits Taxable? To find out whether any of your benefits shown on Forms SSA-1099 and RRB-1099 may be taxable, compare the base amount (explained later) for your filing status with the total of: One-half of your benefits, plus All your other income, including tax-exempt interest. Amend 2010 tax When making this comparison, do not reduce your other income by any exclusions for: Interest from qualified U. Amend 2010 tax S. Amend 2010 tax savings bonds, Employer-provided adoption benefits, Foreign earned income or foreign housing, or Income earned by bona fide residents of American Samoa or Puerto Rico. Amend 2010 tax Children's benefits. Amend 2010 tax   The rules in this publication apply to benefits received by children. Amend 2010 tax See Who is taxed , later. Amend 2010 tax The SSA issues Form SSA-1099 and Form SSA-1042S. Amend 2010 tax The RRB issues Form RRB-1099 and Form RRB-1042S. Amend 2010 tax These forms (tax statements) report the amounts paid and repaid, and taxes withheld for a tax year. Amend 2010 tax You may receive more than one of these forms for the same tax year. Amend 2010 tax See the Appendix at the end of this publication for more information. Amend 2010 tax Each original Form RRB-1099 or Form RRB-1042S is valid unless it has been corrected. Amend 2010 tax The RRB will issue a corrected Form RRB-1099 or Form RRB-1042S if there is an error in the original. Amend 2010 tax A corrected Form RRB-1099 or Form RRB-1042S is indicated as “CORRECTED” and replaces the corresponding original Form RRB-1099 or Form RRB-1042S. Amend 2010 tax You must use the latest corrected Form RRB-1099 or Form RRB-1042S you received and any original Form RRB-1099 or Form RRB-1042S that the RRB has not corrected when you determine what amounts to report on your tax return. Amend 2010 tax Figuring total income. Amend 2010 tax   To figure the total of one-half of your benefits plus your other income, use Worksheet A, discussed later. Amend 2010 tax If the total is more than your base amount, part of your benefits may be taxable. Amend 2010 tax   If you are married and file a joint return for 2013, you and your spouse must combine your incomes and your benefits to figure whether any of your combined benefits are taxable. Amend 2010 tax Even if your spouse did not receive any benefits, you must add your spouse's income to yours to figure whether any of your benefits are taxable. Amend 2010 tax If the only income you received during 2013 was your social security or the SSEB portion of tier 1 railroad retirement benefits, your benefits generally are not taxable and you probably do not have to file a return. Amend 2010 tax If you have income in addition to your benefits, you may have to file a return even if none of your benefits are taxable. Amend 2010 tax Base amount. Amend 2010 tax   Your base amount is: $25,000 if you are single, head of household, or qualifying widow(er), $25,000 if you are married filing separately and lived apart from your spouse for all of 2013, $32,000 if you are married filing jointly, or $-0- if you are married filing separately and lived with your spouse at any time during 2013. Amend 2010 tax Worksheet A. Amend 2010 tax   You can use Worksheet A to figure the amount of income to compare with your base amount. Amend 2010 tax This is a quick way to check whether some of your benefits may be taxable. Amend 2010 tax     Worksheet A. Amend 2010 tax A Quick Way To Check if Your Benefits May Be Taxable Keep for your records A. Amend 2010 tax Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Amend 2010 tax Include the full amount of any lump-sum benefit payments received in 2013, for 2013 and earlier years. Amend 2010 tax (If you received more than one form, combine the amounts from box 5 and enter the total. Amend 2010 tax ) A. Amend 2010 tax   Note. Amend 2010 tax If the amount on line A is zero or less, stop here; none of your benefits are taxable this year. Amend 2010 tax B. Amend 2010 tax Enter one-half of the amount on line A B. Amend 2010 tax   C. Amend 2010 tax Enter your taxable pensions, wages, interest, dividends, and other taxable income C. Amend 2010 tax   D. Amend 2010 tax Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income (listed earlier) D. Amend 2010 tax   E. Amend 2010 tax Add lines B, C, and D E. Amend 2010 tax   Note. Amend 2010 tax Compare the amount on line E to your base amount for your filing status. Amend 2010 tax If the amount on line E equals or is less than the base amount for your filing status, none of your benefits are taxable this year. Amend 2010 tax If the amount on line E is more than your base amount, some of your benefits may be taxable. Amend 2010 tax You need to complete Worksheet 1, shown later. Amend 2010 tax If none of your benefits are taxable, but you otherwise must file a tax return, see Benefits not taxable , later, under How To Report Your Benefits . Amend 2010 tax   Example. Amend 2010 tax You and your spouse (both over 65) are filing a joint return for 2013 and you both received social security benefits during the year. Amend 2010 tax In January 2014, you received a Form SSA-1099 showing net benefits of $7,500 in box 5. Amend 2010 tax Your spouse received a Form SSA-1099 showing net benefits of $3,500 in box 5. Amend 2010 tax You also received a taxable pension of $22,800 and interest income of $500. Amend 2010 tax You did not have any tax-exempt interest income. Amend 2010 tax Your benefits are not taxable for 2013 because your income, as figured in Worksheet A below, is not more than your base amount ($32,000) for married filing jointly. Amend 2010 tax   Even though none of your benefits are taxable, you must file a return for 2013 because your taxable gross income ($23,300) exceeds the minimum filing requirement amount for your filing status. Amend 2010 tax     Filled-in Worksheet A. Amend 2010 tax A Quick Way To Check if Your Benefits May Be Taxable Keep for your records A. Amend 2010 tax Enter the amount from box 5 of all your Forms SSA-1099 and RRB-1099. Amend 2010 tax Include the full amount of any lump-sum benefit payments received in 2013, for 2013 and earlier years. Amend 2010 tax (If you received more than one form, combine the amounts from box 5 and enter the total. Amend 2010 tax ) A. Amend 2010 tax $11,000 Note. Amend 2010 tax If the amount on line A is zero or less, stop here; none of your benefits are taxable this year. Amend 2010 tax B. Amend 2010 tax Enter one-half of the amount on line A B. Amend 2010 tax 5,500 C. Amend 2010 tax Enter your taxable pensions, wages, interest, dividends, and other taxable income C. Amend 2010 tax 23,300 D. Amend 2010 tax Enter any tax-exempt interest income (such as interest on municipal bonds) plus any exclusions from income (listed earlier) D. Amend 2010 tax -0- E. Amend 2010 tax Add lines B, C, and D E. Amend 2010 tax $28,800 Note. Amend 2010 tax Compare the amount on line E to your base amount for your filing status. Amend 2010 tax If the amount on line E equals or is less than the base amount for your filing status, none of your benefits are taxable this year. Amend 2010 tax If the amount on line E is more than your base amount, some of your benefits may be taxable. Amend 2010 tax You need to complete Worksheet 1, shown later. Amend 2010 tax If none of your benefits are taxable, but you otherwise must file a tax return, see Benefits not taxable , later, under How To Report Your Benefits . Amend 2010 tax   Who is taxed. Amend 2010 tax   Benefits are included in the taxable income (to the extent they are taxable) of the person who has the legal right to receive the benefits. Amend 2010 tax For example, if you and your child receive benefits, but the check for your child is made out in your name, you must use only your part of the benefits to see whether any benefits are taxable to you. Amend 2010 tax One-half of the part that belongs to your child must be added to your child's other income to see whether any of those benefits are taxable to your child. Amend 2010 tax Repayment of benefits. Amend 2010 tax   Any repayment of benefits you made during 2013 must be subtracted from the gross benefits you received in 2013. Amend 2010 tax It does not matter whether the repayment was for a benefit you received in 2013 or in an earlier year. Amend 2010 tax If you repaid more than the gross benefits you received in 2013, see Repayments More Than Gross Benefits , later. Amend 2010 tax   Your gross benefits are shown in box 3 of Form SSA-1099 or Form RRB-1099. Amend 2010 tax Your repayments are shown in box 4. Amend 2010 tax The amount in box 5 shows your net benefits for 2013 (box 3 minus box 4). Amend 2010 tax Use the amount in box 5 to figure whether any of your benefits are taxable. Amend 2010 tax Example. Amend 2010 tax In 2012, you received $3,000 in social security benefits, and in 2013 you received $2,700. Amend 2010 tax In March 2013, SSA notified you that you should have received only $2,500 in benefits in 2012. Amend 2010 tax During 2013, you repaid $500 to SSA. Amend 2010 tax The Form SSA-1099 you received for 2013 shows $2,700 in box 3 (gross amount) and $500 in box 4 (repayment). Amend 2010 tax The amount in box 5 shows your net benefits of $2,200 ($2,700 minus $500). Amend 2010 tax Tax withholding and estimated tax. Amend 2010 tax   You can choose to have federal income tax withheld from your social security benefits and/or the SSEB portion of your tier 1 railroad retirement benefits. Amend 2010 tax If you choose to do this, you must complete a Form W-4V, Voluntary Withholding Statement. Amend 2010 tax   If you do not choose to have income tax withheld, you may have to request additional withholding from other income or pay estimated tax during the year. Amend 2010 tax For details, see Publication 505, Tax Withholding and Estimated Tax, or the instructions for Form 1040-ES, Estimated Tax for Individuals. Amend 2010 tax U. Amend 2010 tax S. Amend 2010 tax citizens residing abroad. Amend 2010 tax   U. Amend 2010 tax S. Amend 2010 tax citizens who are residents of the following countries are exempt from U. Amend 2010 tax S. Amend 2010 tax tax on their benefits. Amend 2010 tax Canada. Amend 2010 tax Egypt. Amend 2010 tax Germany. Amend 2010 tax Ireland. Amend 2010 tax Israel. Amend 2010 tax Italy. Amend 2010 tax (You must also be a citizen of Italy for the exemption to apply. Amend 2010 tax ) Romania. Amend 2010 tax United Kingdom. Amend 2010 tax   The SSA will not withhold U. Amend 2010 tax S. Amend 2010 tax tax from your benefits if you are a U. Amend 2010 tax S. Amend 2010 tax citizen. Amend 2010 tax   The RRB will withhold U. Amend 2010 tax S. Amend 2010 tax tax from your benefits unless you file Form RRB-1001, Nonresident Questionnaire, with the RRB to provide citizenship and residency information. Amend 2010 tax If you do not file Form RRB-1001, the RRB will consider you a nonresident alien and withhold tax from your railroad retirement benefits at a 30% rate. Amend 2010 tax Contact the RRB to get this form. Amend 2010 tax Lawful permanent residents. Amend 2010 tax   For U. Amend 2010 tax S. Amend 2010 tax income tax purposes, lawful permanent residents (green card holders) are considered resident aliens until their lawful permanent resident status under the immigration laws is either taken away or is administratively or judicially determined to have been abandoned. Amend 2010 tax Social security benefits paid to a green card holder are not subject to 30% withholding. Amend 2010 tax If you are a green card holder and tax was withheld in error on your social security benefits because you have a foreign address, the withholding tax is refundable by the Social Security Administration (SSA) or the IRS. Amend 2010 tax SSA will refund taxes erroneously withheld if the refund can be processed during the same calendar year in which the tax was withheld. Amend 2010 tax If SSA cannot refund the taxes withheld, you must file a Form 1040 or 1040A with the Internal Revenue Service Center, Austin, TX 73301 to determine if you are entitled to a refund. Amend 2010 tax You must also attach the following information to your Form 1040 or 1040A: A copy of the Form SSA-1042S, Social Security Benefit Statement, A copy of the “green card,” and A signed declaration that includes the following statements:    “The SSA should not have withheld federal income tax from my social security benefits because I am a U. Amend 2010 tax S. Amend 2010 tax lawful permanent resident and my green card has been neither revoked nor administratively or judicially determined to have been abandoned. Amend 2010 tax I am filing a U. Amend 2010 tax S. Amend 2010 tax income tax return for the tax year as a resident alien reporting all of my worldwide income. Amend 2010 tax I have not claimed benefits for the tax year under an income tax treaty as a nonresident alien. Amend 2010 tax ” Nonresident aliens. Amend 2010 tax   A nonresident alien is an individual who is not a citizen or resident of the United States. Amend 2010 tax If you are a nonresident alien, the rules discussed in this publication do not apply to you. Amend 2010 tax Instead, 85% of your benefits are taxed at a 30% rate, unless exempt (or subject to a lower rate) by treaty. Amend 2010 tax You will receive a Form SSA-1042S or Form RRB-1042S showing the amount of your benefits. Amend 2010 tax These forms will also show the tax rate and the amount of tax withheld from your benefits. Amend 2010 tax   Under tax treaties with the following countries, residents of these countries are exempt from U. Amend 2010 tax S. Amend 2010 tax tax on their benefits. Amend 2010 tax Canada. Amend 2010 tax Egypt. Amend 2010 tax Germany. Amend 2010 tax Ireland. Amend 2010 tax Israel. Amend 2010 tax Italy. Amend 2010 tax Japan. Amend 2010 tax Romania. Amend 2010 tax United Kingdom. Amend 2010 tax   Under a treaty with India, benefits paid to individuals who are both residents and nationals of India are exempt from U. Amend 2010 tax S. Amend 2010 tax tax if the benefits are for services performed for the United States, its subdivisions, or local government authorities. Amend 2010 tax   If you are a resident of Switzerland, your total benefit amount will be taxed at a 15% rate. Amend 2010 tax   For more information on whether you are a nonresident alien, see Publication 519, U. Amend 2010 tax S. Amend 2010 tax Tax Guide for Aliens. Amend 2010 tax Exemption from withholding. Amend 2010 tax   If your social security benefits are exempt from tax because you are a resident of one of the treaty countries listed, the SSA will not withhold U. Amend 2010 tax S. Amend 2010 tax tax from your benefits. Amend 2010 tax   If your railroad retirement benefits are exempt from tax because you are a resident of one of the treaty countries listed, you can claim an exemption from withholding by filing Form RRB-1001 with the RRB. Amend 2010 tax Contact the RRB to get this form. Amend 2010 tax Canadian or German social security benefits paid to U. Amend 2010 tax S. Amend 2010 tax residents. Amend 2010 tax   Under income tax treaties with Canada and Germany, social security benefits paid by those countries to U. Amend 2010 tax S. Amend 2010 tax residents are treated for U. Amend 2010 tax S. Amend 2010 tax income tax purposes as if they were paid under the social security legislation of the United States. Amend 2010 tax If you receive social security benefits from Canada or Germany, include them on line 1 of Worksheet 1, shown later. Amend 2010 tax How To Report Your Benefits If part of your benefits are taxable, you must use Form 1040 or Form 1040A. Amend 2010 tax You cannot use Form 1040EZ. Amend 2010 tax Reporting on Form 1040. Amend 2010 tax   Report your net benefits (the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099) on line 20a and the taxable part on line 20b. Amend 2010 tax If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 20a. Amend 2010 tax Reporting on Form 1040A. Amend 2010 tax   Report your net benefits (the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099) on line 14a and the taxable part on line 14b. Amend 2010 tax If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on line 14a. Amend 2010 tax Benefits not taxable. Amend 2010 tax   If you are filing Form 1040EZ, do not report any benefits on your tax return. Amend 2010 tax If you are filing Form 1040 or Form 1040A, report your net benefits (the total amount from box 5 of all your Forms SSA-1099 and Forms RRB-1099) on Form 1040, line 20a, or Form 1040A, line 14a. Amend 2010 tax Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Amend 2010 tax If you are married filing separately and you lived apart from your spouse for all of 2013, also enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Amend 2010 tax How Much Is Taxable? If part of your benefits are taxable, how much is taxable depends on the total amount of your benefits and other income. Amend 2010 tax Generally, the higher that total amount, the greater the taxable part of your benefits. Amend 2010 tax Maximum taxable part. Amend 2010 tax   Generally, up to 50% of your benefits will be taxable. Amend 2010 tax However, up to 85% of your benefits can be taxable if either of the following situations applies to you. Amend 2010 tax The total of one-half of your benefits and all your other income is more than $34,000 ($44,000 if you are married filing jointly). Amend 2010 tax You are married filing separately and lived with your spouse at any time during 2013. Amend 2010 tax Which worksheet to use. Amend 2010 tax   A worksheet you can use to figure your taxable benefits is in the instructions for your Form 1040 or 1040A. Amend 2010 tax You can use either that worksheet or Worksheet 1 in this publication, unless any of the following situations applies to you. Amend 2010 tax You contributed to a traditional individual retirement arrangement (IRA) and you or your spouse is covered by a retirement plan at work. Amend 2010 tax In this situation you must use the special worksheets in Appendix B of Publication 590 to figure both your IRA deduction and your taxable benefits. Amend 2010 tax Situation (1) does not apply and you take an exclusion for interest from qualified U. Amend 2010 tax S. Amend 2010 tax savings bonds (Form 8815), for adoption benefits (Form 8839), for foreign earned income or housing (Form 2555 or Form 2555-EZ), or for income earned in American Samoa (Form 4563) or Puerto Rico by bona fide residents. Amend 2010 tax In this situation, you must use Worksheet 1 in this publication to figure your taxable benefits. Amend 2010 tax You received a lump-sum payment for an earlier year. Amend 2010 tax In this situation, also complete Worksheet 2 or 3 and Worksheet 4 in this publication. Amend 2010 tax See Lump-Sum Election , later. Amend 2010 tax Examples A few examples you can use as a guide to figure the taxable part of your benefits follow. Amend 2010 tax Filled-in Worksheet 1. Amend 2010 tax Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Amend 2010 tax Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). Amend 2010 tax None of your benefits are taxable for 2013. Amend 2010 tax For more information, see Repayments More Than Gross Benefits . Amend 2010 tax If you are filing Form 8815, Exclusion of Interest From Series EE and I U. Amend 2010 tax S. Amend 2010 tax Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. Amend 2010 tax Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. Amend 2010 tax 1. Amend 2010 tax Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Amend 2010 tax Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. Amend 2010 tax $5,980         2. Amend 2010 tax Enter one-half of line 1 2. Amend 2010 tax 2,990     3. Amend 2010 tax Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. Amend 2010 tax 28,990     4. Amend 2010 tax Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. Amend 2010 tax -0-     5. Amend 2010 tax Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. Amend 2010 tax -0-     6. Amend 2010 tax Combine lines 2, 3, 4, and 5 6. Amend 2010 tax 31,980     7. Amend 2010 tax Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Amend 2010 tax  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. Amend 2010 tax -0-     8. Amend 2010 tax Is the amount on line 7 less than the amount on line 6?             No. Amend 2010 tax None of your social security benefits are taxable. Amend 2010 tax Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Amend 2010 tax             Yes. Amend 2010 tax Subtract line 7 from line 6 8. Amend 2010 tax 31,980     9. Amend 2010 tax If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. Amend 2010 tax 25,000       Note. Amend 2010 tax If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Amend 2010 tax 85) and enter the result on line 17. Amend 2010 tax Then go to line 18. Amend 2010 tax         10. Amend 2010 tax Is the amount on line 9 less than the amount on line 8?             No. Amend 2010 tax None of your benefits are taxable. Amend 2010 tax Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Amend 2010 tax If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Amend 2010 tax             Yes. Amend 2010 tax Subtract line 9 from line 8 10. Amend 2010 tax 6,980     11. Amend 2010 tax Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. Amend 2010 tax 9,000     12. Amend 2010 tax Subtract line 11 from line 10. Amend 2010 tax If zero or less, enter -0- 12. Amend 2010 tax -0-     13. Amend 2010 tax Enter the smaller of line 10 or line 11 13. Amend 2010 tax 6,980     14. Amend 2010 tax Enter one-half of line 13 14. Amend 2010 tax 3,490     15. Amend 2010 tax Enter the smaller of line 2 or line 14 15. Amend 2010 tax 2,990     16. Amend 2010 tax Multiply line 12 by 85% (. Amend 2010 tax 85). Amend 2010 tax If line 12 is zero, enter -0- 16. Amend 2010 tax -0-     17. Amend 2010 tax Add lines 15 and 16 17. Amend 2010 tax 2,990     18. Amend 2010 tax Multiply line 1 by 85% (. Amend 2010 tax 85) 18. Amend 2010 tax 5,083     19. Amend 2010 tax Taxable benefits. Amend 2010 tax Enter the smaller of line 17 or line 18. Amend 2010 tax Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. Amend 2010 tax $2,990       If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. Amend 2010 tax         Example 1. Amend 2010 tax George White is single and files Form 1040 for 2013. Amend 2010 tax In addition to receiving social security payments, he received a fully taxable pension of $18,600, wages from a part-time job of $9,400, and taxable interest income of $990, for a total of $28,990. Amend 2010 tax He received a Form SSA-1099 in January 2014 that shows his net social security benefits of $5,980 in box 5. Amend 2010 tax   To figure his taxable benefits, George completes Worksheet 1, shown below. Amend 2010 tax On line 20a of his Form 1040, George enters his net benefits of $5,980. Amend 2010 tax On line 20b, he enters his taxable benefits of $2,990. Amend 2010 tax Example 2. Amend 2010 tax Ray and Alice Hopkins file a joint return on Form 1040A for 2013. Amend 2010 tax Ray is retired and received a fully taxable pension of $15,500. Amend 2010 tax He also received social security benefits and his Form SSA-1099 for 2013 shows net benefits of $5,600 in box 5. Amend 2010 tax Alice worked during the year and had wages of $14,000. Amend 2010 tax She made a deductible payment to her IRA account of $1,000. Amend 2010 tax Ray and Alice have two savings accounts with a total of $250 in taxable interest income. Amend 2010 tax They complete Worksheet 1, entering $29,750 ($15,500 + $14,000 + $250) on line 3. Amend 2010 tax They find none of Ray's social security benefits are taxable. Amend 2010 tax On Form 1040A, they enter $5,600 on line 14a and -0- on line 14b. Amend 2010 tax Filled-in Worksheet 1. Amend 2010 tax Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Amend 2010 tax Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). Amend 2010 tax None of your benefits are taxable for 2013. Amend 2010 tax For more information, see Repayments More Than Gross Benefits . Amend 2010 tax If you are filing Form 8815, Exclusion of Interest From Series EE and I U. Amend 2010 tax S. Amend 2010 tax Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. Amend 2010 tax Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. Amend 2010 tax 1. Amend 2010 tax Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Amend 2010 tax Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. Amend 2010 tax $5,600         2. Amend 2010 tax Enter one-half of line 1 2. Amend 2010 tax 2,800     3. Amend 2010 tax Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. Amend 2010 tax 29,750     4. Amend 2010 tax Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. Amend 2010 tax -0-     5. Amend 2010 tax Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. Amend 2010 tax -0-     6. Amend 2010 tax Combine lines 2, 3, 4, and 5 6. Amend 2010 tax 32,550     7. Amend 2010 tax Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Amend 2010 tax  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. Amend 2010 tax 1,000     8. Amend 2010 tax Is the amount on line 7 less than the amount on line 6?             No. Amend 2010 tax None of your social security benefits are taxable. Amend 2010 tax Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Amend 2010 tax             Yes. Amend 2010 tax Subtract line 7 from line 6 8. Amend 2010 tax 31,550     9. Amend 2010 tax If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. Amend 2010 tax 32,000       Note. Amend 2010 tax If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Amend 2010 tax 85) and enter the result on line 17. Amend 2010 tax Then go to line 18. Amend 2010 tax         10. Amend 2010 tax Is the amount on line 9 less than the amount on line 8?             No. Amend 2010 tax None of your benefits are taxable. Amend 2010 tax Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Amend 2010 tax If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Amend 2010 tax             Yes. Amend 2010 tax Subtract line 9 from line 8 10. Amend 2010 tax       11. Amend 2010 tax Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. Amend 2010 tax       12. Amend 2010 tax Subtract line 11 from line 10. Amend 2010 tax If zero or less, enter -0- 12. Amend 2010 tax       13. Amend 2010 tax Enter the smaller of line 10 or line 11 13. Amend 2010 tax       14. Amend 2010 tax Enter one-half of line 13 14. Amend 2010 tax       15. Amend 2010 tax Enter the smaller of line 2 or line 14 15. Amend 2010 tax       16. Amend 2010 tax Multiply line 12 by 85% (. Amend 2010 tax 85). Amend 2010 tax If line 12 is zero, enter -0- 16. Amend 2010 tax       17. Amend 2010 tax Add lines 15 and 16 17. Amend 2010 tax       18. Amend 2010 tax Multiply line 1 by 85% (. Amend 2010 tax 85) 18. Amend 2010 tax       19. Amend 2010 tax Taxable benefits. Amend 2010 tax Enter the smaller of line 17 or line 18. Amend 2010 tax Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. Amend 2010 tax         If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. Amend 2010 tax         Example 3. Amend 2010 tax Joe and Betty Johnson file a joint return on Form 1040 for 2013. Amend 2010 tax Joe is a retired railroad worker and in 2013 received the social security equivalent benefit (SSEB) portion of tier 1 railroad retirement benefits. Amend 2010 tax Joe's Form RRB-1099 shows $10,000 in box 5. Amend 2010 tax Betty is a retired government worker and received a fully taxable pension of $38,000. Amend 2010 tax They had $2,300 in taxable interest income plus interest of $200 on a qualified U. Amend 2010 tax S. Amend 2010 tax savings bond. Amend 2010 tax The savings bond interest qualified for the exclusion. Amend 2010 tax They figure their taxable benefits by completing Worksheet 1 below. Amend 2010 tax Because they have qualified U. Amend 2010 tax S. Amend 2010 tax savings bond interest, they follow the note at the beginning of the worksheet and use the amount from line 2 of their Schedule B (Form 1040A or 1040) on line 3 of the worksheet instead of the amount from line 8a of their Form 1040. Amend 2010 tax On line 3 of the worksheet, they enter $40,500 ($38,000 + $2,500). Amend 2010 tax More than 50% of Joe's net benefits are taxable because the income on line 8 of the worksheet ($45,500) is more than $44,000. Amend 2010 tax (See Maximum taxable part under How Much Is Taxable earlier. Amend 2010 tax ) Joe and Betty enter $10,000 on Form 1040, line 20a, and $6,275 on Form 1040, line 20b. Amend 2010 tax Filled-in Worksheet 1. Amend 2010 tax Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Amend 2010 tax Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). Amend 2010 tax None of your benefits are taxable for 2013. Amend 2010 tax For more information, see Repayments More Than Gross Benefits . Amend 2010 tax If you are filing Form 8815, Exclusion of Interest From Series EE and I U. Amend 2010 tax S. Amend 2010 tax Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. Amend 2010 tax Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. Amend 2010 tax 1. Amend 2010 tax Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Amend 2010 tax Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. Amend 2010 tax $10,000         2. Amend 2010 tax Enter one-half of line 1 2. Amend 2010 tax 5,000     3. Amend 2010 tax Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. Amend 2010 tax 40,500     4. Amend 2010 tax Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. Amend 2010 tax -0-     5. Amend 2010 tax Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. Amend 2010 tax -0-     6. Amend 2010 tax Combine lines 2, 3, 4, and 5 6. Amend 2010 tax 45,500     7. Amend 2010 tax Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Amend 2010 tax  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. Amend 2010 tax -0-     8. Amend 2010 tax Is the amount on line 7 less than the amount on line 6?             No. Amend 2010 tax None of your social security benefits are taxable. Amend 2010 tax Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Amend 2010 tax             Yes. Amend 2010 tax Subtract line 7 from line 6 8. Amend 2010 tax 45,500     9. Amend 2010 tax If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. Amend 2010 tax 32,000       Note. Amend 2010 tax If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Amend 2010 tax 85) and enter the result on line 17. Amend 2010 tax Then go to line 18. Amend 2010 tax         10. Amend 2010 tax Is the amount on line 9 less than the amount on line 8?             No. Amend 2010 tax None of your benefits are taxable. Amend 2010 tax Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Amend 2010 tax If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Amend 2010 tax             Yes. Amend 2010 tax Subtract line 9 from line 8 10. Amend 2010 tax 13,500     11. Amend 2010 tax Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. Amend 2010 tax 12,000     12. Amend 2010 tax Subtract line 11 from line 10. Amend 2010 tax If zero or less, enter -0- 12. Amend 2010 tax 1,500     13. Amend 2010 tax Enter the smaller of line 10 or line 11 13. Amend 2010 tax 12,000     14. Amend 2010 tax Enter one-half of line 13 14. Amend 2010 tax 6,000     15. Amend 2010 tax Enter the smaller of line 2 or line 14 15. Amend 2010 tax 5,000     16. Amend 2010 tax Multiply line 12 by 85% (. Amend 2010 tax 85). Amend 2010 tax If line 12 is zero, enter -0- 16. Amend 2010 tax 1,275     17. Amend 2010 tax Add lines 15 and 16 17. Amend 2010 tax 6,275     18. Amend 2010 tax Multiply line 1 by 85% (. Amend 2010 tax 85) 18. Amend 2010 tax 8,500     19. Amend 2010 tax Taxable benefits. Amend 2010 tax Enter the smaller of line 17 or line 18. Amend 2010 tax Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. Amend 2010 tax $6,275       If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. Amend 2010 tax         Filled-in Worksheet 1. Amend 2010 tax Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Amend 2010 tax Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). Amend 2010 tax None of your benefits are taxable for 2013. Amend 2010 tax For more information, see Repayments More Than Gross Benefits . Amend 2010 tax If you are filing Form 8815, Exclusion of Interest From Series EE and I U. Amend 2010 tax S. Amend 2010 tax Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. Amend 2010 tax Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. Amend 2010 tax 1. Amend 2010 tax Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Amend 2010 tax Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. Amend 2010 tax $4,000         2. Amend 2010 tax Enter one-half of line 1 2. Amend 2010 tax 2,000     3. Amend 2010 tax Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. Amend 2010 tax 8,000     4. Amend 2010 tax Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. Amend 2010 tax -0-     5. Amend 2010 tax Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. Amend 2010 tax -0-     6. Amend 2010 tax Combine lines 2, 3, 4, and 5 6. Amend 2010 tax 10,000     7. Amend 2010 tax Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Amend 2010 tax  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. Amend 2010 tax -0-     8. Amend 2010 tax Is the amount on line 7 less than the amount on line 6?             No. Amend 2010 tax None of your social security benefits are taxable. Amend 2010 tax Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Amend 2010 tax             Yes. Amend 2010 tax Subtract line 7 from line 6 8. Amend 2010 tax 10,000     9. Amend 2010 tax If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. Amend 2010 tax         Note. Amend 2010 tax If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Amend 2010 tax 85) and enter the result on line 17. Amend 2010 tax Then go to line 18. Amend 2010 tax         10. Amend 2010 tax Is the amount on line 9 less than the amount on line 8?             No. Amend 2010 tax None of your benefits are taxable. Amend 2010 tax Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Amend 2010 tax If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Amend 2010 tax             Yes. Amend 2010 tax Subtract line 9 from line 8 10. Amend 2010 tax       11. Amend 2010 tax Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. Amend 2010 tax       12. Amend 2010 tax Subtract line 11 from line 10. Amend 2010 tax If zero or less, enter -0- 12. Amend 2010 tax       13. Amend 2010 tax Enter the smaller of line 10 or line 11 13. Amend 2010 tax       14. Amend 2010 tax Enter one-half of line 13 14. Amend 2010 tax       15. Amend 2010 tax Enter the smaller of line 2 or line 14 15. Amend 2010 tax       16. Amend 2010 tax Multiply line 12 by 85% (. Amend 2010 tax 85). Amend 2010 tax If line 12 is zero, enter -0- 16. Amend 2010 tax       17. Amend 2010 tax Add lines 15 and 16 17. Amend 2010 tax 8,500     18. Amend 2010 tax Multiply line 1 by 85% (. Amend 2010 tax 85) 18. Amend 2010 tax 3,400     19. Amend 2010 tax Taxable benefits. Amend 2010 tax Enter the smaller of line 17 or line 18. Amend 2010 tax Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. Amend 2010 tax $3,400       If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. Amend 2010 tax         Example 4. Amend 2010 tax Bill and Eileen Jones are married and live together, but file separate Form 1040 returns for 2013. Amend 2010 tax Bill earned $8,000 during 2013. Amend 2010 tax The only other income he had for the year was $4,000 net social security benefits (box 5 of his Form SSA-1099). Amend 2010 tax Bill figures his taxable benefits by completing Worksheet 1 below. Amend 2010 tax He must include 85% of his social security benefits in his taxable income because he is married filing separately and lived with his spouse during 2013. Amend 2010 tax See How Much Is Taxable earlier. Amend 2010 tax Bill enters $4,000 on his Form 1040, line 20a, and $3,400 on Form 1040, line 20b. Amend 2010 tax Lump-Sum Election You must include the taxable part of a lump-sum (retroactive) payment of benefits received in 2013 in your 2013 income, even if the payment includes benefits for an earlier year. Amend 2010 tax This type of lump-sum benefit payment should not be confused with the lump-sum death benefit that both the SSA and RRB pay to many of their beneficiaries. Amend 2010 tax No part of the lump-sum death benefit is subject to tax. Amend 2010 tax Generally, you use your 2013 income to figure the taxable part of the total benefits received in 2013. Amend 2010 tax However, you may be able to figure the taxable part of a lump-sum payment for an earlier year separately, using your income for the earlier year. Amend 2010 tax You can elect this method if it lowers your taxable benefits. Amend 2010 tax Under the lump-sum election method, you refigure the taxable part of all your benefits for the earlier year (including the lump-sum payment) using that year's income. Amend 2010 tax Then you subtract any taxable benefits for that year that you previously reported. Amend 2010 tax The remainder is the taxable part of the lump-sum payment. Amend 2010 tax Add it to the taxable part of your benefits for 2013 (figured without the lump-sum payment for the earlier year). Amend 2010 tax Because the earlier year's taxable benefits are included in your 2013 income, no adjustment is made to the earlier year's return. Amend 2010 tax Do not file an amended return for the earlier year. Amend 2010 tax Will the lump-sum election method lower your taxable benefits?   To find out, take the following steps. Amend 2010 tax Complete Worksheet 1 in this publication. Amend 2010 tax Complete Worksheet 2 and Worksheet 3 as appropriate. Amend 2010 tax Use Worksheet 2 if your lump-sum payment was for a year after 1993. Amend 2010 tax Use Worksheet 3 if it was for 1993 or an earlier year. Amend 2010 tax Complete a separate Worksheet 2 or Worksheet 3 for each earlier year for which you received the lump-sum payment. Amend 2010 tax Complete Worksheet 4. Amend 2010 tax Compare the taxable benefits on line 19 of Worksheet 1 with the taxable benefits on line 21 of Worksheet 4. Amend 2010 tax If the taxable benefits on Worksheet 4 are lower than the taxable benefits on Worksheet 1, you can elect to report the lower amount on your return. Amend 2010 tax Making the election. Amend 2010 tax   If you elect to report your taxable benefits under the lump-sum election method, follow the instructions at the bottom of Worksheet 4. Amend 2010 tax Do not attach the completed worksheets to your return. Amend 2010 tax Keep them with your records. Amend 2010 tax    Once you elect this method of figuring the taxable part of a lump-sum payment, you can revoke your election only with the consent of the IRS. Amend 2010 tax Lump-sum payment reported on Form SSA-1099 or RRB-1099. Amend 2010 tax   If you received a lump-sum payment in 2013 that includes benefits for one or more earlier years after 1983, it will be included in box 3 of either Form SSA-1099 or Form RRB-1099. Amend 2010 tax That part of any lump-sum payment for years before 1984 is not taxed and will not be shown on the form. Amend 2010 tax The form will also show the year (or years) the payment is for. Amend 2010 tax However, Form RRB-1099 will not show a breakdown by year (or years) of any lump-sum payment for years before 2011. Amend 2010 tax You must contact the RRB for a breakdown by year for any amount shown in box 9. Amend 2010 tax Example Jane Jackson is single. Amend 2010 tax In 2012 she applied for social security disability benefits but was told she was ineligible. Amend 2010 tax She appealed the decision and won. Amend 2010 tax In 2013, she received a lump-sum payment of $6,000, of which $2,000 was for 2012 and $4,000 was for 2013. Amend 2010 tax Jane also received $5,000 in social security benefits in 2013, so her total benefits in 2013 were $11,000. Amend 2010 tax Jane's other income for 2012 and 2013 is as follows. Amend 2010 tax   Income 2012 2013     Wages $20,000 $ 3,500     Interest income 2,000 2,500     Dividend income 1,000 1,500     Fully taxable pension   18,000     Total $23,000 $25,500   To see if the lump-sum election method results in lower taxable benefits, she completes Worksheets 1, 2, and 4 from this publication. Amend 2010 tax She does not need to complete Worksheet 3 because her lump-sum payment was for years after 1993. Amend 2010 tax Jane completes Worksheet 1 to find the amount of her taxable benefits for 2013 under the regular method. Amend 2010 tax She completes Worksheet 2 to find the taxable part of the lump-sum payment for 2012 under the lump-sum election method. Amend 2010 tax She completes Worksheet 4 to decide if the lump-sum election method will lower her taxable benefits. Amend 2010 tax After completing the worksheets, Jane compares the amounts from Worksheet 4, line 21, and Worksheet 1, line 19. Amend 2010 tax Because the amount on Worksheet 4 is smaller, she chooses to use the lump-sum election method. Amend 2010 tax To do this, she prints “LSE” to the left of Form 1040, line 20a. Amend 2010 tax She then enters $11,000 on Form 1040, line 20a, and her taxable benefits of $2,500 on line 20b. Amend 2010 tax Jane's filled-in worksheets (1, 2, and 4) follow. Amend 2010 tax Jane Jackson's Filled-in Worksheet 1. Amend 2010 tax Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Amend 2010 tax Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). Amend 2010 tax None of your benefits are taxable for 2013. Amend 2010 tax For more information, see Repayments More Than Gross Benefits . Amend 2010 tax If you are filing Form 8815, Exclusion of Interest From Series EE and I U. Amend 2010 tax S. Amend 2010 tax Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. Amend 2010 tax Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. Amend 2010 tax 1. Amend 2010 tax Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Amend 2010 tax Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. Amend 2010 tax $11,000         2. Amend 2010 tax Enter one-half of line 1 2. Amend 2010 tax 5,500     3. Amend 2010 tax Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. Amend 2010 tax 25,500     4. Amend 2010 tax Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. Amend 2010 tax -0-     5. Amend 2010 tax Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. Amend 2010 tax -0-     6. Amend 2010 tax Combine lines 2, 3, 4, and 5 6. Amend 2010 tax 31,000     7. Amend 2010 tax Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Amend 2010 tax  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. Amend 2010 tax -0-     8. Amend 2010 tax Is the amount on line 7 less than the amount on line 6?             No. Amend 2010 tax None of your social security benefits are taxable. Amend 2010 tax Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Amend 2010 tax             Yes. Amend 2010 tax Subtract line 7 from line 6 8. Amend 2010 tax 31,000     9. Amend 2010 tax If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. Amend 2010 tax 25,000       Note. Amend 2010 tax If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Amend 2010 tax 85) and enter the result on line 17. Amend 2010 tax Then go to line 18. Amend 2010 tax         10. Amend 2010 tax Is the amount on line 9 less than the amount on line 8?             No. Amend 2010 tax None of your benefits are taxable. Amend 2010 tax Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Amend 2010 tax If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Amend 2010 tax             Yes. Amend 2010 tax Subtract line 9 from line 8 10. Amend 2010 tax 6,000     11. Amend 2010 tax Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. Amend 2010 tax 9,000     12. Amend 2010 tax Subtract line 11 from line 10. Amend 2010 tax If zero or less, enter -0- 12. Amend 2010 tax -0-     13. Amend 2010 tax Enter the smaller of line 10 or line 11 13. Amend 2010 tax 6,000     14. Amend 2010 tax Enter one-half of line 13 14. Amend 2010 tax 3,000     15. Amend 2010 tax Enter the smaller of line 2 or line 14 15. Amend 2010 tax 3,000     16. Amend 2010 tax Multiply line 12 by 85% (. Amend 2010 tax 85). Amend 2010 tax If line 12 is zero, enter -0- 16. Amend 2010 tax -0-     17. Amend 2010 tax Add lines 15 and 16 17. Amend 2010 tax 3,000     18. Amend 2010 tax Multiply line 1 by 85% (. Amend 2010 tax 85) 18. Amend 2010 tax 9,350     19. Amend 2010 tax Taxable benefits. Amend 2010 tax Enter the smaller of line 17 or line 18. Amend 2010 tax Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. Amend 2010 tax $3,000       If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. Amend 2010 tax         Jane Jackson's Filled-in Worksheet 2. Amend 2010 tax Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year After 1993)     Enter earlier year 2012 1. Amend 2010 tax Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 for the earlier year, plus the lump-sum payment for the earlier year received after that year 1. Amend 2010 tax $2,000           Note. Amend 2010 tax If line 1 is zero or less, skip lines 2 through 20 and enter -0- on line 21. Amend 2010 tax Otherwise, go on to line 2. Amend 2010 tax             2. Amend 2010 tax Enter one-half of line 1 2. Amend 2010 tax 1,000   3. Amend 2010 tax Enter your adjusted gross income for the earlier year 3. Amend 2010 tax 23,000   4. Amend 2010 tax Enter the total of any exclusions/adjustments you claimed in the earlier year for: Adoption benefits (Form 8839) Qualified U. Amend 2010 tax S. Amend 2010 tax savings bond interest (Form 8815) Student loan interest (Form 1040, page 1, or Form 1040A, page 1) Tuition and fees (Form 1040, page 1, or Form 1040A, page 1) Domestic production activities (for 2005 through 2012) (Form 1040, page 1) Foreign earned income or housing (Form 2555 or Form 2555-EZ) Certain income of bona fide residents of American Samoa (Form 4563) or Puerto Rico 4. Amend 2010 tax -0-   5. Amend 2010 tax Enter any tax-exempt interest received in the earlier year 5. Amend 2010 tax -0-   6. Amend 2010 tax Add lines 2 through 5 6. Amend 2010 tax 24,000   7. Amend 2010 tax Enter your taxable benefits for the earlier year that you previously reported 7. Amend 2010 tax -0-   8. Amend 2010 tax Subtract line 7 from line 6 8. Amend 2010 tax 24,000   9. Amend 2010 tax If, for the earlier year, you were:     Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), married filing separately and you lived apart from your spouse for all of the earlier year, enter $25,000 9. Amend 2010 tax 25,000     Note. Amend 2010 tax If you were married filing separately and you lived with your spouse at any time during the earlier year, skip lines 9 through 16; multiply line 8 by 85% (. Amend 2010 tax 85) and enter the result on line 17. Amend 2010 tax Then go to line 18. Amend 2010 tax         10. Amend 2010 tax Is the amount on line 8 more than the amount on line 9?       No. Amend 2010 tax Skip lines 10 through 20 and enter -0- on line 21. Amend 2010 tax       Yes. Amend 2010 tax Subtract line 9 from line 8 10. Amend 2010 tax     11. Amend 2010 tax Enter $12,000 if married filing jointly for the earlier year; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of the earlier year 11. Amend 2010 tax     12. Amend 2010 tax Subtract line 11 from line 10. Amend 2010 tax If zero or less, enter -0- 12. Amend 2010 tax     13. Amend 2010 tax Enter the smaller of line 10 or line 11 13. Amend 2010 tax     14. Amend 2010 tax Enter one-half of line 13 14. Amend 2010 tax     15. Amend 2010 tax Enter the smaller of line 2 or line 14 15. Amend 2010 tax     16. Amend 2010 tax Multiply line 12 by 85% (. Amend 2010 tax 85). Amend 2010 tax If line 12 is zero, enter -0- 16. Amend 2010 tax     17. Amend 2010 tax Add lines 15 and 16 17. Amend 2010 tax     18. Amend 2010 tax Multiply line 1 by 85% (. Amend 2010 tax 85) 18. Amend 2010 tax     19. Amend 2010 tax Refigured taxable benefits. Amend 2010 tax Enter the smaller of line 17 or line 18 19. Amend 2010 tax     20. Amend 2010 tax Enter your taxable benefits for the earlier year (or as refigured due to a previous lump-sum payment for the year) 20. Amend 2010 tax     21. Amend 2010 tax Additional taxable benefits. Amend 2010 tax Subtract line 20 from line 19. Amend 2010 tax Also enter this amount on Worksheet 4, line 20 21. Amend 2010 tax -0-     Do not file an amended return for this earlier year. Amend 2010 tax Complete a separate Worksheet 2 or Worksheet 3 for each earlier year for which you received a lump-sum payment in 2013. Amend 2010 tax   Jane Jackson's Filled-in Worksheet 4. Amend 2010 tax Figure Your Taxable Benefits Under the Lump-Sum Election Method (Use With Worksheet 2 or 3)     Complete Worksheet 1 and Worksheets 2 and 3 as appropriate before completing this worksheet. Amend 2010 tax 1. Amend 2010 tax Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 for 2013, minus the lump-sum payment for years before 2013 1. Amend 2010 tax $9,000         Note. Amend 2010 tax If line 1 is zero or less, skip lines 2 through 18, enter -0- on line 19 and go to line 20. Amend 2010 tax Otherwise, go on to line 2. Amend 2010 tax           2. Amend 2010 tax Enter one-half of line 1 2. Amend 2010 tax 4,500   3. Amend 2010 tax Enter the amount from Worksheet 1, line 3 3. Amend 2010 tax 25,500   4. Amend 2010 tax Enter the amount from Worksheet 1, line 4 4. Amend 2010 tax -0-   5. Amend 2010 tax Enter the amount from Worksheet 1, line 5 5. Amend 2010 tax -0-   6. Amend 2010 tax Combine lines 2, 3, 4, and 5 6. Amend 2010 tax 30,000   7. Amend 2010 tax Enter the amount from Worksheet 1, line 7 7. Amend 2010 tax -0-   8. Amend 2010 tax Subtract line 7 from line 6 8. Amend 2010 tax 30,000   9. Amend 2010 tax Enter the amount from Worksheet 1, line 9. Amend 2010 tax But if you are married filing separately and lived with your spouse at any time during 2013, skip lines 9 through 16; multiply line 8 by 85% (. Amend 2010 tax 85) and enter the result on line 17. Amend 2010 tax Then, go to line 18 9. Amend 2010 tax 25,000   10. Amend 2010 tax Is the amount on line 8 more than the amount on line 9? No. Amend 2010 tax Skip lines 10 through 18, enter -0- on line 19, and go to line 20. Amend 2010 tax  Yes. Amend 2010 tax Subtract line 9 from line 8 10. Amend 2010 tax 5,000   11. Amend 2010 tax Enter the amount from Worksheet 1, line 11 11. Amend 2010 tax 9,000   12. Amend 2010 tax Subtract line 11 from line 10. Amend 2010 tax If zero or less, enter -0- 12. Amend 2010 tax -0-   13. Amend 2010 tax Enter the smaller of line 10 or line 11 13. Amend 2010 tax 5,000   14. Amend 2010 tax Enter one-half of line 13 14. Amend 2010 tax 2,500   15. Amend 2010 tax Enter the smaller of line 2 or line 14 15. Amend 2010 tax 2,500   16. Amend 2010 tax Multiply line 12 by 85% (. Amend 2010 tax 85). Amend 2010 tax If line 12 is zero, enter -0- 16. Amend 2010 tax -0-   17. Amend 2010 tax Add lines 15 and 16 17. Amend 2010 tax 2,500   18. Amend 2010 tax Multiply line 1 by 85% (. Amend 2010 tax 85) 18. Amend 2010 tax 7,650   19. Amend 2010 tax Enter the smaller of line 17 or line 18 19. Amend 2010 tax 2,500   20. Amend 2010 tax Enter the total of the amounts from Worksheet 2, line 21, and Worksheet 3, line 14, for all earlier years for which the lump-sum payment was received 20. Amend 2010 tax -0-   21. Amend 2010 tax Taxable benefits under lump-sum election method. Amend 2010 tax Add lines 19 and 20 21. Amend 2010 tax $2,500   Next. Amend 2010 tax Is line 21 above smaller than Worksheet 1, line 19? No. Amend 2010 tax Do not use this method to figure your taxable benefits. Amend 2010 tax Follow the instructions on Worksheet 1 to report your benefits. Amend 2010 tax  Yes. Amend 2010 tax You can elect to report your taxable benefits under this method. Amend 2010 tax To elect this method:     Enter “LSE” to the left of Form 1040, line 20a, or Form 1040A, line 14a. Amend 2010 tax If line 21 above is zero, follow the instructions in line 10 for “No” on Worksheet 1. Amend 2010 tax Otherwise: Enter the amount from Worksheet 1, line 1, on Form 1040, line 20a, or on Form 1040A, line 14a. Amend 2010 tax Enter the amount from line 21 above on Form 1040, line 20b, or on Form 1040A, line 14b. Amend 2010 tax If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Amend 2010 tax   Deductions Related to Your Benefits You may be entitled to deduct certain amounts related to the benefits you receive. Amend 2010 tax Disability payments. Amend 2010 tax   You may have received disability payments from your employer or an insurance company that you included as income on your tax return in an earlier year. Amend 2010 tax If you received a lump-sum payment from SSA or RRB, and you had to repay the employer or insurance company for the disability payments, you can take an itemized deduction for the part of the payments you included in gross income in the earlier year. Amend 2010 tax If the amount you repay is more than $3,000, you may be able to claim a tax credit instead. Amend 2010 tax Claim the deduction or credit in the same way explained under Repayment of benefits received in an earlier year in the section Repayments More Than Gross Benefits , later. Amend 2010 tax Legal expenses. Amend 2010 tax   You can usually deduct legal expenses that you pay or incur to produce or collect taxable income or in connection with the determination, collection, or refund of any tax. Amend 2010 tax   Legal expenses for collecting the taxable part of your benefits are deductible as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23. Amend 2010 tax Repayments More Than Gross Benefits In some situations, your Form SSA-1099 or Form RRB-1099 will show that the total benefits you repaid (box 4) are more than the gross benefits (box 3) you received. Amend 2010 tax If this occurred, your net benefits in box 5 will be a negative figure (a figure in parentheses) and none of your benefits will be taxable. Amend 2010 tax Do not use Worksheet 1 in this case. Amend 2010 tax If you receive more than one form, a negative figure in box 5 of one form is used to offset a positive figure in box 5 of another form for that same year. Amend 2010 tax If you have any questions about this negative figure, contact your local SSA office or your local RRB field office. Amend 2010 tax Joint return. Amend 2010 tax   If you and your spouse file a joint return, and your Form SSA-1099 or RRB-1099 has a negative figure in box 5, but your spouse's does not, subtract the amount in box 5 of your form from the amount in box 5 of your spouse's form. Amend 2010 tax You do this to get your net benefits when figuring if your combined benefits are taxable. Amend 2010 tax Example. Amend 2010 tax John and Mary file a joint return for 2013. Amend 2010 tax John received Form SSA-1099 showing $3,000 in box 5. Amend 2010 tax Mary also received Form SSA-1099 and the amount in box 5 was ($500). Amend 2010 tax John and Mary will use $2,500 ($3,000 minus $500) as the amount of their net benefits when figuring if any of their combined benefits are taxable. Amend 2010 tax Repayment of benefits received in an earlier year. Amend 2010 tax   If the total amount shown in box 5 of all of your Forms SSA-1099 and RRB-1099 is a negative figure, you can take an itemized deduction for the part of this negative figure that represents benefits you included in gross income in an earlier year. Amend 2010 tax Deduction $3,000 or less. Amend 2010 tax   If this deduction is $3,000 or less, it is subject to the 2%-of-adjusted-gross-income limit that applies to certain miscellaneous itemized deductions. Amend 2010 tax Claim it on Schedule A (Form 1040), line 23. Amend 2010 tax Deduction more than $3,000. Amend 2010 tax   If this deduction is more than $3,000, you should figure your tax two ways: Figure your tax for 2013 with the itemized deduction included on Schedule A, line 28. Amend 2010 tax Figure your tax for 2013 in the following steps: Figure the tax without the itemized deduction included on Schedule A, line 28. Amend 2010 tax For each year after 1983 for which part of the negative figure represents a repayment of benefits, refigure your taxable benefits as if your total benefits for the year were reduced by that part of the negative figure. Amend 2010 tax Then refigure the tax for that year. Amend 2010 tax Subtract the total of the refigured tax amounts in (b) from the total of your actual tax amounts. Amend 2010 tax Subtract the result in (c) from the result in (a). Amend 2010 tax   Compare the tax figured in methods (1) and (2). Amend 2010 tax Your tax for 2013 is the smaller of the two amounts. Amend 2010 tax If method (1) results in less tax, take the itemized deduction on Schedule A (Form 1040), line 28. Amend 2010 tax If method (2) results in less tax, claim a credit for the amount from step 2(c) above on Form 1040, line 71. Amend 2010 tax Check box d and enter “I. Amend 2010 tax R. Amend 2010 tax C. Amend 2010 tax 1341” in the space next to that box. Amend 2010 tax If both methods produce the same tax, deduct the repayment on Schedule A (Form 1040), line 28. Amend 2010 tax Worksheets Blank Worksheets 1 through 4 are provided in this section: Worksheet 1, Figuring Your Taxable Benefits; Worksheet 2, Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year After 1993); Worksheet 3, Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year Before 1994); Worksheet 4, Figure Your Taxable Benefits Under the Lump-Sum Election Method (Use With Worksheet 2 or 3). Amend 2010 tax Worksheet 1. Amend 2010 tax Figuring Your Taxable Benefits Before you begin: If you are married filing separately and you lived apart from your spouse for all of 2013, enter “D” to the right of the word “benefits” on Form 1040, line 20a, or Form 1040A, line 14a. Amend 2010 tax Do not use this worksheet if you repaid benefits in 2013 and your total repayments (box 4 of Forms SSA-1099 and RRB-1099) were more than your gross benefits for 2013 (box 3 of Forms SSA-1099 and RRB-1099). Amend 2010 tax None of your benefits are taxable for 2013. Amend 2010 tax For more information, see Repayments More Than Gross Benefits . Amend 2010 tax If you are filing Form 8815, Exclusion of Interest From Series EE and I U. Amend 2010 tax S. Amend 2010 tax Savings Bonds Issued After 1989, do not include the amount from line 8a of Form 1040 or Form 1040A on line 3 of this worksheet. Amend 2010 tax Instead, include the amount from Schedule B (Form 1040A or 1040), line 2. Amend 2010 tax 1. Amend 2010 tax Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099. Amend 2010 tax Also enter this amount on Form 1040, line 20a, or Form 1040A, line 14a 1. Amend 2010 tax           2. Amend 2010 tax Enter one-half of line 1 2. Amend 2010 tax       3. Amend 2010 tax Combine the amounts from: Form 1040: Lines 7, 8a, 9a, 10 through 14, 15b, 16b, 17 through 19, and 21 Form 1040A: Lines 7, 8a, 9a, 10, 11b, 12b, and 13 3. Amend 2010 tax       4. Amend 2010 tax Enter the amount, if any, from Form 1040 or 1040A, line 8b 4. Amend 2010 tax       5. Amend 2010 tax Enter the total of any exclusions/adjustments for: Adoption benefits (Form 8839, line 28), Foreign earned income or housing (Form 2555, lines 45 and 50, or Form 2555-EZ, line 18), and Certain income of bona fide residents of American Samoa (Form 4563, line 15) or Puerto Rico 5. Amend 2010 tax       6. Amend 2010 tax Combine lines 2, 3, 4, and 5 6. Amend 2010 tax       7. Amend 2010 tax Form 1040 filers: Enter the amounts from Form 1040, lines 23 through 32, and any write-in adjustments you entered on the dotted line next to line 36. Amend 2010 tax  Form 1040A filers: Enter the amounts from Form 1040A, lines 16 and 17 7. Amend 2010 tax       8. Amend 2010 tax Is the amount on line 7 less than the amount on line 6?             No. Amend 2010 tax None of your social security benefits are taxable. Amend 2010 tax Enter -0- on Form 1040, line 20b, or Form 1040A, line 14b. Amend 2010 tax             Yes. Amend 2010 tax Subtract line 7 from line 6 8. Amend 2010 tax       9. Amend 2010 tax If you are:  Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013, enter $25,000 9. Amend 2010 tax         Note. Amend 2010 tax If you are married filing separately and you lived with your spouse at any time in 2013, skip lines 9 through 16; multiply line 8 by 85% (. Amend 2010 tax 85) and enter the result on line 17. Amend 2010 tax Then go to line 18. Amend 2010 tax         10. Amend 2010 tax Is the amount on line 9 less than the amount on line 8?             No. Amend 2010 tax None of your benefits are taxable. Amend 2010 tax Enter -0- on Form 1040, line 20b, or on Form 1040A, line 14b. Amend 2010 tax If you are married filing separately and you lived apart from your spouse for all of 2013, be sure you entered “D” to the right of the word “benefits” on Form 1040, line 20a, or on Form 1040A, line 14a. Amend 2010 tax             Yes. Amend 2010 tax Subtract line 9 from line 8 10. Amend 2010 tax       11. Amend 2010 tax Enter $12,000 if married filing jointly; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of 2013 11. Amend 2010 tax       12. Amend 2010 tax Subtract line 11 from line 10. Amend 2010 tax If zero or less, enter -0- 12. Amend 2010 tax       13. Amend 2010 tax Enter the smaller of line 10 or line 11 13. Amend 2010 tax       14. Amend 2010 tax Enter one-half of line 13 14. Amend 2010 tax       15. Amend 2010 tax Enter the smaller of line 2 or line 14 15. Amend 2010 tax       16. Amend 2010 tax Multiply line 12 by 85% (. Amend 2010 tax 85). Amend 2010 tax If line 12 is zero, enter -0- 16. Amend 2010 tax       17. Amend 2010 tax Add lines 15 and 16 17. Amend 2010 tax       18. Amend 2010 tax Multiply line 1 by 85% (. Amend 2010 tax 85) 18. Amend 2010 tax       19. Amend 2010 tax Taxable benefits. Amend 2010 tax Enter the smaller of line 17 or line 18. Amend 2010 tax Also enter this amount on Form 1040, line 20b, or Form 1040A, line 14b 19. Amend 2010 tax         If you received a lump-sum payment in 2013 that was for an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to see if you can report a lower taxable benefit. Amend 2010 tax         Worksheet 2. Amend 2010 tax Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year After 1993)     Enter earlier year 1. Amend 2010 tax Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 for the earlier year, plus the lump-sum payment for the earlier year received after that year 1. Amend 2010 tax             Note. Amend 2010 tax If line 1 is zero or less, skip lines 2 through 20 and enter -0- on line 21. Amend 2010 tax Otherwise, go on to line 2. Amend 2010 tax             2. Amend 2010 tax Enter one-half of line 1 2. Amend 2010 tax     3. Amend 2010 tax Enter your adjusted gross income for the earlier year 3. Amend 2010 tax     4. Amend 2010 tax Enter the total of any exclusions/adjustments you claimed in the earlier year for: Adoption benefits (Form 8839) Qualified U. Amend 2010 tax S. Amend 2010 tax savings bond interest (Form 8815) Student loan interest (Form 1040, page 1, or Form 1040A, page 1) Tuition and fees (Form 1040, page 1, or Form 1040A, page 1) Domestic production activities (for 2005 through 2012) (Form 1040, page 1) Foreign earned income or housing (Form 2555 or Form 2555-EZ) Certain income of bona fide residents of American Samoa (Form 4563) or Puerto Rico 4. Amend 2010 tax     5. Amend 2010 tax Enter any tax-exempt interest received in the earlier year 5. Amend 2010 tax     6. Amend 2010 tax Add lines 2 through 5 6. Amend 2010 tax     7. Amend 2010 tax Enter your taxable benefits for the earlier year that you previously reported 7. Amend 2010 tax     8. Amend 2010 tax Subtract line 7 from line 6 8. Amend 2010 tax     9. Amend 2010 tax If, for the earlier year, you were:     Married filing jointly, enter $32,000 Single, head of household, qualifying widow(er), married filing separately and you lived apart from your spouse for all of the earlier year, enter $25,000 9. Amend 2010 tax       Note. Amend 2010 tax If you were married filing separately and you lived with your spouse at any time during the earlier year, skip lines 9 through 16; multiply line 8 by 85% (. Amend 2010 tax 85) and enter the result on line 17. Amend 2010 tax Then go to line 18. Amend 2010 tax         10. Amend 2010 tax Is the amount on line 8 more than the amount on line 9?       No. Amend 2010 tax Skip lines 10 through 20 and enter -0- on line 21. Amend 2010 tax       Yes. Amend 2010 tax Subtract line 9 from line 8 10. Amend 2010 tax     11. Amend 2010 tax Enter $12,000 if married filing jointly for the earlier year; $9,000 if single, head of household, qualifying widow(er), or married filing separately and you lived apart from your spouse for all of the earlier year 11. Amend 2010 tax     12. Amend 2010 tax Subtract line 11 from line 10. Amend 2010 tax If zero or less, enter -0- 12. Amend 2010 tax     13. Amend 2010 tax Enter the smaller of line 10 or line 11 13. Amend 2010 tax     14. Amend 2010 tax Enter one-half of line 13 14. Amend 2010 tax     15. Amend 2010 tax Enter the smaller of line 2 or line 14 15. Amend 2010 tax     16. Amend 2010 tax Multiply line 12 by 85% (. Amend 2010 tax 85). Amend 2010 tax If line 12 is zero, enter -0- 16. Amend 2010 tax     17. Amend 2010 tax Add lines 15 and 16 17. Amend 2010 tax     18. Amend 2010 tax Multiply line 1 by 85% (. Amend 2010 tax 85) 18. Amend 2010 tax     19. Amend 2010 tax Refigured taxable benefits. Amend 2010 tax Enter the smaller of line 17 or line 18 19. Amend 2010 tax     20. Amend 2010 tax Enter your taxable benefits for the earlier year (or as refigured due to a previous lump-sum payment for the year) 20. Amend 2010 tax     21. Amend 2010 tax Additional taxable benefits. Amend 2010 tax Subtract line 20 from line 19. Amend 2010 tax Also enter this amount on Worksheet 4, line 20 21. Amend 2010 tax       Do not file an amended return for this earlier year. Amend 2010 tax Complete a separate Worksheet 2 or Worksheet 3 for each earlier year for which you received a lump-sum payment in 2013. Amend 2010 tax   Worksheet 3. Amend 2010 tax Figure Your Additional Taxable Benefits (From a Lump-Sum Payment for a Year Before 1994) Enter earlier year 1. Amend 2010 tax Enter the total amount from box 5 of ALL your Forms SSA-1099 and RRB-1099 for the earlier year, plus the lump-sum payment for the earlier year received after that year 1. Amend 2010 tax           Note. Amend 2010 tax If line 1 is zero or less, skip lines 2 through 13 and enter -0- on line 14. Amend 2010 tax Otherwise, go on to line 2. Amend 2010 tax           2. Amend 2010 tax Enter one-half of line 1 2. Amend 2010 tax     3. Amend 2010 tax Enter your adjusted gross income for the earlier year 3. Amend 2010 tax     4. Amend 2010 tax Enter the total of any exclusions/adjustments you claimed in the earlier year for: Qualified U. Amend 2010 tax S. Amend 2010 tax savings bond interest (Form 8815) Foreign earned income or housing (Form 2555 or Form 2555-EZ) Certain income of bona fide residents of American Samoa (Form 4563) or Puerto Rico 4. Amend 2010 tax     5. Amend 2010 tax Enter any tax-exempt interest received in the earlier year 5. Amend 2010 tax     6. Amend 2010 tax Add lines 2 through 5 6. Amend 2010 tax     7. Amend 2010 tax Enter your taxable benefits for the earlier year that you previously reported 7. Amend 2010 tax     8. Amend 2010 tax Subtract line 7 from line 6 8. Amend 2010 tax     9. Amend 2010 tax Enter $25,000 ($32,000 if married filing jointly for the earlier year; $-0- if married filing separately for the earlier year and you lived with your spouse at any time during the earlier year) 9. Amend 2010 tax     10. Amend 2010 tax Is the amount on line 8 more than the amount on line 9? No. Amend 2010 tax Skip lines 10 through 13 and enter -0- on line 14. Amend 2010 tax  Yes. Amend 2010 tax Subtract line 9 from line 8. Amend 2010 tax 10. Amend 2010 tax     11. Amend 2010 tax Enter one-half of line 10 11. Amend 2010 tax     12. Amend 2010 tax Refigured taxable benefits. Amend 2010 tax Enter the smaller of line 2 or line 11 12. Amend 2010 tax     13. Amend 2010 tax Enter your taxable benefits for the earlier year (or as refigured due to a previous