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Amended Return

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Amended Return

Amended return Publication 523 - Main Content Table of Contents Main HomeVacant land. Amended return Factors used to determine main home. Amended return Figuring Gain or LossSelling Price Amount Realized Adjusted Basis Amount of Gain or Loss Dispositions Other Than Sales Determining BasisCost As Basis Basis Other Than Cost Adjusted Basis Excluding the GainMaximum Exclusion Ownership and Use Tests Reduced Maximum Exclusion Nonqualified Use Business Use or Rental of HomeUnrecaptured section 1250 gain. Amended return Property Used Partly for Business or Rental Reporting the SaleSeller-financed mortgage. Amended return Individual taxpayer identification number (ITIN). Amended return More information. Amended return Comprehensive Examples Special SituationsException for sales to related persons. Amended return Deducting Taxes in the Year of SaleForm 1099-S. Amended return More information. Amended return Recapturing (Paying Back) a Federal Mortgage Subsidy Recapture of First-Time Homebuyer CreditExample. Amended return Worksheets How To Get Tax HelpLow Income Taxpayer Clinics Main Home This section explains the term “main home. Amended return ” Usually, the home you live in most of the time is your main home and can be a: House, Houseboat, Mobile home, Cooperative apartment, or Condominium. Amended return To exclude gain under the rules in this publication, you in most cases must have owned and lived in the property as your main home for at least 2 years during the 5-year period ending on the date of sale. Amended return Land. Amended return   If you sell the land on which your main home is located, but not the house itself, you cannot exclude any gain you have from the sale of the land. Amended return Example. Amended return You buy a piece of land and move your main home to it. Amended return Then, you sell the land on which your main home was located. Amended return This sale is not considered a sale of your main home, and you cannot exclude any gain on the sale of the land. Amended return Vacant land. Amended return   The sale of vacant land is not a sale of your main home unless: The vacant land is adjacent to land containing your home, You owned and used the vacant land as part of your main home, The separate sale of your home satisfies the requirements for exclusion and occurs within 2 years before or 2 years after the date of the sale of the vacant land, and The other requirements for excluding gain from the sale of a main home have been satisfied with respect to the vacant land. Amended return If these requirements are met, the sale of the home and the sale of the vacant land are treated as one sale and only one maximum exclusion can be applied to any gain. Amended return See Excluding the Gain , later. Amended return The destruction of your home is treated as a sale of your home. Amended return As a result, you may be able to meet these requirements if you sell vacant land used as a part of your main home within 2 years from the date of the destruction of your main home. Amended return For information, see Publication 547. Amended return More than one home. Amended return   If you have more than one home, you can exclude gain only from the sale of your main home. Amended return You must include in income the gain from the sale of any other home. Amended return If you have two homes and live in each of them, your main home is ordinarily the one you live in most of the time during the year. Amended return Example 1. Amended return You own two homes, one in New York and one in Florida. Amended return From 2009 through 2013, you live in the New York home for 7 months and in the Florida residence for 5 months of each year. Amended return In the absence of facts and circumstances indicating otherwise, the New York home is your main home. Amended return You would be eligible to exclude the gain from the sale of the New York home but not of the Florida home in 2013. Amended return Example 2. Amended return You own a house, but you live in another house that you rent. Amended return The rented house is your main home. Amended return Example 3. Amended return You own two homes, one in Virginia and one in New Hampshire. Amended return In 2009 and 2010, you lived in the Virginia home. Amended return In 2011 and 2012, you lived in the New Hampshire home. Amended return In 2013, you lived again in the Virginia home. Amended return Your main home in 2009, 2010, and 2013 is the Virginia home. Amended return Your main home in 2011 and 2012 is the New Hampshire home. Amended return You would be eligible to exclude gain from the sale of either home (but not both) in 2013. Amended return Factors used to determine main home. Amended return   In addition to the amount of time you live in each home, other factors are relevant in determining which home is your main home. Amended return Those factors include the following. Amended return Your place of employment. Amended return The location of your family members' main home. Amended return Your mailing address for bills and correspondence. Amended return The address listed on your: Federal and state tax returns, Driver's license, Car registration, and Voter registration card. Amended return The location of the banks you use. Amended return The location of recreational clubs and religious organizations of which you are a member. Amended return Property used partly as your main home. Amended return   If you use only part of the property as your main home, the rules discussed in this publication apply only to the gain or loss on the sale of that part of the property. Amended return For details, see Business Use or Rental of Home , later. Amended return Figuring Gain or Loss To figure the gain or loss on the sale of your main home, you must know the selling price, the amount realized, and the adjusted basis. Amended return Subtract the adjusted basis from the amount realized to get your gain or loss. Amended return     Selling price     − Selling expenses       Amount realized     − Adjusted basis       Gain or loss   Gain. Amended return   Gain is the excess of the amount realized over the adjusted basis of the property. Amended return Loss. Amended return   Loss is the excess of the adjusted basis over the amount realized for the property. Amended return Selling Price The selling price is the total amount you receive for your home. Amended return It includes money and the fair market value of any other property or any other services you receive and all notes, mortgages or other debts assumed by the buyer as part of the sale. Amended return Personal property. Amended return   The selling price of your home does not include amounts you received for personal property sold with your home. Amended return Personal property is property that is not a permanent part of the home. Amended return Examples are furniture, draperies, rugs, a washer and dryer, and lawn equipment. Amended return Separately stated amounts you received for these items should not be shown on Form 1099-S (discussed later). Amended return Any gains from sales of personal property must be included in your income, but not as part of the sale of your home. Amended return Payment by employer. Amended return   You may have to sell your home because of a job transfer. Amended return If your employer pays you for a loss on the sale or for your selling expenses, do not include the payment as part of the selling price. Amended return Your employer will include it as wages in box 1 of your Form W-2 and you will include it in your income on Form 1040, line 7, or on Form 1040NR, line 8. Amended return Option to buy. Amended return   If you grant an option to buy your home and the option is exercised, add the amount you receive for the option to the selling price of your home. Amended return If the option is not exercised, you must report the amount as ordinary income in the year the option expires. Amended return Report this amount on Form 1040, line 21, or on Form 1040NR, line 21. Amended return Form 1099-S. Amended return   If you received Form 1099-S, box 2 (gross proceeds) should show the total amount you received for your home. Amended return   However, box 2 will not include the fair market value of any services or property other than cash or notes you received or will receive. Amended return Instead, box 4 will be checked to indicate your receipt or expected receipt of these items. Amended return Amount Realized The amount realized is the selling price minus selling expenses. Amended return Selling expenses. Amended return   Selling expenses include: Commissions, Advertising fees, Legal fees, and Loan charges paid by the seller, such as loan placement fees or “points. Amended return ” Adjusted Basis While you owned your home, you may have made adjustments (increases or decreases) to the basis. Amended return This adjusted basis must be determined before you can figure gain or loss on the sale of your home. Amended return For information on how to figure your home's adjusted basis, see Determining Basis , later. Amended return Amount of Gain or Loss To figure the amount of gain or loss, compare the amount realized to the adjusted basis. Amended return Gain on sale. Amended return   If the amount realized is more than the adjusted basis, the difference is a gain and, except for any part you can exclude, generally is taxable. Amended return Loss on sale. Amended return   If the amount realized is less than the adjusted basis, the difference is a loss. Amended return Generally, a loss on the sale of your main home cannot be deducted. Amended return Jointly owned home. Amended return   If you and your spouse sell your jointly owned home and file a joint return, you figure your gain or loss as one taxpayer. Amended return Separate returns. Amended return   If you file separate returns, each of you must figure your own gain or loss according to your ownership interest in the home. Amended return Your ownership interest is generally determined by state law. Amended return Joint owners not married. Amended return   If you and a joint owner other than your spouse sell your jointly owned home, each of you must figure your own gain or loss according to your ownership interest in the home. Amended return Each of you applies the rules discussed in this publication on an individual basis. Amended return Dispositions Other Than Sales Some special rules apply to other dispositions of your main home. Amended return Foreclosure or repossession. Amended return   If your home was foreclosed on or repossessed, you have a disposition. Amended return See Publication 4681 to determine if you have ordinary income, gain, or loss. Amended return More information. Amended return   If part of a home is used for business or rental purposes, see Foreclosures and Repossessions in chapter 1 of Publication 544 for more information. Amended return Publication 544 has examples of how to figure gain or loss on a foreclosure or repossession. Amended return Abandonment. Amended return   If you abandon your home, see Publication 4681 to determine if you have ordinary income, gain, or loss. Amended return Trading (exchanging) homes. Amended return   If you trade your home for another home, treat the trade as a sale and a purchase. Amended return Example. Amended return You owned and lived in a home with an adjusted basis of $41,000. Amended return A real estate dealer accepted your old home as a trade-in and allowed you $50,000 toward a new home priced at $80,000. Amended return This is treated as a sale of your old home for $50,000 with a gain of $9,000 ($50,000 − $41,000). Amended return If the dealer had allowed you $27,000 and assumed your unpaid mortgage of $23,000 on your old home, your sales price would still be $50,000 (the $27,000 trade-in allowed plus the $23,000 mortgage assumed). Amended return Transfer to spouse. Amended return   If you transfer your home to your spouse or you transfer it to your former spouse incident to your divorce, you in most cases have no gain or loss (unless the Exception, discussed next, applies). Amended return This is true even if you receive cash or other consideration for the home. Amended return As a result, the rules explained in this publication do not apply. Amended return   If you owned your home jointly with your spouse and transfer your interest in the home to your spouse, or to your former spouse incident to your divorce, the same rule applies. Amended return You have no gain or loss. Amended return Exception. Amended return   These transfer rules do not apply if your spouse or former spouse is a nonresident alien. Amended return In that case, you generally will have a gain or loss. Amended return More information. Amended return    See Property Settlements in Publication 504, Divorced or Separated Individuals, for more information. Amended return Involuntary conversion. Amended return   You have a disposition when your home is destroyed or condemned and you receive other property or money in payment, such as insurance or a condemnation award. Amended return This is treated as a sale and you may be able to exclude all or part of any gain from the destruction or condemnation of your home, as explained later under Special Situations (see Home destroyed or condemned ). Amended return Determining Basis You need to know your basis in your home to figure any gain or loss when you sell it. Amended return Your basis in your home is determined by how you got the home. Amended return Generally, your basis is its cost if you bought it or built it. Amended return If you got it in some other way (inheritance, gift, etc. Amended return ), your basis is generally either its fair market value when you received it or the adjusted basis of the previous owner. Amended return While you owned your home, you may have made adjustments (increases or decreases) to your home's basis. Amended return The result of these adjustments is your home's adjusted basis, which is used to figure gain or loss on the sale of your home. Amended return To figure your adjusted basis, you can use Worksheet 1, near the end of this publication. Amended return Filled-in examples of that worksheet are included in the Comprehensive Examples , later. Amended return Cost As Basis The cost of property is the amount you paid for it in cash, debt obligations, other property, or services. Amended return Purchase. Amended return   If you bought your home, your basis is its cost to you. Amended return This includes the purchase price and certain settlement or closing costs. Amended return In most cases, your purchase price includes your down payment and any debt, such as a first or second mortgage or notes you gave the seller in payment for the home. Amended return If you build, or contract to build, a new home, your purchase price can include costs of construction, as discussed later. Amended return Seller-paid points. Amended return   If the person who sold you your home paid points on your loan, you may have to reduce your home's basis by the amount of the points, as shown in the following chart. Amended return    IF you bought your home. Amended return . Amended return . Amended return THEN reduce your home's basis by the seller-paid points. Amended return . Amended return . Amended return after 1990 but before April 4, 1994 only if you deducted them as home mortgage interest in the year paid. Amended return after April 3, 1994 even if you did not deduct them. Amended return Settlement fees or closing costs. Amended return   When you bought your home, you may have paid settlement fees or closing costs in addition to the contract price of the property. Amended return You can include in your basis some of the settlement fees and closing costs you paid for buying the home, but not the fees and costs for getting a mortgage loan. Amended return A fee paid for buying the home is any fee you would have had to pay even if you paid cash for the home (that is, without the need for financing). Amended return   Settlement fees do not include amounts placed in escrow for the future payment of items such as taxes and insurance. Amended return   Some of the settlement fees or closing costs that you can include in your basis are: Abstract fees (abstract of title fees), Charges for installing utility services, Legal fees (including fees for the title search and preparing the sales contract and deed), Recording fees, Survey fees, Transfer or stamp taxes, Owner's title insurance, and Any amounts the seller owes that you agree to pay, such as: Certain real estate taxes (discussed later), Back interest, Recording or mortgage fees, Charges for improvements or repairs, and Sales commissions. Amended return   Some settlement fees and closing costs you cannot include in your basis are: Fire insurance premiums, Rent for occupancy of the house before closing, Charges for utilities or other services related to occupancy of the house before closing, Any fee or cost that you deducted as a moving expense (allowed for certain fees and costs before 1994), Charges connected with getting a mortgage loan, such as: Mortgage insurance premiums (including funding fees connected with loans guaranteed by the Department of Veterans Affairs), Loan assumption fees, Cost of a credit report, Fee for an appraisal required by a lender, and Fees for refinancing a mortgage. Amended return Real estate taxes. Amended return   Real estate taxes for the year you bought your home may affect your basis, as shown in the following chart. Amended return    IF. Amended return . Amended return . Amended return AND. Amended return . Amended return . Amended return THEN the taxes. Amended return . Amended return . Amended return you pay taxes that the seller owed on the home up to the date of sale the seller does not reimburse you are added to the basis of your home. Amended return the seller reimburses you do not affect the basis of your home. Amended return the seller pays taxes for you (taxes owed beginning on the date of sale) you do not reimburse the seller are subtracted from the basis of your home. Amended return you reimburse the seller do not affect the basis of your home. Amended return Construction. Amended return   If you contracted to have your house built on land you own, your basis is: The cost of the land, plus The amount it cost you to complete the house, including: The cost of labor and materials, Any amounts paid to a contractor, Any architect's fees, Building permit charges, Utility meter and connection charges, and Legal fees directly connected with building the house. Amended return   Your cost includes your down payment and any debt such as a first or second mortgage or notes you gave the seller or builder. Amended return It also includes certain settlement or closing costs. Amended return You may have to reduce your basis by points the seller paid for you. Amended return For more information, see Seller-paid points and Settlement fees or closing costs , earlier. Amended return Built by you. Amended return   If you built all or part of your house yourself, its basis is the total amount it cost you to complete it. Amended return Do not include in the cost of the house: The value of your own labor, or The value of any other labor you did not pay for. Amended return Temporary housing. Amended return   If a builder gave you temporary housing while your home was being finished, you must reduce your basis by the part of the contract price that was for the temporary housing. Amended return To figure the amount of the reduction, multiply the contract price by a fraction. Amended return The numerator is the value of the temporary housing, and the denominator is the sum of the value of the temporary housing plus the value of the new home. Amended return Cooperative apartment. Amended return   If you are a tenant-stockholder in a cooperative housing corporation, your basis in the cooperative apartment used as your home is usually the cost of your stock in the corporation. Amended return This may include your share of a mortgage on the apartment building. Amended return Condominium. Amended return   To determine your basis in a condominium apartment used as your home, use the same rules as for any other home. Amended return Basis Other Than Cost You must use a basis other than cost, such as adjusted basis or fair market value, if you received your home as a gift, inheritance, a trade, or from your spouse. Amended return These situations are discussed in the following pages. Amended return Also, the instructions for Worksheet 1 (near the end of the publication) address each of these issues. Amended return Other special rules may apply in certain situations. Amended return If you converted the property, or some part of it, to business or rental use, see Property Changed to Business or Rental Use, in Publication 551. Amended return Home received as gift. Amended return   Use the following chart to find the basis of a home you received as a gift. Amended return IF the donor's adjusted basis at the time of the gift was. Amended return . Amended return . Amended return THEN your basis is. Amended return . Amended return . Amended return more than the fair market value of the home at that time the same as the donor's adjusted basis at the time of the gift. Amended return   Exception: If using the donor's adjusted basis results in a loss when you sell the home, you must use the fair market value of the home at the time of the gift as your basis. Amended return If using the fair market value results in a gain, you have neither gain nor loss. Amended return equal to or less than the fair market value at that time, and you received the gift before 1977 the smaller of the: • donor's adjusted basis, plus  any federal gift tax paid on  the gift, or • the home's fair market value  at the time of the gift. Amended return equal to or less than the fair market value at that time, and you received the gift after 1976 the same as the donor's adjusted basis, plus the part of any federal gift tax paid that is due to the net increase in value of the home (explained next). Amended return Fair market value. Amended return   The fair market value of property at the time of the gift is the value of the property as appraised for purposes of the federal gift tax. Amended return If the gift was not subject to the federal gift tax, the fair market value is the value as appraised for the purposes of a state gift tax. Amended return Part of federal gift tax due to net increase in value. Amended return   Figure the part of the federal gift tax paid that is due to the net increase in value of the home by multiplying the total federal gift tax paid by a fraction. Amended return The numerator of the fraction is the net increase in the value of the home, and the denominator is the value of the home for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. Amended return The net increase in the value of the home is its fair market value minus the donor's adjusted basis immediately before the gift. Amended return Home acquired from a decedent who died before or after 2010. Amended return   If you inherited your home from a decedent who died before or after 2010, your basis is the fair market value of the property on the date of the decedent's death (or the later alternate valuation date chosen by the personal representative of the estate). Amended return If an estate tax return was filed or required to be filed, the value of the property listed on the estate tax return is your basis. Amended return If a federal estate tax return did not have to be filed, your basis in the home is the same as its appraised value at the date of death, for purposes of state inheritance or transmission taxes. Amended return Surviving spouse. Amended return   If you are a surviving spouse and you owned your home jointly, your basis in the home will change. Amended return The new basis for the interest your spouse owned will be its fair market value on the date of death (or alternate valuation date). Amended return The basis in your interest will remain the same. Amended return Your new basis in the home is the total of these two amounts. Amended return   If you and your spouse owned the home either as tenants by the entirety or as joint tenants with right of survivorship, you will each be considered to have owned one-half of the home. Amended return Example. Amended return Your jointly owned home (owned as joint tenants with right of survivorship) had an adjusted basis of $50,000 on the date of your spouse's death, and the fair market value on that date was $100,000. Amended return Your new basis in the home is $75,000 ($25,000 for one-half of the adjusted basis plus $50,000 for one-half of the fair market value). Amended return Community property. Amended return   In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), each spouse is usually considered to own half of the community property. Amended return When either spouse dies, the total fair market value of the community property becomes the basis of the entire property, including the part belonging to the surviving spouse. Amended return For this to apply, at least half the value of the community property interest must be includible in the decedent's gross estate, whether or not the estate must file a return. Amended return   For more information about community property, see Publication 555, Community Property. Amended return    If you are selling a home in which you acquired an interest from a decedent who died in 2010, see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, to determine your basis. Amended return Home received as trade. Amended return   If you acquired your home as a trade for other property, in most cases, the basis of your home is the fair market value (at the time of the trade) of the property you gave up. Amended return If you traded one home for another, you have made a sale and purchase. Amended return In that case, you may have a gain. Amended return See Trading (exchanging) homes under Dispositions Other Than Sales, earlier, for an example of figuring the gain. Amended return Home received from spouse. Amended return   If you received your home from your spouse or from your former spouse incident to your divorce, your basis in the home depends on the date of the transfer. Amended return Transfers after July 18, 1984. Amended return   If you received the home after July 18, 1984, there was no gain or loss on the transfer. Amended return In most cases, your basis in this home is the same as your spouse's (or former spouse's) adjusted basis just before you received it. Amended return This rule applies even if you received the home in exchange for cash, the release of marital rights, the assumption of liabilities, or other considerations. Amended return   If you owned a home jointly with your spouse and your spouse transferred his or her interest in the home to you, in most cases, your basis in the half interest received from your spouse is the same as your spouse's adjusted basis just before the transfer. Amended return This also applies if your former spouse transferred his or her interest in the home to you incident to your divorce. Amended return Your basis in the half interest you already owned does not change. Amended return Your new basis in the home is the total of these two amounts. Amended return Transfers before July 19, 1984. Amended return   If you received your home before July 19, 1984, in exchange for your release of marital rights, in most cases, your basis in the home is generally its fair market value at the time you received it. Amended return More information. Amended return   For more information on property received from a spouse or former spouse, see Property Settlements in Publication 504. Amended return Involuntary conversion. Amended return   If your home is destroyed or condemned, you may receive insurance proceeds or a condemnation award. Amended return If you acquired a replacement home with these proceeds, the basis is its cost decreased by any gain not recognized on the conversion under the rules explained in: Publication 547, in the case of a home that was destroyed, or Chapter 1 of Publication 544, in the case of a home that was condemned. Amended return Example. Amended return A fire destroyed your home that you owned and used for only 6 months. Amended return The home had an adjusted basis of $80,000 and the insurance company paid you $130,000 for the loss. Amended return Your gain is $50,000 ($130,000 − $80,000). Amended return You bought a replacement home for $100,000. Amended return The part of your gain that is taxable is $30,000 ($130,000 − $100,000), the unspent part of the payment from the insurance company. Amended return The rest of the gain ($20,000) is not taxable, so that amount reduces your basis in the new home. Amended return The basis of the new home is figured as follows. Amended return Cost of replacement home $100,000 Minus: Gain not recognized 20,000 Basis of the replacement home $80,000 More information. Amended return   For more information about basis, see Publication 551. Amended return Adjusted Basis Adjusted basis is your cost or other basis increased or decreased by certain amounts. Amended return To figure your adjusted basis, you can use Worksheet 1, found toward the end of this publication. Amended return Filled-in examples of that worksheet are included in Comprehensive Examples , later. Amended return Recordkeeping. Amended return You should keep records to prove your home's adjusted basis. Amended return Ordinarily, you must keep records for 3 years after the due date for filing your return for the tax year in which you sold your home. Amended return But if you sold a home before May 7, 1997, and postponed tax on any gain, the basis of that home affects the basis of the new home you bought. Amended return Keep records proving the basis of both homes as long as they are needed for tax purposes. Amended return The records you should keep include: Proof of the home's purchase price and purchase expenses; Receipts and other records for all improvements, additions, and other items that affect the home's adjusted basis; Any worksheets or other computations you used to figure the adjusted basis of the home you sold, the gain or loss on the sale, the exclusion, and the taxable gain; Any Form 982 you filed to exclude any discharge of qualified principal residence indebtedness; Any Form 2119, Sale of Your Home, you filed to postpone gain from the sale of a previous home before May 7, 1997; and Any worksheets you used to prepare Form 2119, such as the Adjusted Basis of Home Sold Worksheet or the Capital Improvements Worksheet from the Form 2119 instructions, or other source of computations. Amended return Increases to Basis These include the following. Amended return Additions and other improvements that have a useful life of more than 1 year. Amended return Special assessments for local improvements. Amended return Amounts you spent after a casualty to restore damaged property. Amended return Improvements. Amended return   These add to the value of your home, prolong its useful life, or adapt it to new uses. Amended return You add the cost of additions and other improvements to the basis of your property. Amended return   The following chart lists some other examples of improvements. Amended return Examples of Improvements That Increase Basis Additions Bedroom Bathroom Deck Garage Porch Patio Heating & Air Conditioning Heating system Central air conditioning Furnace Duct work Central humidifier Filtration system Lawn & Grounds Landscaping Driveway Walkway Fence  Retaining wall Sprinkler system Swimming pool  Miscellaneous Storm windows, doors New roof Central vacuum Wiring upgrades Satellite dish Security system  Plumbing Septic system Water heater Soft water system Filtration system  Interior Improvements Built-in appliances  Kitchen modernization  Flooring Wall-to-wall carpeting  Insulation Attic Walls Floors Pipes and duct work Improvements no longer part of home. Amended return   Your home's adjusted basis does not include the cost of any improvements that are replaced and are no longer part of the home. Amended return Example. Amended return You put wall-to-wall carpeting in your home 15 years ago. Amended return Later, you replaced that carpeting with new wall-to-wall carpeting. Amended return The cost of the old carpeting you replaced is no longer part of your home's adjusted basis. Amended return Repairs. Amended return   These maintain your home in good condition but do not add to its value or prolong its life. Amended return You do not add their cost to the basis of your property. Amended return Examples. Amended return Repainting your house inside or outside, fixing your gutters or floors, repairing leaks or plastering, and replacing broken window panes are examples of repairs. Amended return Exception. Amended return   The entire job is considered an improvement if items that would otherwise be considered repairs are done as part of an extensive remodeling or restoration of your home. Amended return For example, if you have a casualty and your home is damaged, increase your basis by the amount you spend on repairs that restore the property to its pre-casualty condition. Amended return Decreases to Basis These include the following. Amended return Discharge of qualified principal residence indebtedness that was excluded from income (but not below zero). Amended return For details, see Publication 4681. Amended return Some or all of the cancellation of debt income that was excluded due to your bankruptcy or insolvency. Amended return For details, see Publication 4681. Amended return Gain you postponed from the sale of a previous home before May 7, 1997. Amended return Deductible casualty losses. Amended return Insurance payments you received or expect to receive for casualty losses. Amended return Payments you received for granting an easement or right-of-way. Amended return Depreciation allowed or allowable if you used your home for business or rental purposes. Amended return Energy-related credits allowed for expenditures made on the residence. Amended return (Reduce the increase in basis otherwise allowable for expenditures on the residence by the amount of credit allowed for those expenditures. Amended return ) Adoption credit you claimed for improvements added to the basis of your home. Amended return Nontaxable payments from an adoption assistance program of your employer you used for improvements you added to the basis of your home. Amended return Energy conservation subsidy excluded from your gross income because you received it (directly or indirectly) from a public utility after 1992 to buy or install any energy conservation measure. Amended return An energy conservation measure is an installation or modification primarily designed either to reduce consumption of electricity or natural gas or to improve the management of energy demand for a home. Amended return District of Columbia first-time homebuyer credit allowed on the purchase of a principal residence in the District of Columbia. Amended return General sales taxes claimed as an itemized deduction on Schedule A (Form 1040) that were imposed on the purchase of personal property, such as a houseboat used as your home or a mobile home. Amended return Discharges of qualified principal residence indebtedness. Amended return   You may be able to exclude from gross income a discharge of qualified principal residence indebtedness. Amended return This exclusion applies to discharges made after 2006 and before 2014. Amended return If you choose to exclude this income, you must reduce (but not below zero) the basis of your principal residence by the amount excluded from gross income. Amended return   File Form 982 with your tax return. Amended return See the form's instructions for detailed information. Amended return    A decrease in basis due to a discharge of qualified principal residence indebtedness that is excluded from income occurs only if you retain ownership of the principal residence after a discharge. Amended return In most cases, this would occur in a refinancing or a restructuring of the mortgage. Amended return Excluding the Gain You may qualify to exclude from your income all or part of any gain from the sale of your main home. Amended return This means that, if you qualify, you will not have to pay tax on the gain up to the limit described under Maximum Exclusion , next. Amended return To qualify, you must meet the ownership and use tests described later. Amended return You can choose not to take the exclusion by including the gain from the sale in your gross income on your tax return for the year of the sale. Amended return This choice can be made (or revoked) at any time before the expiration of a 3-year period beginning on the due date of your return (not including extensions) for the year of the sale. Amended return You can use Worksheet 2 (near the end of this publication) to figure the amount of your exclusion and your taxable gain, if any. Amended return If you have any taxable gain from the sale of your home, you may have to increase your withholding or make estimated tax payments. Amended return See Publication 505, Tax Withholding and Estimated Tax. Amended return Maximum Exclusion You can exclude up to $250,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if all of the following are true. Amended return You meet the ownership test. Amended return You meet the use test. Amended return During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home. Amended return For details on gain allocated to periods of nonqualified use, see Nonqualified Use , later. Amended return If you and another person owned the home jointly but file separate returns, each of you can exclude up to $250,000 of gain from the sale of your interest in the home if each of you meets the three conditions just listed. Amended return You may be able to exclude up to $500,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if you are married and file a joint return and meet the requirements listed in the discussion of the special rules for joint returns, later, under Married Persons . Amended return Ownership and Use Tests To claim the exclusion, you must meet the ownership and use tests. Amended return This means that during the 5-year period ending on the date of the sale, you must have: Owned the home for at least 2 years (the ownership test), and Lived in the home as your main home for at least 2 years (the use test). Amended return Exception. Amended return   If you owned and lived in the property as your main home for less than 2 years, you can still claim an exclusion in some cases. Amended return However, the maximum amount you may be able to exclude will be reduced. Amended return See Reduced Maximum Exclusion , later. Amended return Example 1—home owned and occupied for at least 2 years. Amended return Mya bought and moved into her main home in September 2011. Amended return She sold the home at a gain in October 2013. Amended return During the 5-year period ending on the date of sale in October 2013, she owned and lived in the home for more than 2 years. Amended return She meets the ownership and use tests. Amended return Example 2—ownership test met but use test not met. Amended return Ayden bought a home, lived in it for 6 months, moved out, and never occupied the home again. Amended return He later sold the home for a gain in June 2013. Amended return He owned the home during the entire 5-year period ending on the date of sale. Amended return He meets the ownership test but not the use test. Amended return He cannot exclude any part of his gain on the sale unless he qualified for a reduced maximum exclusion (explained later). Amended return Period of Ownership and Use The required 2 years of ownership and use during the 5-year period ending on the date of the sale do not have to be continuous nor do they both have to occur at the same time. Amended return You meet the tests if you can show that you owned and lived in the property as your main home for either 24 full months or 730 days (365 × 2) during the 5-year period ending on the date of sale. Amended return Example. Amended return Naomi bought and moved into a house in July 2009. Amended return She lived there for 13 months and then moved in with a friend. Amended return She later moved back into her house and lived there for 12 months until she sold it in August 2013. Amended return Naomi meets the ownership and use tests because, during the 5-year period ending on the date of sale, she owned the house for more than 2 years and lived in it for a total of 25 (13 + 12) months. Amended return Temporary absence. Amended return   Short temporary absences for vacations or other seasonal absences, even if you rent out the property during the absences, are counted as periods of use. Amended return The following examples assume that the reduced maximum exclusion (discussed later) does not apply to the sales. Amended return Example 1. Amended return David Johnson, who is single, bought and moved into his home on February 1, 2011. Amended return Each year during 2011 and 2012, David left his home for a 2-month summer vacation. Amended return David sold the house on March 1, 2013. Amended return Although the total time David lived in his home is less than 2 years (21 months), he meets the use requirement and may exclude gain. Amended return The 2-month vacations are short temporary absences and are counted as periods of use in determining whether David used the home for the required 2 years. Amended return Example 2. Amended return Professor Paul Beard, who is single, bought and moved into a house in December 2010, went abroad for a 1-year sabbatical leave in January 2012, returned to the house in January 2013, and sold it at a gain in February 2013. Amended return Because his leave was not a short temporary absence, he cannot include the period of leave to meet the 2-year use test. Amended return He cannot exclude any part of his gain because he did not use the residence for the required 2 years. Amended return Ownership and use tests met at different times. Amended return   You can meet the ownership and use tests during different 2-year periods. Amended return However, you must meet both tests during the 5-year period ending on the date of the sale. Amended return Example. Amended return Beginning in 2002, Helen Jones lived in a rented apartment. Amended return The apartment building was later converted to condominiums, and she bought her same apartment on December 3, 2010. Amended return In 2011, Helen became ill and on April 14 of that year she moved to her daughter's home. Amended return On July 12, 2013, while still living in her daughter's home, she sold her condominium. Amended return Helen can exclude gain on the sale of her condominium because she met the ownership and use tests during the 5-year period from July 13, 2008, to July 12, 2013, the date she sold the condominium. Amended return She owned her condominium from December 3, 2010, to July 12, 2013 (more than 2 years). Amended return She lived in the property from July 13, 2008 (the beginning of the 5-year period), to April 14, 2011 (more than 2 years). Amended return The time Helen lived in her daughter's home during the 5-year period can be counted toward her period of ownership, and the time she lived in her rented apartment during the 5-year period can be counted toward her period of use. Amended return Cooperative apartment. Amended return   If you sold stock as a tenant-shareholder in a cooperative housing corporation, the ownership and use tests are met if, during the 5-year period ending on the date of sale, you: Owned the stock for at least 2 years, and Lived in the house or apartment that the stock entitled you to occupy as your main home for at least 2 years. Amended return Exceptions to Ownership and Use Tests The following sections contain exceptions to the ownership and use tests for certain taxpayers. Amended return Exception for individuals with a disability. Amended return   There is an exception to the use test if: You become physically or mentally unable to care for yourself, and You owned and lived in your home as your main home for a total of at least 1 year during the 5-year period before the sale of your home. Amended return Under this exception, you are considered to live in your home during any time within the 5-year period that you own the home and live in a facility (including a nursing home) licensed by a state or political subdivision to care for persons in your condition. Amended return   If you meet this exception to the use test, you still have to meet the 2-out-of-5-year ownership test to claim the exclusion. Amended return Previous home destroyed or condemned. Amended return   For the ownership and use tests, you add the time you owned and lived in a previous home that was destroyed or condemned to the time you owned and lived in the replacement home on whose sale you wish to exclude gain. Amended return This rule applies if any part of the basis of the home you sold depended on the basis of the destroyed or condemned home (see Involuntary Conversions in Publication 551). Amended return Otherwise, you must have owned and lived in the same home for 2 of the 5 years before the sale to qualify for the exclusion. Amended return Members of the uniformed services or Foreign Service, employees of the intelligence community, or employees or volunteers of the Peace Corps. Amended return   You can choose to have the 5-year test period for ownership and use suspended during any period you or your spouse serve on qualified official extended duty (defined later) as a member of the uniformed services or Foreign Service of the United States, or as an employee of the intelligence community. Amended return You can choose to have the 5-year test period for ownership and use suspended during any period you or your spouse serve outside the United States either as an employee of the Peace Corps on qualified official extended duty (defined later) or as an enrolled volunteer or volunteer leader of the Peace Corps. Amended return This means that you may be able to meet the 2-year use test even if, because of your service, you did not actually live in your home for at least the required 2 years during the 5-year period ending on the date of sale. Amended return   If this helps you qualify to exclude gain, you can choose to have the 5-year test period suspended by filing a return for the year of sale that does not include the gain. Amended return Example. Amended return John bought and moved into a home in 2005. Amended return He lived in it as his main home for 2½ years. Amended return For the next 6 years, he did not live in it because he was on qualified official extended duty with the Army. Amended return He then sold the home at a gain in 2013. Amended return To meet the use test, John chooses to suspend the 5-year test period for the 6 years he was on qualified official extended duty. Amended return This means he can disregard those 6 years. Amended return Therefore, John's 5-year test period consists of the 5 years before he went on qualified official extended duty. Amended return He meets the ownership and use tests because he owned and lived in the home for 2½ years during this test period. Amended return Period of suspension. Amended return   The period of suspension cannot last more than 10 years. Amended return Together, the 10-year suspension period and the 5-year test period can be as long as, but no more than, 15 years. Amended return You cannot suspend the 5-year period for more than one property at a time. Amended return You can revoke your choice to suspend the 5-year period at any time. Amended return Example. Amended return Mary bought a home on April 1, 1997. Amended return She used it as her main home until August 31, 2000. Amended return On September 1, 2000, she went on qualified official extended duty with the Navy. Amended return She did not live in the house again before selling it on July 31, 2013. Amended return Mary chooses to use the entire 10-year suspension period. Amended return Therefore, the suspension period would extend back from July 31, 2013, to August 1, 2003, and the 5-year test period would extend back to August 1, 1998. Amended return During that period, Mary owned the house all 5 years and lived in it as her main home from August 1, 1998, until August 31, 2000, a period of more than 24 months. Amended return She meets the ownership and use tests because she owned and lived in the home for at least 2 years during this test period. Amended return Uniformed services. Amended return   The uniformed services are: The Armed Forces (the Army, Navy, Air Force, Marine Corps, and Coast Guard), The commissioned corps of the National Oceanic and Atmospheric Administration, and The commissioned corps of the Public Health Service. Amended return Foreign Service member. Amended return   For purposes of the choice to suspend the 5-year test period for ownership and use, you are a member of the Foreign Service if you are any of the following. Amended return A Chief of mission. Amended return An Ambassador at large. Amended return A member of the Senior Foreign Service. Amended return A Foreign Service officer. Amended return Part of the Foreign Service personnel. Amended return Employee of the intelligence community. Amended return   For purposes of the choice to suspend the 5-year test period for ownership and use, you are an employee of the intelligence community if you are an employee of any of the following. Amended return The Office of the Director of National Intelligence. Amended return The Central Intelligence Agency. Amended return The National Security Agency. Amended return The Defense Intelligence Agency. Amended return The National Geospatial-Intelligence Agency. Amended return The National Reconnaissance Office and any other office within the Department of Defense for the collection of specialized national intelligence through reconnaissance programs. Amended return Any of the intelligence elements of the Army, the Navy, the Air Force, the Marine Corps, the Federal Bureau of Investigation, the Department of Treasury, the Department of Energy, and the Coast Guard. Amended return The Bureau of Intelligence and Research of the Department of State. Amended return Any of the elements of the Department of Homeland Security concerned with the analyses of foreign intelligence information. Amended return Qualified official extended duty. Amended return   You are on qualified official extended duty if you are on extended duty while: Serving at a duty station at least 50 miles from your main home, or Living in Government quarters under Government orders. Amended return   You are on extended duty when you are called or ordered to active duty for a period of more than 90 days or for an indefinite period. Amended return Married Persons If you and your spouse file a joint return for the year of sale and one spouse meets the ownership and use tests, you can exclude up to $250,000 of the gain. Amended return (But see Special rules for joint returns, next. Amended return ) Special rules for joint returns. Amended return   You can exclude up to $500,000 of the gain on the sale of your main home if all of the following are true. Amended return You are married and file a joint return for the year. Amended return Either you or your spouse meets the ownership test. Amended return Both you and your spouse meet the use test. Amended return During the 2-year period ending on the date of the sale, neither you nor your spouse excluded gain from the sale of another home. Amended return If either spouse does not satisfy all these requirements, the maximum exclusion that can be claimed by the couple is the total of the maximum exclusions that each spouse would qualify for if not married and the amounts were figured separately. Amended return For this purpose, each spouse is treated as owning the property during the period that either spouse owned the property. Amended return Example 1—one spouse sells a home. Amended return Emily sells her home in June 2013 for a gain of $300,000. Amended return She marries Jamie later in the year. Amended return She meets the ownership and use tests, but Jamie does not. Amended return Emily can exclude up to $250,000 of gain on a separate or joint return for 2013. Amended return The $500,000 maximum exclusion for certain joint returns does not apply because Jamie does not meet the use test. Amended return Example 2—each spouse sells a home. Amended return The facts are the same as in Example 1 except that Jamie also sells a home in 2013 for a gain of $200,000 before he marries Emily. Amended return He meets the ownership and use tests on his home, but Emily does not. Amended return Emily can exclude $250,000 of gain and Jamie can exclude $200,000 of gain on the respective sales of their individual homes. Amended return However, Emily cannot use Jamie's unused exclusion to exclude more than $250,000 of gain. Amended return Therefore, Emily and Jamie must recognize $50,000 of gain on the sale of Emily's home. Amended return The $500,000 maximum exclusion for certain joint returns does not apply because Emily and Jamie do not both meet the use test for the same home. Amended return Sale of main home by surviving spouse. Amended return   If your spouse died and you did not remarry before the date of sale, you are considered to have owned and lived in the property as your main home during any period of time when your spouse owned and lived in it as a main home. Amended return   If you meet all of the following requirements, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home. Amended return The sale or exchange took place after 2008. Amended return The sale or exchange took place no more than 2 years after the date of death of your spouse. Amended return You have not remarried. Amended return You and your spouse met the use test at the time of your spouse's death. Amended return You or your spouse met the ownership test at the time of your spouse's death. Amended return Neither you nor your spouse excluded gain from the sale of another home during the last 2 years before the date of death. Amended return The ownership and use tests were described earlier. Amended return Example. Amended return Harry owned and used a house as his main home since 2009. Amended return Harry and Wilma married on July 1, 2013, and from that date they used Harry's house as their main home. Amended return Harry died on August 15, 2013, and Wilma inherited the property. Amended return Wilma sold the property on September 1, 2013, at which time she had not remarried. Amended return Although Wilma owned and used the house for less than 2 years, Wilma is considered to have satisfied the ownership and use tests because her period of ownership and use includes the period that Harry owned and used the property before death. Amended return Home transferred from spouse. Amended return   If your home was transferred to you by your spouse (or former spouse if the transfer was incident to divorce), you are considered to have owned it during any period of time when your spouse owned it. Amended return Use of home after divorce. Amended return   You are considered to have used property as your main home during any period when: You owned it, and Your spouse or former spouse is allowed to live in it under a divorce or separation instrument and uses it as his or her main home. Amended return Reduced Maximum Exclusion If you fail to meet the requirements to qualify for the $250,000 or $500,000 exclusion, you may still qualify for a reduced exclusion. Amended return This applies to those who: Fail to meet the ownership and use tests, or Have used the exclusion within 2 years of selling their current home. Amended return In both cases, to qualify for a reduced exclusion, the sale of your main home must be due to one of the following reasons. Amended return A change in place of employment. Amended return Health. Amended return Unforeseen circumstances. Amended return Qualified individual. Amended return   For purposes of the reduced maximum exclusion, a qualified individual is any of the following. Amended return You. Amended return Your spouse. Amended return A co-owner of the home. Amended return A person whose main home is the same as yours. Amended return Primary reason for sale. Amended return   One of the three reasons above will be considered to be the primary reason you sold your home if either (1) or (2) is true. Amended return You qualify under a “safe harbor. Amended return ” This is a specific set of facts and circumstances that, if applicable, qualifies you to claim a reduced maximum exclusion. Amended return Safe harbors corresponding to the reasons listed above are described later. Amended return A safe harbor does not apply, but you can establish, based on facts and circumstances, that the primary reason for the sale is a change in place of employment, health, or unforeseen circumstances. Amended return  Factors that may be relevant in determining your primary reason for sale include whether: Your sale and the circumstances causing it were close in time, The circumstances causing your sale occurred during the time you owned and used the property as your main home, The circumstances causing your sale were not reasonably foreseeable when you began using the property as your main home, Your financial ability to maintain the property became materially impaired, The suitability of the property as your main home materially changed, and During the time you owned the property, you used it as your home. Amended return Change in Place of Employment You may qualify for a reduced exclusion if the primary reason for the sale of your main home is a change in the location of employment of a qualified individual. Amended return Employment. Amended return   For this purpose, employment includes the start of work with a new employer or continuation of work with the same employer. Amended return It also includes the start or continuation of self-employment. Amended return Distance safe harbor. Amended return   A change in place of employment is considered to be the reason you sold your home if: The change occurred during the period you owned and used the property as your main home, and The new place of employment is at least 50 miles farther from the home you sold than was the former place of employment (or, if there was no former place of employment, the distance between your new place of employment and the home sold is at least 50 miles). Amended return Example. Amended return Justin was unemployed and living in a townhouse in Florida he had owned and used as his main home since 2012. Amended return He got a job in North Carolina and sold his townhouse in 2013. Amended return Because the distance between Justin's new place of employment and the home he sold is at least 50 miles, the sale satisfies the conditions of the distance safe harbor. Amended return Justin's sale of his home is considered to be because of a change in place of employment, and he is entitled to claim a reduced maximum exclusion of gain from the sale. Amended return Health The sale of your main home is because of health if your primary reason for the sale is: To obtain, provide, or facilitate the diagnosis, cure, mitigation, or treatment of disease, illness, or injury of a qualified individual, or To obtain or provide medical or personal care for a qualified individual suffering from a disease, illness, or injury. Amended return The sale of your home is not because of health if the sale merely benefits a qualified individual's general health or well-being. Amended return For purposes of this reason, a qualified individual includes, in addition to the individuals listed earlier under Qualified individual , any of the following family members of these individuals. Amended return Parent, grandparent, stepmother, stepfather. Amended return Child, grandchild, stepchild, adopted child, eligible foster child. Amended return Brother, sister, stepbrother, stepsister, half-brother, half-sister. Amended return Mother-in-law, father-in-law, brother-in-law, sister-in-law, son-in-law, or daughter-in-law. Amended return Uncle, aunt, nephew, niece, or cousin. Amended return Example. Amended return In 2012, Chase and Lauren, spouses, bought a house that they used as their main home. Amended return Lauren's father has a chronic disease and is unable to care for himself. Amended return In 2013, Chase and Lauren sold their home in order to move into Lauren's father's house to provide care for him. Amended return Because the primary reason for the sale of their home was to provide care for Lauren's father, Chase and Lauren are entitled to a reduced maximum exclusion. Amended return Doctor's recommendation safe harbor. Amended return   Health is considered to be the reason you sold your home if, for one or more of the reasons listed at the beginning of this discussion, a doctor recommends a change of residence. Amended return Unforeseen Circumstances The sale of your main home is because of an unforeseen circumstance if your primary reason for the sale is the occurrence of an event that you could not reasonably have anticipated before buying and occupying that home. Amended return You are not considered to have an unforeseen circumstance if the primary reason you sold your home was that you preferred to get a different home or because your finances improved. Amended return Specific event safe harbors. Amended return   Unforeseen circumstances are considered to be the reason for selling your home if any of the following events occurred while you owned and used the property as your main home. Amended return An involuntary conversion of your home, such as when your home is destroyed or condemned. Amended return Natural or man-made disasters or acts of war or terrorism resulting in a casualty to your home, whether or not your loss is deductible. Amended return In the case of qualified individuals (listed earlier under Qualified individual ): Death, Unemployment (if the individual is eligible for unemployment compensation), A change in employment or self-employment status that results in the individual's inability to pay reasonable basic living expenses (listed under Reasonable basic living expenses , later) for his or her household, Divorce or legal separation under a decree of divorce or separate maintenance, or Multiple births resulting from the same pregnancy. Amended return An event the IRS determined to be an unforeseen circumstance in published guidance of general applicability. Amended return For example, the IRS determined the September 11, 2001, terrorist attacks to be an unforeseen circumstance. Amended return Reasonable basic living expenses. Amended return   Reasonable basic living expenses for your household include the following. Amended return Amounts spent for food. Amended return Amounts spent for clothing. Amended return Housing and related expenses. Amended return Medical expenses. Amended return Transportation expenses. Amended return Tax payments. Amended return Court-ordered payments. Amended return Expenses reasonably necessary to produce income. Amended return   Any of these amounts spent to maintain an affluent or luxurious standard of living are not reasonable basic living expenses. Amended return Nonqualified Use Gain from the sale or exchange of the main home is not excludable from income if it is allocable to periods of nonqualified use. Amended return Nonqualified use means any period after 2008 where neither you nor your spouse (or your former spouse) used the property as a main home, with certain exceptions (see next). Amended return Exceptions. Amended return   A period of nonqualified use does not include: Any portion of the 5-year period ending on the date of the sale or exchange after the last date you (or your spouse) use the property as a main home; Any period (not to exceed an aggregate period of 10 years) during which you (or your spouse) are serving on qualified official extended duty: As a member of the uniformed services; As a member of the Foreign Service of the United States; or As an employee of the intelligence community; and Any other period of temporary absence (not to exceed an aggregate period of 2 years) due to change of employment, health conditions, or such other unforeseen circumstances as may be specified by the IRS. Amended return Calculation. Amended return   To figure the portion of the gain allocated to the period of nonqualified use, multiply the gain (net of any depreciation allowed or allowable on the property for periods after May 6, 1997) by the following fraction:   Total nonqualified use during the period of ownership after 2008     Total period of ownership     This calculation can be found in Worksheet 2, line 10, later in this publication. Amended return   For examples of this calculation, see Business Use or Rental of Home , next. Amended return Business Use or Rental of Home You may be able to exclude gain from the sale of a home you have used for business or to produce rental income if you meet the ownership and use tests. Amended return Example 1. Amended return On May 23, 2007, Amy, who is unmarried for all years in this example, bought a house. Amended return She moved in on that date and lived in it until May 31, 2009, when she moved out of the house and put it up for rent. Amended return The house was rented from June 1, 2009, to March 31, 2011. Amended return Amy claimed depreciation deductions in 2009 through 2011 totaling $10,000. Amended return Amy moved back into the house on April 1, 2011, and lived there until she sold it on January 31, 2013, for a gain of $200,000. Amended return During the 5-year period ending on the date of the sale (January 31, 2008–January 31, 2013), Amy owned and lived in the house for more than 2 years as shown in the following table. Amended return Five-Year Period Used as Home Used as Rental 1/31/08 – 5/31/09 16 months   6/01/09 – 3/31/11   22 months 4/01/11 – 1/31/13 22 months     38 months 22 months       During the period Amy owned the house (2,080 days), her period of nonqualified use was 668 days. Amended return Because the gain attributable to periods of nonqualified use is $60,990, Amy can exclude $129,010 of her gain, as shown on Worksheet 2. Amended return Example 2. Amended return William owned and used a house as his main home from 2007 through 2010. Amended return On January 1, 2011, he moved to another state. Amended return He rented his house from that date until April 30, 2013, when he sold it. Amended return During the 5-year period ending on the date of sale (May 1, 2008-April 30, 2013), William owned and lived in the house for more than 2 years. Amended return Because it was rental property at the time of the sale, he must report the sale on Form 4797. Amended return Because the period of nonqualified use does not include any part of the 5-year period after the last date William lived in the house, he has no period of nonqualified use. Amended return Because he met the ownership and use tests, he can exclude gain up to $250,000. Amended return However, he cannot exclude the part of the gain equal to the depreciation he claimed or could have claimed for renting the house, as explained next. Amended return Depreciation after May 6, 1997. Amended return   If you were entitled to take depreciation deductions because you used your home for business purposes or as rental property, you cannot exclude the part of your gain equal to any depreciation allowed or allowable as a deduction for periods after May 6, 1997. Amended return If you can show by adequate records or other evidence that the depreciation allowed was less than the amount allowable, then you may limit the amount of gain recognized to the depreciation allowed. Amended return Unrecaptured section 1250 gain. Amended return   This is the part of any long-term capital gain from the sale of your home that is due to depreciation and cannot be excluded. Amended return To figure the amount of unrecaptured section 1250 gain to be reported on Schedule D (Form 1040), you must also take into account certain gains or losses from the sale of property other than your home. Amended return Use the Unrecaptured Section 1250 Gain Worksheet in the Schedule D instructions for this purpose. Amended return Worksheet 2. Amended return Taxable Gain on Sale of Home—Completed Example 1 for Amy Part 1. Amended return Gain or (Loss) on Sale       1. Amended return   Selling price of home 1. Amended return     2. Amended return   Selling expenses (including commissions, advertising and legal fees, and seller-paid loan charges) 2. Amended return     3. Amended return   Subtract line 2 from line 1. Amended return This is the amount realized 3. Amended return     4. Amended return   Adjusted basis of home sold (from Worksheet 1, line 13) 4. Amended return     5. Amended return   Gain or (loss) on the sale. Amended return Subtract line 4 from line 3. Amended return If this is a loss, stop here 5. Amended return 200,000   Part 2. Amended return Exclusion and Taxable Gain       6. Amended return   Enter any depreciation allowed or allowable on the property for periods after May 6, 1997. Amended return If none, enter -0- 6. Amended return 10,000   7. Amended return   Subtract line 6 from line 5. Amended return If the result is less than zero, enter -0- 7. Amended return 190,000   8. Amended return   Aggregate number of days of nonqualified use after 2008. Amended return If none, enter -0-. Amended return  If line 8 is equal to zero, skip to line 12 and enter the amount from line 7 on line 12 8. Amended return 668   9. Amended return   Number of days taxpayer owned the property 9. Amended return 2,080   10. Amended return   Divide the amount on line 8 by the amount on line 9. Amended return Enter the result as a decimal (rounded to at least 3 places). Amended return But do not enter an amount greater than 1. Amended return 00 10. Amended return 0. Amended return 321   11. Amended return   Gain allocated to nonqualified use. Amended return (Line 7 multiplied by line 10) 11. Amended return 60,990   12. Amended return   Gain eligible for exclusion. Amended return Subtract line 11 from line 7 12. Amended return 129,010   13. Amended return   If you qualify to exclude gain on the sale, enter your maximum exclusion (see Maximum Exclusion ). Amended return  If you qualify for a reduced maximum exclusion, enter the amount from Worksheet 3, line 7. Amended return If you do  not qualify to exclude gain, enter -0- 13. Amended return 250,000   14. Amended return   Exclusion. Amended return Enter the smaller of line 12 or line 13 14. Amended return 129,010   15. Amended return   Taxable gain. Amended return Subtract line 14 from line 5. Amended return Report your taxable gain as described under Reporting the Sale . Amended return If the amount on line 6 is more than zero, complete line 16 15. Amended return 70,990   16. Amended return   Enter the smaller of line 6 or line 15. Amended return Enter this amount on line 12 of the Unrecaptured Section 1250 Gain  Worksheet in the instructions for Schedule D (Form 1040) 16. Amended return 10,000 Property Used Partly for Business or Rental If you use property partly as a home and partly for business or to produce rental income, the treatment of any gain on the sale depends partly on whether the business or rental part of the property is part of your home or separate from it. Amended return Part of Home Used for Business or Rental If the part of your property used for business or to produce rental income is within your home, such as a room used as a home office for a business, you do not need to allocate gain on the sale of the property between the business part of the property and the part used as a home. Amended return In addition, you do not need to report the sale of the business or rental part on Form 4797. Amended return This is true whether or not you were entitled to claim any depreciation. Amended return However, you cannot exclude the part of any gain equal to any depreciation allowed or allowable after May 6, 1997. Amended return See Depreciation after May 6, 1997, earlier. Amended return Example 1. Amended return Ray sold his main home in 2013 at a $30,000 gain. Amended return He has no gains or losses from the sale of property other than the gain from the sale of his home. Amended return He meets the ownership and use tests to exclude the gain from his income. Amended return However, he used part of the home as a business office in 2012 and claimed $500 depreciation. Amended return Because the business office was part of his home (not separate from it), he does not have to allocate the gain on the sale between the business part of the property and the part used as a home. Amended return In addition, he does not have to report any part of the gain on Form 4797. Amended return Because Ray was entitled to take a depreciation deduction, he must recognize $500 of the gain as unrecaptured section 1250 gain. Amended return He reports his gain, exclusion, and the taxable gain of $500 on Form 8949 and Schedule D (Form 1040). Amended return Example 2. Amended return The facts are the same as in Example 1 except that Ray was not entitled to claim depreciation for the business use of his home. Amended return Since Ray did not claim any depreciation, he can exclude the entire $30,000 gain. Amended return Separate Part of Property Used for Business or Rental You may have used part of your property as your home and a separate part of it for business or to produce rental income. Amended return Examples are: A working farm on which your house was located, A duplex in w
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Affordable Care Act of 2010: News Releases, Multimedia and Legal Guidance

Check this page for updates 

News Releases

  • IR-2014-27, IRS Encourages Small Employers to Check Out Small Business Health Care Tax Credit; Helpful Resources, Tax Tips Available on IRS.gov
  • IR-2014-19, IRS Offers Health Care Tax Tips to Help Individuals Understand Tax Provisions in the Affordable Care Act
  • IR-2012-33: IRS Encourages Small Employers to Check Out Small Business Health Care Tax Credit
  • IR-2011-120, Filing Deadline Extended to March 30 for Some Tax-Exempt Organizations
  • IR-2011-92, Treasury, IRS Seek Public Input on Certain Employer Provisions of the Affordable Care Act
  • IR-2011-90, As Tax Filing Extension Deadlines Near, IRS and HHS Announce New Round of Outreach to Small Businesses and Practitioners About the Small Business Health Care Tax Credit
  • IR-2011-50, Treasury, IRS Seek Public Input on Certain Employer Provisions of the Affordable Care Act
  • IR-2011-31, IRS Issues Interim Guidance on Informational Reporting of Employer-Sponsored Health Coverage; Reporting is Voluntary for All Employers for 2011 and Small Employers for 2012
  • IR-2010-128, IRS Offers New Guidance on FSA and HRA Debit Cards
  • IR-2010-117, IRS Helps Small Employers Claim New Health Care Tax Credit; Forms and Additional Guidance Now Available on Small Business Health Care Tax Credit
  • IR-2010-103, IRS Releases Draft W-2 Form for 2011; Announces Relief for Employers
  • IR-2010-100, IRS Issues Guidance on Expanded Adoption Credit Available for Tax-Year 2010
  • IR-2010-96, IRS Releases Form to Help Small Businesses Claim New Health Care Tax Credit
  • IR-2010-95, IRS Issues Guidance Explaining 2011 Changes to Flexible Spending Arrangements
  • IR-2010-79, IRS Requests Public Input on Expanded Information Reporting Requirement
  • IR-2010-76, IRS Begins Accepting Applications for Qualifying Therapeutic Discovery Project Program
  • IR-2010-74, Affordable Care Act Provides Expanded Tax Benefit to Health Professionals Working in Underserved Areas
  • IR-2010-73, IRS Issues Regulations on 10-Percent Tax on Tanning Services Effective July 1
  • IR-2010-69, Recent Legislation Offers Special Tax Incentives for Small Businesses to Provide Health Care, Hire New Workers
  • IR-2010-63, Offers Details on New Small Business Health Care Tax Credit
  • IR-2010-53, Tax-Free Employer-Provided Health Coverage Now Available for Children under Age 27
  • IR-2010-48, IRS Reaches Out to Millions of Employers on Benefits of New Health Care Tax Credit
  • IR-2010-38, New for 2010: Tax Credit Helps Small Employers Provide Health Insurance Coverage

Additional Materials

  • Treasury Department, FACT SHEET: Final Regulations Implementing Information Reporting for Employers and Insurers under the Affordable Care Act (ACA)
  • Publication 5093, Health Care Law Online Resources
  • Publication 5120; Facts about the Premium Tax Credit; Your Credit, Your Choice – Get it Now or Get it Later  English | Spanish
  • Publication 5121; Facts about the Premium Tax Credit; Need help paying for health insurance premiums?  English | Spanish
  • IRC § 7216, Disclosure or Use of Information by Tax Return Preparers, questions and answers
  • Fact Sheet 2011-11, Tax-Exempt Organizations Participating in the Medicare Shared Savings Program through Accountable Care Organizations
  • Treasury Department fact sheet on health insurance premium tax credit
  • Fact Sheet 2011-02, Tax Changes for Small Businesses
  • Publication 4894, Affordable Care Act Tax Provisions and the IRS
  • Flyer on the adoption tax credit
  • Flyer on changes to health care plans, including FSAs.
  • Flyer on the small business health care tax credit for small employers: English | Spanish
  • 3 Simple Steps fact sheet for small employers
  • Small business health care tax credit scenarios for small employers
  • Health care postcard notice for small employers

Tax Tips

Videos

  • Tanning Tax Fitness Center Exception: English | ASL

Podcasts

Webinars

Legal Guidance

Announcements

Notices

  • Notice 2014-24, Health Insurance Providers Fee; Procedural and Administrative Guidance
  • Notice 2014-23, Eligibility for Premium Tax Credit for Victims of Domestic Abuse
  • Notice 2014-10, Section 5000A Transition Relief for Individuals with Certain Government-Sponsored Limited-Benefit Health Coverage
  • Notice 2014-2, Reliance on Proposed Regulations for Tax-exempt Hospitals
  • Notice 2014-3, Proposed Procedures for Charitable Hospitals to Correct and Disclose Failures to Meet § 501(r)
  • Notice 2014-6, Section 45R – Transition Relief with Respect to the Tax Credit for Employee Health Insurance Expenses of Certain Small Employers
  • Notice 2013-76, Health Insurance Providers Fee; Procedural and Administrative Guidance
  • Notice 2013-71, Modification of “Use-or-Lose” Rule For Health Flexible Spending Arrangements (FSAs) and Clarification Regarding 2013-2014 Non-Calendar Year Salary Reduction Elections Under § 125 Cafeteria Plans
  • Notice 2013-54, Application of Market Reform and other Provisions of the Affordable Care Act to HRAs, Health FSAs, and Certain other Employer Healthcare Arrangements
  • Notice 2013-57, Preventive health services required under Public Health Service Act section 2713 and preventive care for purposes of Health Savings Accounts
  • Notice 2013-51, Branded Prescription Drug Fee; Guidance for the 2014 Fee Year
  • Notice 2013-45, Transition Relief for 2014 Under §§ 6055 (§ 6055 Information Reporting), 6056 (§ 6056 Information Reporting) and 4 980H (Employer Shared Responsibility Provisions)
  • Notice 2013-42, Transition Relief for Employees and Related Individuals Eligible to Enroll in Eligible Employer-Sponsored Health Plans for Non-Calendar Plan Years that Begin in 2013 and End in 2014
  • Notice-2013-41, Eligibility for Minimum Essential Coverage for Purposes of the Premium Tax Credit
  • Notice 2012-77, Interim Guidance and Request for Comments; Medical Device Excise Tax; Manufacturers Excise Taxes; Constructive Sale Price; Deposit Penalties
  • Notice 2012-59, Guidance on 90-Day Waiting Period Limitation Under Public Health Service Act § 2708
  • Notice 2012-58, Determining Full-Time Employees for Purposes of Shared Responsibility for Employers Regarding Health Coverage (§ 4980H)
  • Notice Requesting Information Regarding Stop Loss Insurance
  • Notice 2012-40, Health flexible spending arrangements not subject to $2,500 limit on salary reduction contributions for plan years beginning before 2013 and comments requested on potential modification of use-or-lose rule.
  • Notice 2012-37, Extension of Interim Guidance on Modification of Section 833 Treatment of Certain Health Organizations
  • Notice 2012-33, Request for Comments on Reporting by Applicable Large Employers on Health Insurance Coverage Under Employer-Sponsored Plans
  • Notice 2012-32, Request for Comments on Reporting of Health Insurance Coverage
  • Notice 2012-31, Minimum Value of an Employer-Sponsored Health Plan
  • Notice 2012-17, Frequently Asked Questions from Employers Regarding Automatic Enrollment, Employer Shared responsibility, and Waiting Periods
  • Notice 2012-9, Interim Guidance on Informational Reporting to Employees of the Cost of Their Group Health Insurance Coverage
  • Notice 2012-4, Certain Filing Changes for Tax-Exempt Organizations
  • Notice 2011-92, Branded Prescription Drug Fee; Guidance for the 2012 Fee Year
  • Notice 2011-73, Request for Comments on Health Coverage Affordability Safe Harbor for Employers (Section 4980H)
  • Notice Soliciting Comments on Summary of Benefits and Coverage and Uniform Glossary — Templates, Instructions, and Related Materials Under the Public Health Service Act
  • Notice 2011-52, Notice and Request for Comments Regarding the Community Health Needs Assessment Requirements for Tax-exempt Hospitals
  • Notice 2011-51, Extension of Interim Guidance on Modification of Section 833 Treatment of Certain Health Organizations
  • Notice 2011-46, Deferral of Dates Related to the 2011 Branded Prescription Drug Fee
  • Notice 2011-36, Request for Comments on Shared Responsibility for Employers Regarding Health Coverage (Section 4980H)
  • Notice 2011-35, Request for Comments on Funding of Patient-Centered Outcomes Research Through Fees Payable by Issuers of Health Insurance Policies and Self-Insured Health Plan Sponsors
  • Notice 2011-28, Interim Guidance on Informational Reporting to Employees of the Cost of Their Group Health Insurance Coverage
  • Notice 2011-23, Request for Comments Regarding Application of § 501(c)(29) of the Internal Revenue Code
  • Notice 2011-20, which solicits written comments regarding what additional guidance, if any, is needed for tax-exempt organizations participating in the Medicare shared savings program (MSSP) through an accountable care organization (ACO).
  • Notice 2011-5, Section 105: Amounts Received under Accident and Health Plans; Section 106: Contributions by Employers to Accident and Health Plans; Section 125: Cafeteria Plans
  • Notice 2011-4, Certain Changes in Method of Accounting for Organizations to which Section 833 Applies
  • Notice 2011-2, Guidance on the Application of Section 162(m)(6)
  • Notice 2011-1, Affordable Care Act Nondiscrimination Provisions Applicable to Insured Group Health Plans
  • Notice 2010-89, Request for Comments Regarding the Excise Tax on Medical Devices
  • Notice 2010-82, Tax Credit for Employee Health Insurance Expenses of Small Employers
  • Notice 2010-79, Modification of Section 833 Treatment of Certain Health Organizations
  • Notice 2010-71, Branded Prescription Drug Sales
  • Notice 2010-69, Interim Relief with Respect to Form W-2 Reporting of the Cost of Coverage of Group Health Insurance Under § 6051(a)(14)
  • Notice 2010-66, Interim Guidance on the Adoption Credit.
  • Notice 2010-63, Request for Comments on Requirements Prohibiting Discrimination in Favor of Highly Compensated Individuals in Insured Group Health Plans
  • Notice 2010-59, IRS Issues Guidance Explaining 2011 Changes to Flexible Spending Arrangements
  • Notice 2010-51, Information Reporting Under the Amendments to Section 6041 for Payments to Corporations and Payments of Gross Proceeds and With Respect to Property (Note: The amendments referenced in this notice were repealed in April 2011.)
  • Notice 2010-45, Qualifying Therapeutic Discovery Project Credit
  • Notice 2010-44, Tax Credit for Employee Health Insurance Expenses of Small Employers
  • Notice 2010-39, Request for Comments Regarding Additional Requirements for Tax-Exempt Hospitals
  • Notice 2010-38, Tax Treatment of Health Care Benefits Provided With Respect to Children Under Age 27
  • Notice Requesting Information Regarding Value-Based Insurance Design in Connection With Preventive Care Benefits
  • Notice of Availability of Interim Procedures for Federal External Review and Model Notices Relating to Internal Claims and Appeals and External Review Under the Patient Protection and Affordable Care Act
  • Notice on Medical Loss Ratios Requesting Comments Regarding Section 2718 of the Public Health Service Act Regulations

Regulations

  • REG-141036–13, Minimum Essential Coverage and Other Rules Regarding the Shared Responsibility Payment for Individuals
  • REG-143172-13, Amendments to Excepted Benefits
  • REG-130843-13, Net Investment Income Tax
  • REG-136630-12, Information Reporting by Applicable Large Employers on Health Insurance Coverage Offered Under Employer-Sponsored Plans
  • REG-132455-11, Information Reporting of Minimum Essential Coverage
  • REG-113792-13, Tax Credit for Employee Health Insurance Expenses of Small Employers
  • REG-115300-13, Requirement of a Section 4959 Excise Tax Return and Time for Filing the Return.
  • REG-120391-10 (TD 9624), NPRM on Coverage of Certain Preventive Services under the ACA
  • REG-140789-12, Information Reporting for Affordable Insurance Exchanges
  • REG-126633-12, Computation of, and Rules Relating to, Medical Loss Ratio
  • REG-125398-12, Minimum Value of Eligible Employer-Sponsored Plans and Other Rules Regarding the Health Insurance Premium Tax Credit
  • REG-106499-12, Community Health Needs Assessments for Charitable Hospitals
  • REG-106796-12, The $500,000 Deduction Limitation for Remuneration Provided by Certain Health Insurance Providers
  • REG-122706-12, Ninety-Day Waiting Period Limitation and Technical Amendments to Certain Health Coverage Requirements Under the Affordable Care Act
  • REG-118315-12, Health Insurance Providers Fee; Notice of proposed rulemaking and notice of public hearing
  • REG-148500-12, Shared Responsibility Payment for Not Maintaining Minimum Essential Coverage
  • REG-138006-12, Shared Responsibility for Employers Regarding Health Coverage
  • REG-130507-11, Net Investment Income
  • REG-130074-11, Rules Relating to Additional Medicare Tax
  • REG-122707-12, Incentives for Nondiscriminatory Wellness Programs in Group Health Plans
  • REG-130266-11, Additional Requirements for Charitable Hospitals
  • REG-119632-11, Regulations Pertaining to the Disclosure of Return Information to Carry Out Eligibility Requirements for Health Insurance Affordability Programs
  • REG-136008-11, Fees on Health Insurance Policies and Self-Insured Plans for the Patient-Centered Outcomes Research Trust Fund
  • REG-120391-10, ANPRM requesting comments on alternative ways to meet preventive services requirements by religious organization that objects to the coverage of contraceptive services for religious reasons.
  • REG-125592-10 (TD 9532), Requirements for Group Health Plans and Health Insurance Issuers Relating to Internal Claims and Appeals and External Review Processes Under the Patient Protection and Affordable Care Act — NPRM for Amendment
  • REG-135071-11, Application for Recognition as a 501(c)(29) Organization
  • REG-113770-10, Taxable Medical Devices
  • REG-140038-10, Disclosures of the Summary of Benefits and Coverage and the Uniform Glossary for Group Health Plans and Health Insurance Coverage in the Group and Individual Markets under the Patient Protection and Affordable Care Act
  • REG-131491-10, Health Insurance Premium Tax Credit
  • REG-112805-10 (TD 9544), Branded Prescriptions Drug Fee
  • REG-120391-10 (TD 9541), Requirement for Group Health Plans and Health Insurance Issuers to Provide Coverage of Preventive Services under the Patient Protection and Affordable Care Act - NPRM for Amendment
  • REG-118412-10 (TD 9506), Group Health Plans and Health Insurance Coverage Rules Relating to Status as a Grandfathered Health Plan under the Patient Protection and Affordable Care Act - NPRM for Amendment
  • REG-125592-10 (TD 9494), Appeals Regulations under the Public Health Services Act section 2719
  • REG-120391-10 (TD 9493), Requirement for Group Health Plans and Health Insurance Issuers to Provide Coverage of Preventive Services under the Patient Protection and Affordable Care Act
  • REG-120399-10 (TD 9491), Preexisting Condition Exclusions, Lifetime and Annual Limits, Rescissions, and Patient Protections
  • REG-118412-10 (TD 9489), Group Health Plans and Health Insurance Coverage Rules Relating to Status as a Grandfathered Health Plan under the Patient Protection and Affordable Care Act
  • REG-112841-10 (TD 9486), Indoor Tanning Services, Cosmetic Services; Excise Taxes
  • REG-114494-10 (TD 9482), Group Health Plans and Health Insurance Issuers Providing Dependent Coverage of Children to Age 26

Revenue Procedures

  • Revenue Procedure 2012-11 sets forth procedures for issuing determination letters and rulings on the exempt status of qualified nonprofit health insurance issuers (QNHIIs) described in § 501(c)(29) of the Internal Revenue Code (Code).
  • Revenue Procedure 2011-52, Administrative, Procedural, and Miscellaneous. Section 3, Adoption credit
  • Revenue Procedure 2011-24 establishes a dispute resolution process for the preliminary fee calculation for the 2011 annual fee imposed on covered entities engaged in the business of manufacturing or importing branded prescription drugs.
  • Revenue Procedure 2010-35 modifies and supersedes sections 3.03 and 3.14 of Rev. Proc. 2009-50, 2009-45 I.R.B. 617, to reflect the statutory amendments to the adoption credit under § 36C (formerly § 23) and the exclusion for adoption assistance programs under § 137.
  • Revenue Procedure 2010-31 provides guidance on safe harbors for determining the finality of foreign adoptions for purposes of the adoption credit.

Revenue Rulings

Treasury Decisions (TD)

  • TD 9661, Information Reporting by Applicable Large Employers on Health Insurance Coverage Offered Under Employer-Sponsored Plans
  • TD 9660, Information Reporting of Minimum Essential Coverage
  • TD 9656, Ninety-Day Waiting Period Limitation and Technical Amendments to Certain Health Coverage Requirements Under the Affordable Care Act
  • TD 9655, Shared Responsibility for Employers Regarding Health Coverage
  • TD 9651, Computation of, and Rules Relating to, Medical Loss Ratio
  • TD 9645, Rules Relating to Additional Medicare Tax
  • TD 9644, Net Investment Income Tax
  • TD 9643, Health Insurance Providers Fee
  • TD 9632, Shared Responsibility Payment for Not Maintaining Minimum Essential Coverage
  • TD 9629, Requirement of a Section 4959 Excise Tax Return and Time for Filing the Return
  • TD 9628, Regulations Pertaining to the Disclosure of Return Information to Carry Out Eligibility Requirements for Health Insurance Affordability Programs
  • TD 9624, Final Regulations on Coverage of Certain Preventive Services under the ACA
  • TD 9621, Final Regulations on Indoor Tanning Services; Excise Taxes
  • TD 9620, Incentives for Nondiscriminatory Wellness Programs in Group Health Plans
  • TD 9611, Final regulations providing guidance to individuals related to employees who may enroll in eligible employer-sponsored coverage and who wish to enroll in qualified health plans through Affordable Insurance Exchanges and claim the premium tax credit.
  • TD 9604, Taxable Medical Devices
  • TD 9602, Fees on Health Insurance Policies and Self-Insured Plans for Patient-Centered Outcomes Research Trust Fund
  • TD 9590, Health Insurance Premium Tax Credit
  • TD 9578, Final Regulations Authorizing the Exemption of Group Health Plans and Group Health Insurance Coverage Sponsored by Certain Religious Employers from Having to Cover Certain Preventive Health Services under Provisions of the Patient Protection and Affordable Care Act
  • TD 9574, Application for Recognition as a 501(c)(29) Organization
  • TD 9575, Summary of Benefits and Coverage and Uniform Glossary for Group Health Plans and Health Insurance Coverage in the Group and Individual Markets under the Patient Protection and Affordable Care Act
  • TD 9544, Branded Prescription Drug Fee
  • TD 9541, Amendment to Interim Final Rules for Group Health Plans and Health Insurance Issuers Relating to Coverage of Preventive Services under the Patient Protection and Affordable Care Act
  • TD 9532, Amendment to Interim Final Regulations Implementing the Requirements Regarding Internal Claims and Appeals and External Review Processes for Group Health Plans and Health Insurance Coverage in the Group and Individual Markets
  • TD 9506, Amendment to the Interim Final Rules for Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan under the Patient Protection and Affordable Care Act
  • TD 9494, Interim Final Rules for Group Health Plans and Health Insurance Issuers Relating to Internal Claims and Appeals and External Review Processes Under the Patient Protection and Affordable Care Act
  • TD 9493, Interim Final Rules for Group Health Plans and Health Insurance Issuers Relating to Coverage of Preventive Services Under the Patient Protection and Affordable Care Act
  • TD 9491, Patient Protection and Affordable Care Act: Preexisting Condition Exclusions, Lifetime and Annual Limits, Rescissions, and Patient Protections
  • TD 9489, Interim Final Rules for Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan under the Patient Protection and Affordable Care Act
  • TD 9486, Final and Temporary Regulations for Indoor Tanning Services; Cosmetic Services; Excise Taxes
  • TD 9482, Interim Final Rules for Group Health Plans and Health Insurance Issuers Relating to Dependent Coverage of Children to Age 26 under the Patient Protection and Affordable Care Act

Related Items:

Page Last Reviewed or Updated: 28-Mar-2014

 

The Amended Return

Amended return IRAs and Other Retirement Plans Table of Contents 2002 ChangesSimplified Employee Pensions (SEPs) 403(b) Plans Later ChangeDeemed IRAs 2002 Changes Simplified Employee Pensions (SEPs) Contribution limit increased. Amended return   For plan years beginning after December 31, 2001, the annual limit on the amount of employer contributions to a SEP increases to the lesser of the following amounts. Amended return 25% of an eligible employee's compensation. Amended return $40,000 (subject to cost-of-living adjustments after 2002). Amended return Deduction limit. Amended return   For years beginning after 2001, the following changes apply to the SEP deduction limit. Amended return Elective deferrals (SARSEPs). Amended return   Elective deferrals under a SARSEP are not subject to the deduction limit that applies to employer contributions. Amended return Also, elective deferrals are not taken into account when figuring the amount you can deduct for employer contributions that are not elective deferrals. Amended return Definition of compensation. Amended return    Compensation for figuring the deduction for employer contributions includes elective deferrals under a SARSEP. Amended return More information. Amended return   For more information about SEPs, see Publication 560, Retirement Plans for Small Business. Amended return 403(b) Plans Figuring catch-up contributions. Amended return   When figuring allowable catch-up contributions, combine all contributions made by your employer on your behalf to the following plans. Amended return Qualified retirement plans. Amended return 403(b) plans. Amended return Simplified employee pensions (SEP). Amended return SIMPLE plans. Amended return   The total amount of the catch-up contributions to all plans maintained by your employer cannot exceed the annual limit. Amended return For 2002, the limit is $1,000. Amended return Rollovers to and from 403(b) plans. Amended return   If a distribution includes both pre-tax contributions and after-tax contributions, the portion of the distribution that is rolled over is treated as consisting first of pre-tax amounts (contributions and earnings that would be includible in income if no rollover occurred). Amended return This means that if you roll over an amount that is at least as much as the pre-tax portion of the distribution, you do not have to include any of the distribution in income. Amended return Years of service for church employees and ministers. Amended return   If you are a minister or church employee, treat all of your years of service as an employee of a church or a convention or association of churches as years of service with one employer. Amended return Prior law required church employees and ministers to figure years of service separately for each employer. Amended return   As a minister or church employee, all contributions made to 403(b) plans on your behalf, as an employee of a church or a convention or association of churches, are considered made by one employer. Amended return Foreign missionaries. Amended return   If you are a foreign missionary, contributions to your 403(b) account will not be treated as exceeding the limit on annual additions if the contributions are not more than the greater of: $3,000, or Your includible compensation. Amended return More information. Amended return   For more information about 403(b) plans, see Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans). Amended return Later Change Deemed IRAs For plan years beginning after 2002, a qualified employer plan can provide for voluntary employee contributions to a separate account or annuity that is deemed to be an IRA. Amended return For this purpose, a qualified employer plan includes a deferred compensation plan (section 457(b) plan) maintained by a state, a political subdivision of a state, or an agency or instrumentality of a state or political subdivision of a state. Amended return The term qualified employer plan also includes: A qualified pension, profit-sharing, or stock bonus plan (section 401(a) plan), A qualified employee annuity plan (section 403(a) plan), and A tax-sheltered annuity plan (section 403(b) plan). Amended return More information about IRAs can be found in Publication 590, Individual Retirement Arrangements (IRAs). Amended return Prev  Up  Next   Home   More Online Publications