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Amending Tax Return

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Amending Tax Return

Amending tax return Publication 575 - Introductory Material Table of Contents What's New Reminders IntroductionThe General Rule. Amending tax return Individual retirement arrangements (IRAs). Amending tax return Civil service retirement benefits. Amending tax return Social security and equivalent tier 1 railroad retirement benefits. Amending tax return Tax-sheltered annuity plans (403(b) plans). Amending tax return Ordering forms and publications. Amending tax return Tax questions. Amending tax return Useful Items - You may want to see: What's New For purposes of the net investment income tax (NIIT), net investment income does not include distributions from a qualified retirement plan (for example, 401(a), 403(a), 403(b), 408, 408A, or 457(b) plans). Amending tax return However, these distributions are taken into account when determining the modified adjusted gross income threshold. Amending tax return Distributions from a nonqualified retirement plan are included in net investment income. Amending tax return See Form 8960, Net Investment Income Tax - Individuals, Estates, and Trusts, and its instructions for more information. Amending tax return Reminders Future developments. Amending tax return  For the latest information about developments related to Publication 575, such as legislation enacted after it was published, go to www. Amending tax return irs. Amending tax return gov/pub575. Amending tax return In-plan Roth rollovers. Amending tax return   Starting in 2013, the American Taxpayer Relief Act of 2012 expanded the rules for in-plan Roth rollovers to include more taxpayers. Amending tax return For more information, see In-plan Roth rollovers under Rollovers, discussed later. Amending tax return Photographs of missing children. Amending tax return  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Amending tax return Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Amending tax return You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Amending tax return Introduction This publication discusses the tax treatment of distributions you receive from pension and annuity plans and also shows you how to report the income on your federal income tax return. Amending tax return How these distributions are taxed depends on whether they are periodic payments (amounts received as an annuity) that are paid at regular intervals over several years or nonperiodic payments (amounts not received as an annuity). Amending tax return What is covered in this publication?   This publication contains information that you need to understand the following topics. Amending tax return How to figure the tax-free part of periodic payments under a pension or annuity plan, including using a simple worksheet for payments under a qualified plan. Amending tax return How to figure the tax-free part of nonperiodic payments from qualified and nonqualified plans, and how to use the optional methods to figure the tax on lump-sum distributions from pension, stock bonus, and profit-sharing plans. Amending tax return How to roll over certain distributions from a retirement plan into another retirement plan or IRA. Amending tax return How to report disability payments, and how beneficiaries and survivors of employees and retirees must report benefits paid to them. Amending tax return How to report railroad retirement benefits. Amending tax return When additional taxes on certain distributions may apply (including the tax on early distributions and the tax on excess accumulation). Amending tax return For additional information on how to report pension or annuity payments on your federal income tax return, be sure to review the instructions on the back of Copies B, C, and 2 of the Form 1099-R that you received and the instructions for Form 1040, lines 16a and 16b (Form 1040A, lines 12a and 12b or Form 1040NR, lines 17a and 17b). Amending tax return A “corrected” Form 1099-R replaces the corresponding original Form 1099-R if the original Form 1099-R contained an error. Amending tax return Make sure you use the amounts shown on the corrected Form 1099-R when reporting information on your tax return. Amending tax return What is not covered in this publication?   The following topics are not discussed in this publication. Amending tax return The General Rule. Amending tax return   This is the method generally used to determine the tax treatment of pension and annuity income from nonqualified plans (including commercial annuities). Amending tax return For a qualified plan, you generally cannot use the General Rule unless your annuity starting date is before November 19, 1996. Amending tax return Although this publication will help you determine whether you can use the General Rule, it will not help you use it to determine the tax treatment of your pension or annuity income. Amending tax return For that and other information on the General Rule, see Publication 939, General Rule for Pensions and Annuities. Amending tax return Individual retirement arrangements (IRAs). Amending tax return   Information on the tax treatment of amounts you receive from an IRA is in Publication 590, Individual Retirement Arrangements (IRAs). Amending tax return Civil service retirement benefits. Amending tax return   If you are retired from the federal government (regular, phased, or disability retirement) or are the survivor or beneficiary of a federal employee or retiree who died, get Publication 721, Tax Guide to U. Amending tax return S. Amending tax return Civil Service Retirement Benefits. Amending tax return Publication 721 covers the tax treatment of federal retirement benefits, primarily those paid under the Civil Service Retirement System (CSRS) or the Federal Employees' Retirement System (FERS). Amending tax return It also covers benefits paid from the Thrift Savings Plan (TSP). Amending tax return Social security and equivalent tier 1 railroad retirement benefits. Amending tax return   For information about the tax treatment of these benefits, see Publication 915, Social Security and Equivalent Railroad Retirement Benefits. Amending tax return However, this publication (575) covers the tax treatment of the non-social security equivalent benefit portion of tier 1 railroad retirement benefits, tier 2 benefits, vested dual benefits, and supplemental annuity benefits paid by the U. Amending tax return S. Amending tax return Railroad Retirement Board. Amending tax return Tax-sheltered annuity plans (403(b) plans). Amending tax return   If you work for a public school or certain tax-exempt organizations, you may be eligible to participate in a 403(b) retirement plan offered by your employer. Amending tax return Although this publication covers the treatment of benefits under 403(b) plans and discusses in-plan Roth rollovers from 403(b) plans to designated Roth accounts, it does not cover other tax provisions that apply to these plans. Amending tax return For that and other information on 403(b) plans, see Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans) For Employees of Public Schools and Certain Tax-Exempt Organizations. Amending tax return Comments and suggestions. Amending tax return   We welcome your comments about this publication and your suggestions for future editions. Amending tax return   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Amending tax return NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Amending tax return Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Amending tax return   You can send your comments from www. Amending tax return irs. Amending tax return gov/formspubs/. Amending tax return Click on “More Information” and then on “Comment on Tax Forms and Publications. Amending tax return ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Amending tax return Ordering forms and publications. Amending tax return   Visit www. Amending tax return irs. Amending tax return gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. Amending tax return Internal Revenue Service 1201 N. Amending tax return Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Amending tax return   If you have a tax question, check the information available on IRS. Amending tax return gov or call 1-800-829-1040. Amending tax return We cannot answer tax questions sent to either of the above addresses. Amending tax return Useful Items - You may want to see: Publication 524 Credit for the Elderly or the Disabled 525 Taxable and Nontaxable Income 560 Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans) 571 Tax-Sheltered Annuity Plans (403(b) Plans) For Employees of Public Schools and Certain Tax-Exempt Organizations 590 Individual Retirement Arrangements (IRAs) 721 Tax Guide to U. Amending tax return S. Amending tax return Civil Service Retirement Benefits 915 Social Security and Equivalent Railroad Retirement Benefits 939 General Rule for Pensions and Annuities Form (and Instructions) W-4P Withholding Certificate for Pension or Annuity Payments 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Amending tax return 4972 Tax on Lump-Sum Distributions 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts See How To Get Tax Help near the end of this publication for information about getting publications and forms. Amending tax return Prev  Up  Next   Home   More Online Publications
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The Amending Tax Return

Amending tax return 1. Amending tax return   Bona Fide Residence Table of Contents Presence TestDays of Presence in the United States or Relevant Possession Significant Connection Tax HomeExceptions Closer ConnectionException for Year of Move Special Rules in the Year of a MoveYear of Moving to a Possession Year of Moving From a Possession Reporting a Change in Bona Fide ResidenceWho Must File Penalty for Not Filing Form 8898 In order to qualify for certain tax benefits (see chapter 3), you must be a bona fide resident of American Samoa, the CNMI, Guam, Puerto Rico, or the USVI for the entire tax year. Amending tax return Generally, you are a bona fide resident of one of these possessions (the relevant possession) if, during the tax year, you: Meet the presence test, Do not have a tax home outside the relevant possession, and Do not have a closer connection to the United States or to a foreign country than to the relevant possession. Amending tax return Special rule for members of the U. Amending tax return S. Amending tax return Armed Forces. Amending tax return   If you are a member of the U. Amending tax return S. Amending tax return Armed Forces who qualified as a bona fide resident of the relevant possession in an earlier tax year, your absence from that possession during the current tax year in compliance with military orders will not affect your status as a bona fide resident. Amending tax return Likewise, being in a possession solely in compliance with military orders will not qualify you for bona fide residency. Amending tax return Also see the special income source rule for members of the U. Amending tax return S. Amending tax return Armed Forces in chapter 2, under Compensation for Labor or Personal Services . Amending tax return Special rule for civilian spouse of active duty member of the U. Amending tax return S. Amending tax return Armed Forces. Amending tax return   If you are the civilian spouse of an active duty servicemember, under Military Spouses Residency Relief Act (MSRRA) you can choose to keep your prior residence or domicile for tax purposes (tax residence) when accompanying the servicemember spouse, who is relocating under military orders, to a new military duty station in one of the 50 states, the District of Columbia, or a U. Amending tax return S. Amending tax return possession. Amending tax return Before relocating, you and your spouse must have the same tax residence. Amending tax return If you are a civilian spouse and choose to keep your prior tax residence after such relocation, the source of income for services performed (for example, wages, salaries, tips, or self-employment) by you is considered to be (the jurisdiction of) the prior tax residence. Amending tax return As a result, the amount of income tax withholding (from Form(s) W-2, Wage and Tax Statement) that you are able to claim on your federal return, as well as the need to file a state or U. Amending tax return S. Amending tax return possession return, may be affected. Amending tax return For more information, consult with state, local, or U. Amending tax return S. Amending tax return possession tax authorities regarding your tax obligations under MSRRA. Amending tax return Presence Test If you are a U. Amending tax return S. Amending tax return citizen or resident alien, you will satisfy the presence test for the entire tax year if you meet one of the following conditions. Amending tax return You were present in the relevant possession for at least 183 days during the tax year. Amending tax return You were present in the relevant possession for at least 549 days during the 3-year period that includes the current tax year and the 2 immediately preceding tax years. Amending tax return During each year of the 3-year period, you must be present in the relevant possession for at least 60 days. Amending tax return You were present in the United States for no more than 90 days during the tax year. Amending tax return You had earned income in the United States of no more than a total of $3,000 and were present for more days in the relevant possession than in the United States during the tax year. Amending tax return Earned income is pay for personal services performed, such as wages, salaries, or professional fees. Amending tax return You had no significant connection to the United States during the tax year. Amending tax return Special rule for nonresident aliens. Amending tax return   Conditions (1) through (5) above do not apply to nonresident aliens of the United States. Amending tax return Instead, nonresident aliens must meet the substantial presence test discussed in chapter 1 of Publication 519. Amending tax return In that discussion, substitute the name of the possession for “United States” and “U. Amending tax return S. Amending tax return ” wherever they appear. Amending tax return Disregard the discussion in that chapter about a Closer Connection to a Foreign Country. Amending tax return Days of Presence in the United States or Relevant Possession Generally, you are treated as being present in the United States or in the relevant possession on any day that you are physically present in that location at any time during the day. Amending tax return Days of presence in a possession. Amending tax return   You are considered to be present in the relevant possession on any of the following days. Amending tax return Any day you are physically present in that possession at any time during the day. Amending tax return Any day you are outside of the relevant possession in order to receive, or to accompany any of the following family members to receive, qualifying medical treatment (see Qualifying Medical Treatment , later). Amending tax return Your parent. Amending tax return Your spouse. Amending tax return Your child, who is your son, daughter, stepson, or stepdaughter. Amending tax return This includes an adopted child or child lawfully placed with you for legal adoption. Amending tax return This also includes a foster child who is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. Amending tax return Any day you are outside the relevant possession because you leave or are unable to return to the relevant possession during any: 14-day period within which a major disaster occurs in the relevant possession for which a Federal Emergency Management Agency (FEMA) notice of a federal declaration of a major disaster is issued in the Federal Register, or Period for which a mandatory evacuation order is in effect for the geographic area in the relevant possession in which your main home is located. Amending tax return   If, during a single day, you are physically present: In the United States and in the relevant possession, that day is considered a day of presence in the relevant possession; or In two possessions, that day is considered a day of presence in the possession where your tax home is located (see Tax Home , later). Amending tax return Days of presence in the United States. Amending tax return   You are considered to be present in the United States on any day that you are physically present in the United States at any time during the day. Amending tax return However, do not count the following days as days of presence in the United States. Amending tax return Any day you are temporarily present in the United States in order to receive, or to accompany a parent, spouse, or child who is receiving, qualifying medical treatment. Amending tax return “Child” is defined under item 2c earlier. Amending tax return “Qualifying medical treatment” is defined later. Amending tax return Any day you are temporarily present in the United States because you leave or are unable to return to the relevant possession during any: 14-day period within which a major disaster occurs in the relevant possession for which a Federal Emergency Management Agency (FEMA) notice of a federal declaration of a major disaster is issued in the Federal Register, or Period for which a mandatory evacuation order is in effect for the geographic area in the relevant possession in which your main home is located. Amending tax return Any day you are in the United States for less than 24 hours when you are traveling between two places outside the United States. Amending tax return Any day you are temporarily present in the United States as a professional athlete to compete in a charitable sports event (defined later). Amending tax return Any day you are temporarily in the United States as a student (defined later). Amending tax return Any day you are in the United States serving as an elected representative of the relevant possession, or serving full time as an elected or appointed official or employee of the government of that possession (or any of its political subdivisions). Amending tax return Qualifying Medical Treatment Such treatment is generally provided by (or under the supervision of) a physician for an illness, injury, impairment, or physical or mental condition. Amending tax return The treatment generally involves: Any period of inpatient care that requires an overnight stay in a hospital or hospice, and any period immediately before or after that inpatient care to the extent it is medically necessary, or Any temporary period of inpatient care in a residential medical care facility for medically necessary rehabilitation services. Amending tax return With respect to each qualifying medical treatment, you must prepare (or obtain) and maintain documentation supporting your claim that such treatment meets the criteria to be considered days of presence in the relevant possession. Amending tax return You must be able to produce this documentation within 30 days if requested by the IRS or tax administrator for the relevant possession. Amending tax return You must keep the following documentation. Amending tax return Records that provide: The patient's name and relationship to you (if the medical treatment is provided to a person you accompany); The name and address of the hospital, hospice, or residential medical care facility where the medical treatment was provided; The name, address, and telephone number of the physician who provided the medical treatment; The date(s) on which the medical treatment was provided; and Receipt(s) of payment for the medical treatment. Amending tax return Signed certification by the providing or supervising physician that the medical treatment met the requirements for being qualified medical treatment, and setting forth: The patient's name, A reasonably detailed description of the medical treatment provided by (or under the supervision of) the physician, The dates on which the medical treatment was provided, and The medical facts that support the physician's certification and determination that the treatment was medically necessary. Amending tax return Charitable Sports Event A charitable sports event is one that meets all of the following conditions. Amending tax return The main purpose is to benefit a qualified charitable organization. Amending tax return The entire net proceeds go to charity. Amending tax return Volunteers perform substantially all the work. Amending tax return In figuring the days of presence in the United States, you can exclude only the days on which you actually competed in the charitable sports event. Amending tax return You cannot exclude the days on which you were in the United States to practice for the event, to perform promotional or other activities related to the event, or to travel between events. Amending tax return Student To qualify as a student, you must be, during some part of each of any 5 calendar months during the calendar year: A full-time student at a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or A student taking a full-time, on-farm training course given by a school described in (1) above or by a state, county, or local government agency. Amending tax return The 5 calendar months do not have to be consecutive. Amending tax return Full-time student. Amending tax return   A full-time student is a person who is enrolled for the number of hours or courses the school considers to be full-time attendance. Amending tax return However, school attendance exclusively at night is not considered full-time attendance. Amending tax return School. Amending tax return   The term “school” includes elementary schools, middle schools, junior and senior high schools, colleges, universities, and technical, trade, and mechanical schools. Amending tax return It does not include on-the-job training courses, correspondence schools, and schools offering courses only through the Internet. Amending tax return Significant Connection One way in which you can meet the presence test is to have no significant connection to the United States during the tax year. Amending tax return This section looks at the factors that determine if a significant connection exists. Amending tax return You are treated as having a significant connection to the United States if you: Have a permanent home in the United States, Are currently registered to vote in any political subdivision of the United States, or Have a spouse or child (see item 2c under Days of presence in a possession , earlier) who is under age 18 whose main home is in the United States, other than: A child who is in the United States because he or she is the child of divorced or legally separated parents and is living with a custodial parent under a custodial decree or multiple support agreement, or A child who is in the United States as a student. Amending tax return For the purpose of determining if you have a significant connection to the United States, the term “spouse” does not include a spouse from whom you are legally separated under a decree of divorce or separate maintenance. Amending tax return Permanent home. Amending tax return   A permanent home generally includes an accommodation such as a house, an apartment, or a furnished room that is either owned or rented by you or your spouse. Amending tax return The dwelling unit must be available at all times, continuously, not only for short stays. Amending tax return Exception for rental property. Amending tax return   If you or your spouse own the dwelling unit and at any time during the tax year it is rented to someone else at fair rental value, it will be considered your permanent home only if you or your spouse use that property for personal purposes for more than the greater of: 14 days, or 10% of the number of days during that tax year that the property is rented to others at a fair rental value. Amending tax return   You are treated as using rental property for personal purposes on any day the property is not being rented to someone else at fair rental value for the entire day. Amending tax return   A day of personal use of a dwelling unit is also any day that the unit is used by any of the following persons. Amending tax return You or any other person who has an interest in it, unless you rent it to another owner as his or her main home under a shared equity financing agreement. Amending tax return A member of your family or a member of the family of any other person who has an interest in it, unless the family member uses the dwelling unit as his or her main home and pays a fair rental price. Amending tax return Family includes only brothers and sisters, half-brothers and half-sisters, spouses, ancestors (parents, grandparents, etc. Amending tax return ), and lineal descendants (children, grandchildren, etc. Amending tax return ). Amending tax return Anyone under an arrangement that lets you use some other dwelling unit. Amending tax return Anyone at less than a fair rental price. Amending tax return   However, any day you spend working substantially full time repairing and maintaining (not improving) your property is not counted as a day of personal use. Amending tax return Whether your property is used mainly for this purpose is determined in light of all the facts and circumstances, such as: The amount of time you devote to repair and maintenance work, How often during the tax year you perform repair and maintenance work on this property, and The presence and activities of companions. Amending tax return   See Publication 527, Residential Rental Property, for more information about personal use of a dwelling unit. Amending tax return Example—significant connection. Amending tax return Ann Green, a U. Amending tax return S. Amending tax return citizen, is a sales representative for a company based in Guam. Amending tax return Ann lives with her spouse and young children in their house in Guam, where she is also registered to vote. Amending tax return Her business travel requires her to spend 120 days in the United States and another 120 days in foreign countries. Amending tax return When traveling on business, Ann generally stays at hotels but sometimes stays with her brother, who lives in the United States. Amending tax return Ann's stays are always of short duration and she asks her brother's permission to stay with him. Amending tax return Her brother's house is not her permanent home, nor does she have any other accommodations in the United States that would be considered her permanent home. Amending tax return Ann satisfies the presence test because she has no significant connection to the United States. Amending tax return Example—presence test. Amending tax return Eric and Wanda Brown live for part of the year in a condominium, which they own, in the CNMI. Amending tax return They also own a house in Maine where they live for 120 days every year to be near their grown children and grandchildren. Amending tax return The Browns are retired and their only income is from pension payments, dividends, interest, and social security benefits. Amending tax return In 2013, they spent only 175 days in the CNMI because of a 70-day vacation to Europe and Asia. Amending tax return Thus, in 2013, the Browns were not present in the CNMI for at least 183 days, were present in the United States for more than 90 days, and had a significant connection to the United States because of their permanent home. Amending tax return However, the Browns still satisfied the presence test with respect to the CNMI because they had no earned income in the United States and were physically present for more days in the CNMI than in the United States. Amending tax return Tax Home You will have met the tax home test if you did not have a tax home outside the relevant possession during any part of the tax year. Amending tax return Your tax home is your regular or main place of business, employment, or post of duty regardless of where you maintain your family home. Amending tax return If you do not have a regular or main place of business because of the nature of your work, then your tax home is the place where you regularly live. Amending tax return If you do not fit either of these categories, you are considered an itinerant and your tax home is wherever you work. Amending tax return Exceptions There are some special rules regarding tax home that provide exceptions to the general rule stated above. Amending tax return Students and Government Officials Disregard the following days when determining whether you have a tax home outside the relevant possession. Amending tax return Days you were temporarily in the United States as a student (see Student under Days of Presence in the United States or Relevant Possession, earlier). Amending tax return Days you were in the United States serving as an elected representative of the relevant possession, or serving full time as an elected or appointed official or employee of the government of that possession (or any of its political subdivisions). Amending tax return Seafarers You will not be considered to have a tax home outside the relevant possession solely because you are employed on a ship or other seafaring vessel that is predominantly used in local and international waters. Amending tax return For this purpose, a vessel is considered to be predominantly used in local and international waters if, during the tax year, the total amount of time it is used in international waters and in the waters within 3 miles of the relevant possession exceeds the total amount of time it is used in the territorial waters of the United States, another possession, or any foreign country. Amending tax return Example. Amending tax return In 2013, Sean Silverman, a U. Amending tax return S. Amending tax return citizen, was employed by a fishery and spent 250 days at sea on a fishing vessel. Amending tax return When not at sea, Sean lived with his spouse at a house they own in American Samoa. Amending tax return The fishing vessel on which Sean works departs and arrives at various ports in American Samoa, other possessions, and foreign countries, but was in international or American Samoa's local waters for 225 days. Amending tax return For purposes of determining bona fide residency of American Samoa, Sean will not be considered to have a tax home outside that possession solely because of his employment on board the fishing vessel. Amending tax return Year of Move If you are moving to or from a possession during the year, you may still be able to meet the tax home test for that year. Amending tax return See Special Rules in the Year of a Move , later in this chapter. Amending tax return Closer Connection You will have met the closer connection test if, during any part of the tax year, you do not have a closer connection to the United States or a foreign country than to the relevant U. Amending tax return S. Amending tax return possession. Amending tax return You will be considered to have a closer connection to a possession than to the United States or to a foreign country if you have maintained more significant contacts with the possession(s) than with the United States or foreign country. Amending tax return In determining if you have maintained more significant contacts with the relevant possession, the facts and circumstances to be considered include, but are not limited to, the following. Amending tax return The location of your permanent home. Amending tax return The location of your family. Amending tax return The location of personal belongings, such as automobiles, furniture, clothing, and jewelry owned by you and your family. Amending tax return The location of social, political, cultural, professional, or religious organizations with which you have a current relationship. Amending tax return The location where you conduct your routine personal banking activities. Amending tax return The location where you conduct business activities (other than those that go into determining your tax home). Amending tax return The location of the jurisdiction in which you hold a driver's license. Amending tax return The location of the jurisdiction in which you vote. Amending tax return The location of charitable organizations to which you contribute. Amending tax return The country of residence you designate on forms and documents. Amending tax return The types of official forms and documents you file, such as Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals), or Form W-9, Request for Taxpayer Identification Number and Certification. Amending tax return Your connections to the relevant possession will be compared to the total of your connections with the United States and foreign countries. Amending tax return Your answers to the questions on Form 8898, Part III, will help establish the jurisdiction to which you have a closer connection. Amending tax return Example—closer connection to the United States. Amending tax return Marcos Reyes, a U. Amending tax return S. Amending tax return citizen, moved to Puerto Rico in 2013 to start an investment consulting and venture capital business. Amending tax return His spouse and two teenage children remained in California to allow the children to complete high school. Amending tax return He traveled back to the United States regularly to see his spouse and children, to engage in business activities, and to take vacations. Amending tax return Marcos had an apartment available for his full-time use in Puerto Rico, but remained a joint owner of the residence in California where his spouse and children lived. Amending tax return Marcos and his family had automobiles and personal belongings such as furniture, clothing, and jewelry located at both residences. Amending tax return Although Marcos was a member of the Puerto Rico Chamber of Commerce, he also belonged to and had current relationships with social, political, cultural, and religious organizations in California. Amending tax return Marcos received mail in California, including bank and brokerage statements and credit card bills. Amending tax return He conducted his personal banking activities in California. Amending tax return He held a California driver's license and was also registered to vote there. Amending tax return Based on all of the particular facts and circumstances pertaining to Marcos, he was not a bona fide resident of Puerto Rico in 2013 because he had a closer connection to the United States than to Puerto Rico. Amending tax return Closer connection to another possession. Amending tax return   Generally, possessions are not treated as foreign countries. Amending tax return Therefore, a closer connection to a possession other than the relevant possession will not be treated as a closer connection to a foreign country. Amending tax return Example—tax home and closer connection to possession. Amending tax return Pearl Blackmon, a U. Amending tax return S. Amending tax return citizen, is a permanent employee of a hotel in Guam, but works only during the tourist season. Amending tax return For the remainder of each year, Pearl lives with her spouse and children in the CNMI, where she has no outside employment. Amending tax return Most of Pearl's personal belongings, including her automobile, are located in the CNMI. Amending tax return She is registered to vote in, and has a driver's license issued by, the CNMI. Amending tax return She does her personal banking in the CNMI and routinely lists her CNMI address as her permanent address on forms and documents. Amending tax return Pearl satisfies the presence test with respect to both Guam and the CNMI. Amending tax return She satisfies the tax home test with respect to Guam, because her regular place of business is in Guam. Amending tax return Pearl satisfies the closer connection test with respect to both Guam and the CNMI, because she does not have a closer connection to the United States or to any foreign country. Amending tax return Pearl is considered a bona fide resident of Guam, the location of her tax home. Amending tax return Exception for Year of Move If you are moving to or from a possession during the year, you may still be able to meet the closer connection test for that year. Amending tax return See Special Rules in the Year of a Move , next. Amending tax return Special Rules in the Year of a Move If you are moving to or from a possession during the year, you may still be able to meet the tax home and closer connection tests for that year. Amending tax return Year of Moving to a Possession You will satisfy the tax home and closer connection tests in the tax year of changing your residence to the relevant possession if you meet all of the following. Amending tax return You have not been a bona fide resident of the relevant possession in any of the 3 tax years immediately preceding your move. Amending tax return In the year of the move, you do not have a tax home outside the relevant possession or a closer connection to the United States or a foreign country than to the relevant possession during any of the last 183 days of the tax year. Amending tax return You are a bona fide resident of the relevant possession for each of the 3 tax years immediately following your move. Amending tax return Example. Amending tax return Dwight Wood, a U. Amending tax return S. Amending tax return citizen, files returns on a calendar year basis. Amending tax return He lived in the United States from January 2007 through May 2013. Amending tax return In June 2013 he moved to the USVI, purchased a house, and accepted a permanent job with a local employer. Amending tax return From July 1 through December 31, 2013 (more than 183 days), Dwight's principal place of business was in the USVI and, during that time, he did not have a closer connection to the United States or a foreign country than to the USVI. Amending tax return If he is a bona fide resident of the USVI during all of 2014 through 2016, he will satisfy the tax home and closer connection tests for 2013. Amending tax return If Dwight also satisfies the presence test in 2013, he will be considered a bona fide resident of the USVI for the entire 2013 tax year. Amending tax return Year of Moving From a Possession In the year you cease to be a bona fide resident of American Samoa, the CNMI, Guam, or the USVI, you will satisfy the tax home and closer connection tests with respect to the relevant possession if you meet all of the following. Amending tax return You have been a bona fide resident of the relevant possession for each of the 3 tax years immediately preceding your change of residence. Amending tax return In the year of the move, you do not have a tax home outside the relevant possession or a closer connection to the United States or a foreign country than to the relevant possession during any of the first 183 days of the tax year. Amending tax return You are not a bona fide resident of the relevant possession for any of the 3 tax years immediately following your move. Amending tax return Example. Amending tax return Jean Aspen, a U. Amending tax return S. Amending tax return citizen, files returns on a calendar year basis. Amending tax return From January 2010 through December 2012, Jean was a bona fide resident of American Samoa. Amending tax return Jean continued to live there until September 6, 2013, when she accepted new employment and moved to Hawaii. Amending tax return Jean's principal place of business from January 1 through September 5, 2013 (more than 183 days), was in American Samoa, and during that period Jean did not have a closer connection to the United States or a foreign country than to American Samoa. Amending tax return If Jean continues to live and work in Hawaii for the rest of 2013 and throughout years 2014 through 2016, she will satisfy the tax home and closer connection tests for 2013 with respect to American Samoa. Amending tax return If Jean also satisfies the presence test in 2013, she will be considered a bona fide resident for the entire 2013 tax year. Amending tax return Puerto Rico You will be considered a bona fide resident of Puerto Rico for the part of the tax year preceding the date on which you move if you: Are a U. Amending tax return S. Amending tax return citizen, Are a bona fide resident of Puerto Rico for at least 2 tax years immediately preceding the tax year of the move, Cease to be a bona fide resident of Puerto Rico during the tax year, Cease to have a tax home in Puerto Rico during the tax year, and Have a closer connection to Puerto Rico than to the United States or a foreign country throughout the part of the tax year preceding the date on which you cease to have a tax home in Puerto Rico. Amending tax return Example. Amending tax return Randy White, a U. Amending tax return S. Amending tax return citizen, files returns on a calendar year basis. Amending tax return For all of 2011 and 2012, Randy was a bona fide resident of Puerto Rico. Amending tax return From January through April 2013, Randy continued to reside and maintain his principal place of business in and closer connection to Puerto Rico. Amending tax return On May 5, 2013, Randy moved and changed his tax home to Nevada. Amending tax return Later that year he established a closer connection to the United States than to Puerto Rico. Amending tax return Randy did not satisfy the presence test for 2013 with respect to Puerto Rico, nor the tax home or closer connection tests. Amending tax return However, because Randy was a bona fide resident of Puerto Rico for at least 2 tax years before he moved to Nevada in 2013, he was a bona fide resident of Puerto Rico from January 1 through May 4, 2013. Amending tax return Reporting a Change in Bona Fide Residence If you became or ceased to be a bona fide resident of a U. Amending tax return S. Amending tax return possession, you may need to file Form 8898. Amending tax return This applies to the U. Amending tax return S. Amending tax return possessions of American Samoa, the CNMI, Guam, Puerto Rico, and the USVI. Amending tax return Who Must File You must file Form 8898 for the tax year in which you meet both of the following conditions. Amending tax return Your worldwide gross income (defined below) in that tax year is more than $75,000. Amending tax return You meet one of the following. Amending tax return You take a position for U. Amending tax return S. Amending tax return tax purposes that you became a bona fide resident of a U. Amending tax return S. Amending tax return possession after a tax year for which you filed a U. Amending tax return S. Amending tax return income tax return as a citizen or resident alien of the United States but not as a bona fide resident of the possession. Amending tax return You are a citizen or resident alien of the United States who takes the position for U. Amending tax return S. Amending tax return tax purposes that you ceased to be a bona fide resident of a U. Amending tax return S. Amending tax return possession after a tax year for which you filed an income tax return (with the IRS, the possession tax authority, or both) as a bona fide resident of the possession. Amending tax return You take the position for U. Amending tax return S. Amending tax return tax purposes that you became a bona fide resident of Puerto Rico or American Samoa after a tax year for which you were required to file an income tax return as a bona fide resident of the CNMI, Guam, or the USVI. Amending tax return Worldwide gross income. Amending tax return   Worldwide gross income means all income you received in the form of money, goods, property, and services, including any income from sources outside the United States (even if you can exclude part or all of it) and before any deductions, credits, or rebates. Amending tax return Example. Amending tax return You are a U. Amending tax return S. Amending tax return citizen who moved to the CNMI in December 2012, but did not become a bona fide resident of that possession until the 2013 tax year. Amending tax return You must file Form 8898 for the 2013 tax year if your worldwide gross income for that year was more than $75,000. Amending tax return Penalty for Not Filing Form 8898 If you are required to file Form 8898 for any tax year and you fail to file it, you may owe a penalty of $1,000. Amending tax return You may also owe this penalty if you do not include all the information required by the form or the form includes incorrect information. Amending tax return In either case, you will not owe this penalty if you can show that such failure is due to reasonable cause and not willful neglect. Amending tax return This is in addition to any criminal penalty that may be imposed. Amending tax return Prev  Up  Next   Home   More Online Publications