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Can I File My 2011 And 2012 Taxes Together

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Can I File My 2011 And 2012 Taxes Together

Can i file my 2011 and 2012 taxes together 8. Can i file my 2011 and 2012 taxes together   Gains and Losses Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Sales and ExchangesDetermining Gain or Loss Like-Kind Exchanges Transfer to Spouse Ordinary or Capital Gain or LossCapital Assets Noncapital Assets Hedging (Commodity Futures) Livestock Converted Wetland and Highly Erodible Cropland Timber Sale of a Farm Foreclosure or Repossession Abandonment Introduction This chapter explains how to figure, and report on your tax return, your gain or loss on the disposition of your property or debt and whether such gain or loss is ordinary or capital. Can i file my 2011 and 2012 taxes together Ordinary gain is taxed at the same rates as wages and interest income while capital gain is generally taxed at lower rates. Can i file my 2011 and 2012 taxes together Dispositions discussed in this chapter include sales, exchanges, foreclosures, repossessions, canceled debts, hedging transactions, and elections to treat cutting of timber as a sale or exchange. Can i file my 2011 and 2012 taxes together Topics - This chapter discusses: Sales and exchanges Ordinary or capital gain or loss Useful Items - You may want to see: Publication 334 Tax Guide for Small Business 523 Selling Your Home 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 908 Bankruptcy Tax Guide Form (and Instructions) 982 Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) Sch D (Form 1040) Capital Gains and Losses Sch F (Form 1040) Profit or Loss From Farming 1099-A Acquisition or Abandonment of Secured Property 1099-C Cancellation of Debt 4797 Sales of Business Property 8949 Sales and Other Dispositions of Capital Assets See chapter 16 for information about getting publications and forms. Can i file my 2011 and 2012 taxes together Sales and Exchanges If you sell, exchange, or otherwise dispose of your property, you usually have a gain or a loss. Can i file my 2011 and 2012 taxes together This section explains certain rules for determining whether any gain you have is taxable, and whether any loss you have is deductible. Can i file my 2011 and 2012 taxes together A sale is a transfer of property for money or a mortgage, note, or other promise to pay money. Can i file my 2011 and 2012 taxes together An exchange is a transfer of property for other property or services. Can i file my 2011 and 2012 taxes together Determining Gain or Loss You usually realize a gain or loss when you sell or exchange property. Can i file my 2011 and 2012 taxes together If the amount you realize from a sale or exchange of property is more than its adjusted basis, you will have a gain. Can i file my 2011 and 2012 taxes together If the adjusted basis of the property is more than the amount you realize, you will have a loss. Can i file my 2011 and 2012 taxes together Basis and adjusted basis. Can i file my 2011 and 2012 taxes together   The basis of property you buy is usually its cost. Can i file my 2011 and 2012 taxes together The adjusted basis of property is basis plus certain additions and minus certain deductions. Can i file my 2011 and 2012 taxes together See chapter 6 for more information about basis and adjusted basis. Can i file my 2011 and 2012 taxes together Amount realized. Can i file my 2011 and 2012 taxes together   The amount you realize from a sale or exchange is the total of all money you receive plus the fair market value (FMV) (defined in chapter 6) of all property or services you receive. Can i file my 2011 and 2012 taxes together The amount you realize also includes any of your liabilities assumed by the buyer and any liabilities to which the property you transferred is subject, such as real estate taxes or a mortgage. Can i file my 2011 and 2012 taxes together   If the liabilities relate to an exchange of multiple properties, see Multiple Property Exchanges in chapter 1 of Publication 544. Can i file my 2011 and 2012 taxes together Amount recognized. Can i file my 2011 and 2012 taxes together   Your gain or loss realized from a sale or exchange of certain property is usually a recognized gain or loss for tax purposes. Can i file my 2011 and 2012 taxes together A recognized gain is a gain you must include in gross income and report on your income tax return. Can i file my 2011 and 2012 taxes together A recognized loss is a loss you deduct from gross income. Can i file my 2011 and 2012 taxes together However, your gain or loss realized from the exchange of certain property may not be recognized for tax purposes. Can i file my 2011 and 2012 taxes together See Like-Kind Exchanges next. Can i file my 2011 and 2012 taxes together Also, a loss from the disposition of property held for personal use is not deductible. Can i file my 2011 and 2012 taxes together Like-Kind Exchanges Certain exchanges of property are not taxable. Can i file my 2011 and 2012 taxes together This means any gain from the exchange is not recognized, and any loss cannot be deducted. Can i file my 2011 and 2012 taxes together Your gain or loss will not be recognized until you sell or otherwise dispose of the property you receive. Can i file my 2011 and 2012 taxes together The exchange of property for the same kind of property is the most common type of nontaxable exchange. Can i file my 2011 and 2012 taxes together To qualify for treatment as a like-kind exchange, the property traded and the property received must be both of the following. Can i file my 2011 and 2012 taxes together Qualifying property. Can i file my 2011 and 2012 taxes together Like-kind property. Can i file my 2011 and 2012 taxes together These two requirements are discussed later. Can i file my 2011 and 2012 taxes together Multiple-party transactions. Can i file my 2011 and 2012 taxes together   The like-kind exchange rules also apply to property exchanges that involve three and four-party transactions. Can i file my 2011 and 2012 taxes together Any part of these multiple-party transactions can qualify as a like-kind exchange if it meets all the requirements described in this section. Can i file my 2011 and 2012 taxes together Receipt of title from third party. Can i file my 2011 and 2012 taxes together   If you receive property in a like-kind exchange and the other party who transfers the property to you does not give you the title, but a third party does, you can still treat this transaction as a like-kind exchange if it meets all the requirements. Can i file my 2011 and 2012 taxes together Basis of property received. Can i file my 2011 and 2012 taxes together   If you receive property in a like-kind exchange, the basis of the property will be the same as the basis of the property you gave up. Can i file my 2011 and 2012 taxes together See chapter 6 for more information. Can i file my 2011 and 2012 taxes together Money paid. Can i file my 2011 and 2012 taxes together   If, in addition to giving up like-kind property, you pay money in a like-kind exchange, you still have no recognized gain or loss. Can i file my 2011 and 2012 taxes together The basis of the property received is the basis of the property given up, increased by the money paid. Can i file my 2011 and 2012 taxes together Example. Can i file my 2011 and 2012 taxes together You traded an old tractor with an adjusted basis of $15,000 for a new one. Can i file my 2011 and 2012 taxes together The new tractor costs $300,000. Can i file my 2011 and 2012 taxes together You were allowed $80,000 for the old tractor and paid $220,000 cash. Can i file my 2011 and 2012 taxes together You have no recognized gain or loss on the transaction regardless of the adjusted basis of your old tractor and the basis of the new tractor is $235,000, the adjusted basis of the old tractor plus the cash paid ($15,000 + $220,000). Can i file my 2011 and 2012 taxes together If you had sold the old tractor to a third party for $80,000 and bought a new one, you would have a recognized gain or loss on the sale of your old tractor equal to the difference between the amount realized and the adjusted basis of the old tractor. Can i file my 2011 and 2012 taxes together In this case, the taxable gain would be $65,000 ($80,000 − $15,000) and the basis of the new tractor would be $300,000. Can i file my 2011 and 2012 taxes together Reporting the exchange. Can i file my 2011 and 2012 taxes together   Report the exchange of like-kind property, even though no gain or loss is recognized, on Form 8824, Like-Kind Exchanges. Can i file my 2011 and 2012 taxes together The Instructions for Form 8824 explain how to report the details of the exchange. Can i file my 2011 and 2012 taxes together   If you have any recognized gain because you received money or unlike property, report it on Schedule D (Form 1040) or Form 4797, whichever applies. Can i file my 2011 and 2012 taxes together You may also have to report the recognized gain as ordinary income because of depreciation recapture on Form 4797. Can i file my 2011 and 2012 taxes together See chapter 9 for more information. Can i file my 2011 and 2012 taxes together Qualifying property. Can i file my 2011 and 2012 taxes together   In a like-kind exchange, both the property you give up and the property you receive must be held by you for investment or for productive use in your trade or business. Can i file my 2011 and 2012 taxes together Machinery, buildings, land, trucks, breeding livestock, rental houses, and certain mutual ditch, reservoir, or irrigation company stock are examples of property that may qualify. Can i file my 2011 and 2012 taxes together Nonqualifying property. Can i file my 2011 and 2012 taxes together   The rules for like-kind exchanges do not apply to exchanges of the following property. Can i file my 2011 and 2012 taxes together Property you use for personal purposes, such as your home and family car. Can i file my 2011 and 2012 taxes together Stock in trade or other property held primarily for sale, such as crops and produce. Can i file my 2011 and 2012 taxes together Stocks, bonds, or notes. Can i file my 2011 and 2012 taxes together However, see Qualifying property above. Can i file my 2011 and 2012 taxes together Other securities or evidences of indebtedness, such as accounts receivable. Can i file my 2011 and 2012 taxes together Partnership interests. Can i file my 2011 and 2012 taxes together However, you may have a nontaxable exchange under other rules. Can i file my 2011 and 2012 taxes together See Other Nontaxable Exchanges in chapter 1 of Publication 544. Can i file my 2011 and 2012 taxes together Like-kind property. Can i file my 2011 and 2012 taxes together   To qualify as a nontaxable exchange, the properties exchanged must be of like kind. Can i file my 2011 and 2012 taxes together Like-kind properties are properties of the same nature or character, even if they differ in grade or quality. Can i file my 2011 and 2012 taxes together Generally, real property exchanged for real property qualifies as an exchange of like-kind property. Can i file my 2011 and 2012 taxes together For example, an exchange of city property for farm property or improved property for unimproved property is a like-kind exchange. Can i file my 2011 and 2012 taxes together   An exchange of a tractor for a new tractor is an exchange of like-kind property, and so is an exchange of timber land for crop acreage. Can i file my 2011 and 2012 taxes together An exchange of a tractor for acreage, however, is not an exchange of like-kind property. Can i file my 2011 and 2012 taxes together The exchange of livestock of one sex for livestock of the other sex is not a like-kind exchange. Can i file my 2011 and 2012 taxes together For example, the exchange of a bull for a cow is not a like-kind exchange. Can i file my 2011 and 2012 taxes together An exchange of the assets of a business for the assets of a similar business cannot be treated as an exchange of one property for another property. Can i file my 2011 and 2012 taxes together    Note. Can i file my 2011 and 2012 taxes together Whether you engaged in a like-kind exchange depends on an analysis of each asset involved in the exchange. Can i file my 2011 and 2012 taxes together Personal property. Can i file my 2011 and 2012 taxes together   Depreciable tangible personal property can be either like kind or like class to qualify for nontaxable exchange treatment. Can i file my 2011 and 2012 taxes together Like-class properties are depreciable tangible personal properties within the same General Asset Class or Product Class. Can i file my 2011 and 2012 taxes together Property classified in any General Asset Class may not be classified within a Product Class. Can i file my 2011 and 2012 taxes together Assets that are not in the same class will qualify as like-kind property if they are of the same nature or character. Can i file my 2011 and 2012 taxes together General Asset Classes. Can i file my 2011 and 2012 taxes together   General Asset Classes describe the types of property frequently used in many businesses. Can i file my 2011 and 2012 taxes together They include, but are not limited to, the following property. Can i file my 2011 and 2012 taxes together Office furniture, fixtures, and equipment (asset class 00. Can i file my 2011 and 2012 taxes together 11). Can i file my 2011 and 2012 taxes together Information systems, such as computers and peripheral equipment (asset class 00. Can i file my 2011 and 2012 taxes together 12). Can i file my 2011 and 2012 taxes together Data handling equipment except computers (asset class 00. Can i file my 2011 and 2012 taxes together 13). Can i file my 2011 and 2012 taxes together Automobiles and taxis (asset class 00. Can i file my 2011 and 2012 taxes together 22). Can i file my 2011 and 2012 taxes together Light general purpose trucks (asset class 00. Can i file my 2011 and 2012 taxes together 241). Can i file my 2011 and 2012 taxes together Heavy general purpose trucks (asset class 00. Can i file my 2011 and 2012 taxes together 242). Can i file my 2011 and 2012 taxes together Tractor units for use over-the-road (asset class 00. Can i file my 2011 and 2012 taxes together 26). Can i file my 2011 and 2012 taxes together Trailers and trailer-mounted containers (asset class 00. Can i file my 2011 and 2012 taxes together 27). Can i file my 2011 and 2012 taxes together Industrial steam and electric generation and/or distribution systems (asset class 00. Can i file my 2011 and 2012 taxes together 4). Can i file my 2011 and 2012 taxes together Product Classes. Can i file my 2011 and 2012 taxes together   Product Classes include property listed in a 6-digit product class in sectors 31 through 33 of the North American Industry Classification System (NAICS) of the Executive Office of the President, Office of Management and Budget, United States, (NAICS Manual). Can i file my 2011 and 2012 taxes together The latest version of the manual can be accessed at www. Can i file my 2011 and 2012 taxes together census. Can i file my 2011 and 2012 taxes together gov/eos/www/naics/. Can i file my 2011 and 2012 taxes together Copies of the printed manual may be purchased from the National Technical Information Service (NTIS) at  www. Can i file my 2011 and 2012 taxes together ntis. Can i file my 2011 and 2012 taxes together gov/products/naics. Can i file my 2011 and 2012 taxes together aspx or by calling 1-800-553-NTIS (1-800-553-6847) or (703) 605-6000. Can i file my 2011 and 2012 taxes together A CD-ROM version with search and retrieval software is also available from NTIS. Can i file my 2011 and 2012 taxes together    NAICS class 333111, Farm Machinery and Equipment Manufacturing, includes most machinery and equipment used in a farming business. Can i file my 2011 and 2012 taxes together Partially nontaxable exchange. Can i file my 2011 and 2012 taxes together   If, in addition to like-kind property, you receive money or unlike property in an exchange on which you realize gain, you have a partially nontaxable exchange. Can i file my 2011 and 2012 taxes together You are taxed on the gain you realize, but only to the extent of the money and the FMV of the unlike property you receive. Can i file my 2011 and 2012 taxes together A loss is not deductible. Can i file my 2011 and 2012 taxes together Example 1. Can i file my 2011 and 2012 taxes together You trade farmland that cost $30,000 for $10,000 cash and other land to be used in farming with a FMV of $50,000. Can i file my 2011 and 2012 taxes together You have a realized gain of $30,000 ($50,000 FMV of new land + $10,000 cash − $30,000 basis of old farmland = $30,000 realized gain). Can i file my 2011 and 2012 taxes together However, only $10,000, the cash received, is recognized (included in income). Can i file my 2011 and 2012 taxes together Example 2. Can i file my 2011 and 2012 taxes together Assume the same facts as in Example 1, except that, instead of money, you received a tractor with a FMV of $10,000. Can i file my 2011 and 2012 taxes together Your recognized gain is still limited to $10,000, the value of the tractor (the unlike property). Can i file my 2011 and 2012 taxes together Example 3. Can i file my 2011 and 2012 taxes together Assume in Example 1 that the FMV of the land you received was only $15,000. Can i file my 2011 and 2012 taxes together Your $5,000 loss is not recognized. Can i file my 2011 and 2012 taxes together Unlike property given up. Can i file my 2011 and 2012 taxes together   If, in addition to like-kind property, you give up unlike property, you must recognize gain or loss on the unlike property you give up. Can i file my 2011 and 2012 taxes together The gain or loss is the difference between the FMV of the unlike property and the adjusted basis of the unlike property. Can i file my 2011 and 2012 taxes together Like-kind exchanges between related persons. Can i file my 2011 and 2012 taxes together   Special rules apply to like-kind exchanges between related persons. Can i file my 2011 and 2012 taxes together These rules affect both direct and indirect exchanges. Can i file my 2011 and 2012 taxes together Under these rules, if either person disposes of the property within 2 years after the exchange, the exchange is disqualified from nonrecognition treatment. Can i file my 2011 and 2012 taxes together The gain or loss on the original exchange must be recognized as of the date of the later disposition. Can i file my 2011 and 2012 taxes together The 2-year holding period begins on the date of the last transfer of property that was part of the like-kind exchange. Can i file my 2011 and 2012 taxes together Related persons. Can i file my 2011 and 2012 taxes together   Under these rules, related persons include, for example, you and a member of your family (spouse, brother, sister, parent, child, etc. Can i file my 2011 and 2012 taxes together ), you and a corporation in which you have more than 50% ownership, you and a partnership in which you directly or indirectly own more than a 50% interest of the capital or profits, and two partnerships in which you directly or indirectly own more than 50% of the capital interests or profits. Can i file my 2011 and 2012 taxes together   For the complete list of related persons, see Related persons in chapter 2 of Publication 544. Can i file my 2011 and 2012 taxes together Example. Can i file my 2011 and 2012 taxes together You used a grey pickup truck in your farming business. Can i file my 2011 and 2012 taxes together Your sister used a red pickup truck in her landscaping business. Can i file my 2011 and 2012 taxes together In December 2012, you exchanged your grey pickup truck, plus $200, for your sister's red pickup truck. Can i file my 2011 and 2012 taxes together At that time, the FMV of the grey pickup truck was $7,000 and its adjusted basis was $6,000. Can i file my 2011 and 2012 taxes together The FMV of the red pickup truck was $7,200 and its adjusted basis was $1,000. Can i file my 2011 and 2012 taxes together You realized a gain of $1,000 (the $7,200 FMV of the red pickup truck, minus the grey pickup truck's $6,000 adjusted basis, minus the $200 you paid). Can i file my 2011 and 2012 taxes together Your sister realized a gain of $6,200 (the $7,000 FMV of the grey pickup truck plus the $200 you paid, minus the $1,000 adjusted basis of the red pickup truck). Can i file my 2011 and 2012 taxes together However, because this was a like-kind exchange, you recognized no gain. Can i file my 2011 and 2012 taxes together Your basis in the red pickup truck was $6,200 (the $6,000 adjusted basis of the grey pickup truck plus the $200 you paid). Can i file my 2011 and 2012 taxes together She recognized gain only to the extent of the money she received, $200. Can i file my 2011 and 2012 taxes together Her basis in the grey pickup truck was $1,000 (the $1,000 adjusted basis of the red pickup truck minus the $200 received, plus the $200 gain recognized). Can i file my 2011 and 2012 taxes together In 2013, you sold the red pickup truck to a third party for $7,000. Can i file my 2011 and 2012 taxes together Because you sold it within 2 years after the exchange, the exchange is disqualified from nonrecognition treatment. Can i file my 2011 and 2012 taxes together On your tax return for 2013, you must report your $1,000 gain on the 2012 exchange. Can i file my 2011 and 2012 taxes together You also report a loss on the sale as $200 (the adjusted basis of the red pickup truck, $7,200 (its $6,200 basis plus the $1,000 gain recognized), minus the $7,000 realized from the sale). Can i file my 2011 and 2012 taxes together In addition, your sister must report on her tax return for 2013 the $6,000 balance of her gain on the 2012 exchange. Can i file my 2011 and 2012 taxes together Her adjusted basis in the grey pickup truck is increased to $7,000 (its $1,000 basis plus the $6,000 gain recognized). Can i file my 2011 and 2012 taxes together Exceptions to the rules for related persons. Can i file my 2011 and 2012 taxes together   The following property dispositions are excluded from these rules. Can i file my 2011 and 2012 taxes together Dispositions due to the death of either related person. Can i file my 2011 and 2012 taxes together Involuntary conversions. Can i file my 2011 and 2012 taxes together Dispositions where it is established to the satisfaction of the IRS that neither the exchange nor the disposition has, as a main purpose, the avoidance of federal income tax. Can i file my 2011 and 2012 taxes together Multiple property exchanges. Can i file my 2011 and 2012 taxes together   Under the like-kind exchange rules, you must generally make a property-by-property comparison to figure your recognized gain and the basis of the property you receive in the exchange. Can i file my 2011 and 2012 taxes together However, for exchanges of multiple properties, you do not make a property-by-property comparison if you do either of the following. Can i file my 2011 and 2012 taxes together Transfer and receive properties in two or more exchange groups. Can i file my 2011 and 2012 taxes together Transfer or receive more than one property within a single exchange group. Can i file my 2011 and 2012 taxes together   For more information, see Multiple Property Exchanges in chapter 1 of Publication 544. Can i file my 2011 and 2012 taxes together Deferred exchange. Can i file my 2011 and 2012 taxes together   A deferred exchange for like-kind property may qualify for nonrecognition of gain or loss. Can i file my 2011 and 2012 taxes together A deferred exchange is an exchange in which you transfer property you use in business or hold for investment and later receive like-kind property you will use in business or hold for investment. Can i file my 2011 and 2012 taxes together The property you receive is replacement property. Can i file my 2011 and 2012 taxes together The transaction must be an exchange of property for property rather than a transfer of property for money used to buy replacement property. Can i file my 2011 and 2012 taxes together In addition, the replacement property will not be treated as like-kind property unless certain identification and receipt requirements are met. Can i file my 2011 and 2012 taxes together   For more information see Deferred Exchanges in chapter 1 of Publication 544. Can i file my 2011 and 2012 taxes together Transfer to Spouse No gain or loss is recognized on a transfer of property from an individual to (or in trust for the benefit of) a spouse, or a former spouse if incident to divorce. Can i file my 2011 and 2012 taxes together This rule does not apply if the recipient is a nonresident alien. Can i file my 2011 and 2012 taxes together Nor does this rule apply to a transfer in trust to the extent the liabilities assumed and the liabilities on the property are more than the property's adjusted basis. Can i file my 2011 and 2012 taxes together Any transfer of property to a spouse or former spouse on which gain or loss is not recognized is not considered a sale or exchange. Can i file my 2011 and 2012 taxes together The recipient's basis in the property will be the same as the adjusted basis of the giver immediately before the transfer. Can i file my 2011 and 2012 taxes together This carryover basis rule applies whether the adjusted basis of the transferred property is less than, equal to, or greater than either its FMV at the time of transfer or any consideration paid by the recipient. Can i file my 2011 and 2012 taxes together This rule applies for determining loss as well as gain. Can i file my 2011 and 2012 taxes together Any gain recognized on a transfer in trust increases the basis. Can i file my 2011 and 2012 taxes together For more information on transfers of property incident to divorce, see Property Settlements in Publication 504, Divorced or Separated Individuals. Can i file my 2011 and 2012 taxes together Ordinary or Capital Gain or Loss Generally, you will have a capital gain or loss if you sell or exchange a capital asset (defined below). Can i file my 2011 and 2012 taxes together You may also have a capital gain if your section 1231 transactions result in a net gain. Can i file my 2011 and 2012 taxes together See Section 1231 Gains and Losses in  chapter 9. Can i file my 2011 and 2012 taxes together To figure your net capital gain or loss, you must classify your gains and losses as either ordinary or capital (and your capital gains or losses as either short-term or long-term). Can i file my 2011 and 2012 taxes together Your net capital gains may be taxed at a lower tax rate than ordinary income. Can i file my 2011 and 2012 taxes together See Capital Gains Tax Rates , later. Can i file my 2011 and 2012 taxes together Your deduction for a net capital loss may be limited. Can i file my 2011 and 2012 taxes together See Treatment of Capital Losses , later. Can i file my 2011 and 2012 taxes together Capital Assets Almost everything you own and use for personal purposes or investment is a capital asset. Can i file my 2011 and 2012 taxes together The following items are examples of capital assets. Can i file my 2011 and 2012 taxes together A home owned and occupied by you and your family. Can i file my 2011 and 2012 taxes together Household furnishings. Can i file my 2011 and 2012 taxes together A car used for pleasure. Can i file my 2011 and 2012 taxes together If your car is used both for pleasure and for farm business, it is partly a capital asset and partly a noncapital asset, defined later. Can i file my 2011 and 2012 taxes together Stocks and bonds. Can i file my 2011 and 2012 taxes together However, there are special rules for gains on qualified small business stock. Can i file my 2011 and 2012 taxes together For more information on this subject, see Gains on Qualified Small Business Stock and Losses on Section 1244 (Small Business) Stock in chapter 4 of Publication 550. Can i file my 2011 and 2012 taxes together Personal-use property. Can i file my 2011 and 2012 taxes together   Gain from a sale or exchange of personal-use property is a capital gain and is taxable. Can i file my 2011 and 2012 taxes together Loss from the sale or exchange of personal-use property is not deductible. Can i file my 2011 and 2012 taxes together You can deduct a loss relating to personal-use property only if it results from a casualty or theft. Can i file my 2011 and 2012 taxes together For information on casualties and thefts, see chapter 11. Can i file my 2011 and 2012 taxes together Long and Short Term Where you report a capital gain or loss depends on how long you own the asset before you sell or exchange it. Can i file my 2011 and 2012 taxes together The time you own an asset before disposing of it is the holding period. Can i file my 2011 and 2012 taxes together If you hold a capital asset 1 year or less, the gain or loss resulting from its disposition is short term. Can i file my 2011 and 2012 taxes together Report it in Part I of Schedule D (Form 1040). Can i file my 2011 and 2012 taxes together If you hold a capital asset longer than 1 year, the gain or loss resulting from its disposition is long term. Can i file my 2011 and 2012 taxes together Report it in Part II of Schedule D (Form 1040). Can i file my 2011 and 2012 taxes together Holding period. Can i file my 2011 and 2012 taxes together   To figure if you held property longer than 1 year, start counting on the day after the day you acquired the property. Can i file my 2011 and 2012 taxes together The day you disposed of the property is part of your holding period. Can i file my 2011 and 2012 taxes together Example. Can i file my 2011 and 2012 taxes together If you bought an asset on June 19, 2012, you should start counting on June 20, 2012. Can i file my 2011 and 2012 taxes together If you sold the asset on June 19, 2013, your holding period is not longer than 1 year, but if you sold it on June 20, 2013, your holding period is longer than 1 year. Can i file my 2011 and 2012 taxes together Inherited property. Can i file my 2011 and 2012 taxes together   If you inherit property, you are considered to have held the property longer than 1 year, regardless of how long you actually held it. Can i file my 2011 and 2012 taxes together This rule does not apply to livestock used in a farm business. Can i file my 2011 and 2012 taxes together See Holding period under Livestock , later. Can i file my 2011 and 2012 taxes together Nonbusiness bad debt. Can i file my 2011 and 2012 taxes together   A nonbusiness bad debt is a short-term capital loss, deductible in the year the debt becomes worthless. Can i file my 2011 and 2012 taxes together See chapter 4 of Publication 550. Can i file my 2011 and 2012 taxes together Nontaxable exchange. Can i file my 2011 and 2012 taxes together   If you acquire an asset in exchange for another asset and your basis for the new asset is figured, in whole or in part, by using your basis in the old property, the holding period of the new property includes the holding period of the old property. Can i file my 2011 and 2012 taxes together That is, it begins on the same day as your holding period for the old property. Can i file my 2011 and 2012 taxes together Gift. Can i file my 2011 and 2012 taxes together   If you receive a gift of property and your basis in it is figured using the donor's basis, your holding period includes the donor's holding period. Can i file my 2011 and 2012 taxes together Real property. Can i file my 2011 and 2012 taxes together   To figure how long you held real property, start counting on the day after you received title to it or, if earlier, on the day after you took possession of it and assumed the burdens and privileges of ownership. Can i file my 2011 and 2012 taxes together   However, taking possession of real property under an option agreement is not enough to start the holding period. Can i file my 2011 and 2012 taxes together The holding period cannot start until there is an actual contract of sale. Can i file my 2011 and 2012 taxes together The holding period of the seller cannot end before that time. Can i file my 2011 and 2012 taxes together Figuring Net Gain or Loss The totals for short-term capital gains and losses and the totals for long-term capital gains and losses must be figured separately. Can i file my 2011 and 2012 taxes together Net short-term capital gain or loss. Can i file my 2011 and 2012 taxes together   Combine your short-term capital gains and losses. Can i file my 2011 and 2012 taxes together Do this by adding all of your short-term capital gains. Can i file my 2011 and 2012 taxes together Then add all of your short-term capital losses. Can i file my 2011 and 2012 taxes together Subtract the lesser total from the greater. Can i file my 2011 and 2012 taxes together The difference is your net short-term capital gain or loss. Can i file my 2011 and 2012 taxes together Net long-term capital gain or loss. Can i file my 2011 and 2012 taxes together   Follow the same steps to combine your long-term capital gains and losses. Can i file my 2011 and 2012 taxes together The result is your net long-term capital gain or loss. Can i file my 2011 and 2012 taxes together Net gain. Can i file my 2011 and 2012 taxes together   If the total of your capital gains is more than the total of your capital losses, the difference is taxable. Can i file my 2011 and 2012 taxes together However, part of your gain (but not more than your net capital gain) may be taxed at a lower rate than the rate of tax on your ordinary income. Can i file my 2011 and 2012 taxes together See Capital Gains Tax Rates , later. Can i file my 2011 and 2012 taxes together Net loss. Can i file my 2011 and 2012 taxes together   If the total of your capital losses is more than the total of your capital gains, the difference is deductible. Can i file my 2011 and 2012 taxes together But there are limits on how much loss you can deduct and when you can deduct it. Can i file my 2011 and 2012 taxes together See Treatment of Capital Losses next. Can i file my 2011 and 2012 taxes together Treatment of Capital Losses If your capital losses are more than your capital gains, you must claim the difference even if you do not have ordinary income to offset it. Can i file my 2011 and 2012 taxes together For taxpayers other than corporations, the yearly limit on the capital loss you can deduct is $3,000 ($1,500 if you are married and file a separate return). Can i file my 2011 and 2012 taxes together If your other income is low, you may not be able to use the full $3,000. Can i file my 2011 and 2012 taxes together The part of the $3,000 you cannot use becomes part of your capital loss carryover (discussed next). Can i file my 2011 and 2012 taxes together Capital loss carryover. Can i file my 2011 and 2012 taxes together   Generally, you have a capital loss carryover if either of the following situations applies to you. Can i file my 2011 and 2012 taxes together Your net loss on Schedule D (Form 1040), is more than the yearly limit. Can i file my 2011 and 2012 taxes together Your taxable income without your deduction for exemptions is less than zero. Can i file my 2011 and 2012 taxes together If either of these situations applies to you for 2013, see Capital Losses under Reporting Capital Gains and Losses in chapter 4 of Publication 550 to figure the amount you can carry over to 2014. Can i file my 2011 and 2012 taxes together    To figure your capital loss carryover from 2013 to 2014, you will need a copy of your 2013 Form 1040 and Schedule D (Form 1040). Can i file my 2011 and 2012 taxes together Capital Gains Tax Rates The tax rates that apply to a net capital gain are generally lower than the tax rates that apply to other income. Can i file my 2011 and 2012 taxes together These lower rates are called the maximum capital gains rates. Can i file my 2011 and 2012 taxes together The term “net capital gain” means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. Can i file my 2011 and 2012 taxes together See Schedule D (Form 1040) and the Instructions for Schedule D (Form 1040). Can i file my 2011 and 2012 taxes together Also see Publication 550. Can i file my 2011 and 2012 taxes together Noncapital Assets Noncapital assets include property such as inventory and depreciable property used in a trade or business. Can i file my 2011 and 2012 taxes together A list of properties that are not capital assets is provided in the Instructions for Schedule D (Form 1040). Can i file my 2011 and 2012 taxes together Property held for sale in the ordinary course of your farm business. Can i file my 2011 and 2012 taxes together   Property you hold mainly for sale to customers, such as livestock, poultry, livestock products, and crops, is a noncapital asset. Can i file my 2011 and 2012 taxes together Gain or loss from sales or other dispositions of this property is reported on Schedule F (Form 1040) (not on Schedule D (Form 1040) or Form 4797). Can i file my 2011 and 2012 taxes together The treatment of this property is discussed in chapter 3. Can i file my 2011 and 2012 taxes together Land and depreciable properties. Can i file my 2011 and 2012 taxes together   Land and depreciable property you use in farming are not capital assets. Can i file my 2011 and 2012 taxes together Noncapital assets also include livestock held for draft, breeding, dairy, or sporting purposes. Can i file my 2011 and 2012 taxes together However, your gains and losses from sales and exchanges of your farmland and depreciable properties must be considered together with certain other transactions to determine whether the gains and losses are treated as capital or ordinary gains and losses. Can i file my 2011 and 2012 taxes together The sales of these business assets are reported on Form 4797. Can i file my 2011 and 2012 taxes together See chapter 9 for more information. Can i file my 2011 and 2012 taxes together Hedging (Commodity Futures) Hedging transactions are transactions that you enter into in the normal course of business primarily to manage the risk of interest rate or price changes, or currency fluctuations, with respect to borrowings, ordinary property, or ordinary obligations. Can i file my 2011 and 2012 taxes together Ordinary property or obligations are those that cannot produce capital gain or loss if sold or exchanged. Can i file my 2011 and 2012 taxes together A commodity futures contract is a standardized, exchange-traded contract for the sale or purchase of a fixed amount of a commodity at a future date for a fixed price. Can i file my 2011 and 2012 taxes together The holder of an option on a futures contract has the right (but not the obligation) for a specified period of time to enter into a futures contract to buy or sell at a particular price. Can i file my 2011 and 2012 taxes together A forward contract is generally similar to a futures contract except that the terms are not standardized and the contract is not exchange traded. Can i file my 2011 and 2012 taxes together Businesses may enter into commodity futures contracts or forward contracts and may acquire options on commodity futures contracts as either of the following. Can i file my 2011 and 2012 taxes together Hedging transactions. Can i file my 2011 and 2012 taxes together Transactions that are not hedging transactions. Can i file my 2011 and 2012 taxes together Futures transactions with exchange-traded commodity futures contracts that are not hedging transactions, generally, result in capital gain or loss and are subject to the mark-to-market rules discussed in Publication 550. Can i file my 2011 and 2012 taxes together There is a limit on the amount of capital losses you can deduct each year. Can i file my 2011 and 2012 taxes together Hedging transactions are not subject to the mark-to-market rules. Can i file my 2011 and 2012 taxes together If, as a farmer-producer, to protect yourself from the risk of unfavorable price fluctuations, you enter into commodity forward contracts, futures contracts, or options on futures contracts and the contracts cover an amount of the commodity within your range of production, the transactions are generally considered hedging transactions. Can i file my 2011 and 2012 taxes together They can take place at any time you have the commodity under production, have it on hand for sale, or reasonably expect to have it on hand. Can i file my 2011 and 2012 taxes together The gain or loss on the termination of these hedges is generally ordinary gain or loss. Can i file my 2011 and 2012 taxes together Farmers who file their income tax returns on the cash method report any profit or loss on the hedging transaction on Schedule F, line 8. Can i file my 2011 and 2012 taxes together Gains or losses from hedging transactions that hedge supplies of a type regularly used or consumed in the ordinary course of your trade or business may be ordinary gains or losses. Can i file my 2011 and 2012 taxes together Examples include fuel and feed. Can i file my 2011 and 2012 taxes together If you have numerous transactions in the commodity futures market during the year, you must be able to show which transactions are hedging transactions. Can i file my 2011 and 2012 taxes together Clearly identify a hedging transaction on your books and records before the end of the day you entered into the transaction. Can i file my 2011 and 2012 taxes together It may be helpful to have separate brokerage accounts for your hedging and speculation transactions. Can i file my 2011 and 2012 taxes together Retain the identification of each hedging transaction with your books and records. Can i file my 2011 and 2012 taxes together Also, identify the item(s) or aggregate risk that is being hedged in your records. Can i file my 2011 and 2012 taxes together Although the identification of the hedging transaction must be made before the end of the day it was entered into, you have 35 days after entering into the transaction to identify the hedged item(s) or risk. Can i file my 2011 and 2012 taxes together For more information on the tax treatment of futures and options contracts, see Commodity Futures and Section 1256 Contracts Marked to Market in Publication 550. Can i file my 2011 and 2012 taxes together Accounting methods for hedging transactions. Can i file my 2011 and 2012 taxes together   The accounting method you use for a hedging transaction must clearly reflect income. Can i file my 2011 and 2012 taxes together This means that your accounting method must reasonably match the timing of income, deduction, gain, or loss from a hedging transaction with the timing of income, deduction, gain, or loss from the item or items being hedged. Can i file my 2011 and 2012 taxes together There are requirements and limits on the method you can use for certain hedging transactions. Can i file my 2011 and 2012 taxes together See Regulations section 1. Can i file my 2011 and 2012 taxes together 446-4(e) for those requirements and limits. Can i file my 2011 and 2012 taxes together   Hedging transactions must be accounted for under the rules stated above unless the transaction is subject to mark-to-market accounting under section 475 or you use an accounting method other than the following methods. Can i file my 2011 and 2012 taxes together Cash method. Can i file my 2011 and 2012 taxes together Farm-price method. Can i file my 2011 and 2012 taxes together Unit-livestock-price method. Can i file my 2011 and 2012 taxes together   Once you adopt a method, you must apply it consistently and must have IRS approval before changing it. Can i file my 2011 and 2012 taxes together   Your books and records must describe the accounting method used for each type of hedging transaction. Can i file my 2011 and 2012 taxes together They must also contain any additional identification necessary to verify the application of the accounting method you used for the transaction. Can i file my 2011 and 2012 taxes together You must make the additional identification no more than 35 days after entering into the hedging transaction. Can i file my 2011 and 2012 taxes together Example of a hedging transaction. Can i file my 2011 and 2012 taxes together   You file your income tax returns on the cash method. Can i file my 2011 and 2012 taxes together On July 2 you anticipate a yield of 50,000 bushels of corn this year. Can i file my 2011 and 2012 taxes together The December futures price is $5. Can i file my 2011 and 2012 taxes together 75 a bushel, but there are indications that by harvest time the price will drop. Can i file my 2011 and 2012 taxes together To protect yourself against a drop in the price, you enter into the following hedging transaction. Can i file my 2011 and 2012 taxes together You sell ten December futures contracts of 5,000 bushels each for a total of 50,000 bushels of corn at $5. Can i file my 2011 and 2012 taxes together 75 a bushel. Can i file my 2011 and 2012 taxes together   The price did not drop as anticipated but rose to $6 a bushel. Can i file my 2011 and 2012 taxes together In November, you sell your crop at a local elevator for $6 a bushel. Can i file my 2011 and 2012 taxes together You also close out your futures position by buying ten December contracts for $6 a bushel. Can i file my 2011 and 2012 taxes together You paid a broker's commission of $1,400 ($70 per contract) for the complete in and out position in the futures market. Can i file my 2011 and 2012 taxes together   The result is that the price of corn rose 25 cents a bushel and the actual selling price is $6 a bushel. Can i file my 2011 and 2012 taxes together Your loss on the hedge is 25 cents a bushel. Can i file my 2011 and 2012 taxes together In effect, the net selling price of your corn is $5. Can i file my 2011 and 2012 taxes together 75 a bushel. Can i file my 2011 and 2012 taxes together   Report the results of your futures transactions and your sale of corn separately on Schedule F. Can i file my 2011 and 2012 taxes together See the instructions for the 2013 Schedule F (Form 1040). Can i file my 2011 and 2012 taxes together   The loss on your futures transactions is $13,900, figured as follows. Can i file my 2011 and 2012 taxes together July 2 - Sold December corn futures (50,000 bu. Can i file my 2011 and 2012 taxes together @$5. Can i file my 2011 and 2012 taxes together 75) $287,500 November 6 - Bought December corn futures (50,000 bu. Can i file my 2011 and 2012 taxes together @$6 plus $1,400 broker's commission) 301,400 Futures loss ($13,900) This loss is reported as a negative figure on Schedule F, Part I, line 8, as other income. Can i file my 2011 and 2012 taxes together   The proceeds from your corn sale at the local elevator are $300,000 (50,000 bu. Can i file my 2011 and 2012 taxes together × $6). Can i file my 2011 and 2012 taxes together Report it on Schedule F, Part I, line 2, as income from sales of products you raised. Can i file my 2011 and 2012 taxes together   Assume you were right and the price went down 25 cents a bushel. Can i file my 2011 and 2012 taxes together In effect, you would still net $5. Can i file my 2011 and 2012 taxes together 75 a bushel, figured as follows. Can i file my 2011 and 2012 taxes together Sold cash corn, per bushel $5. Can i file my 2011 and 2012 taxes together 50 Gain on hedge, per bushel . Can i file my 2011 and 2012 taxes together 25 Net price, per bushel $5. Can i file my 2011 and 2012 taxes together 75       The gain on your futures transactions would have been $11,100, figured as follows. Can i file my 2011 and 2012 taxes together July 2 - Sold December corn futures (50,000 bu. Can i file my 2011 and 2012 taxes together @$5. Can i file my 2011 and 2012 taxes together 75) $287,500 November 6 - Bought December corn futures (50,000 bu. Can i file my 2011 and 2012 taxes together @$5. Can i file my 2011 and 2012 taxes together 50 plus $1,400 broker's commission) 276,400 Futures gain $11,100 The $11,100 is reported on Schedule F, Part I, line 8, as other income. Can i file my 2011 and 2012 taxes together   The proceeds from the sale of your corn at the local elevator, $275,000, are reported on Schedule F, Part I, line 2, as income from sales of products you raised. Can i file my 2011 and 2012 taxes together Livestock This part discusses the sale or exchange of livestock used in your farm business. Can i file my 2011 and 2012 taxes together Gain or loss from the sale or exchange of this livestock may qualify as a section 1231 gain or loss. Can i file my 2011 and 2012 taxes together However, any part of the gain that is ordinary income from the recapture of depreciation is not included as section 1231 gain. Can i file my 2011 and 2012 taxes together See chapter 9 for more information on section 1231 gains and losses and the recapture of depreciation under section 1245. Can i file my 2011 and 2012 taxes together The rules discussed here do not apply to the sale of livestock held primarily for sale to customers. Can i file my 2011 and 2012 taxes together The sale of this livestock is reported on Schedule F. Can i file my 2011 and 2012 taxes together See chapter 3. Can i file my 2011 and 2012 taxes together Also, special rules apply to sales or exchanges caused by weather-related conditions. Can i file my 2011 and 2012 taxes together See chapter 3. Can i file my 2011 and 2012 taxes together Holding period. Can i file my 2011 and 2012 taxes together   The sale or exchange of livestock used in your farm business (defined below) qualifies as a section 1231 transaction if you held the livestock for 12 months or more (24 months or more for horses and cattle). Can i file my 2011 and 2012 taxes together Livestock. Can i file my 2011 and 2012 taxes together   For section 1231 transactions, livestock includes cattle, hogs, horses, mules, donkeys, sheep, goats, fur-bearing animals, and other mammals. Can i file my 2011 and 2012 taxes together Also, for section 1231 transactions, livestock does not include chickens, turkeys, pigeons, geese, emus, ostriches, rheas, or other birds, fish, frogs, reptiles, etc. Can i file my 2011 and 2012 taxes together Livestock used in farm business. Can i file my 2011 and 2012 taxes together   If livestock is held primarily for draft, breeding, dairy, or sporting purposes, it is used in your farm business. Can i file my 2011 and 2012 taxes together The purpose for which an animal is held ordinarily is determined by a farmer's actual use of the animal. Can i file my 2011 and 2012 taxes together An animal is not held for draft, breeding, dairy, or sporting purposes merely because it is suitable for that purpose, or because it is held for sale to other persons for use by them for that purpose. Can i file my 2011 and 2012 taxes together However, a draft, breeding, or sporting purpose may be present if an animal is disposed of within a reasonable time after it is prevented from its intended use or made undesirable as a result of an accident, disease, drought, or unfitness of the animal. Can i file my 2011 and 2012 taxes together Example 1. Can i file my 2011 and 2012 taxes together You discover an animal that you intend to use for breeding purposes is sterile. Can i file my 2011 and 2012 taxes together You dispose of it within a reasonable time. Can i file my 2011 and 2012 taxes together This animal was held for breeding purposes. Can i file my 2011 and 2012 taxes together Example 2. Can i file my 2011 and 2012 taxes together You retire and sell your entire herd, including young animals that you would have used for breeding or dairy purposes had you remained in business. Can i file my 2011 and 2012 taxes together These young animals were held for breeding or dairy purposes. Can i file my 2011 and 2012 taxes together Also, if you sell young animals to reduce your breeding or dairy herd because of drought, these animals are treated as having been held for breeding or dairy purposes. Can i file my 2011 and 2012 taxes together See Sales Caused by Weather-Related Conditions in chapter 3. Can i file my 2011 and 2012 taxes together Example 3. Can i file my 2011 and 2012 taxes together You are in the business of raising hogs for slaughter. Can i file my 2011 and 2012 taxes together Customarily, before selling your sows, you obtain a single litter of pigs that you will raise for sale. Can i file my 2011 and 2012 taxes together You sell the brood sows after obtaining the litter. Can i file my 2011 and 2012 taxes together Even though you hold these brood sows for ultimate sale to customers in the ordinary course of your business, they are considered to be held for breeding purposes. Can i file my 2011 and 2012 taxes together Example 4. Can i file my 2011 and 2012 taxes together You are in the business of raising registered cattle for sale to others for use as breeding cattle. Can i file my 2011 and 2012 taxes together The business practice is to breed the cattle before sale to establish their fitness as registered breeding cattle. Can i file my 2011 and 2012 taxes together Your use of the young cattle for breeding purposes is ordinary and necessary for selling them as registered breeding cattle. Can i file my 2011 and 2012 taxes together Such use does not demonstrate that you are holding the cattle for breeding purposes. Can i file my 2011 and 2012 taxes together However, those cattle you held as additions or replacements to your own breeding herd to produce calves are considered to be held for breeding purposes, even though they may not actually have produced calves. Can i file my 2011 and 2012 taxes together The same applies to hog and sheep breeders. Can i file my 2011 and 2012 taxes together Example 5. Can i file my 2011 and 2012 taxes together You breed, raise, and train horses for racing purposes. Can i file my 2011 and 2012 taxes together Every year you cull horses from your racing stable. Can i file my 2011 and 2012 taxes together In 2013, you decided that to prevent your racing stable from getting too large to be effectively operated, you must cull six horses that had been raced at public tracks in 2012. Can i file my 2011 and 2012 taxes together These horses are all considered held for sporting purposes. Can i file my 2011 and 2012 taxes together Figuring gain or loss on the cash method. Can i file my 2011 and 2012 taxes together   Farmers or ranchers who use the cash method of accounting figure their gain or loss on the sale of livestock used in their farming business as follows. Can i file my 2011 and 2012 taxes together Raised livestock. Can i file my 2011 and 2012 taxes together   Gain on the sale of raised livestock is generally the gross sales price reduced by any expenses of the sale. Can i file my 2011 and 2012 taxes together Expenses of sale include sales commissions, freight or hauling from farm to commission company, and other similar expenses. Can i file my 2011 and 2012 taxes together The basis of the animal sold is zero if the costs of raising it were deducted during the years the animal was being raised. Can i file my 2011 and 2012 taxes together However, see Uniform Capitalization Rules in chapter 6. Can i file my 2011 and 2012 taxes together Purchased livestock. Can i file my 2011 and 2012 taxes together   The gross sales price minus your adjusted basis and any expenses of sale is the gain or loss. Can i file my 2011 and 2012 taxes together Example. Can i file my 2011 and 2012 taxes together A farmer sold a breeding cow on January 8, 2013, for $1,250. Can i file my 2011 and 2012 taxes together Expenses of the sale were $125. Can i file my 2011 and 2012 taxes together The cow was bought July 2, 2009, for $1,300. Can i file my 2011 and 2012 taxes together Depreciation (not less than the amount allowable) was $867. Can i file my 2011 and 2012 taxes together Gross sales price $1,250 Cost (basis) $1,300   Minus: Depreciation deduction 867   Unrecovered cost (adjusted basis) $ 433   Expense of sale 125 558 Gain realized $ 692 Converted Wetland and Highly Erodible Cropland Special rules apply to dispositions of land converted to farming use after March 1, 1986. Can i file my 2011 and 2012 taxes together Any gain realized on the disposition of converted wetland or highly erodible cropland is treated as ordinary income. Can i file my 2011 and 2012 taxes together Any loss on the disposition of such property is treated as a long-term capital loss. Can i file my 2011 and 2012 taxes together Converted wetland. Can i file my 2011 and 2012 taxes together   This is generally land that was drained or filled to make the production of agricultural commodities possible. Can i file my 2011 and 2012 taxes together It includes converted wetland held by the person who originally converted it or held by any other person who used the converted wetland at any time after conversion for farming. Can i file my 2011 and 2012 taxes together   A wetland (before conversion) is land that meets all the following conditions. Can i file my 2011 and 2012 taxes together It is mostly soil that, in its undrained condition, is saturated, flooded, or ponded long enough during a growing season to develop an oxygen-deficient state that supports the growth and regeneration of plants growing in water. Can i file my 2011 and 2012 taxes together It is saturated by surface or groundwater at a frequency and duration sufficient to support mostly plants that are adapted for life in saturated soil. Can i file my 2011 and 2012 taxes together It supports, under normal circumstances, mostly plants that grow in saturated soil. Can i file my 2011 and 2012 taxes together Highly erodible cropland. Can i file my 2011 and 2012 taxes together   This is cropland subject to erosion that you used at any time for farming purposes other than grazing animals. Can i file my 2011 and 2012 taxes together Generally, highly erodible cropland is land currently classified by the Department of Agriculture as Class IV, VI, VII, or VIII under its classification system. Can i file my 2011 and 2012 taxes together Highly erodible cropland also includes land that would have an excessive average annual erosion rate in relation to the soil loss tolerance level, as determined by the Department of Agriculture. Can i file my 2011 and 2012 taxes together Successor. Can i file my 2011 and 2012 taxes together   Converted wetland or highly erodible cropland is also land held by any person whose basis in the land is figured by reference to the adjusted basis of a person in whose hands the property was converted wetland or highly erodible cropland. Can i file my 2011 and 2012 taxes together Timber Standing timber you held as investment property is a capital asset. Can i file my 2011 and 2012 taxes together Gain or loss from its sale is capital gain or loss reported on Form 8949 and Schedule D (Form 1040), as applicable. Can i file my 2011 and 2012 taxes together If you held the timber primarily for sale to customers, it is not a capital asset. Can i file my 2011 and 2012 taxes together Gain or loss on its sale is ordinary business income or loss. Can i file my 2011 and 2012 taxes together It is reported on Schedule F, line 1 (purchased timber) or line 2 (raised timber). Can i file my 2011 and 2012 taxes together See the Instructions for Schedule F (Form 1040). Can i file my 2011 and 2012 taxes together Farmers who cut timber on their land and sell it as logs, firewood, or pulpwood usually have no cost or other basis for that timber. Can i file my 2011 and 2012 taxes together Amounts realized from these sales, and the expenses incurred in cutting, hauling, etc. Can i file my 2011 and 2012 taxes together , are ordinary farm income and expenses reported on Schedule F. Can i file my 2011 and 2012 taxes together Different rules apply if you owned the timber longer than 1 year and elect to treat timber cutting as a sale or exchange or you enter into a cutting contract, discussed below. Can i file my 2011 and 2012 taxes together Timber considered cut. Can i file my 2011 and 2012 taxes together   Timber is considered cut on the date when, in the ordinary course of business, the quantity of felled timber is first definitely determined. Can i file my 2011 and 2012 taxes together This is true whether the timber is cut under contract or whether you cut it yourself. Can i file my 2011 and 2012 taxes together Christmas trees. Can i file my 2011 and 2012 taxes together   Evergreen trees, such as Christmas trees, that are more than 6 years old when severed from their roots and sold for ornamental purposes are included in the term timber. Can i file my 2011 and 2012 taxes together They qualify for both rules discussed below. Can i file my 2011 and 2012 taxes together Election to treat cutting as a sale or exchange. Can i file my 2011 and 2012 taxes together   Under the general rule, the cutting of timber results in no gain or loss. Can i file my 2011 and 2012 taxes together It is not until a sale or exchange occurs that gain or loss is realized. Can i file my 2011 and 2012 taxes together But if you owned or had a contractual right to cut timber, you can elect to treat the cutting of timber as a section 1231 transaction in the year it is cut. Can i file my 2011 and 2012 taxes together Even though the cut timber is not actually sold or exchanged, you report your gain or loss on the cutting for the year the timber is cut. Can i file my 2011 and 2012 taxes together Any later sale results in ordinary business income or loss. Can i file my 2011 and 2012 taxes together See the example below. Can i file my 2011 and 2012 taxes together   To elect this treatment, you must: Own or hold a contractual right to cut the timber for a period of more than 1 year before it is cut, and Cut the timber for sale or use in your trade or business. Can i file my 2011 and 2012 taxes together Making the election. Can i file my 2011 and 2012 taxes together   You make the election on your return for the year the cutting takes place by including in income the gain or loss on the cutting and including a computation of your gain or loss. Can i file my 2011 and 2012 taxes together You do not have to make the election in the first year you cut the timber. Can i file my 2011 and 2012 taxes together You can make it in any year to which the election would apply. Can i file my 2011 and 2012 taxes together If the timber is partnership property, the election is made on the partnership return. Can i file my 2011 and 2012 taxes together This election cannot be made on an amended return. Can i file my 2011 and 2012 taxes together   Once you have made the election, it remains in effect for all later years unless you revoke it. Can i file my 2011 and 2012 taxes together Election under section 631(a) may be revoked. Can i file my 2011 and 2012 taxes together   If you previously elected for any tax year ending before October 23, 2004, to treat the cutting of timber as a sale or exchange under section 631(a), you may revoke this election without the consent of the IRS for any tax year ending after October 22, 2004. Can i file my 2011 and 2012 taxes together The prior election (and revocation) is disregarded for purposes of making a subsequent election. Can i file my 2011 and 2012 taxes together See Form T (Timber), Forest Activities Schedule, for more information. Can i file my 2011 and 2012 taxes together Gain or loss. Can i file my 2011 and 2012 taxes together   Your gain or loss on the cutting of standing timber is the difference between its adjusted basis for depletion and its FMV on the first day of your tax year in which it is cut. Can i file my 2011 and 2012 taxes together   Your adjusted basis for depletion of cut timber is based on the number of units (board feet, log scale, or other units) of timber cut during the tax year and considered to be sold or exchanged. Can i file my 2011 and 2012 taxes together Your adjusted basis for depletion is also based on the depletion unit of timber in the account used for the cut timber, and should be figured in the same manner as shown in section 611 and Regulations section 1. Can i file my 2011 and 2012 taxes together 611-3. Can i file my 2011 and 2012 taxes together   Depletion of timber is discussed in chapter 7. Can i file my 2011 and 2012 taxes together Example. Can i file my 2011 and 2012 taxes together   In April 2013, you owned 4,000 MBF (1,000 board feet) of standing timber longer than 1 year. Can i file my 2011 and 2012 taxes together It had an adjusted basis for depletion of $40 per MBF. Can i file my 2011 and 2012 taxes together You are a calendar year taxpayer. Can i file my 2011 and 2012 taxes together On January 1, 2013, the timber had a FMV of $350 per MBF. Can i file my 2011 and 2012 taxes together It was cut in April for sale. Can i file my 2011 and 2012 taxes together On your 2013 tax return, you elect to treat the cutting of the timber as a sale or exchange. Can i file my 2011 and 2012 taxes together You report the difference between the FMV and your adjusted basis for depletion as a gain. Can i file my 2011 and 2012 taxes together This amount is reported on Form 4797 along with your other section 1231 gains and losses to figure whether it is treated as a capital gain or as ordinary gain. Can i file my 2011 and 2012 taxes together You figure your gain as follows. Can i file my 2011 and 2012 taxes together FMV of timber January 1, 2013 $1,400,000 Minus: Adjusted basis for depletion 160,000 Section 1231 gain $1,240,000   The FMV becomes your basis in the cut timber, and a later sale of the cut timber, including any by-product or tree tops, will result in ordinary business income or loss. Can i file my 2011 and 2012 taxes together Outright sales of timber. Can i file my 2011 and 2012 taxes together   Outright sales of timber by landowners qualify for capital gains treatment using rules similar to the rules for certain disposal of timber under a contract with retained economic interest (defined later). Can i file my 2011 and 2012 taxes together However, for outright sales, the date of disposal is not deemed to be the date the timber is cut because the landowner can elect to treat the payment date as the date of disposal (see Date of disposal below). Can i file my 2011 and 2012 taxes together Cutting contract. Can i file my 2011 and 2012 taxes together   You must treat the disposal of standing timber under a cutting contract as a section 1231 transaction if all the following apply to you. Can i file my 2011 and 2012 taxes together You are the owner of the timber. Can i file my 2011 and 2012 taxes together You held the timber longer than 1 year before its disposal. Can i file my 2011 and 2012 taxes together You kept an economic interest in the timber. Can i file my 2011 and 2012 taxes together   You have kept an economic interest in standing timber if, under the cutting contract, the expected return on your investment is conditioned on the cutting of the timber. Can i file my 2011 and 2012 taxes together   The difference between the amount realized from the disposal of the timber and its adjusted basis for depletion is treated as gain or loss on its sale. Can i file my 2011 and 2012 taxes together Include this amount on Form 4797 along with your other section 1231 gains or losses. Can i file my 2011 and 2012 taxes together Date of disposal. Can i file my 2011 and 2012 taxes together   The date of disposal is the date the timber is cut. Can i file my 2011 and 2012 taxes together However, for outright sales by landowners or if you receive payment under the contract before the timber is cut, you can elect to treat the date of payment as the date of disposal. Can i file my 2011 and 2012 taxes together   This election applies only to figure the holding period of the timber. Can i file my 2011 and 2012 taxes together It has no effect on the time for reporting gain or loss (generally when the timber is sold or exchanged). Can i file my 2011 and 2012 taxes together   To make this election, attach a statement to the tax return filed by the due date (including extensions) for the year payment is received. Can i file my 2011 and 2012 taxes together The statement must identify the advance payments subject to the election and the contract under which they were made. Can i file my 2011 and 2012 taxes together   If you timely filed your return for the year you received payment without making the election, you can still make the election by filing an amended return within 6 months after the due date for that year's return (excluding extensions). Can i file my 2011 and 2012 taxes together Attach the statement to the amended return and write “Filed pursuant to section 301. Can i file my 2011 and 2012 taxes together 9100-2” at the top of the statement. Can i file my 2011 and 2012 taxes together File the amended return at the same address the original return was filed. Can i file my 2011 and 2012 taxes together Owner. Can i file my 2011 and 2012 taxes together   An owner is any person who owns an interest in the timber, including a sublessor and the holder of a contract to cut the timber. Can i file my 2011 and 2012 taxes together You own an interest in timber if you have the right to cut it for sale on your own account or for use in your business. Can i file my 2011 and 2012 taxes together Tree stumps. Can i file my 2011 and 2012 taxes together   Tree stumps are a capital asset if they are on land held by an investor who is not in the timber or stump business as a buyer, seller, or processor. Can i file my 2011 and 2012 taxes together Gain from the sale of stumps sold in one lot by such a holder is taxed as a capital gain. Can i file my 2011 and 2012 taxes together However, tree stumps held by timber operators after the saleable standing timber was cut and removed from the land are considered by-products. Can i file my 2011 and 2012 taxes together Gain from the sale of stumps in lots or tonnage by such operators is taxed as ordinary income. Can i file my 2011 and 2012 taxes together   See Form T (Timber) and its separate instructions for more information about dispositions of timber. Can i file my 2011 and 2012 taxes together Sale of a Farm The sale of your farm will usually involve the sale of both nonbusiness property (your home) and business property (the land and buildings used in the farm operation and perhaps machinery and livestock). Can i file my 2011 and 2012 taxes together If you have a gain from the sale, you may be allowed to exclude the gain on your home. Can i file my 2011 and 2012 taxes together For more information, see Publication 523, Selling Your Home. Can i file my 2011 and 2012 taxes together The gain on the sale of your business property is taxable. Can i file my 2011 and 2012 taxes together A loss on the sale of your business property to an unrelated person is deducted as an ordinary loss. Can i file my 2011 and 2012 taxes together Your taxable gain or loss on the sale of property used in your farm business is taxed under the rules for section 1231 transactions. Can i file my 2011 and 2012 taxes together See chapter 9. Can i file my 2011 and 2012 taxes together Losses from personal-use property, other than casualty or theft losses, are not deductible. Can i file my 2011 and 2012 taxes together If you receive payments for your farm in installments, your gain is taxed over the period of years the payments are received, unless you elect not to use the installment method of reporting the gain. Can i file my 2011 and 2012 taxes together See chapter 10 for information about installment sales. Can i file my 2011 and 2012 taxes together When you sell your farm, the gain or loss on each asset is figured separately. Can i file my 2011 and 2012 taxes together The tax treatment of gain or loss on the sale of each asset is determined by the classification of the asset. Can i file my 2011 and 2012 taxes together Each of the assets sold must be classified as one of the following. Can i file my 2011 and 2012 taxes together Capital asset held 1 year or less. Can i file my 2011 and 2012 taxes together Capital asset held longer than 1 year. Can i file my 2011 and 2012 taxes together Property (including real estate) used in your business and held 1 year or less (including draft, breeding, dairy, and sporting animals held less than the holding periods discussed earlier under Livestock ). Can i file my 2011 and 2012 taxes together Property (including real estate) used in your business and held longer than 1 year (including only draft, breeding, dairy, and sporting animals held for the holding periods discussed earlier). Can i file my 2011 and 2012 taxes together Property held primarily for sale or which is of the kind that would be included in inventory if on hand at the end of your tax year. Can i file my 2011 and 2012 taxes together Allocation of consideration paid for a farm. Can i file my 2011 and 2012 taxes together   The sale of a farm for a lump sum is considered a sale of each individual asset rather than a single asset. Can i file my 2011 and 2012 taxes together The residual method is required only if the group of assets sold constitutes a trade or business. Can i file my 2011 and 2012 taxes together This method determines gain or loss from the transfer of each asset. Can i file my 2011 and 2012 taxes together It also determines the buyer's basis in the business assets. Can i file my 2011 and 2012 taxes together For more information, see Sale of a Business in chapter 2 of Publication 544. Can i file my 2011 and 2012 taxes together Property used in farm operation. Can i file my 2011 and 2012 taxes together   The rules for excluding the gain on the sale of your home, described later under Sale of your home , do not apply to the property used for your farming business. Can i file my 2011 and 2012 taxes together Recognized gains and losses on business property must be reported on your return for the year of the sale. Can i file my 2011 and 2012 taxes together If the property was held longer than 1 year, it may qualify for section 1231 treatment (see chapter 9). Can i file my 2011 and 2012 taxes together Example. Can i file my 2011 and 2012 taxes together You sell your farm, including your main home, which you have owned since December 2001. Can i file my 2011 and 2012 taxes together You realize gain on the sale as follows. Can i file my 2011 and 2012 taxes together   Farm   Farm   With Home Without   Home Only Home Selling price $382,000 $158,000 $224,000 Cost (or other basis) 240,000 110,000 130,000 Gain $142,000 $48,000 $94,000 You must report the $94,000 gain from the sale of the property used in your farm business. Can i file my 2011 and 2012 taxes together All or a part of that gain may have to be reported as ordinary income from the recapture of depreciation or soil and water conservation expenses. Can i file my 2011 and 2012 taxes together Treat the balance as section 1231 gain. Can i file my 2011 and 2012 taxes together The $48,000 gain from the sale of your home is not taxable as long as you meet the requirements explained later under Sale of your home . Can i file my 2011 and 2012 taxes together Partial sale. Can i file my 2011 and 2012 taxes together   If you sell only part of your farm, you must report any recognized gain or loss on the sale of that part on your tax return for the year of the sale. Can i file my 2011 and 2012 taxes together You cannot wait until you have sold enough of the farm to recover its entire cost before reporting gain or loss. Can i file my 2011 and 2012 taxes together For a detailed discussion on installment sales, see Publication 544. Can i file my 2011 and 2012 taxes together Adjusted basis of the part sold. Can i file my 2011 and 2012 taxes together   This is the properly allocated part of your original cost or other basis of the entire farm plus or minus necessary adjustments for improvements, depreciation, etc. Can i file my 2011 and 2012 taxes together , on the part sold. Can i file my 2011 and 2012 taxes together If your home is on the farm, you must properly adjust the basis to exclude those costs from your farm asset costs, as discussed below under Sale of your home . Can i file my 2011 and 2012 taxes together Example. Can i file my 2011 and 2012 taxes together You bought a 600-acre farm for $700,000. Can i file my 2011 and 2012 taxes together The farm included land and buildings. Can i file my 2011 and 2012 taxes together The purchase contract designated $600,000 of the purchase price to the land. Can i file my 2011 and 2012 taxes together You later sold 60 acres of land on which you had installed a fence. Can i file my 2011 and 2012 taxes together Your adjusted basis for the part of your farm sold is $60,000 (1/10 of $600,000), plus any unrecovered cost (cost not depreciated) of the fence on the 60 acres at the time of sale. Can i file my 2011 and 2012 taxes together Use this amount to determine your gain or loss on the sale of the 60 acres. Can i file my 2011 and 2012 taxes together Assessed values for local property taxes. Can i file my 2011 and 2012 taxes together   If you paid a flat sum for the entire farm and no other facts are available for properly allocating your original cost or other basis between the land and the buildings, you can use the assessed values for local property taxes for the year of purchase to allocate the costs. Can i file my 2011 and 2012 taxes together Example. Can i file my 2011 and 2012 taxes together Assume that in the preceding example there was no breakdown of the $700,000 purchase price between land and buildings. Can i file my 2011 and 2012 taxes together However, in the year of purchase, local taxes on the entire property were based on assessed valuations of $420,000 for land and $140,000 for improvements, or a total of $560,000. Can i file my 2011 and 2012 taxes together The assessed valuation of the land is 3/4 (75%) of the total assessed valuation. Can i file my 2011 and 2012 taxes together Multiply the $700,000 total purchase price by 75% to figure basis of $525,000 for the 600 acres of land. Can i file my 2011 and 2012 taxes together The unadjusted basis of the 60 acres you sold would then be $52,500 (1/10 of $525,000). Can i file my 2011 and 2012 taxes together Sale of your home. Can i file my 2011 and 2012 taxes together   Your home is a capital asset and not property used in the trade or business of farming. Can i file my 2011 and 2012 taxes together If you sell a farm that includes a house you and your family occupy, you must determine the part of the selling price and the part of the cost or other basis allocable to your home. Can i file my 2011 and 2012 taxes together Your home includes the immediate surroundings and outbuildings relating to it that are not used for business purposes. Can i file my 2011 and 2012 taxes together   If you use part of your home for business, you must make an appropriate adjustment to the basis for depreciation allowed or allowable. Can i file my 2011 and 2012 taxes together For more information on basis, see chapter 6. Can i file my 2011 and 2012 taxes together More information. Can i file my 2011 and 2012 taxes together   For more information on selling your home, see Publication 523. Can i file my 2011 and 2012 taxes together Gain from condemnation. Can i file my 2011 and 2012 taxes together   If you have a gain from a condemnation or sale under threat of condemnation, you may use the preceding rules for excluding the gain, rather than the rules discussed under Postponing Gain in chapter 11. Can i file my 2011 and 2012 taxes together However, any gain that cannot be excluded (because it is more than the limit) may be postponed under the rules discussed under Postponing Gain in chapter 11. Can i file my 2011 and 2012 taxes together Foreclosure or Repossession If you do not make payments you owe on a loan secured by property, the lender may foreclose on the loan or repossess the property. Can i file my 2011 and 2012 taxes together The foreclosure or repossession is treated as a sale or exchange from which you may realize gain or loss. Can i file my 2011 and 2012 taxes together This is true even if you voluntarily return the property to the lender. Can i file my 2011 and 2012 taxes together You may also realize ordinary income from cancellation of debt if the loan balance is more than the FMV of the property. Can i file my 2011 and 2012 taxes together Buyer's (borrower's) gain or loss. Can i file my 2011 and 2012 taxes together   You figure and report gain or loss from a foreclosure or repossession in the same way as gain or loss from a sale or exchange. Can i file my 2011 and 2012 taxes together The gain or loss is the difference between your adjusted basis in the transferred property and the amount realized. Can i file my 2011 and 2012 taxes together See Determining Gain or Loss , earlier. Can i file my 2011 and 2012 taxes together Worksheet 8-1. Can i file my 2011 and 2012 taxes together Worksheet for Foreclosures andRepossessions Part 1. Can i file my 2011 and 2012 taxes together Use Part 1 to figure your ordinary income from the cancellation of debt upon foreclosure or repossession. Can i file my 2011 and 2012 taxes together Complete this part only if you were personally liable for the debt. Can i file my 2011 and 2012 taxes together Otherwise, go to Part 2. Can i file my 2011 and 2012 taxes together   1. Can i file my 2011 and 2012 taxes together Enter the amount of outstanding debt immediately before the transfer of property reduced by any amount for which you remain personally liable after the transfer of property   2. Can i file my 2011 and 2012 taxes together Enter the Fair Market Value of the transferred property   3. Can i file my 2011 and 2012 taxes together Ordinary income from cancellation of debt upon foreclosure or repossession. Can i file my 2011 and 2012 taxes together * Subtract line 2 from line 1. Can i file my 2011 and 2012 taxes together If zero or less, enter -0-   Part 2. Can i file my 2011 and 2012 taxes together Figure your gain or loss from foreclosure or repossession. Can i file my 2011 and 2012 taxes together   4. Can i file my 2011 and 2012 taxes together If you completed Part 1, enter the smaller of line 1 or line 2. Can i file my 2011 and 2012 taxes together If you did not complete Part 1, enter the outstanding debt immediately before the transfer of property   5. Can i file my 2011 and 2012 taxes together Enter any proceeds you received from the foreclosure sale   6. Can i file my 2011 and 2012 taxes together Add lines 4 and 5   7. Can i file my 2011 and 2012 taxes together Enter the adjusted basis of the transferred property   8. Can i file my 2011 and 2012 taxes together Gain or loss from foreclosure or repossession. Can i file my 2011 and 2012 taxes together Subtract line 7  from line 6   * The income may not be taxable. Can i file my 2011 and 2012 taxes together See Cancellation of debt . Can i file my 2011 and 2012 taxes together    You can use Worksheet 8-1 to figure your gain or loss from a foreclosure or repossession. Can i file my 2011 and 2012 taxes together Amount realized on a nonrecourse debt. Can i file my 2011 and 2012 taxes together   If you are not personally liable for repaying the debt (nonrecourse debt) secured by the transferred property, the amount you realize includes the full amount of the debt canceled by the transfer. Can i file my 2011 and 2012 taxes together The full canceled debt is included in the amount realized even if the fair market value of the property is less than the canceled debt. Can i file my 2011 and 2012 taxes together Example 1. Can i file my 2011 and 2012 taxes together Ann paid $200,000 for land used in her farming business. Can i file my 2011 and 2012 taxes together She paid $15,000 down and borrowed the remaining $185,000 from a bank. Can i file my 2011 and 2012 taxes together Ann is not personally liable for the loan (nonrecourse debt), but pledges the land as security. Can i file my 2011 and 2012 taxes together The bank foreclosed on the loan 2 years after Ann stopped making payments. Can i file my 2011 and 2012 taxes together When the bank foreclosed, the balance due on the loan was $180,000 and the FMV of the land was $170,000. Can i file my 2011 and 2012 taxes together The amount Ann realized on the foreclosure was $180,000, the debt canceled by the foreclosure. Can i file my 2011 and 2012 taxes together She figures her gain or loss on Form 4797, Part I, by comparing the amount realized ($180,000) with her adjusted basis ($200,000). Can i file my 2011 and 2012 taxes together She has a $20,000 deductible loss. Can i file my 2011 and 2012 taxes together Example 2. Can i file my 2011 and 2012 taxes together Assume the same facts as in Example 1 except the FMV of the land was $210,000. Can i file my 2011 and 2012 taxes together The result is the same. Can i file my 2011 and 2012 taxes together The amount Ann realized on the foreclosure is $180,000, the debt canceled by the foreclosure. Can i file my 2011 and 2012 taxes together Because her adjusted basis is $200,000, she has a deductible loss of $20,000, which she reports on Form 4797, Part I. Can i file my 2011 and 2012 taxes together Amount realized on a recourse debt. Can i file my 2011 and 2012 taxes together   If you are personally liable for the debt (recourse debt), the amount realized on the foreclosure or repossession includes the lesser of: The outstanding debt immediately before the transfer reduced by any amount for which you remain personally liable immediately after the transfer, or The fair market value of the transferred property. Can i file my 2011 and 2012 taxes together   You are treated as receiving ordinary income from the canceled debt for the part of the debt that is more than the fair market value. Can i file my 2011 and 2012 taxes together The amount realized does not include the canceled debt that is your income from cancellation of debt. Can i file my 2011 and 2012 taxes together See Cancellation of debt , later. Can i file my 2011 and 2012 taxes together Example 3. Can i file my 2011 and 2012 taxes together Assume the same facts as in Example 1 above except Ann is personally liable for the loan (recourse debt). Can i file my 2011 and 2012 taxes together In this case, the amount she realizes is $170,000. Can i file my 2011 and 2012 taxes together This is the canceled debt ($180,000) up to the FMV of the land ($170,000). Can i file my 2011 and 2012 taxes together Ann figures her gain or loss on the foreclosure by comparing the amount realized ($170,000) with her adjusted basis ($200,000). Can i file my 2011 and 2012 taxes together She has a $30,000 deductible loss, which she figures on Form 4797, Part I. Can i file my 2011 and 2012 taxes together She is also treated as receiving ordinary income from cancellation of debt. Can i file my 2011 and 2012 taxes together That income is $10,000 ($180,000 − $170,000). Can i file my 2011 and 2012 taxes together This is the part of the canceled debt not included in the amount realized. Can i file my 2011 and 2012 taxes together She reports this as other income on Schedule F, line 8. Can i file my 2011 and 2012 taxes together Seller's (lender's) gain or loss on repossession. Can i file my 2011 and 2012 taxes together   If you finance a buyer's purchase of property and later acquire an interest in it through foreclosure or repossession, you may have a gain or loss on the acquisition. Can i file my 2011 and 2012 taxes together For more information, see Repossession in Publication 537, Installment Sales. Can i file my 2011 and 2012 taxes together Cancellation of debt. Can i file my 2011 and 2012 taxes together   If property that is repossessed or foreclosed upon secures a debt for which you are personally liable (recourse debt), you generally must report as ordinary income the amount by which the canceled debt is more than the FMV of the property. Can i file my 2011 and 2012 taxes together This income is separate from any gain or loss realized from the foreclosure or repossession. Can i file my 2011 and 2012 taxes together Report the income from cancellation of a business debt on Schedule F, line 8. Can i file my 2011 and 2012 taxes together Report the income from cancellation of a nonbusiness debt as miscellaneous income on Form 1040. Can i file my 2011 and 2012 taxes together    You can use Worksheet 8-1 to figure your income from cancellation of debt. Can i file my 2011 and 2012 taxes together   However, income from cancellation of debt is not taxed if any of the following apply. Can i file my 2011 and 2012 taxes together The cancellation is intended as a gift. Can i file my 2011 and 2012 taxes together The debt is qualified farm debt (see chapter 3). Can i file my 2011 and 2012 taxes together The debt is qualified real property business debt (see chapter 5 of Publication 334). Can i file my 2011 and 2012 taxes together You are insolvent or bankrupt (see  chapter 3). Can i file my 2011 and 2012 taxes together The debt is qualified principal residence indebtedness (see chapter 3). Can i file my 2011 and 2012 taxes together   Use Form 982 to report the income exclusion. Can i file my 2011 and 2012 taxes together Abandonment The abandonment of property is a disposition of property. Can i file my 2011 and 2012 taxes together You abandon property when you voluntarily and permanently give up possession and use of the property with the intention of ending your ownership, but without passing it on to anyone else. Can i file my 2011 and 2012 taxes together Business or investment property. Can i file my 2011 and 2012 taxes together   Loss from abandonment of business or investment property is deductible as a loss. Can i file my 2011 and 2012 taxes together Loss from abandonment of business or investment property that is not treated as a sale or exchange generally is an ordinary loss. Can i file my 2011 and 2012 taxes together If your adjusted basis is more than the amount you realize (if any), then you have a loss. Can i file my 2011 and 2012 taxes together If the amount you realize (if any) is more than your adjusted basis, then you have a gain. Can i file my 2011 and 2012 taxes together This rule also applies to leasehold improvements the lessor made for the lessee. Can i file my 2011 and 2012 taxes together However, if the property is foreclosed on or repossessed in lieu of abandonment, gain or loss is figured as discussed earlier under Foreclosure or Repossession . Can i file my 2011 and 2012 taxes together   If the abandoned property is secured by debt, special rules apply. Can i file my 2011 and 2012 taxes together The tax consequences of abandonment of property that secures a debt depend on whether you are personally liable for the debt (recourse debt) or were not personally liable for the debt (nonrecourse debt). Can i file my 2011 and 2012 taxes together For more information, see chapter 3 of Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals). Can i file my 2011 and 2012 taxes together The abandonment loss is deducted in the tax year in which the loss is sustained. Can i file my 2011 and 2012 taxes together Report the loss on Form 4797, Part II, line 10. Can i file my 2011 and 2012 taxes together Personal-use property. Can i file my 2011 and 2012 taxes together   You cannot deduct any loss from abandonment of your home or other property held for personal use. Can i file my 2011 and 2012 taxes together Canceled debt. Can i file my 2011 and 2012 taxes together   If the abandoned property secures a debt for which you are personally liable and the debt is canceled, you will realize ordinary income equal to the canceled debt. Can i file my 2011 and 2012 taxes together This income is separate from any loss realized from abandonment of the property. Can i file my 2011 and 2012 taxes together Report income from cancellation of a debt related to a business or rental activity as business or rental income. Can i file my 2011 and 2012 taxes together Report income from cancellation of a nonbusiness debt as miscellaneous income on Form 1040. Can i file my 2011 and 2012 taxes together   However, income from cancellation of debt is not taxed in certain circumstances. Can i file my 2011 and 2012 taxes together See Cancellation of debt earlier under Foreclosure or Repossession . Can i file my 2011 and 2012 taxes together Forms 1099-A and 1099-C. Can i file my 2011 and 2012 taxes together   A lender who acquires an interest in your property in a foreclosure, repossession, or abandonment should send you Form 1099-A showing the information you need to figure your loss from the foreclosure, repossession, or abandonment. Can i file my 2011 and 2012 taxes together However, if the lender cancels part of your debt and the lender must file Form 1099-C, the lender may include the information about the foreclosure, repossession, or abandonment on that form instead of Form 1099-A. Can i file my 2011 and 2012 taxes together The lender must file Form 1099-C and send you a copy if the canceled debt is $600 or more and the lender is a financial institution, credit union, federal government agency, or any organization that has a significant trade or business of lending money. Can i file my 2011 and 2012 taxes together For foreclosures, repossessions, abandonments of property, and debt cancellations occurring in 2013, these forms should be sent to you by January 31, 2014. Can i file my 2011 and 2012 taxes together Prev  Up  Next   Home   More Online Publications
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Understanding Your CP53B Notice

We tried to direct deposit your refund, but the financial institution couldn’t process it. We are researching your account, but it will take 8 to 10 weeks to complete our review and verify this refund.


What you need to do

  • You don’t need to do anything at this time.

You may want to

  • Call us at the toll-free number on the notice if you don’t receive your refund check or a follow-up letter within 10 weeks
  • Monitor your financial accounts

If you notice any suspicious or unusual activity, you should:

  • Notify your financial institutions
  • Contact the fraud department of one of the three major credit bureaus
  • Report any fraudulent activity to your local police or sheriff's department
  • File a complaint with the Federal Trade Commission
  • Submit a Form 14039, Identity Theft Affidavit

Answers to Common Questions

Q. What should I do if I didn’t file a return?

A. Submit a Form 14039, Identity Theft Affidavit, to the IRS address in the Form 14039 instructions.

Q. Can I direct part of my refund into my tax professional’s checking or savings account to pay my tax preparation fee?

A. No. You can direct your refund to any of your checking or savings accounts. You can’t direct your refund to someone else’s account (except for your spouse’s account when you have a joint refund).

Q. Why will it take up to 10 weeks to receive my refund?

A. We must research your account to determine if you are entitled to the refund. We try to balance customer service and tax compliance when we review tax returns.  Refund timeframes are also affected by:

  • Bankruptcy
  • An open audit
  • A balance due on a related account (such as a different tax year)

Q. Will calling the IRS give me additional information or speed my refund?

A. No, calling us won’t speed up your refund. You don’t need to call us unless we send you a letter that asks you to contact us. Our telephone assistors won’t be able to provide any additional information.


Tips for next year

If you request a direct deposit refund, be sure the account you specify is in your name (or your spouse’s if you have a joint refund).

If you changed your name as a result of a recent marriage or divorce, be sure the name on your tax return matches the name registered with the Social Security Administration.

Never direct your refund to an account that belongs to a relative, friend, or tax return preparer.

 

Page Last Reviewed or Updated: 21-Jan-2014

Printable samples of this notice (PDF)

 

 

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The Can I File My 2011 And 2012 Taxes Together

Can i file my 2011 and 2012 taxes together Publication 80 - Additional Material Prev  Up  Next   Home   More Online Publications