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Can I Still File My 2010 Taxes Online

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Can I Still File My 2010 Taxes Online

Can i still file my 2010 taxes online Publication 587 - Main Content Table of Contents Qualifying for a DeductionExclusive Use Regular Use Trade or Business Use Principal Place of Business Place To Meet Patients, Clients, or Customers Separate Structure Figuring the DeductionUsing Actual Expenses Using the Simplified Method Daycare Facility Standard meal and snack rates. Can i still file my 2010 taxes online Sale or Exchange of Your HomeGain on Sale Depreciation Basis Adjustment Reporting the Sale More Information Business Furniture and EquipmentListed Property Property Bought for Business Use Personal Property Converted to Business Use Recordkeeping Where To DeductSelf-Employed Persons Employees Partners How To Get Tax HelpLow Income Taxpayer Clinics Worksheet To Figure the Deduction for Business Use of Your HomeInstructions for the Worksheet Worksheets To Figure the Deduction for Business Use of Your Home (Simplified Method) Instructions for the Simplified Method Worksheet Instructions for the Daycare Facility Worksheet Instructions for the Area Adjustment Worksheet Qualifying for a Deduction Generally, you cannot deduct items related to your home, such as mortgage interest, real estate taxes, utilities, maintenance, rent, depreciation, or property insurance, as business expenses. Can i still file my 2010 taxes online However, you may be able to deduct expenses related to the business use of part of your home if you meet specific requirements. Can i still file my 2010 taxes online Even then, the deductible amount of these types of expenses may be limited. Can i still file my 2010 taxes online Use this section and Figure A, later, to decide if you can deduct expenses for the business use of your home. Can i still file my 2010 taxes online To qualify to deduct expenses for business use of your home, you must use part of your home: Exclusively and regularly as your principal place of business (defined later), Exclusively and regularly as a place where you meet or deal with patients, clients, or customers in the normal course of your trade or business, In the case of a separate structure which is not attached to your home, in connection with your trade or business, On a regular basis for certain storage use (see Storage of inventory or product samples , later), For rental use (see Publication 527), or As a daycare facility (see Daycare Facility , later). Can i still file my 2010 taxes online Additional tests for employee use. Can i still file my 2010 taxes online   If you are an employee and you use a part of your home for business, you may qualify for a deduction for its business use. Can i still file my 2010 taxes online You must meet the tests discussed earlier plus: Your business use must be for the convenience of your employer, and You must not rent any part of your home to your employer and use the rented portion to perform services as an employee for that employer. Can i still file my 2010 taxes online If the use of the home office is merely appropriate and helpful, you cannot deduct expenses for the business use of your home. Can i still file my 2010 taxes online Exclusive Use To qualify under the exclusive use test, you must use a specific area of your home only for your trade or business. Can i still file my 2010 taxes online The area used for business can be a room or other separately identifiable space. Can i still file my 2010 taxes online The space does not need to be marked off by a permanent partition. Can i still file my 2010 taxes online You do not meet the requirements of the exclusive use test if you use the area in question both for business and for personal purposes. Can i still file my 2010 taxes online Example. Can i still file my 2010 taxes online You are an attorney and use a den in your home to write legal briefs and prepare clients' tax returns. Can i still file my 2010 taxes online Your family also uses the den for recreation. Can i still file my 2010 taxes online The den is not used exclusively in your trade or business, so you cannot claim a deduction for the business use of the den. Can i still file my 2010 taxes online Exceptions to Exclusive Use You do not have to meet the exclusive use test if either of the following applies. Can i still file my 2010 taxes online You use part of your home for the storage of inventory or product samples (discussed next). Can i still file my 2010 taxes online You use part of your home as a daycare facility, discussed later under Daycare Facility . Can i still file my 2010 taxes online Note. Can i still file my 2010 taxes online With the exception of these two uses, any portion of the home used for business purposes must meet the exclusive use test. Can i still file my 2010 taxes online Storage of inventory or product samples. Can i still file my 2010 taxes online    If you use part of your home for storage of inventory or product samples, you can deduct expenses for the business use of your home without meeting the exclusive use test. Can i still file my 2010 taxes online However, you must meet all the following tests. Can i still file my 2010 taxes online You sell products at wholesale or retail as your trade or business. Can i still file my 2010 taxes online You keep the inventory or product samples in your home for use in your trade or business. Can i still file my 2010 taxes online Your home is the only fixed location of your trade or business. Can i still file my 2010 taxes online You use the storage space on a regular basis. Can i still file my 2010 taxes online The space you use is a separately identifiable space suitable for storage. Can i still file my 2010 taxes online Example. Can i still file my 2010 taxes online Your home is the only fixed location of your business of selling mechanics' tools at retail. Can i still file my 2010 taxes online You regularly use half of your basement for storage of inventory and product samples. Can i still file my 2010 taxes online You sometimes use the area for personal purposes. Can i still file my 2010 taxes online The expenses for the storage space are deductible even though you do not use this part of your basement exclusively for business. Can i still file my 2010 taxes online Regular Use To qualify under the regular use test, you must use a specific area of your home for business on a regular basis. Can i still file my 2010 taxes online Incidental or occasional business use is not regular use. Can i still file my 2010 taxes online You must consider all facts and circumstances in determining whether your use is on a regular basis. Can i still file my 2010 taxes online Trade or Business Use To qualify under the trade-or-business-use test, you must use part of your home in connection with a trade or business. Can i still file my 2010 taxes online If you use your home for a profit-seeking activity that is not a trade or business, you cannot take a deduction for its business use. Can i still file my 2010 taxes online Example. Can i still file my 2010 taxes online You use part of your home exclusively and regularly to read financial periodicals and reports, clip bond coupons, and carry out similar activities related to your own investments. Can i still file my 2010 taxes online You do not make investments as a broker or dealer. Can i still file my 2010 taxes online So, your activities are not part of a trade or business and you cannot take a deduction for the business use of your home. Can i still file my 2010 taxes online Principal Place of Business You can have more than one business location, including your home, for a single trade or business. Can i still file my 2010 taxes online To qualify to deduct the expenses for the business use of your home under the principal place of business test, your home must be your principal place of business for that trade or business. Can i still file my 2010 taxes online To determine whether your home is your principal place of business, you must consider: The relative importance of the activities performed at each place where you conduct business, and The amount of time spent at each place where you conduct business. Can i still file my 2010 taxes online Your home office will qualify as your principal place of business if you meet the following requirements. Can i still file my 2010 taxes online You use it exclusively and regularly for administrative or management activities of your trade or business. Can i still file my 2010 taxes online You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. Can i still file my 2010 taxes online If, after considering your business locations, your home cannot be identified as your principal place of business, you cannot deduct home office expenses. Can i still file my 2010 taxes online However, see the later discussions under Place To Meet Patients, Clients, or Customers and Separate Structure for other ways to qualify to deduct home office expenses. Can i still file my 2010 taxes online Administrative or management activities. Can i still file my 2010 taxes online   There are many activities that are administrative or managerial in nature. Can i still file my 2010 taxes online The following are a few examples. Can i still file my 2010 taxes online Billing customers, clients, or patients. Can i still file my 2010 taxes online Keeping books and records. Can i still file my 2010 taxes online Ordering supplies. Can i still file my 2010 taxes online Setting up appointments. Can i still file my 2010 taxes online Forwarding orders or writing reports. Can i still file my 2010 taxes online Administrative or management activities performed at other locations. Can i still file my 2010 taxes online   The following activities performed by you or others will not disqualify your home office from being your principal place of business. Can i still file my 2010 taxes online You have others conduct your administrative or management activities at locations other than your home. Can i still file my 2010 taxes online (For example, another company does your billing from its place of business. Can i still file my 2010 taxes online ) You conduct administrative or management activities at places that are not fixed locations of your business, such as in a car or a hotel room. Can i still file my 2010 taxes online You occasionally conduct minimal administrative or management activities at a fixed location outside your home. Can i still file my 2010 taxes online You conduct substantial nonadministrative or nonmanagement business activities at a fixed location outside your home. Can i still file my 2010 taxes online (For example, you meet with or provide services to customers, clients, or patients at a fixed location of the business outside your home. Can i still file my 2010 taxes online ) You have suitable space to conduct administrative or management activities outside your home, but choose to use your home office for those activities instead. Can i still file my 2010 taxes online Please click here for the text description of the image. Can i still file my 2010 taxes online Can you deduct business use of the home expenses? Example 1. Can i still file my 2010 taxes online John is a self-employed plumber. Can i still file my 2010 taxes online Most of John's time is spent at customers' homes and offices installing and repairing plumbing. Can i still file my 2010 taxes online He has a small office in his home that he uses exclusively and regularly for the administrative or management activities of his business, such as phoning customers, ordering supplies, and keeping his books. Can i still file my 2010 taxes online John writes up estimates and records of work completed at his customers' premises. Can i still file my 2010 taxes online He does not conduct any substantial administrative or management activities at any fixed location other than his home office. Can i still file my 2010 taxes online John does not do his own billing. Can i still file my 2010 taxes online He uses a local bookkeeping service to bill his customers. Can i still file my 2010 taxes online John's home office qualifies as his principal place of business for deducting expenses for its use. Can i still file my 2010 taxes online He uses the home office for the administrative or managerial activities of his plumbing business and he has no other fixed location where he conducts these administrative or managerial activities. Can i still file my 2010 taxes online His choice to have his billing done by another company does not disqualify his home office from being his principal place of business. Can i still file my 2010 taxes online He meets all the qualifications, including principal place of business, so he can deduct expenses (subject to certain limitations, explained later) for the business use of his home. Can i still file my 2010 taxes online Example 2. Can i still file my 2010 taxes online Pamela is a self-employed sales representative for several different product lines. Can i still file my 2010 taxes online She has an office in her home that she uses exclusively and regularly to set up appointments and write up orders and other reports for the companies whose products she sells. Can i still file my 2010 taxes online She occasionally writes up orders and sets up appointments from her hotel room when she is away on business overnight. Can i still file my 2010 taxes online Pamela's business is selling products to customers at various locations throughout her territory. Can i still file my 2010 taxes online To make these sales, she regularly visits customers to explain the available products and take orders. Can i still file my 2010 taxes online Pamela's home office qualifies as her principal place of business for deducting expenses for its use. Can i still file my 2010 taxes online She conducts administrative or management activities there and she has no other fixed location where she conducts substantial administrative or management activities. Can i still file my 2010 taxes online The fact that she conducts some administrative or management activities in her hotel room (not a fixed location) does not disqualify her home office from being her principal place of business. Can i still file my 2010 taxes online She meets all the qualifications, including principal place of business, so she can deduct expenses (subject to certain limitations, explained later) for the business use of her home. Can i still file my 2010 taxes online Example 3. Can i still file my 2010 taxes online Paul is a self-employed anesthesiologist. Can i still file my 2010 taxes online He spends the majority of his time administering anesthesia and postoperative care in three local hospitals. Can i still file my 2010 taxes online One of the hospitals provides him with a small shared office where he could conduct administrative or management activities. Can i still file my 2010 taxes online Paul very rarely uses the office the hospital provides. Can i still file my 2010 taxes online He uses a room in his home that he has converted to an office. Can i still file my 2010 taxes online He uses this room exclusively and regularly to conduct all the following activities. Can i still file my 2010 taxes online Contacting patients, surgeons, and hospitals regarding scheduling. Can i still file my 2010 taxes online Preparing for treatments and presentations. Can i still file my 2010 taxes online Maintaining billing records and patient logs. Can i still file my 2010 taxes online Satisfying continuing medical education requirements. Can i still file my 2010 taxes online Reading medical journals and books. Can i still file my 2010 taxes online Paul's home office qualifies as his principal place of business for deducting expenses for its use. Can i still file my 2010 taxes online He conducts administrative or management activities for his business as an anesthesiologist there and he has no other fixed location where he conducts substantial administrative or management activities for this business. Can i still file my 2010 taxes online His choice to use his home office instead of the one provided by the hospital does not disqualify his home office from being his principal place of business. Can i still file my 2010 taxes online His performance of substantial nonadministrative or nonmanagement activities at fixed locations outside his home also does not disqualify his home office from being his principal place of business. Can i still file my 2010 taxes online He meets all the qualifications, including principal place of business, so he can deduct expenses (subject to certain limitations, explained later) for the business use of his home. Can i still file my 2010 taxes online Example 4. Can i still file my 2010 taxes online Kathleen is employed as a teacher. Can i still file my 2010 taxes online She is required to teach and meet with students at the school and to grade papers and tests. Can i still file my 2010 taxes online The school provides her with a small office where she can work on her lesson plans, grade papers and tests, and meet with parents and students. Can i still file my 2010 taxes online The school does not require her to work at home. Can i still file my 2010 taxes online Kathleen prefers to use the office she has set up in her home and does not use the one provided by the school. Can i still file my 2010 taxes online She uses this home office exclusively and regularly for the administrative duties of her teaching job. Can i still file my 2010 taxes online Kathleen must meet the convenience-of-the-employer test, even if her home qualifies as her principal place of business for deducting expenses for its use. Can i still file my 2010 taxes online Her employer provides her with an office and does not require her to work at home, so she does not meet the convenience-of-the-employer test and cannot claim a deduction for the business use of her home. Can i still file my 2010 taxes online More Than One Trade or Business The same home office can be the principal place of business for two or more separate business activities. Can i still file my 2010 taxes online Whether your home office is the principal place of business for more than one business activity must be determined separately for each of your trade or business activities. Can i still file my 2010 taxes online You must use the home office exclusively and regularly for one or more of the following purposes. Can i still file my 2010 taxes online As the principal place of business for one or more of your trades or businesses. Can i still file my 2010 taxes online As a place to meet or deal with patients, clients, or customers in the normal course of one or more of your trades or businesses. Can i still file my 2010 taxes online If your home office is a separate structure, in connection with one or more of your trades or businesses. Can i still file my 2010 taxes online You can use your home office for more than one business activity, but you cannot use it for any nonbusiness (i. Can i still file my 2010 taxes online e. Can i still file my 2010 taxes online , personal) activities. Can i still file my 2010 taxes online If you are an employee, any use of the home office in connection with your employment must be for the convenience of your employer. Can i still file my 2010 taxes online See Rental to employer , later, if you rent part of your home to your employer. Can i still file my 2010 taxes online Example. Can i still file my 2010 taxes online Tracy White is employed as a teacher. Can i still file my 2010 taxes online Her principal place of work is the school, which provides her office space to do her school work. Can i still file my 2010 taxes online She also has a mail order jewelry business. Can i still file my 2010 taxes online All her work in the jewelry business is done in her home office and the office is used exclusively for that business. Can i still file my 2010 taxes online If she meets all the other tests, she can deduct expenses for the business use of her home for the jewelry business. Can i still file my 2010 taxes online If Tracy also uses the office for work related to her teaching, she must meet the exclusive use test for both businesses to qualify for the deduction. Can i still file my 2010 taxes online As an employee, Tracy must also meet the convenience-of-the-employer test to qualify for the deduction. Can i still file my 2010 taxes online She does not meet this test for her work as a teacher, so she cannot claim a deduction for the business use of her home for either activity. Can i still file my 2010 taxes online Place To Meet Patients, Clients, or Customers If you meet or deal with patients, clients, or customers in your home in the normal course of your business, even though you also carry on business at another location, you can deduct your expenses for the part of your home used exclusively and regularly for business if you meet both the following tests. Can i still file my 2010 taxes online You physically meet with patients, clients, or customers on your premises. Can i still file my 2010 taxes online Their use of your home is substantial and integral to the conduct of your business. Can i still file my 2010 taxes online Doctors, dentists, attorneys, and other professionals who maintain offices in their homes generally will meet this requirement. Can i still file my 2010 taxes online Using your home for occasional meetings and telephone calls will not qualify you to deduct expenses for the business use of your home. Can i still file my 2010 taxes online The part of your home you use exclusively and regularly to meet patients, clients, or customers does not have to be your principal place of business. Can i still file my 2010 taxes online Example. Can i still file my 2010 taxes online June Quill, a self-employed attorney, works 3 days a week in her city office. Can i still file my 2010 taxes online She works 2 days a week in her home office used only for business. Can i still file my 2010 taxes online She regularly meets clients there. Can i still file my 2010 taxes online Her home office qualifies for a business deduction because she meets clients there in the normal course of her business. Can i still file my 2010 taxes online Separate Structure You can deduct expenses for a separate free-standing structure, such as a studio, workshop, garage, or barn, if you use it exclusively and regularly for your business. Can i still file my 2010 taxes online The structure does not have to be your principal place of business or a place where you meet patients, clients, or customers. Can i still file my 2010 taxes online Example. Can i still file my 2010 taxes online John Berry operates a floral shop in town. Can i still file my 2010 taxes online He grows the plants for his shop in a greenhouse behind his home. Can i still file my 2010 taxes online He uses the greenhouse exclusively and regularly in his business, so he can deduct the expenses for its use, subject to certain limitations, explained later. Can i still file my 2010 taxes online Figuring the Deduction After you determine that you meet the tests under Qualifying for a Deduction , you can begin to figure how much you can deduct. Can i still file my 2010 taxes online When figuring the amount you can deduct for the business use of your home, you will use either your actual expenses or a simplified method. Can i still file my 2010 taxes online Electing to use the simplified method. Can i still file my 2010 taxes online   The simplified method is an alternative to the calculation, allocation, and substantiation of actual expenses. Can i still file my 2010 taxes online You choose whether or not to figure your deduction using the simplified method each taxable year. Can i still file my 2010 taxes online See Using the Simplified Method , later. Can i still file my 2010 taxes online Rental to employer. Can i still file my 2010 taxes online   If you rent part of your home to your employer and you use the rented part in performing services for your employer as an employee, your deduction for the business use of your home is limited. Can i still file my 2010 taxes online You can deduct mortgage interest, qualified mortgage insurance premiums, real estate taxes, and personal casualty losses for the rented part, subject to any limitations. Can i still file my 2010 taxes online However, you cannot deduct otherwise allowable trade or business expenses, business casualty losses, or depreciation related to the use of your home (or use the simplified method as an alternative to deducting these actual expenses) in performing services for your employer. Can i still file my 2010 taxes online Using Actual Expenses If you do not or cannot elect to use the simplified method for a home, you will figure your deduction for that home using your actual expenses. Can i still file my 2010 taxes online You will also need to figure the percentage of your home used for business and the limit on the deduction. Can i still file my 2010 taxes online If you are an employee or a partner, or you use your home in your farming business and you file Schedule F (Form 1040), you can use the Worksheet To Figure the Deduction for Business Use of Your Home, near the end of this publication, to help you figure your deduction. Can i still file my 2010 taxes online If you use your home in a trade or business and you file Schedule C (Form 1040), you will use Form 8829 to figure your deduction. Can i still file my 2010 taxes online Part-year use. Can i still file my 2010 taxes online   You cannot deduct expenses for the business use of your home incurred during any part of the year you did not use your home for business purposes. Can i still file my 2010 taxes online For example, if you begin using part of your home for business on July 1, and you meet all the tests from that date until the end of the year, consider only your expenses for the last half of the year in figuring your allowable deduction. Can i still file my 2010 taxes online Expenses related to tax-exempt income. Can i still file my 2010 taxes online   Generally, you cannot deduct expenses that are related to tax-exempt allowances. Can i still file my 2010 taxes online However, if you receive a tax-exempt parsonage allowance or a tax-exempt military allowance, your expenses for mortgage interest and real estate taxes are deductible under the normal rules. Can i still file my 2010 taxes online No deduction is allowed for other expenses related to the tax-exempt allowance. Can i still file my 2010 taxes online   If your housing is provided free of charge and the value of the housing is tax exempt, you cannot deduct the rental value of any portion of the housing. Can i still file my 2010 taxes online Actual Expenses You must divide the expenses of operating your home between personal and business use. Can i still file my 2010 taxes online The part of a home operating expense you can use to figure your deduction depends on both of the following. Can i still file my 2010 taxes online Whether the expense is direct, indirect, or unrelated. Can i still file my 2010 taxes online The percentage of your home used for business. Can i still file my 2010 taxes online Table 1, next, describes the types of expenses you may have and the extent to which they are deductible. Can i still file my 2010 taxes online Table 1. Can i still file my 2010 taxes online Types of Expenses  Expense  Description  Deductibility Direct Expenses only for  the business part  of your home. Can i still file my 2010 taxes online Deductible in full. Can i still file my 2010 taxes online *   Examples:  Painting or repairs  only in the area  used for business. Can i still file my 2010 taxes online Exception: May be only partially  deductible in a daycare facility. Can i still file my 2010 taxes online See Daycare Facility , later. Can i still file my 2010 taxes online Indirect Expenses for  keeping up and running your  entire home. Can i still file my 2010 taxes online Deductible based on the percentage of your home used for business. Can i still file my 2010 taxes online *   Examples:  Insurance, utilities, and  general repairs. Can i still file my 2010 taxes online   Unrelated Expenses only for  the parts of your  home not used  for business. Can i still file my 2010 taxes online Not deductible. Can i still file my 2010 taxes online   Examples:  Lawn care or painting  a room not used  for business. Can i still file my 2010 taxes online   *Subject to the deduction limit, discussed later. Can i still file my 2010 taxes online Form 8829 and the Worksheet To Figure the Deduction for Business Use of Your Home have separate columns for direct and indirect expenses. Can i still file my 2010 taxes online Certain expenses are deductible whether or not you use your home for business. Can i still file my 2010 taxes online If you qualify to deduct business use of the home expenses, use the business percentage of these expenses to figure your total business use of the home deduction. Can i still file my 2010 taxes online These expenses include the following. Can i still file my 2010 taxes online Real estate taxes. Can i still file my 2010 taxes online Qualified mortgage insurance premiums. Can i still file my 2010 taxes online Deductible mortgage interest. Can i still file my 2010 taxes online Casualty losses. Can i still file my 2010 taxes online Other expenses are deductible only if you use your home for business. Can i still file my 2010 taxes online You can use the business percentage of these expenses to figure your total business use of the home deduction. Can i still file my 2010 taxes online These expenses generally include (but are not limited to) the following. Can i still file my 2010 taxes online Depreciation (covered under Depreciating Your Home , later). Can i still file my 2010 taxes online Insurance. Can i still file my 2010 taxes online Rent paid for the use of property you do not own but use in your trade or business. Can i still file my 2010 taxes online Repairs. Can i still file my 2010 taxes online Security system. Can i still file my 2010 taxes online Utilities and services. Can i still file my 2010 taxes online Real estate taxes. Can i still file my 2010 taxes online   To figure the business part of your real estate taxes, multiply the real estate taxes paid by the percentage of your home used for business. Can i still file my 2010 taxes online   For more information on the deduction for real estate taxes, see Publication 530, Tax Information for Homeowners. Can i still file my 2010 taxes online Deductible mortgage interest. Can i still file my 2010 taxes online   To figure the business part of your deductible mortgage interest, multiply this interest by the percentage of your home used for business. Can i still file my 2010 taxes online You can include interest on a second mortgage in this computation. Can i still file my 2010 taxes online If your total mortgage debt is more than $1,000,000 or your home equity debt is more than $100,000, your deduction may be limited. Can i still file my 2010 taxes online For more information on what interest is deductible, see Publication 936, Home Mortgage Interest Deduction. Can i still file my 2010 taxes online Qualified mortgage insurance premiums. Can i still file my 2010 taxes online   To figure the business part of your qualified mortgage insurance premiums, multiply the premiums by the percentage of your home used for business. Can i still file my 2010 taxes online You can include premiums for insurance on a second mortgage in this computation. Can i still file my 2010 taxes online If your adjusted gross income is more than $100,000 ($50,000 if your filing status is married filing separately), your deduction may be limited. Can i still file my 2010 taxes online For more information, see Publication 936, and Line 13 in the Instructions for Schedule A (Form 1040). Can i still file my 2010 taxes online Casualty losses. Can i still file my 2010 taxes online    If you have a casualty loss on your home that you use for business, treat the casualty loss as a direct expense, an indirect expense, or an unrelated expense, depending on the property affected. Can i still file my 2010 taxes online A direct expense is the loss on the portion of the property you use only in your business. Can i still file my 2010 taxes online Use the entire loss to figure the business use of the home deduction. Can i still file my 2010 taxes online An indirect expense is the loss on property you use for both business and personal purposes. Can i still file my 2010 taxes online Use only the business portion to figure the deduction. Can i still file my 2010 taxes online An unrelated expense is the loss on property you do not use in your business. Can i still file my 2010 taxes online Do not use any of the loss to figure the deduction. Can i still file my 2010 taxes online Example. Can i still file my 2010 taxes online You meet the rules to take a deduction for an office in your home that is 10% of the total area of your house. Can i still file my 2010 taxes online A storm damages your roof. Can i still file my 2010 taxes online This is an indirect expense as the roof is part of the whole house and is considered to be used both for business and personal purposes. Can i still file my 2010 taxes online You would complete Form 4684, Casualties and Thefts, to report your loss. Can i still file my 2010 taxes online You complete both section A (Personal Use Property) and section B (Business and Income-Producing Property) as your home is used both for business and personal purposes. Can i still file my 2010 taxes online Since you use 90% of your home for personal purposes, use 90% of the cost or adjusted basis of your home, insurance or other reimbursement, and fair market value, both before and after the storm, to figure the amounts to enter on lines 2, 3, 5, and 6 of Form 4684. Can i still file my 2010 taxes online Since you use 10% of your home for business purposes, use 10% of the cost or adjusted basis of your home, insurance or other reimbursement, and fair market value, both before and after the storm, to figure the amounts to enter on lines 20, 21, 23, and 24 of Form 4684. Can i still file my 2010 taxes online Forms and worksheets to use. Can i still file my 2010 taxes online   If you are filing Schedule C (Form 1040), get Form 8829 and follow the instructions for casualty losses. Can i still file my 2010 taxes online If you are an employee or a partner, or you file Schedule F (Form 1040), use the Worksheet To Figure the Deduction for Business Use of Your Home, near the end of this publication. Can i still file my 2010 taxes online You will also need to get Form 4684. Can i still file my 2010 taxes online More information. Can i still file my 2010 taxes online   For more information on casualty losses, see Publication 547, Casualties, Disasters, and Thefts. Can i still file my 2010 taxes online Insurance. Can i still file my 2010 taxes online   You can deduct the cost of insurance that covers the business part of your home. Can i still file my 2010 taxes online However, if your insurance premium gives you coverage for a period that extends past the end of your tax year, you can deduct only the business percentage of the part of the premium that gives you coverage for your tax year. Can i still file my 2010 taxes online You can deduct the business percentage of the part that applies to the following year in that year. Can i still file my 2010 taxes online Rent. Can i still file my 2010 taxes online   If you rent the home you occupy and meet the requirements for business use of the home, you can deduct part of the rent you pay. Can i still file my 2010 taxes online To figure your deduction, multiply your rent payments by the percentage of your home used for business. Can i still file my 2010 taxes online   If you own your home, you cannot deduct the fair rental value of your home. Can i still file my 2010 taxes online However, see Depreciating Your Home , later. Can i still file my 2010 taxes online Repairs. Can i still file my 2010 taxes online   The cost of repairs that relate to your business, including labor (other than your own labor), is a deductible expense. Can i still file my 2010 taxes online For example, a furnace repair benefits the entire home. Can i still file my 2010 taxes online If you use 10% of your home for business, you can deduct 10% of the cost of the furnace repair. Can i still file my 2010 taxes online   Repairs keep your home in good working order over its useful life. Can i still file my 2010 taxes online Examples of common repairs are patching walls and floors, painting, wallpapering, repairing roofs and gutters, and mending leaks. Can i still file my 2010 taxes online However, repairs are sometimes treated as a permanent improvement and are not deductible. Can i still file my 2010 taxes online See Permanent improvements , later, under Depreciating Your Home. Can i still file my 2010 taxes online Security system. Can i still file my 2010 taxes online   If you install a security system that protects all the doors and windows in your home, you can deduct the business part of the expenses you incur to maintain and monitor the system. Can i still file my 2010 taxes online You also can take a depreciation deduction for the part of the cost of the security system relating to the business use of your home. Can i still file my 2010 taxes online Utilities and services. Can i still file my 2010 taxes online   Expenses for utilities and services, such as electricity, gas, trash removal, and cleaning services, are primarily personal expenses. Can i still file my 2010 taxes online However, if you use part of your home for business, you can deduct the business part of these expenses. Can i still file my 2010 taxes online Generally, the business percentage for utilities is the same as the percentage of your home used for business. Can i still file my 2010 taxes online Telephone. Can i still file my 2010 taxes online   The basic local telephone service charge, including taxes, for the first telephone line into your home (i. Can i still file my 2010 taxes online e. Can i still file my 2010 taxes online , landline) is a nondeductible personal expense. Can i still file my 2010 taxes online However, charges for business long-distance phone calls on that line, as well as the cost of a second line into your home used exclusively for business, are deductible business expenses. Can i still file my 2010 taxes online Do not include these expenses as a cost of using your home for business. Can i still file my 2010 taxes online Deduct these charges separately on the appropriate form or schedule. Can i still file my 2010 taxes online For example, if you file Schedule C (Form 1040), deduct these expenses on line 25, Utilities (instead of line 30, Expenses for business use of your home). Can i still file my 2010 taxes online Depreciating Your Home If you own your home and qualify to deduct expenses for its business use, you can claim a deduction for depreciation. Can i still file my 2010 taxes online Depreciation is an allowance for the wear and tear on the part of your home used for business. Can i still file my 2010 taxes online You cannot depreciate the cost or value of the land. Can i still file my 2010 taxes online You recover its cost when you sell or otherwise dispose of the property. Can i still file my 2010 taxes online Before you figure your depreciation deduction, you need to know the following information. Can i still file my 2010 taxes online The month and year you started using your home for business. Can i still file my 2010 taxes online The adjusted basis and fair market value of your home (excluding land) at the time you began using it for business. Can i still file my 2010 taxes online The cost of any improvements before and after you began using the property for business. Can i still file my 2010 taxes online The percentage of your home used for business. Can i still file my 2010 taxes online See Business Percentage , later. Can i still file my 2010 taxes online Adjusted basis defined. Can i still file my 2010 taxes online   The adjusted basis of your home is generally its cost, plus the cost of any permanent improvements you made to it, minus any casualty losses or depreciation deducted in earlier tax years. Can i still file my 2010 taxes online For a discussion of adjusted basis, see Publication 551. Can i still file my 2010 taxes online Permanent improvements. Can i still file my 2010 taxes online   A permanent improvement increases the value of property, adds to its life, or gives it a new or different use. Can i still file my 2010 taxes online Examples of improvements are replacing electric wiring or plumbing, adding a new roof or addition, paneling, or remodeling. Can i still file my 2010 taxes online    You must carefully distinguish between repairs and improvements. Can i still file my 2010 taxes online See Repairs , earlier, under Actual Expenses. Can i still file my 2010 taxes online You also must keep accurate records of these expenses. Can i still file my 2010 taxes online These records will help you decide whether an expense is a deductible or a capital (added to the basis) expense. Can i still file my 2010 taxes online However, if you make repairs as part of an extensive remodeling or restoration of your home, the entire job is an improvement. Can i still file my 2010 taxes online Example. Can i still file my 2010 taxes online You buy an older home and fix up two rooms as a beauty salon. Can i still file my 2010 taxes online You patch the plaster on the ceilings and walls, paint, repair the floor, install an outside door, and install new wiring, plumbing, and other equipment. Can i still file my 2010 taxes online Normally, the patching, painting, and floor work are repairs and the other expenses are permanent improvements. Can i still file my 2010 taxes online However, because the work gives your property a new use, the entire remodeling job is a permanent improvement and its cost is added to the basis of the property. Can i still file my 2010 taxes online You cannot deduct any portion of it as a repair expense. Can i still file my 2010 taxes online Adjusting for depreciation deducted in earlier years. Can i still file my 2010 taxes online   Decrease the basis of your property by the depreciation you deducted, or could have deducted, on your tax returns under the method of depreciation you properly selected. Can i still file my 2010 taxes online If you deducted less depreciation than you could have under the method you selected, decrease the basis by the amount you could have deducted under that method. Can i still file my 2010 taxes online If you did not deduct any depreciation, decrease the basis by the amount you could have deducted. Can i still file my 2010 taxes online   If you deducted more depreciation than you should have, decrease your basis by the amount you should have deducted, plus the part of the excess depreciation you deducted that actually decreased your tax liability for any year. Can i still file my 2010 taxes online   If you deducted the incorrect amount of depreciation, see Publication 946. Can i still file my 2010 taxes online Fair market value defined. Can i still file my 2010 taxes online   The fair market value of your home is the price at which the property would change hands between a buyer and a seller, neither having to buy or sell, and both having reasonable knowledge of all necessary facts. Can i still file my 2010 taxes online Sales of similar property, on or about the date you begin using your home for business, may be helpful in determining the property's fair market value. Can i still file my 2010 taxes online Figuring the depreciation deduction for the current year. Can i still file my 2010 taxes online   If you began using your home for business before 2013, continue to use the same depreciation method you used in past tax years. Can i still file my 2010 taxes online   If you began using your home for business for the first time in 2013, depreciate the business part as nonresidential real property under the modified accelerated cost recovery system (MACRS). Can i still file my 2010 taxes online Under MACRS, nonresidential real property is depreciated using the straight line method over 39 years. Can i still file my 2010 taxes online For more information on MACRS and other methods of depreciation, see Publication 946. Can i still file my 2010 taxes online   To figure the depreciation deduction, you must first figure the part of the cost of your home that can be depreciated (depreciable basis). Can i still file my 2010 taxes online The depreciable basis is figured by multiplying the percentage of your home used for business by the smaller of the following. Can i still file my 2010 taxes online The adjusted basis of your home (excluding land) on the date you began using your home for business. Can i still file my 2010 taxes online The fair market value of your home (excluding land) on the date you began using your home for business. Can i still file my 2010 taxes online Depreciation table. Can i still file my 2010 taxes online   If 2013 was the first year you used your home for business, you can figure your 2013 depreciation for the business part of your home by using the appropriate percentage from the following table. Can i still file my 2010 taxes online Table 2. Can i still file my 2010 taxes online MACRS Percentage Table for 39-Year Nonresidential Real Property Month First Used for Business Percentage To Use 1 2. Can i still file my 2010 taxes online 461% 2 2. Can i still file my 2010 taxes online 247% 3 2. Can i still file my 2010 taxes online 033% 4 1. Can i still file my 2010 taxes online 819% 5 1. Can i still file my 2010 taxes online 605% 6 1. Can i still file my 2010 taxes online 391% 7 1. Can i still file my 2010 taxes online 177% 8 0. Can i still file my 2010 taxes online 963% 9 0. Can i still file my 2010 taxes online 749% 10 0. Can i still file my 2010 taxes online 535% 11 0. Can i still file my 2010 taxes online 321% 12 0. Can i still file my 2010 taxes online 107%   Multiply the depreciable basis of the business part of your home by the percentage from the table for the first month you use your home for business. Can i still file my 2010 taxes online See Publication 946 for the percentages for the remaining tax years of the recovery period. Can i still file my 2010 taxes online Example. Can i still file my 2010 taxes online In May, George Miller began to use one room in his home exclusively and regularly to meet clients. Can i still file my 2010 taxes online This room is 8% of the square footage of his home. Can i still file my 2010 taxes online He bought the home in 2003 for $125,000. Can i still file my 2010 taxes online He determined from his property tax records that his adjusted basis in the house (exclusive of land) is $115,000. Can i still file my 2010 taxes online In May, the house had a fair market value of $165,000. Can i still file my 2010 taxes online He multiplies his adjusted basis of $115,000 (which is less than the fair market value) by 8%. Can i still file my 2010 taxes online The result is $9,200, his depreciable basis for the business part of the house. Can i still file my 2010 taxes online George files his return based on the calendar year. Can i still file my 2010 taxes online May is the 5th month of his tax year. Can i still file my 2010 taxes online He multiplies his depreciable basis of $9,200 by 1. Can i still file my 2010 taxes online 605% (. Can i still file my 2010 taxes online 01605), the percentage from the table for the 5th month. Can i still file my 2010 taxes online His depreciation deduction is $147. Can i still file my 2010 taxes online 66. Can i still file my 2010 taxes online Depreciating permanent improvements. Can i still file my 2010 taxes online   Add the costs of permanent improvements made before you began using your home for business to the basis of your property. Can i still file my 2010 taxes online Depreciate these costs as part of the cost of your home as explained earlier. Can i still file my 2010 taxes online The costs of improvements made after you begin using your home for business (that affect the business part of your home, such as a new roof) are depreciated separately. Can i still file my 2010 taxes online Multiply the cost of the improvement by the business-use percentage and depreciate the result over the recovery period that would apply to your home if you began using it for business at the same time as the improvement. Can i still file my 2010 taxes online For improvements made this year, the recovery period is 39 years. Can i still file my 2010 taxes online For the percentage to use for the first year, see Table 2, earlier. Can i still file my 2010 taxes online For more information on recovery periods, see Publication 946. Can i still file my 2010 taxes online Business Percentage To find the business percentage, compare the size of the part of your home that you use for business to your whole house. Can i still file my 2010 taxes online Use the resulting percentage to figure the business part of the expenses for operating your entire home. Can i still file my 2010 taxes online You can use any reasonable method to determine the business percentage. Can i still file my 2010 taxes online The following are two commonly used methods for figuring the percentage. Can i still file my 2010 taxes online Divide the area (length multiplied by the width) used for business by the total area of your home. Can i still file my 2010 taxes online If the rooms in your home are all about the same size, you can divide the number of rooms used for business by the total number of rooms in your home. Can i still file my 2010 taxes online Example 1. Can i still file my 2010 taxes online Your office is 240 square feet (12 feet × 20 feet). Can i still file my 2010 taxes online Your home is 1,200 square feet. Can i still file my 2010 taxes online Your office is 20% (240 ÷ 1,200) of the total area of your home. Can i still file my 2010 taxes online Your business percentage is 20%. Can i still file my 2010 taxes online Example 2. Can i still file my 2010 taxes online You use one room in your home for business. Can i still file my 2010 taxes online Your home has 10 rooms, all about equal size. Can i still file my 2010 taxes online Your office is 10% (1 ÷ 10) of the total area of your home. Can i still file my 2010 taxes online Your business percentage is 10%. Can i still file my 2010 taxes online Use lines 1-7 of Form 8829, or lines 1-3 on the Worksheet To Figure the Deduction for Business Use of Your Home (near the end of this publication) to figure your business percentage. Can i still file my 2010 taxes online Deduction Limit If your gross income from the business use of your home equals or exceeds your total business expenses (including depreciation), you can deduct all your business expenses related to the use of your home. Can i still file my 2010 taxes online If your gross income from the business use of your home is less than your total business expenses, your deduction for certain expenses for the business use of your home is limited. Can i still file my 2010 taxes online Your deduction of otherwise nondeductible expenses, such as insurance, utilities, and depreciation of your home (with depreciation of your home taken last), that are allocable to the business, is limited to the gross income from the business use of your home minus the sum of the following. Can i still file my 2010 taxes online The business part of expenses you could deduct even if you did not use your home for business (such as mortgage interest, real estate taxes, and casualty and theft losses that are allowable as itemized deductions on Schedule A (Form 1040)). Can i still file my 2010 taxes online These expenses are discussed in detail under Actual Expenses , earlier. Can i still file my 2010 taxes online The business expenses that relate to the business activity in the home (for example, business phone, supplies, and depreciation on equipment), but not to the use of the home itself. Can i still file my 2010 taxes online If you are self-employed, do not include in (2) above your deduction for one-half of your self-employment tax. Can i still file my 2010 taxes online Carryover of unallowed expenses. Can i still file my 2010 taxes online   If your deductions are greater than the current year's limit, you can carry over the excess to the next year in which you use actual expenses. Can i still file my 2010 taxes online They are subject to the deduction limit for that year, whether or not you live in the same home during that year. Can i still file my 2010 taxes online Figuring the deduction limit and carryover. Can i still file my 2010 taxes online   If you are an employee or a partner, or you file Schedule F (Form 1040), use the Worksheet To Figure the Deduction for Business Use of Your Home, near the end of this publication. Can i still file my 2010 taxes online If you file Schedule C (Form 1040), figure your deduction limit and carryover on Form 8829. Can i still file my 2010 taxes online Example. Can i still file my 2010 taxes online You meet the requirements for deducting expenses for the business use of your home. Can i still file my 2010 taxes online You use 20% of your home for business. Can i still file my 2010 taxes online In 2013, your business expenses and the expenses for the business use of your home are deducted from your gross income in the following order. Can i still file my 2010 taxes online    Gross income from business $6,000 Minus:   Deductible mortgage interest and real estate taxes (20%) 3,000 Business expenses not related to the use of your home (100%) (business phone, supplies, and depreciation on equipment) 2,000 Deduction limit $1,000 Minus other expenses allocable to business use of home:   Maintenance, insurance, and utilities (20%) 800 Depreciation allowed (20% = $1,600 allowable, but subject to balance of deduction limit) 200 Other expenses up to the deduction limit $1,000 Depreciation carryover to 2014 ($1,600 − $200) (subject to deduction limit in 2014) $1,400   You can deduct all of the business part of your deductible mortgage interest and real estate taxes ($3,000). Can i still file my 2010 taxes online You also can deduct all of your business expenses not related to the use of your home ($2,000). Can i still file my 2010 taxes online Additionally, you can deduct all of the business part of your expenses for maintenance, insurance, and utilities, because the total ($800) is less than the $1,000 deduction limit. Can i still file my 2010 taxes online Your deduction for depreciation for the business use of your home is limited to $200 ($1,000 minus $800) because of the deduction limit. Can i still file my 2010 taxes online You can carry over the $1,400 balance and add it to your depreciation for 2014, subject to your deduction limit in 2014. Can i still file my 2010 taxes online More than one place of business. Can i still file my 2010 taxes online   If part of the gross income from your trade or business is from the business use of part of your home and part is from a place other than your home, you must determine the part of your gross income from the business use of your home before you figure the deduction limit. Can i still file my 2010 taxes online In making this determination, consider the time you spend at each location, the business investment in each location, and any other relevant facts and circumstances. Can i still file my 2010 taxes online If your home office qualifies as your principal place of business, you can deduct your daily transportation costs between your home and another work location in the same trade or business. Can i still file my 2010 taxes online For more information on transportation costs, see Publication 463, Travel, Entertainment, Gift, and Car Expenses. Can i still file my 2010 taxes online Using the Simplified Method The simplified method is an alternative to the calculation, allocation, and substantiation of actual expenses. Can i still file my 2010 taxes online In most cases, you will figure your deduction by multiplying $5, the prescribed rate, by the area of your home used for a qualified business use. Can i still file my 2010 taxes online The area you use to figure your deduction is limited to 300 square feet. Can i still file my 2010 taxes online See Simplified Amount , later, for information about figuring the amount of the deduction. Can i still file my 2010 taxes online For more information about the simplified method, see Revenue Procedure 2013-13, 2013-06 I. Can i still file my 2010 taxes online R. Can i still file my 2010 taxes online B. Can i still file my 2010 taxes online 478, available at www. Can i still file my 2010 taxes online irs. Can i still file my 2010 taxes online gov/irb/2013-06_IRB/ar09. Can i still file my 2010 taxes online html. Can i still file my 2010 taxes online Actual expenses and depreciation of your home. Can i still file my 2010 taxes online   If you elect to use the simplified method, you cannot deduct any actual expenses for the business except for business expenses that are not related to the use of the home. Can i still file my 2010 taxes online You also cannot deduct any depreciation (including any additional first-year depreciation) or section 179 expense for the portion of the home that is used for a qualified business use. Can i still file my 2010 taxes online The depreciation deduction allowable for that portion of the home is deemed to be zero for a year you use the simplified method. Can i still file my 2010 taxes online If you figure your deduction for business use of the home using actual expenses in a subsequent year, you will have to use the appropriate optional depreciation table for MACRS to figure your depreciation. Can i still file my 2010 taxes online More information. Can i still file my 2010 taxes online   For more information about claiming depreciation in a subsequent year, see Revenue Procedure 2013-13, 2013-06 I. Can i still file my 2010 taxes online R. Can i still file my 2010 taxes online B. Can i still file my 2010 taxes online 478, available at www. Can i still file my 2010 taxes online irs. Can i still file my 2010 taxes online gov/irb/2013-06_IRB/ar09. Can i still file my 2010 taxes online html. Can i still file my 2010 taxes online See Publication 946 for the optional depreciation tables Although you cannot deduct any depreciation or section 179 expense for the portion of your home used for a qualified business use, you may still claim depreciation or the section 179 expense deduction on other assets used in the business (for example, furniture and equipment). Can i still file my 2010 taxes online Expenses deductible without regard to business use. Can i still file my 2010 taxes online   When using the simplified method, treat as personal expenses those business expenses related to the use of the home that are deductible without regard to whether there is a qualified business use of the home. Can i still file my 2010 taxes online These expenses include mortgage interest, real estate taxes, and casualty losses, subject to any limitations. Can i still file my 2010 taxes online See Where To Deduct , later. Can i still file my 2010 taxes online If you also rent part of your home, you must still allocate these expenses between rental use and personal use (for this purpose, personal use includes business use reported using the simplified method). Can i still file my 2010 taxes online No deduction of carryover of actual expenses. Can i still file my 2010 taxes online   If you used actual expenses to figure your deduction for business use of the home in a prior year and your deduction was limited, you cannot deduct the disallowed amount carried over from the prior year during a year you figure your deduction using the simplified method. Can i still file my 2010 taxes online Instead, you will continue to carry over the disallowed amount to the next year that you use actual expenses to figure your deduction. Can i still file my 2010 taxes online Electing the Simplified Method You choose whether or not to figure your deduction using the simplified method each taxable year. Can i still file my 2010 taxes online Make the election for a home by using the simplified method to figure the deduction for the qualified business use of that home on a timely filed, original federal income tax return. Can i still file my 2010 taxes online An election for a taxable year, once made, is irrevocable. Can i still file my 2010 taxes online A change from using the simplified method in one year to actual expenses in a succeeding taxable year, or vice-versa, is not a change in method of accounting and does not require the consent of the Commissioner. Can i still file my 2010 taxes online Shared use. Can i still file my 2010 taxes online   If you share your home with someone else who also uses the home in a business that qualifies for this deduction, each of you make your own election. Can i still file my 2010 taxes online More than one qualified business use. Can i still file my 2010 taxes online   If you conduct more than one business that qualifies for this deduction in your home, your election to use the simplified method applies to all your qualified business uses of that home. Can i still file my 2010 taxes online More than one home. Can i still file my 2010 taxes online   If you used more than one home during the year (for example, you moved during the year), you can elect to use the simplified method for only one of the homes. Can i still file my 2010 taxes online You must figure the deduction for any other home using actual expenses. Can i still file my 2010 taxes online Simplified Amount Your deduction for the qualified business use of a home is the sum of each amount you figure for a separate qualified business use of your home. Can i still file my 2010 taxes online To figure your deduction for the business use of a home using the simplified method, you will need to know the following information for each qualified business use of the home. Can i still file my 2010 taxes online The allowable area of your home used in conducting the business. Can i still file my 2010 taxes online If you did not conduct the business for the entire year in the home or the area changed during the year, you will need to know the allowable area you used and the number of days you conducted the business for each month. Can i still file my 2010 taxes online The gross income from the business use of your home. Can i still file my 2010 taxes online The amount of the business expenses that are not related to the use of your home. Can i still file my 2010 taxes online If the qualified business use is for a daycare facility that uses space in your home on a regular (but not exclusive) basis, you will also need to know the percentage of time that part of your home is used for daycare. Can i still file my 2010 taxes online To figure the amount you can deduct for qualified business use of your home using the simplified method, follow these 3 steps. Can i still file my 2010 taxes online Multiply the allowable area by $5 (or less than $5 if the qualified business use is for a daycare that uses space in your home on a regular, but not exclusive, basis). Can i still file my 2010 taxes online See Allowable area and Space used regularly for daycare , later. Can i still file my 2010 taxes online Subtract the expenses from the business that are not related to the use of the home from the gross income related to the business use of the home. Can i still file my 2010 taxes online If these expenses are greater than the gross income from the business use of the home, then you cannot take a deduction for this business use of the home. Can i still file my 2010 taxes online See Gross income limitation , later. Can i still file my 2010 taxes online Take the smaller of the amounts from (1) and (2). Can i still file my 2010 taxes online This is the amount you can deduct for this qualified business use of your home using the simplified method. Can i still file my 2010 taxes online If you are an employee or a partner, or you use your home in your farming business and file Schedule F (Form 1040), you can use the Simplified Method Worksheet, near the end of this publication, to help you figure your deduction. Can i still file my 2010 taxes online If you use your home in a trade or business and you file Schedule C (Form 1040), you will use the Simplified Method Worksheet in your Instructions for Schedule C to figure your deduction. Can i still file my 2010 taxes online Allowable area. Can i still file my 2010 taxes online   In most cases, the allowable area is the smaller of the actual area (in square feet) of your home used in conducting the business and 300 square feet. Can i still file my 2010 taxes online Your allowable area may be smaller if you conducted the business as a qualified joint venture with your spouse, the area used by the business was shared with another qualified business use, you used the home for the business for only part of the year, or the area used by the business changed during the year. Can i still file my 2010 taxes online You can use the Area Adjustment Worksheet (for simplified method), near the end of this publication, to help you figure your allowable area for a qualified business use. Can i still file my 2010 taxes online Area used by a qualified joint venture. Can i still file my 2010 taxes online   If the qualified business use of the home is also a qualified joint venture, you and your spouse will figure the deduction for the business use separately. Can i still file my 2010 taxes online Split the actual area used in conducting business between you and your spouse in the same manner you split your other tax attributes. Can i still file my 2010 taxes online Then, each spouse will figure the allowable area separately. Can i still file my 2010 taxes online For more information about qualified joint ventures, see Qualified Joint Venture in the Instructions for Schedule C. Can i still file my 2010 taxes online Shared use. Can i still file my 2010 taxes online   If you share your home with someone else who uses the home to conduct business that also qualifies for this deduction, you may not include the same square feet to figure your deduction as the other person. Can i still file my 2010 taxes online You must allocate the shared space between you and the other person in a reasonable manner. Can i still file my 2010 taxes online Example. Can i still file my 2010 taxes online Kristin and Lindsey are roommates. Can i still file my 2010 taxes online Kristin uses 300 square feet of their home for a qualified business use. Can i still file my 2010 taxes online Lindsey uses 200 square feet of their home for a separate qualified business use. Can i still file my 2010 taxes online The qualified business uses share 100 square feet. Can i still file my 2010 taxes online In addition to the portion that they do not share, Kristin and Lindsey can both claim 50 of the 100 square feet or divide the 100 square feet between them in any reasonable manner. Can i still file my 2010 taxes online If divided evenly, Kristin could claim 250 square feet using the simplified method and Lindsey could claim 150 square feet. Can i still file my 2010 taxes online More than one qualified business use. Can i still file my 2010 taxes online   If you conduct more than one business qualifying for the deduction, you are limited to a maximum of 300 square feet for all of the businesses. Can i still file my 2010 taxes online Allocate the actual square footage used (up to the maximum of 300 square feet) among your qualified business uses in a reasonable manner. Can i still file my 2010 taxes online However, do not allocate more square feet to a qualified business use than you actually use for that business. Can i still file my 2010 taxes online Rental use. Can i still file my 2010 taxes online   The simplified method does not apply to rental use. Can i still file my 2010 taxes online A rental use that qualifies for the deduction must be figured using actual expenses. Can i still file my 2010 taxes online If the rental use and a qualified business use share the same area, you will have to allocate the actual area used between the two uses. Can i still file my 2010 taxes online You cannot use the same area to figure a deduction for the qualified business use as you are using to figure the deduction for the rental use. Can i still file my 2010 taxes online Part-year use or area changes. Can i still file my 2010 taxes online   If your qualified business use was for a portion of the taxable year (for example, a seasonal business or a business that begins during the taxable year) or you changed the square footage of your qualified business use, your deduction is limited to the average monthly allowable square footage. Can i still file my 2010 taxes online You calculate the average monthly allowable square footage by adding the amount of allowable square feet you used in each month and dividing the sum by 12. Can i still file my 2010 taxes online When determining the average monthly allowable square footage, you cannot take more than 300 square feet into account for any one month. Can i still file my 2010 taxes online Additionally, if your qualified business use was less than 15 days in a month, you must use -0- for that month. Can i still file my 2010 taxes online Example 1. Can i still file my 2010 taxes online Andy files his federal income tax return on a calendar year basis. Can i still file my 2010 taxes online On July 20, he began using 420 square feet of his home for a qualified business use. Can i still file my 2010 taxes online He continued to use the 420 square feet until the end of the year. Can i still file my 2010 taxes online His average monthly allowable square footage is 125 square feet, which is figured using 300 square feet for each month August through December divided by the number of months in the taxable year ((0 + 0 + 0 + 0 + 0 + 0 + 0 + 300 + 300 + 300 + 300 + 300)/12). Can i still file my 2010 taxes online Example 2. Can i still file my 2010 taxes online Amy files her federal income tax return on a calendar year basis. Can i still file my 2010 taxes online On April 20, she began using 100 square feet of her home for a qualified business use. Can i still file my 2010 taxes online On August 5, she expanded the area of her qualified use to 330 square feet. Can i still file my 2010 taxes online Amy continued to use the 330 square feet until the end of the year. Can i still file my 2010 taxes online Her average monthly allowable square footage is 150 square feet, which is figured using 100 square feet for May through July and 300 square feet for August through December divided by the number of months in the taxable year ((0 + 0 + 0 + 0 + 100 + 100 +100 + 300 + 300 + 300 + 300 + 300)/12). Can i still file my 2010 taxes online Gross income limitation. Can i still file my 2010 taxes online   Your deduction for business use of the home is limited to an amount equal to the gross income derived from the qualified business use of the home reduced by the business deductions that are unrelated to the use of your home. Can i still file my 2010 taxes online If the business deductions that are unrelated to the use of your home are greater than the gross income derived from the qualified business use of your home, then you cannot take a deduction for this qualified business use of your home. Can i still file my 2010 taxes online Business expenses not related to use of the home. Can i still file my 2010 taxes online   These expenses relate to the business activity in the home, but not to the use of the home itself. Can i still file my 2010 taxes online You can still deduct business expenses that are unrelated to the use of the home. Can i still file my 2010 taxes online See Where To Deduct , later. Can i still file my 2010 taxes online Examples of business expenses that are unrelated to the use of the home are advertising, wages, supplies, dues, and depreciation for equipment. Can i still file my 2010 taxes online Space used regularly for daycare. Can i still file my 2010 taxes online   If you do not use the area of your home exclusively for daycare, you must reduce the prescribed rate (maximum $5 per square foot) before figuring your deduction. Can i still file my 2010 taxes online The reduced rate will equal the prescribed rate times a fraction. Can i still file my 2010 taxes online The numerator of the fraction is the number of hours that the space was used during the year for daycare and the denominator is the total number of hours during the year that the space was available for all uses. Can i still file my 2010 taxes online You can use the Daycare Facility Worksheet (for simplified method), near the end of this publication, to help you figure the reduced rate. Can i still file my 2010 taxes online    If you used at least 300 square feet for daycare regularly and exclusively during the year, then you do not need to reduce the prescribed rate or complete the Daycare Facility Worksheet. Can i still file my 2010 taxes online Daycare Facility If you use space in your home on a regular basis for providing daycare, you may be able to claim a deduction for that part of your home even if you use the same space for nonbusiness purposes. Can i still file my 2010 taxes online To qualify for this exception to the exclusive use rule, you must meet both of the following requirements. Can i still file my 2010 taxes online You must be in the trade or business of providing daycare for children, persons age 65 or older, or persons who are physically or mentally unable to care for themselves. Can i still file my 2010 taxes online You must have applied for, been granted, or be exempt from having, a license, certification, registration, or approval as a daycare center or as a family or group daycare home under state law. Can i still file my 2010 taxes online You do not meet this requirement if your application was rejected or your license or other authorization was revoked. Can i still file my 2010 taxes online Figuring the deduction. Can i still file my 2010 taxes online   If you elect to use the simplified method for your home, figure your deduction as described earlier in Using the Simplified Method under Figuring the Deduction. Can i still file my 2010 taxes online    If you are figuring your deduction using actual expenses and you regularly use part of your home for daycare, figure what part is used for daycare, as explained in Business Percentage , earlier, under Figuring the Deduction. Can i still file my 2010 taxes online If you also use that part exclusively for daycare, deduct all the allocable expenses, subject to the deduction limit, as explained earlier. Can i still file my 2010 taxes online   If the use of part of your home as a daycare facility is regular, but not exclusive, you must figure the percentage of time that part of your home is used for daycare. Can i still file my 2010 taxes online A room that is available for use throughout each business day and that you regularly use in your business is considered to be used for daycare throughout each business day. Can i still file my 2010 taxes online You do not have to keep records to show the specific hours the area was used for business. Can i still file my 2010 taxes online You can use the area occasionally for personal reasons. Can i still file my 2010 taxes online However, a room you use only occasionally for business does not qualify for the deduction. Can i still file my 2010 taxes online To find the percentage of time you actually use your home for business, compare the total time used for business to the total time that part of your home can be used for all purposes. Can i still file my 2010 taxes online You can compare the hours of business use in a week with the number of hours in a week (168). Can i still file my 2010 taxes online Or you can compare the hours of business use for the year with the number of hours in the year (8,760 in 2013). Can i still file my 2010 taxes online If you started or stopped using your home for daycare in 2013, you must prorate the number of hours based on the number of days the home was available for daycare. Can i still file my 2010 taxes online Example 1. Can i still file my 2010 taxes online Mary Lake used her basement to operate a daycare business for children. Can i still file my 2010 taxes online She figures the business percentage of the basement as follows. Can i still file my 2010 taxes online Square footage of the basement Square footage of her home = 1,600 3,200 = 50%           She used the basement for daycare an average of 12 hours a day, 5 days a week, for 50 weeks a year. Can i still file my 2010 taxes online During the other 12 hours a day, the family could use the basement. Can i still file my 2010 taxes online She figures the percentage of time the basement was used for daycare as follows. Can i still file my 2010 taxes online Number of hours used for daycare (12 x 5 x 50) Total number of hours in the year (24 x 365) = 3,000 8,760 = 34. Can i still file my 2010 taxes online 25%           Mary can deduct 34. Can i still file my 2010 taxes online 25% of any direct expenses for the basement. Can i still file my 2010 taxes online However, because her indirect expenses are for the entire house, she can deduct only 17. Can i still file my 2010 taxes online 13% of the indirect expenses. Can i still file my 2010 taxes online She figures the percentage for her indirect expenses as follows. Can i still file my 2010 taxes online Business percentage of the basement 50% Multiplied by: Percentage of time used for daycare × 34. Can i still file my 2010 taxes online 25% Percentage for indirect expenses 17. Can i still file my 2010 taxes online 13% Mary completes Form 8829, Part I, figuring the percentage of her home used for business, including the percentage of time the basement was used. Can i still file my 2010 taxes online In Part II, Mary figures her deductible expenses. Can i still file my 2010 taxes online She uses the following information to complete Part II. Can i still file my 2010 taxes online Gross income from her daycare business $50,000 Expenses not related to the business use of the home $25,000 Tentative profit $25,000 Rent $8,400 Utilities $850 Painting the basement $500 Mary enters her tentative profit, $25,000, on line 8. Can i still file my 2010 taxes online (This figure is the same as the amount on line 29 of her Schedule C (Form 1040). Can i still file my 2010 taxes online ) The expenses she paid for rent and utilities relate to her entire home. Can i still file my 2010 taxes online Therefore, she enters the amount paid for rent on line 18, column (b), and the amount paid for utilities on line 20, column (b). Can i still file my 2010 taxes online She shows the total of these expenses on line 22, column (b). Can i still file my 2010 taxes online For line 23, she multiplies the amount on line 22, column (b) by the percentage on line 7 and enters the result, $1,585. Can i still file my 2010 taxes online Mary paid $500 to have the basement painted. Can i still file my 2010 taxes online The painting is a direct expense. Can i still file my 2010 taxes online However, because she did not use the basement exclusively for daycare, she must multiply $500 by the percentage of time the basement was used for daycare (34. Can i still file my 2010 taxes online 25% – line 6). Can i still file my 2010 taxes online She enters $171 (34. Can i still file my 2010 taxes online 25% × $500) on line 19, column (a). Can i still file my 2010 taxes online She adds line 22, column (a), and line 23 and enters $1,756 ($171 + $1,585) on line 25. Can i still file my 2010 taxes online This is less than her deduction limit (line 15), so she can deduct the entire amount. Can i still file my 2010 taxes online She follows the instructions to complete the rest of Part II and enters $1,756 on lines 33 and 35. Can i still file my 2010 taxes online She then carries the $1,756 to line 30 of her Schedule C (Form 1040). Can i still file my 2010 taxes online Example 2. Can i still file my 2010 taxes online Assume the same facts as in Example 1 except that Mary also has another room that was available each business day for children to take naps in. Can i still file my 2010 taxes online Although she did not keep a record of the number of hours the room was actually used for naps, it was used for part of each business day. Can i still file my 2010 taxes online Since the room was available for business use during regular operating hours each business day and was used regularly in the business, it is considered used for daycare throughout each business day. Can i still file my 2010 taxes online The basement and room are 60% of the total area of her home. Can i still file my 2010 taxes online In figuring her expenses, 34. Can i still file my 2010 taxes online 25% of any direct expenses for the basement and room are deductible. Can i still file my 2010 taxes online In addition, 20. Can i still file my 2010 taxes online 55% (34. Can i still file my 2010 taxes online 25% × 60%) of her indirect expenses are deductible. Can i still file my 2010 taxes online Example 3. Can i still file my 2010 taxes online Assume the same facts as in Example 1 except that Mary stopped using her home for a daycare facility on June 24, 2013. Can i still file my 2010 taxes online She used the basement for daycare an average of 12 hours a day, 5 days a week, but for only 25 weeks of the year. Can i still file my 2010 taxes online During the other 12 hours a day, the family could still use the basement. Can i still file my 2010 taxes online She figures the percentage of time the basement was used for business as follows. Can i still file my 2010 taxes online Number of hours used for daycare (12 x 5 x 25) Total number of hours during period used (24 x 175) = 1,500 4,200 = 35. Can i still file my 2010 taxes online 71%           Mary can deduct 35. Can i still file my 2010 taxes online 71% of any direct expenses for the basement. Can i still file my 2010 taxes online However, because her indirect expenses are for the entire house, she can deduct only 17. Can i still file my 2010 taxes online 86% of the indirect expenses. Can i still file my 2010 taxes online She figures the percentage for her indirect expenses as follows. Can i still file my 2010 taxes online Business percentage of the basement 50% Multiplied by: Percentage of time used for daycare × 35. Can i still file my 2010 taxes online 71% Percentage for indirect expenses 17. Can i still file my 2010 taxes online 86% Meals. Can i still file my 2010 taxes online   If you provide food for your daycare recipients, do not include the expense as a cost of using your home for business. Can i still file my 2010 taxes online Claim it as a separate deduction on your Schedule C (Form 1040). Can i still file my 2010 taxes online You can never deduct the cost of food consumed by you or your family. Can i still file my 2010 taxes online You can deduct as a business expense 100% of the actual cost of food consumed by your daycare recipients (see Standard meal and snack rates , later, for an optional method for eligible children) and generally only 50% of the cost of food consumed by your employees. Can i still file my 2010 taxes online However, you can deduct 100% of the cost of food consumed by your employees if its value can be excluded from their wages as a de minimis fringe benefit. Can i still file my 2010 taxes online For more information on meals that meet these requirements, see Meals in chapter 2 of Publication 15-B, Employer's Tax Guide to Fringe Benefits. Can i still file my 2010 taxes online   If you deduct the actual cost of food for your daycare business, keep a separate record (with receipts) of your family's food costs. Can i still file my 2010 taxes online   Reimbursements you receive from a sponsor under the Child and Adult Care Food Program of the Department of Agriculture are taxable only to the extent they exceed your expenses for food for eligible children. Can i still file my 2010 taxes online If your reimbursements are more than your expenses for food, show the difference as income in Part I of Schedule C (Form 1040). Can i still file my 2010 taxes online If your food expenses are greater than the reimbursements, show the difference as an expense in Part V of Schedule C (Form 1040). Can i still file my 2010 taxes online Do not include payments or expenses for your own children if they are eligible for the program. Can i still file my 2010 taxes online Follow this procedure even if you receive a Form 1099-MISC, Miscellaneous Income, reporting a payment from the sponsor. Can i still file my 2010 taxes online Standard meal and snack rates. Can i still file my 2010 taxes online   If you qualify as a family daycare provider, you can use the standard meal and snack rates, instead of actual costs, to compute the deductible cost of meals and snacks provided to eligible children. Can i still file my 2010 taxes online For these purposes: A family daycare provider is a person engaged in the business of providing family daycare. Can i still file my 2010 taxes online Family daycare is childcare provided to eligible children in the home of the family daycare provider. Can i still file my 2010 taxes online The care must be non-medical, not involve a transfer of legal custody, and generally last less than 24 hours each day. Can i still file my 2010 taxes online Eligible children are minor children receiving family daycare in the home of the family daycare provider. Can i still file my 2010 taxes online Eligible children do not include children who are full-time or part-time residents in the home where the childcare is provided or children whose parents or guardians are residents of the same home. Can i still file my 2010 taxes online Eligible children do not include children who receive daycare services for personal reasons of the provider. Can i still file my 2010 taxes online For example, if a provider provides daycare services for a relative as a favor to that relative, that child is not an eligible child. Can i still file my 2010 taxes online   You can compute the deductible cost of each meal and snack you actually purchased and served to an eligible child during the time period you provided family daycare using the standard meal and snack rates shown in Table 3, later. Can i still file my 2010 taxes online You can use the standard meal and snack rates for a maximum of one breakfast, one lunch, one dinner, and three snacks per eligible child per day. Can i still file my 2010 taxes online If you receive reimbursement for a particular meal or snack, you can deduct only the portion of the applicable standard meal or snack rate that is more than the amount of the reimbursement. Can i still file my 2010 taxes online   You can use either the standard meal and snack rates or actual costs to calculate the deductible cost of food provided to eligible children in the family daycare for any particular tax year. Can i still file my 2010 taxes online If you choose to use the standard meal and snack rates for a particular tax year, you must use the rates for all your deductible food costs for eligible children during that tax year. Can i still file my 2010 taxes online However, if you use the standard meal and snack rates in any tax year, you can use actual costs to compute the deductible cost of food in any other tax year. Can i still file my 2010 taxes online   If you use the standard meal and snack rates, you must maintain records to substantiate the computation of the total amount deducted for the cost of food provided to eligible children. Can i still file my 2010 taxes online The records kept should include the name of each child, dates and hours of attendance in the daycare, and the type and quantity of meals and snacks served. Can i still file my 2010 taxes online This information can be recorded in a log similar to the one shown in Exhibit A, near the end of this publication. Can i still file my 2010 taxes online   The standard meal and snack rates include beverages, but do not include non-food supplies used for food preparation, service, or storage, such as containers, paper products, or utensils. Can i still file my 2010 taxes online These expenses can be claimed as a separate deduction on your Schedule C (Form 1040). Can i still file my 2010 taxes online     Table 3. Can i still file my 2010 taxes online Standard Meal and Snack Rates1 Location of Family Daycare Provider Breakfast Lunch Dinner Snack States other than Alaska an
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The Can I Still File My 2010 Taxes Online

Can i still file my 2010 taxes online Internal Revenue Bulletin:  2013-7  February 11, 2013  Rev. Can i still file my 2010 taxes online Proc. Can i still file my 2010 taxes online 2013-16 Table of Contents SECTION 1. Can i still file my 2010 taxes online PURPOSE SECTION 2. Can i still file my 2010 taxes online BACKGROUND—HAMP AND THE HAMP PRINCIPAL REDUCTION ALTERNATIVE SECTION 3. Can i still file my 2010 taxes online BACKGROUND—APPLICABLE PROVISIONS OF LAW SECTION 4. Can i still file my 2010 taxes online FEDERAL INCOME TAX TREATMENT SECTION 5. Can i still file my 2010 taxes online INFORMATION-REPORTING OBLIGATIONS SECTION 6. Can i still file my 2010 taxes online HAMP-PRA BORROWERS’ REPORTING OF DISCHARGES OF INDEBTEDNESS UNDER HAMP-PRA SECTION 7. Can i still file my 2010 taxes online PENALTY RELIEF FOR 2012 SECTION 8. Can i still file my 2010 taxes online SCOPE AND EFFECTIVE DATE SECTION 9. Can i still file my 2010 taxes online DRAFTING INFORMATION SECTION 1. Can i still file my 2010 taxes online PURPOSE This revenue procedure provides guidance to mortgage loan holders, loan servicers, and borrowers who are participating in the Department of the Treasury’s (Treasury) and Department of Housing and Urban Development’s (HUD) Home Affordable Modification Program® (HAMP®). Can i still file my 2010 taxes online Under HAMP, a borrower may be eligible for principal reduction of the outstanding balance of a qualifying mortgage pursuant to the program’s Principal Reduction AlternativeSM (PRA). Can i still file my 2010 taxes online In appropriate cases, HAMP has been offering the PRA as part of a HAMP loan modification since the last quarter of 2010. Can i still file my 2010 taxes online Current plans call for HAMP to continue accepting new borrowers through the end of 2013. Can i still file my 2010 taxes online The Internal Revenue Service (Service) is providing this guidance to address the tax consequences for borrowers (HAMP-PRA borrowers) who are participating in the PRA and the reporting obligations for participating mortgage loan holders and servicers. Can i still file my 2010 taxes online SECTION 2. Can i still file my 2010 taxes online BACKGROUND—HAMP AND THE HAMP PRINCIPAL REDUCTION ALTERNATIVE . Can i still file my 2010 taxes online 01 To help distressed borrowers lower their monthly mortgage payments, Treasury and HUD established HAMP for mortgage loans that are not owned or guaranteed by the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac). Can i still file my 2010 taxes online A description of the program can be found at www. Can i still file my 2010 taxes online makinghomeaffordable. Can i still file my 2010 taxes online gov. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 02 Under HAMP, a participating loan servicer, acting on behalf of the mortgage loan holder, must consider a sequence of modification steps for each eligible borrower’s mortgage loan until the borrower’s monthly payment is reduced to a monthly payment amount determined under the HAMP guidelines. Can i still file my 2010 taxes online These steps include a reduction in the mortgage loan’s interest rate, an extension of the mortgage loan’s term, and a reduction in the mortgage loan’s principal balance. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 03 In some cases, the unpaid principal balance of the modified mortgage loan is divided into (1) an amount that bears stated interest and that is used to calculate the borrower’s new monthly mortgage payment (the “Non-forbearance Portion”), and (2) a forbearance amount, which does not bear stated interest and on which periodic payments of stated principal are not required. Can i still file my 2010 taxes online The stated principal of the forbearance amount is due upon the earliest of the borrower’s transfer of the property, payoff of the balance on the Non-forbearance Portion of the mortgage loan, or maturity of the mortgage loan. Can i still file my 2010 taxes online However, as noted in section 2. Can i still file my 2010 taxes online 06 of this revenue procedure, a HAMP-PRA borrower sometimes may not have to pay all or a portion of the forbearance amount. Can i still file my 2010 taxes online (The forbearance amount associated with a HAMP-PRA principal reduction is called the “PRA Forbearance Amount. Can i still file my 2010 taxes online ”) . Can i still file my 2010 taxes online 04 If a mortgage loan is being considered for a HAMP modification and the amount owed on the mortgage loan is greater than 115 percent of the value of the property, then the servicer must consider whether principal reduction under PRA should be used as part of the HAMP modification. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 05 The first step toward a HAMP modification is a trial period plan, in which the borrower’s monthly mortgage payment is set at a monthly payment amount determined under the HAMP guidelines. Can i still file my 2010 taxes online The trial period plan effective date is the due date for the first of the reduced payments that are to be made under the trial period plan. Can i still file my 2010 taxes online (It is the first day of either the first or the second month after the servicer transmits the trial period notice to the borrower. Can i still file my 2010 taxes online ) In general, the trial period is three months, and, during this period, the borrower must satisfy certain conditions before the changes to the terms of the mortgage loan become permanent (the “Trial Period Conditions”). Can i still file my 2010 taxes online Specifically, depending on the borrower’s trial period payment history, the borrower’s compliance with HAMP and servicer guidelines, and his or her satisfaction of all other Trial Period Conditions, the borrower will be offered a permanent modification of the terms of the mortgage loan, including monthly mortgage payments that are lower than those under the old mortgage loan. Can i still file my 2010 taxes online Until the effective date of a permanent modification, the terms of the existing mortgage loan continue to apply. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 06 After the mortgage loan is permanently modified under HAMP, if the modified mortgage loan is in good standing on the first, second, or third annual anniversary of the trial period plan effective date (the “Three-year Period”), the servicer must reduce the unpaid principal balance of the mortgage loan on the respective anniversary date by one-third of the initial PRA Forbearance Amount. Can i still file my 2010 taxes online (The servicer allocates the entire reduction to the remaining PRA Forbearance Amount. Can i still file my 2010 taxes online ) In general, if a HAMP-PRA borrower’s mortgage loan is in good standing and if the HAMP-PRA borrower pays in full the Non-forbearance Portion of the mortgage loan prior to the reduction of the entire PRA Forbearance Amount, the servicer must reduce the remaining outstanding principal balance of the mortgage loan by the remaining PRA Forbearance Amount. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 07 In connection with every HAMP loan modification, the HAMP program administrator (acting on behalf of the federal government) provides incentives to the borrower, the servicer, and the investor (that is, the holder of the mortgage loan). Can i still file my 2010 taxes online If a HAMP loan modification includes a PRA principal reduction, the HAMP program administrator makes additional incentive payments to the investor. Can i still file my 2010 taxes online These additional incentives are called “PRA Investor Incentive Payments” and are generally spread over three years. Can i still file my 2010 taxes online The size of the PRA Investor Incentive Payments depends on the amount of principal reduced, the loan-to-value ratio at the time of the HAMP modification, and the loan’s payment history before the modification. Can i still file my 2010 taxes online The PRA Investor Incentive Payments range from 18 to 63 percent of the principal amounts reduced. Can i still file my 2010 taxes online For purposes of this revenue procedure, the excess of the initial PRA Forbearance Amount of a mortgage loan over the aggregate PRA Investor Incentive Payments scheduled to be paid with respect to that loan is called the “PRA Adjusted Forbearance Amount. Can i still file my 2010 taxes online ” . Can i still file my 2010 taxes online 08 A PRA Investor Incentive Payment is earned by the investor on each date on which the servicer reduces the unpaid principal balance of the mortgage loan by a portion of the PRA Forbearance Amount (generally, on the first three annual anniversaries of the trial period plan effective date). Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 09 If a HAMP-PRA borrower’s early payment in full of the Non-forbearance Portion of the mortgage loan accelerates the reduction of the remaining PRA Forbearance Amount (described above in section 2. Can i still file my 2010 taxes online 06 of this revenue procedure), the remaining PRA Investor Incentive Payments from the HAMP program administrator are also accelerated. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 10 If, prior to completion of the Three-year Period, a mortgage loan ceases to be in good standing because of the HAMP-PRA borrower’s payment history, then the remaining PRA Forbearance Amount is not further reduced and is due when the HAMP-PRA borrower transfers the property, the HAMP-PRA borrower refinances, or otherwise pays off the Non-forbearance Portion of the mortgage loan, or the mortgage loan matures. Can i still file my 2010 taxes online SECTION 3. Can i still file my 2010 taxes online BACKGROUND—APPLICABLE PROVISIONS OF LAW . Can i still file my 2010 taxes online 01 Under § 61 of the Internal Revenue Code, except as otherwise provided in subtitle A, gross income means all income from whatever source derived, including income from discharge of indebtedness. Can i still file my 2010 taxes online See § 61(a)(12). Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 02 Under § 1. Can i still file my 2010 taxes online 1001-3 of the Income Tax Regulations, if a debt instrument undergoes a significant modification, then the modification results in an exchange of the original debt instrument for the modified debt instrument. Can i still file my 2010 taxes online In general, an agreement to change a term of a debt instrument is a modification at the time the borrower and holder enter into the agreement, even if the change in term is not immediately effective. Can i still file my 2010 taxes online However, if the change is conditioned on reasonable closing conditions, a modification occurs on the closing date of the agreement. Can i still file my 2010 taxes online See § 1. Can i still file my 2010 taxes online 1001-3(c)(6). Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 03 Under § 108(e)(10), in the case of a debt-for-debt exchange (including a deemed exchange under § 1. Can i still file my 2010 taxes online 1001-3), the borrower is treated as having satisfied the original debt instrument with an amount of money equal to the issue price of the new debt instrument. Can i still file my 2010 taxes online If the amount of debt satisfied in this manner exceeds that issue price, the borrower realizes discharge of indebtedness income on the exchange. Can i still file my 2010 taxes online See also § 1. Can i still file my 2010 taxes online 61-12(c). Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 04 The issue price of a non-publicly traded debt instrument issued for non-publicly traded property generally reflects the amount of principal that the borrower is required to pay to the holder of the instrument. Can i still file my 2010 taxes online If a borrower has the ability to avoid paying certain amounts (including principal) without violating the terms of the instrument, the payment schedule for the instrument is generally determined based on an assumption that the borrower will avoid any requirement to make those payments. Can i still file my 2010 taxes online See, e. Can i still file my 2010 taxes online g. Can i still file my 2010 taxes online , §§ 1. Can i still file my 2010 taxes online 1272-1(c)(5) and 1. Can i still file my 2010 taxes online 1274-2(d). Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 05 Under § 108(a), gross income does not include any amount that but for § 108(a) would be includible in gross income by reason of the discharge (in whole or in part) of a taxpayer’s indebtedness if (1) the indebtedness discharged is qualified principal residence indebtedness that is discharged before January 1, 2014, or (2) the discharge occurs when the taxpayer is insolvent. Can i still file my 2010 taxes online Section 108(a)(1)(E) and 108(a)(1)(B). Can i still file my 2010 taxes online (Although § 108 contains other exclusions as well, this revenue procedure focuses on these two exclusions because they are the most likely to apply to the greatest number of HAMP-PRA borrowers. Can i still file my 2010 taxes online ) . Can i still file my 2010 taxes online 06 Under §§ 108(h) and 163(h)(3)(B), qualified principal residence indebtedness is any indebtedness that is incurred by a borrower to buy, build, or substantially improve the borrower’s principal residence and is secured by that residence. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 07 Qualified principal residence indebtedness also includes a loan secured by the borrower’s principal residence that refinances qualified principal residence indebtedness, but only to the extent of the amount of the refinanced indebtedness. Can i still file my 2010 taxes online See §§ 108(h) and 163(h)(3)(B)(i). Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 08 The maximum amount of discharged indebtedness that a borrower may exclude from gross income under the qualified principal residence indebtedness exclusion is $2,000,000 ($1,000,000 for a married individual filing a separate return). Can i still file my 2010 taxes online Under § 108(h)(4), if only part of the discharged indebtedness is qualified principal residence indebtedness, then the exclusion applies only to the amount of the discharged indebtedness that exceeds the amount of the loan (determined immediately before the discharge) that is not qualified principal residence indebtedness. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 09 Under § 108(a)(3), the insolvency exclusion applies to the lesser of the amount of the debt discharged or the amount by which the taxpayer is insolvent immediately before the discharge. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 10 Section 108(d)(3) provides that, for purposes of the insolvency exclusion, a taxpayer is insolvent to the extent that the taxpayer’s total liabilities exceed the fair market value of all of the taxpayer’s assets immediately before the discharge of indebtedness. Can i still file my 2010 taxes online Under § 108(a)(2)(C), the qualified principal residence indebtedness exclusion takes precedence over the insolvency exclusion when both exclusions apply to discharged indebtedness, unless the taxpayer elects to apply the insolvency exclusion. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 11 If an amount is excluded from gross income as a discharge of qualified principal residence indebtedness, the taxpayer must reduce the basis of the taxpayer’s principal residence. Can i still file my 2010 taxes online See § 108(h)(1). Can i still file my 2010 taxes online If a discharged amount is excluded from gross income because the taxpayer was insolvent when the discharge occurred, the taxpayer must reduce certain tax attributes (possibly including basis). Can i still file my 2010 taxes online See § 108(b). Can i still file my 2010 taxes online For further discussion of income from the discharge of indebtedness, the qualified principal residence indebtedness exclusion, the insolvency exclusion, and other exclusions from gross income that may apply, see Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals). Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 12 Taxpayers who exclude any discharged amounts from gross income report both the exclusion and the resulting reduction in basis or other tax attributes on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). Can i still file my 2010 taxes online See Form 982 instructions and Publication 4681. Can i still file my 2010 taxes online This form is to be filed with the tax return for the taxable year in which the amount is discharged but is excluded from gross income. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 13 Governmental payments made to or on behalf of individuals or other persons are included within the broad definition of gross income under § 61 unless an exception applies. Can i still file my 2010 taxes online See Notice 2003-18, 2003-1 C. Can i still file my 2010 taxes online B. Can i still file my 2010 taxes online 699, and Rev. Can i still file my 2010 taxes online Rul. Can i still file my 2010 taxes online 79-356, 1979-2 C. Can i still file my 2010 taxes online B. Can i still file my 2010 taxes online 28. Can i still file my 2010 taxes online However, if disbursements are made by a governmental unit to individuals in the interest of the general welfare (that is, are generally based on individual or family need) and the disbursements do not represent compensation for services, then the amounts disbursed are excluded from the income of the recipient (general welfare exclusion). Can i still file my 2010 taxes online See Rev. Can i still file my 2010 taxes online Rul. Can i still file my 2010 taxes online 2005-46, 2005-2 C. Can i still file my 2010 taxes online B. Can i still file my 2010 taxes online 120, and Rev. Can i still file my 2010 taxes online Rul. Can i still file my 2010 taxes online 75-246, 1975-1 C. Can i still file my 2010 taxes online B. Can i still file my 2010 taxes online 24. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 14 Under § 451 and § 1. Can i still file my 2010 taxes online 451-1(a), a taxpayer that uses the cash receipts and disbursements method of accounting includes income in gross income when the taxpayer actually or constructively receives the income. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 15 Section 6041 requires every person engaged in a trade or business (including the United States and its agencies) to (1) file an information return (Form 1099-MISC, Miscellaneous Income, is used for this purpose) for each calendar year in which the person makes, in the course of its trade or business, payments to another person of fixed or determinable income aggregating $600 or more, and (2) furnish a copy of the information return to that other person. Can i still file my 2010 taxes online See § 6041(a) and (d) and § 1. Can i still file my 2010 taxes online 6041-1(a)(1) and (b). Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 16 Section 6050P requires applicable entities (including the United States and its agencies, financial entities, and any organization a significant trade or business of which is the lending of money) to (1) file an information return (Form 1099-C, Cancellation of Debt, is used for this purpose) for each calendar year in which it discharges indebtedness of another person of $600 or more, and (2) furnish a copy of the information return to that other person. Can i still file my 2010 taxes online See § 6050P(a)-(c) and §§ 1. Can i still file my 2010 taxes online 6050P-1(a) and 1. Can i still file my 2010 taxes online 6050P-2(a) and (d). Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 17 Section 6721 imposes penalties with respect to information returns required to be filed with the Service. Can i still file my 2010 taxes online These penalties apply in the case of a failure to timely file an information return, a failure to include all required information on the return, or the inclusion of incorrect information on the return. Can i still file my 2010 taxes online Section 6724(d)(1) includes Forms 1099-MISC and 1099-C in the term “information return. Can i still file my 2010 taxes online ” . Can i still file my 2010 taxes online 18 Section 6722 imposes penalties with respect to payee statements required to be furnished to payees. Can i still file my 2010 taxes online These penalties apply in the case of a failure to timely furnish a payee statement, a failure to include all required information on the statement, or the inclusion of incorrect information on the payee statement. Can i still file my 2010 taxes online Section 6724(d)(2) includes in the term “payee statement” copies of Forms 1099-MISC and 1099-C that are required to be furnished to taxpayers. Can i still file my 2010 taxes online SECTION 4. Can i still file my 2010 taxes online FEDERAL INCOME TAX TREATMENT . Can i still file my 2010 taxes online 01 Because a HAMP modification with a PRA principal reduction is a significant modification, it results in a deemed debt-for-debt exchange in which the HAMP-PRA borrower satisfies the old mortgage loan by issuing a new one. Can i still file my 2010 taxes online See § 1. Can i still file my 2010 taxes online 1001-3. Can i still file my 2010 taxes online At the time of the modification, therefore, under § 108 and this revenue procedure, the HAMP-PRA borrower realizes discharge of indebtedness income equal to any excess of the adjusted issue price of the old mortgage loan (which was satisfied in the deemed exchange) over the issue price of the new (post-modification) mortgage loan. Can i still file my 2010 taxes online See also § 61(a)(12) and § 1. Can i still file my 2010 taxes online 61-12(c). Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 02 A HAMP-PRA borrower has the ability to avoid payment of the PRA Adjusted Forbearance Amount. Can i still file my 2010 taxes online Because the HAMP-PRA borrower has this ability, that amount should not be taken into account in determining the issue price of the new mortgage loan. Can i still file my 2010 taxes online Because the issue price of the new mortgage loan does not include the PRA Adjusted Forbearance Amount, the PRA Adjusted Forbearance Amount contributes to the excess of the adjusted issue price of the old mortgage loan (which was satisfied in the deemed exchange) over the issue price of the new mortgage loan. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 03 On the other hand, the investor has not given up its right to receive the remainder of the PRA Forbearance Amount, because the HAMP program administrator is expected to make those payments on the HAMP-PRA borrower’s behalf by making the PRA Investor Incentive Payments. Can i still file my 2010 taxes online Because the remainder of the PRA Forbearance Amount is payable in this manner, that remainder is included in the issue price of the new mortgage loan. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 04 The Trial Period Conditions are reasonable closing conditions that must be satisfied before the changes to the terms of the mortgage loan become permanent. Can i still file my 2010 taxes online Therefore, for purposes of § 1. Can i still file my 2010 taxes online 1001-3, the date of the modification is the date of the permanent modification. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 05 Unless an exclusion applies, the HAMP-PRA borrower includes in gross income the discharge of indebtedness income described in section 4. Can i still file my 2010 taxes online 01 of this revenue procedure for the taxable year in which the permanent modification occurs. Can i still file my 2010 taxes online Under certain conditions, however, section 6 of this revenue procedure permits a borrower to report the discharge of indebtedness under HAMP-PRA over the Three-year Period. Can i still file my 2010 taxes online The qualified principal residence indebtedness exclusion under § 108(a)(1)(E) and the insolvency exclusion under § 108(a)(1)(B) are two exclusions that may apply to the discharge. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 06 The PRA Investor Incentive Payment is treated as a payment on the mortgage loan by the HAMP program administrator on behalf of the HAMP-PRA borrower. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 07 To the extent that the HAMP-PRA borrower uses the property as the HAMP-PRA borrower’s principal residence or the property is occupied by the HAMP-PRA borrower’s legal dependent, parent, or grandparent without rent being charged or collected, the HAMP-PRA borrower excludes from his or her gross income under the general welfare exclusion the PRA Investor Incentive Payments that the HAMP program administrator makes to the investor in the mortgage loan. Can i still file my 2010 taxes online This is consistent with Rev. Can i still file my 2010 taxes online Rul. Can i still file my 2010 taxes online 2009-19, 2009-28 I. Can i still file my 2010 taxes online R. Can i still file my 2010 taxes online B. Can i still file my 2010 taxes online 111, which addressed the treatment of Pay-for-Performance Success Payments. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 08 To the extent that the HAMP-PRA borrower uses the property as a rental property or holds the property vacant and available for rent, the HAMP-PRA borrower includes PRA Investor Incentive Payments in gross income. Can i still file my 2010 taxes online If the HAMP-PRA borrower uses the cash receipts and disbursements method of accounting, then the HAMP-PRA borrower includes a PRA Investor Incentive Payment in gross income in the taxable year in which it is applied as a payment on the HAMP-PRA borrower’s mortgage loan. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 09 As described in section 2. Can i still file my 2010 taxes online 09 of this revenue procedure, if a HAMP-PRA borrower pays in full the Non-forbearance Portion of the mortgage loan while the loan is in good standing and prior to completion of the Three-year Period, that payment accelerates both the reduction in the remaining PRA Forbearance Amount and the PRA Investor Incentive Payments from the HAMP program administrator. Can i still file my 2010 taxes online To the extent that the HAMP-PRA borrower is described in section 4. Can i still file my 2010 taxes online 07 of this revenue procedure, the HAMP-PRA borrower excludes from his or her gross income under the general welfare exclusion the accelerated PRA Investor Incentive Payments. Can i still file my 2010 taxes online To the extent that the HAMP-PRA borrower is described in section 4. Can i still file my 2010 taxes online 08 of this revenue procedure, the HAMP-PRA borrower includes in income in the year of the acceleration the remaining amount of the PRA Investor Incentive Payment. Can i still file my 2010 taxes online SECTION 5. Can i still file my 2010 taxes online INFORMATION-REPORTING OBLIGATIONS . Can i still file my 2010 taxes online 01 Under § 6050P, the investor is required to file a Form 1099-C with respect to a borrower who realizes discharge of indebtedness of $600 or more. Can i still file my 2010 taxes online A copy of this form is required to be furnished to the borrower. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 02 As stated in sections 4. Can i still file my 2010 taxes online 01 and 4. Can i still file my 2010 taxes online 04 of this revenue procedure, the HAMP-PRA discharge of indebtedness is realized at the time of the permanent modification of the mortgage loan. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 03 An investor is an applicable entity that is required under § 1. Can i still file my 2010 taxes online 6050P-1 and this revenue procedure to issue a Form 1099-C for discharge of indebtedness. Can i still file my 2010 taxes online Under § 1. Can i still file my 2010 taxes online 6050P-1(b)(2)(F), the permanent modification of a mortgage loan is an identifiable event. Can i still file my 2010 taxes online Identifiable events determine when Forms 1099-C have to be issued. Can i still file my 2010 taxes online Thus, the Form 1099-C is issued for the calendar year in which the permanent mortgage loan modification occurs. Can i still file my 2010 taxes online This rule under § 1. Can i still file my 2010 taxes online 6050P-1(b)(2)(F) applies even if, under section 6 of this revenue procedure, the HAMP-PRA borrower chooses to treat the HAMP-PRA discharge as being realized at the times when the unpaid principal balance of the new mortgage loan is reduced. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 04 The investor (or the loan servicer acting on behalf of the investor) reports the full amount of the discharge on the Form 1099-C regardless of whether some or all of the amount is excludible from income under the qualified principal residence indebtedness exclusion, the insolvency exclusion, or any other exclusion that may apply. Can i still file my 2010 taxes online That discharged amount will generally be the PRA Adjusted Forbearance Amount (which does not include the amounts expected to be satisfied by PRA Investor Incentive Payments). Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 05 To the extent that PRA Investor Incentive Payments are made on behalf of a HAMP-PRA borrower who is described in section 4. Can i still file my 2010 taxes online 07 of this revenue procedure, the PRA Investor Incentive Payments are excluded from the gross income of the HAMP-PRA borrower, and thus they are not fixed or determinable income to the HAMP-PRA borrower. Can i still file my 2010 taxes online Under § 6041, these payments are not subject to information reporting. Can i still file my 2010 taxes online See Notice 2011-14, 2011-11 I. Can i still file my 2010 taxes online R. Can i still file my 2010 taxes online B. Can i still file my 2010 taxes online 544, 546. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 06 To the extent that PRA Investor Incentive Payments are made on behalf of a HAMP-PRA borrower who is described in section 4. Can i still file my 2010 taxes online 08 of this revenue procedure, the PRA Investor Incentive Payments are includible in gross income as fixed or determinable income in the taxable year required by the HAMP-PRA borrower’s method of accounting. Can i still file my 2010 taxes online The payment is subject to the information reporting requirements of § 6041, as described in section 3. Can i still file my 2010 taxes online 15 of this revenue procedure. Can i still file my 2010 taxes online Accordingly, the HAMP program administrator is required to issue a Form 1099-MISC reporting the PRA Investor Incentive Payment. Can i still file my 2010 taxes online SECTION 6. Can i still file my 2010 taxes online HAMP-PRA BORROWERS’ REPORTING OF DISCHARGES OF INDEBTEDNESS UNDER HAMP-PRA . Can i still file my 2010 taxes online 01 In general. Can i still file my 2010 taxes online The HAMP-PRA program began in the last quarter of 2010, and since that time there has been uncertainty about whether the amount of the discharge of indebtedness should be reported in the year of the permanent modification or over the Three-year Period (when the unpaid principal balance on the new mortgage loan is reduced). Can i still file my 2010 taxes online As a result, some HAMP-PRA borrowers have been reporting the discharge of indebtedness under HAMP-PRA over the Three-year Period. Can i still file my 2010 taxes online Given the temporary nature of the program and the issuance of this guidance after participation in the program has begun, in the interests of equitable and sound tax administration, HAMP-PRA borrowers may report discharges of indebtedness under HAMP-PRA under the rules in this section 6. Can i still file my 2010 taxes online A HAMP-PRA borrower may choose to report discharges of indebtedness under HAMP-PRA pursuant to the rules in this section 6 only if the borrower applies the same borrower option under section 6. Can i still file my 2010 taxes online 02 of this revenue procedure consistently to the taxable year of the permanent modification and to all subsequent taxable years. Can i still file my 2010 taxes online Thus, a HAMP-PRA borrower may not choose a borrower option under section 6. Can i still file my 2010 taxes online 02 of this revenue procedure if a statute of limitations has expired for any of the taxable years that are necessary for consistent application of that option. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 02 HAMP-PRA borrower options. Can i still file my 2010 taxes online A HAMP-PRA borrower may treat the HAMP-PRA discharge as being realized in either of the following ways— (1) One hundred percent of the PRA Adjusted Forbearance Amount at the time of the permanent modification; or (2) One third of the PRA Adjusted Forbearance Amount on each of the first three annual anniversaries of the trial period plan effective date (described in section 2. Can i still file my 2010 taxes online 06 of this revenue procedure), when, as required by the terms of the new mortgage loan, the servicer reduces the unpaid principal balance of the new mortgage loan. Can i still file my 2010 taxes online If some or all of the reduction in the unpaid principal balance is accelerated (as described in section 2. Can i still file my 2010 taxes online 06 of this revenue procedure) because the HAMP-PRA borrower prepays the Non-forbearance Portion of the mortgage loan, then the HAMP-PRA discharge represented by the amount of the reduction that was accelerated is treated as being realized at the time of the accelerated reduction. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 03 HAMP-PRA borrowers who choose to realize the HAMP-PRA discharge at the time of the permanent modification. Can i still file my 2010 taxes online (1) If a HAMP-PRA borrower chooses to treat the HAMP-PRA discharge as being realized at the time of the permanent modification, then for the taxable year in which the permanent modification occurs, the HAMP-PRA borrower reports on Form 982 the amount, if any, of the discharge that is excluded from gross income and includes in gross income any remaining discharge. Can i still file my 2010 taxes online (2) If a HAMP-PRA borrower’s mortgage loan was permanently modified under HAMP in 2010 or 2011, and if the borrower was reporting the discharge of indebtedness using the method described in section 6. Can i still file my 2010 taxes online 02(2) of this revenue procedure, then the borrower may change to reporting the discharge of indebtedness using the method described in section 6. Can i still file my 2010 taxes online 02(1) of this revenue procedure by filing a 2012 Form 982 with the borrower’s timely filed (with extensions) 2012 income tax return. Can i still file my 2010 taxes online This section 6. Can i still file my 2010 taxes online 03(2) applies only if the change to reporting the discharge using the method described in section 6. Can i still file my 2010 taxes online 02(1) of this revenue procedure does not change the borrower’s federal income tax liability (including any change in federal income tax liability due to a change in basis or tax attributes (under § 108(h)(1) or § 108(b))) for any taxable year prior to the borrower’s 2012 taxable year. Can i still file my 2010 taxes online To make this change, the borrower must— (i) Compute the amount of discharge of indebtedness that would be included in income under § 61(a)(12) or excluded from gross income under § 108, basing the computation of the discharge on the facts as of the year of the permanent modification; and (ii) Report on a 2012 Form 982 the reduction in basis or tax attributes (under § 108(h)(1) or § 108(b)) due to the permanent modification that the borrower would have reported on the Form 982 for the taxable year of the permanent modification, minus any reductions due to the permanent modification that the borrower actually reported on Forms 982 for taxable years prior to 2012. Can i still file my 2010 taxes online (3) Example. Can i still file my 2010 taxes online The following example illustrates the application of section 6. Can i still file my 2010 taxes online 03(2) of this revenue procedure. Can i still file my 2010 taxes online In 2010, B’s basis in B’s principal residence was $330,000. Can i still file my 2010 taxes online In 2010, B’s mortgage loan on the principal residence is permanently modified under HAMP-PRA. Can i still file my 2010 taxes online B realized $30,000 of cancellation of indebtedness from the permanent modification, all of which qualifies for the exclusion from income for qualified principal residence indebtedness under § 108(a)(1)(E). Can i still file my 2010 taxes online The trial period plan effective date also fell in 2010. Can i still file my 2010 taxes online B’s federal income tax return for 2010 was consistent with B’s reporting this discharge of indebtedness using the method described in section 6. Can i still file my 2010 taxes online 02(2) of this revenue procedure. Can i still file my 2010 taxes online That is, B’s 2010 return did not include income from discharge of indebtedness under HAMP-PRA, nor did the return contain a Form 982 reporting exclusion of any such discharge of indebtedness. Can i still file my 2010 taxes online The next year, B reported on line 10(b) of the 2011 Form 982 that B filed with B’s 2011 federal income tax return a $10,000 reduction in basis in the principal residence. Can i still file my 2010 taxes online For 2012, B chooses to change to reporting the discharge of indebtedness using the method described in section 6. Can i still file my 2010 taxes online 02(1) of this revenue procedure. Can i still file my 2010 taxes online Thus, B files a 2012 Form 982 with B’s timely filed (including extensions) 2012 federal income tax return, and on line 10(b) of that form, B reports a $20,000 basis reduction in the principal residence ($30,000 basis reduction that B would have excluded from income in 2010 using the method described in section 6. Can i still file my 2010 taxes online 02(1) of this revenue procedure, minus the $10,000 basis reduction that B reported on B’s 2011 Form 982). Can i still file my 2010 taxes online (4) If a HAMP-PRA borrower reports the entire HAMP-PRA discharge using the method described in section 6. Can i still file my 2010 taxes online 02(1) of this revenue procedure, and if that HAMP-PRA borrower’s mortgage loan ceases to be in good standing during the Three-year Period as described in section 2. Can i still file my 2010 taxes online 10 of this revenue procedure, then some or all of the anticipated reductions in the PRA Adjusted Forbearance Amount will not take place. Can i still file my 2010 taxes online Because the amount of these anticipated reductions was not included in determining the issue price of the new mortgage loan that, pursuant to § 1. Can i still file my 2010 taxes online 1001-3, the HAMP-PRA borrower is deemed to issue in satisfaction of the old mortgage loan, the issue price of the new mortgage loan was understated. Can i still file my 2010 taxes online Under these circumstances, the discharge of indebtedness income determined as of the date of the permanent modification will have been overstated. Can i still file my 2010 taxes online (5) The Service will not challenge a HAMP-PRA borrower who is described in section 6. Can i still file my 2010 taxes online 03(4) of this revenue procedure and who takes the following corrective measures: (i) If a HAMP-PRA borrower included any of the discharge of indebtedness in gross income, the HAMP-PRA borrower may file an amended return that does not include the amount of the discharge of indebtedness that was previously reported as gross income but that, because of the HAMP-PRA borrower’s failure to keep the new mortgage loan in good standing, was not ultimately discharged. Can i still file my 2010 taxes online The amended return should be for the taxable year in which the income was included (that is, the year of the permanent modification), provided the applicable statute of limitations remains open for that taxable year. Can i still file my 2010 taxes online (ii) If the HAMP-PRA borrower did not include any of the discharge of indebtedness in gross income (that is, if the HAMP-PRA borrower excluded all of it), the HAMP-PRA borrower may file a new Form 982 that the Service will treat as superseding the earlier Form 982. Can i still file my 2010 taxes online The new Form 982 will reflect the revised reduction in basis or in tax attributes (under § 108(h)(1) or § 108(b)). Can i still file my 2010 taxes online The new Form 982 should be the Form 982 for the year of the permanent modification and should be filed with the return for the taxable year in which the HAMP-PRA borrower’s mortgage loan ceased to be in good standing. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 04 HAMP-PRA borrowers who choose to treat the HAMP-PRA discharge as being realized on the dates on which the unpaid principal balance of the mortgage loan is reduced. Can i still file my 2010 taxes online (1) If a HAMP-PRA borrower chooses to realize the HAMP-PRA discharge at the times that the unpaid principal balance on the new mortgage loan is reduced, instead of at the time of the permanent modification, then the HAMP-PRA borrower’s federal income tax returns for the taxable year that contains the permanent modification and for the subsequent taxable years must not treat any of the discharge as being realized at the time of the permanent modification and must treat the entire HAMP-PRA discharge as being realized in the amounts—and at the times—of the reductions in the unpaid principal balance. Can i still file my 2010 taxes online Except as described in the last sentence of this paragraph, therefore, the income tax return for the year of the permanent modification must include no gross income from—nor report on Form 982 an exclusion of—any amount of the HAMP-PRA discharge. Can i still file my 2010 taxes online Instead, the HAMP-PRA discharge is included in gross income (or is reported on Form 982 as excluded from gross income) in the subsequent years in which the unpaid principal balance is reduced. Can i still file my 2010 taxes online If the first such reduction occurs in the year of the permanent modification, however, then the amount of any such reduction is reflected as an inclusion or exclusion on the federal income tax return for that year. Can i still file my 2010 taxes online (2) A HAMP-PRA borrower who has been using the method described in section 6. Can i still file my 2010 taxes online 02(1) of this revenue procedure may change to the method described in section 6. Can i still file my 2010 taxes online 02(2) but must comply with the consistency and open-year requirements described in section 6. Can i still file my 2010 taxes online 01 of this revenue procedure. Can i still file my 2010 taxes online SECTION 7. Can i still file my 2010 taxes online PENALTY RELIEF FOR 2012 . Can i still file my 2010 taxes online 01 The Service will not assert penalties under § 6721 or § 6722 against an investor for failing to timely file and furnish a 2012 Form 1099-C as required by section 5. Can i still file my 2010 taxes online 03 through 5. Can i still file my 2010 taxes online 04 and section 8. Can i still file my 2010 taxes online 02 of this revenue procedure with respect to discharge of indebtedness resulting from HAMP-PRA permanent modifications that take place during calendar year 2012 if the following requirements are satisfied: (1) Not later than February 28, 2013, a statement is sent to the HAMP-PRA borrower containing the following: (a) The HAMP-PRA borrower’s name, address, and taxpayer identification number; and (b) The date and amount of the discharge of indebtedness (as described in sections 4. Can i still file my 2010 taxes online 01 through 4. Can i still file my 2010 taxes online 04 of this revenue procedure) that is required to be reported for 2012. Can i still file my 2010 taxes online (2) Not later than March 28, 2013, a statement is sent to the Service. Can i still file my 2010 taxes online It must be in the form of a single statement that separately lists for each HAMP-PRA borrower the information specified in section 7. Can i still file my 2010 taxes online 01(1) of this revenue procedure. Can i still file my 2010 taxes online The statement should be sent to the Service at the following address: Internal Revenue Service Center Stop 6728AUSC Austin, TX 73301 . Can i still file my 2010 taxes online 02 The Service will not assert penalties under § 6721 or § 6722 with respect to any Forms 1099-MISC for 2012 that sections 5. Can i still file my 2010 taxes online 06 and 8. Can i still file my 2010 taxes online 02 of this revenue procedure require to be filed with the Service and furnished to taxpayers. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 03 Section 8. Can i still file my 2010 taxes online 03 and 8. Can i still file my 2010 taxes online 04 of this revenue procedure, below, describes penalty relief regarding Forms 1099-C and 1099-MISC for 2010 and 2011. Can i still file my 2010 taxes online SECTION 8. Can i still file my 2010 taxes online SCOPE AND EFFECTIVE DATE . Can i still file my 2010 taxes online 01 This revenue procedure applies to all borrowers, investors, and servicers who participate, or have participated, in the HAMP-PRA, regardless of when the permanent modification occurs. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 02 Section 5 of this revenue procedure is effective for Forms 1099-C and 1099-MISC due or filed after January 24, 2013. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 03 Because of the effective date in section 8. Can i still file my 2010 taxes online 02 of this revenue procedure, an investor is not subject to penalties under § 6721 or § 6722 on the grounds that the investor failed to timely file and furnish a 2010 or 2011 Form 1099-C as described in section 5. Can i still file my 2010 taxes online 03 through 5. Can i still file my 2010 taxes online 04 of this revenue procedure (or on the grounds that the investor filed or furnished a 2010 or 2011 Form 1099-C that is inconsistent with section 5. Can i still file my 2010 taxes online 03 through 5. Can i still file my 2010 taxes online 04 of this revenue procedure), provided that the investor demonstrates a good faith attempt to comply with the requirements of § 6050P and that the failure was not due to willful neglect. Can i still file my 2010 taxes online . Can i still file my 2010 taxes online 04 Because of the effective date in section 8. Can i still file my 2010 taxes online 02 of this revenue procedure, the Service will not assert penalties under § 6721 or § 6722 on the grounds of a failure to timely file and furnish a 2010 or 2011 Form 1099-MISC, as described in section 5. Can i still file my 2010 taxes online 06 of this revenue procedure. Can i still file my 2010 taxes online SECTION 9. Can i still file my 2010 taxes online DRAFTING INFORMATION The principal authors of this revenue procedure are Ronald J. Can i still file my 2010 taxes online Goldstein of the Office of Chief Counsel (Procedure and Administration); Shareen S. Can i still file my 2010 taxes online Pflanz and Sheldon A. Can i still file my 2010 taxes online Iskow of the Office of Chief Counsel (Income Tax and Accounting); and Andrea M. Can i still file my 2010 taxes online Hoffenson of the Office of Chief Counsel (Financial Institutions and Products). Can i still file my 2010 taxes online For further information regarding this revenue procedure, contact Procedure and Administration branch 1 at (202) 622-4910, Income Tax and Accounting branch 4 at (202) 622-4920, or Financial Institutions and Products branch 1 at (202) 622-3920 (not toll-free calls). Can i still file my 2010 taxes online Prev  Up  Next   Home   More Internal Revenue Bulletins