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Federal Form 1040x

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Federal Form 1040x

Federal form 1040x Publication 584SP - Additional Material Table of Contents This image is too large to be displayed in the current screen. Federal form 1040x Please click the link to view the image. Federal form 1040x Pasillo de Entrada (Entrance Hall) This image is too large to be displayed in the current screen. Federal form 1040x Please click the link to view the image. Federal form 1040x Sala de Estar (Living Room) This image is too large to be displayed in the current screen. Federal form 1040x Please click the link to view the image. Federal form 1040x Comedor (Dining Room) This image is too large to be displayed in the current screen. Federal form 1040x Please click the link to view the image. Federal form 1040x Cocina (Kitchen) This image is too large to be displayed in the current screen. Federal form 1040x Please click the link to view the image. Federal form 1040x Cuarto de Trabajo (Den) This image is too large to be displayed in the current screen. Federal form 1040x Please click the link to view the image. Federal form 1040x Dormitorios (Bedrooms) This image is too large to be displayed in the current screen. Federal form 1040x Please click the link to view the image. Federal form 1040x Baños (Bathrooms) This image is too large to be displayed in the current screen. Federal form 1040x Please click the link to view the image. Federal form 1040x Cuarto de Recreación/Juegos (Recreation Room) This image is too large to be displayed in the current screen. Federal form 1040x Please click the link to view the image. Federal form 1040x Lavadero y Sótano (Laundry and Basement) This image is too large to be displayed in the current screen. Federal form 1040x Please click the link to view the image. Federal form 1040x Garaje (Garage) This image is too large to be displayed in the current screen. Federal form 1040x Please click the link to view the image. Federal form 1040x Equipo Deportivo (Sporting Equipment) This image is too large to be displayed in the current screen. Federal form 1040x Please click the link to view the image. Federal form 1040x Ropa de Hombres (Men's Clothing) This image is too large to be displayed in the current screen. Federal form 1040x Please click the link to view the image. Federal form 1040x Ropa de Mujeres (Women's Clothing) This image is too large to be displayed in the current screen. Federal form 1040x Please click the link to view the image. Federal form 1040x Ropa de Niños (Children's Clothing) This image is too large to be displayed in the current screen. Federal form 1040x Please click the link to view the image. Federal form 1040x Joyería (Jewelry) This image is too large to be displayed in the current screen. Federal form 1040x Please click the link to view the image. Federal form 1040x Enseres Eléctricos (Electrical Appliances) This image is too large to be displayed in the current screen. Federal form 1040x Please click the link to view the image. Federal form 1040x Artículos de Hilo (Linens) This image is too large to be displayed in the current screen. Federal form 1040x Please click the link to view the image. Federal form 1040x Artículos Misceláneos (Miscellaneous) This image is too large to be displayed in the current screen. Federal form 1040x Please click the link to view the image. Federal form 1040x vehículos motorizados This image is too large to be displayed in the current screen. Federal form 1040x Please click the link to view the image. Federal form 1040x Hogar (Excluyendo su contenido) Hoja de Trabajo A. Federal form 1040x Costo u Otra Base (Ajustada) Precaución:Vea Instrucciones de la Hoja de Trabajo A antes de usar esta hoja de trabajo. Federal form 1040x         (a) Parte Personal (b) Parte Comercial/de Alquiler 1. Federal form 1040x   Anote el precio de compra de la vivienda dañada o destruida. Federal form 1040x (Si usted presentó el Formulario 2119 cuando en un principio adquirió dicha vivienda para aplazar ganancias provenientes de la venta de una vivienda anterior antes del 7 de mayo de 1997, anote la base ajustada de la vivienda nueva, usando la cantidad que aparece en dicho Formulario 2119). Federal form 1040x 1. Federal form 1040x     2. Federal form 1040x   Puntos pagados por el vendedor para una vivienda comprada después de 1990. Federal form 1040x No incluya puntos pagados por el vendedor que ya restó para llegar a la cantidad anotada en la línea 1 2. Federal form 1040x     3. Federal form 1040x   Reste la línea 2 de la línea 1 3. Federal form 1040x     4. Federal form 1040x   Cargos por liquidación o costos de cierre. Federal form 1040x (Vea Settlement Costs (Costos de Liquidación) en la Publicación 551, en inglés). Federal form 1040x Si la línea 1 incluye la base ajustada de la vivienda nueva del Formulario 2119, ignore las líneas 4a a la 4g y 5; para entonces pasar a la línea 6. Federal form 1040x         a. Federal form 1040x Honorarios por estudios de escritura 4a. Federal form 1040x       b. Federal form 1040x Honorarios legales (incluyendo honorarios por trámites relacionados con la escritura y la preparación de documentos) 4b. Federal form 1040x       c. Federal form 1040x Estudios topográficos 4c. Federal form 1040x       d. Federal form 1040x Seguro de escritura de propietario 4d. Federal form 1040x       e. Federal form 1040x Impuestos de traspaso o de sello 4e. Federal form 1040x       f. Federal form 1040x Cantidades que el vendedor adeudaba y que usted acordó pagar (impuestos atrasados o intereses, costos de registro o cargos hipotecarios y comisiones sobre las ventas) 4f. Federal form 1040x       g. Federal form 1040x Otros gastos 4g. Federal form 1040x     5. Federal form 1040x   Sume las líneas 4a a la 4g 5. Federal form 1040x     6. Federal form 1040x   Costo de ampliaciones y mejoras. Federal form 1040x (Vea Increases to Basis (Aumentos en la Base) en la Publicación 551, en inglés). Federal form 1040x No incluya ninguna de las ampliaciones o mejoras incluidas en la línea 1 6. Federal form 1040x     7. Federal form 1040x   Tasaciones tributarias especiales pagadas por concepto de mejoras locales, tales como calles y aceras o banquetas 7. Federal form 1040x     8. Federal form 1040x   Otros aumentos en la base 8. Federal form 1040x     9. Federal form 1040x   Sume las líneas 3, 5, 6, 7 y 8 9. Federal form 1040x     10. Federal form 1040x   Depreciación (permitida o permisible) relacionada con el uso comercial o alquiler de la vivienda 10. Federal form 1040x 0   11. Federal form 1040x   Otras disminuciones en la base (Vea Decreases to Basis (Disminuciones en la Base) en la Publicación 551, en inglés). Federal form 1040x 11. Federal form 1040x     12. Federal form 1040x   Sume las líneas 10 y 11 12. Federal form 1040x     13. Federal form 1040x   Costo u otra base (ajustada) de la vivienda dañada o destruida. Federal form 1040x Reste la línea 12 de la línea 9. Federal form 1040x Anote dicha cantidad aquí y en la línea 2 del Anexo 20 13. Federal form 1040x     Instrucciones para la Hoja de Trabajo A. Federal form 1040x Si usted usa la Hoja de Trabajo A para calcular el costo u otra base (ajustada) de su vivienda, siga estas instrucciones. Federal form 1040x NO utilice esta hoja de trabajo para determinar el costo de su base si adquirió interés de su vivienda por un difunto que falleció en 2010 y el albacea de su caudal hereditario presentó el Formulario 8939. Federal form 1040x SI. Federal form 1040x . Federal form 1040x . Federal form 1040x   ENTONCES. Federal form 1040x . Federal form 1040x . Federal form 1040x usted heredó su vivienda de un difunto que falleció antes o depués del 2010, o de un difunto que falleció en el 2010 pero la albacea de su caudal hereditario no presentó el Formulario 8939. Federal form 1040x 1 omita las líneas 1 a la 4 de la hoja de trabajo. Federal form 1040x 2 encuentre su base utilizando las reglas bajo Inherited Property (Bienes Heredados) en la Publicación 551, en inglés. Federal form 1040x Anote esta cantidad en la línea 5 de la hoja de trabajo. Federal form 1040x 3 llene las líneas 6 a la 13 de la hoja de trabajo. Federal form 1040x usted recibió su vivienda como un regalo (donación) 1 lea Property Received as Gift (Bienes Recibidos como Regalo (Donación)) en la Publicación 551, en inglés, y anote en las líneas 1 y 3 de la hoja de trabajo la base ajustada del donante o el valor justo de mercado de la vivienda en el momento del regalo (donación), lo que proceda. Federal form 1040x 2 si usted puede sumar algún impuesto federal sobre donaciones a su base, anote esa cantidad en la línea 5 de la hoja de trabajo. Federal form 1040x 3 llene el resto de la hoja de trabajo. Federal form 1040x usted recibió su vivienda como un canje por otra propiedad 1 anote en la línea 1 de la hoja de trabajo el valor justo de mercado de la otra propiedad al tiempo del canje. Federal form 1040x (Pero si usted recibió su vivienda como un canje por su vivienda anterior antes del 7 de mayo de 1997, y tuvo una ganancia en que el canje se aplazó utilizando el Formulario 2119, anote en la línea 1 de la hoja de trabajo la base ajustada de la vivienda nueva que aparece en dicho formulario). Federal form 1040x 2 llene el resto de la hoja de trabajo. Federal form 1040x usted construyó su vivienda 1 sume el precio de compra del terreno y el costo de la construcción de la vivienda. Federal form 1040x Anote ese total en la línea 1 de la hoja de trabajo. Federal form 1040x (Sin embargo, si usted presentó un Formulario 2119 para aplazar ganancias en la venta de una vivienda anterior antes del 7 de mayo de 1997, anote en la línea 1 de la hoja de trabajo la base ajustada de la vivienda nueva que aparece en dicho formulario). Federal form 1040x 2 llene el resto de la hoja de trabajo. Federal form 1040x usted recibió su vivienda de su cónyuge después del 18 de julio de 1984 1 ignore las líneas 1 a la 4 de la hoja de trabajo. Federal form 1040x 2 anote en la línea 5 de la hoja de trabajo el costo u otra base (ajustada) de su cónyuge en la vivienda justo antes de que usted la haya recibido. Federal form 1040x 3 llene las líneas 6 a la 13 de la hoja de trabajo, haciendo ajustes a la base solamente por acontecimientos después del traspaso. Federal form 1040x usted fue dueño de una vivienda conjuntamente con su cónyuge, el cual le traspasó su participación en la misma después del 18 de julio de 1984     llene una hoja de trabajo, haciendo los ajustes a la base por acontecimientos tanto antes como después del traspaso. Federal form 1040x   usted recibió su vivienda de su cónyuge antes del 19 de julio de 1984 1 ignore las líneas 1 a la 4 de la hoja de trabajo. Federal form 1040x 2 anote en la línea 5 de la hoja de trabajo el valor justo de mercado de la vivienda cuando usted la recibió. Federal form 1040x 3 llene las líneas 6 a la 13 de la hoja de trabajo, ajustando la base solamente por acontecimientos después del traspaso. Federal form 1040x usted fue dueño de una vivienda conjuntamente con su cónyuge, el cual le traspasó su participación en la misma antes del 19 de julio de 1984 1 llene una hoja de trabajo, las líneas 1 a la 13, ajustando la base solamente por acontecimientos antes del traspaso. Federal form 1040x 2 multiplique la cantidad de la línea 13 de esa hoja de trabajo por 0. Federal form 1040x 5 para obtener la base ajustada de la mitad de su participación a la hora del traspaso. Federal form 1040x 3 multiplique el valor justo de mercado de la vivienda a la hora del traspaso por 0. Federal form 1040x 5. Federal form 1040x Generalmente, el resultado corresponde a la base de la mitad de la participación de su cónyuge. Federal form 1040x 4 sume las cantidades de los pasos 2 y 3 y anote el total en la línea 5 de una segunda hoja de trabajo. Federal form 1040x 5 complete el resto de la segunda hoja de trabajo, ajustando la base solamente por acontecimientos después del traspaso. Federal form 1040x usted fue dueño de su vivienda conjuntamente con alguien (aparte de cónyuges que presenten una declaración conjunta) 1 llene las líneas 1 a la 13 de la hoja de trabajo. Federal form 1040x 2 multiplique la cantidad de la línea 13 para obtener la base ajustada suya por el porcentaje de su parte de su participación de la vivienda. Federal form 1040x Instrucciones para la Hoja de Trabajo A. Federal form 1040x (Continuación) SI. Federal form 1040x . Federal form 1040x . Federal form 1040x   ENTONCES. Federal form 1040x . Federal form 1040x . Federal form 1040x usted fue dueño de su vivienda conjuntamente con su cónyuge que falleció antes de 2010 y antes de un hecho fortuito 1 llene una hoja de trabajo, las líneas 1 a la 13, incluyendo ajustes a la base solamente por acontecimientos antes del fallecimiento de su cónyuge. Federal form 1040x 2 multiplique la cantidad de la línea 13 de esa hoja de trabajo por 0. Federal form 1040x 5 para obtener la base ajustada de la mitad de su participación a la fecha del fallecimiento. Federal form 1040x 3 calcule la base de la mitad de la participación de su cónyuge. Federal form 1040x Esto corresponde a la mitad del valor justo de mercado en la fecha del fallecimiento (o la valoración alternativa usada posteriormente para propósitos de los impuestos de sucesiones o caudales hereditarios). Federal form 1040x (La base de su mitad seguirá siendo la mitad de la base ajustada determinada en el paso 2). Federal form 1040x 4 sume las cantidades de los pasos 2 y 3 y anote el total en la línea 5 de una segunda hoja de trabajo. Federal form 1040x 5 complete las líneas 6 a la 13 de la segunda hoja de trabajo, ajustando la base solamente por acontecimientos después del fallecimiento de su cónyuge. Federal form 1040x usted fue dueño de su vivienda conjuntamente con su cónyuge que falleció antes de 2010 y antes de un hecho fortuito y, su vivienda permanente está en un estado donde rigen las leyes de la comunidad de bienes matrimoniales 1 ignore las líneas 1 a la 4 de la hoja de trabajo. Federal form 1040x 2 anote la cantidad de su base en la línea 5 de la hoja de trabajo. Federal form 1040x Generalmente, esto corresponde al valor justo de mercado de la vivienda al momento del fallecimiento. Federal form 1040x (No obstante, vea Community Property (Comunidad de Bienes Matrimoniales) en la Publicación 551, en inglés, para reglas especiales). Federal form 1040x 3 llene el resto de la hoja de trabajo, ajustando la base solamente por acontecimientos después del fallecimiento de su cónyuge. Federal form 1040x usted fue dueño de su vivienda conjuntamente con alguien (que no sean cónyuges que presenten la declaración conjunta) que falleció antes de 2010 y antes de un hecho fortuito 1 llene las líneas 1 a la 13 de la hoja de trabajo, incluyendo ajustes a la base solamente por acontecimientos antes del fallecimiento del codueño. Federal form 1040x 2 multiplique la cantidad de la línea 13 por el porcentaje de su parte de su participación de la vivienda para obtener la base ajustada suyo en la fecha del fallecimiento. Federal form 1040x 3 multiplique el valor justo del mercado en la fecha del fallecimiento (o use la valuació alterna usada posteriormente para propositos de los impuestos de sucesiones o caudales hereditarios) por el porcentaje que corresponde a la participación del codueño. Federal form 1040x Ésta es la base para el interés parcial del codueño. Federal form 1040x 4 sume las cantidades de los pasos 2 y 3 y anote el total en la línea 5 de una segunda hoja de trabajo. Federal form 1040x 5 complete las líneas 6 a la 13 de la segunda hoja de trabajo incluyendo ajustes a la base solamente por acontecimientos después del fallecimiento del codueño. Federal form 1040x alguna vez su vivienda sufrió daños debido a un hecho fortuito anterior 1 en la línea 8 de la hoja de trabajo, anote toda cantidad que haya gastado para restaurar la vivienda a su estado original antes del hecho fortuito anterior. Federal form 1040x 2 en la línea 11 anote: todo reembolso de seguros que usted haya recibido (o espera recibir) por la pérdida anterior  y toda pérdida por hecho fortuito deducible de años anteriores no cubierta por  su seguro. Federal form 1040x la persona que le vendió su vivienda pagó puntos sobre su préstamo y usted compró su vivienda después de 1990 pero antes del 4 de abril de 1994   en la línea 2 anote los puntos pagados por el vendedor solamente si usted los dedujo como intereses hipotecarios de la vivienda en el año en que fueron pagados (a no ser que haya utilizado los puntos pagados por el vendedor para reducir la cantidad de la línea 1). Federal form 1040x la persona que le vendió su vivienda pagó puntos sobre su préstamo y usted compró su vivienda después del 3 de abril de 1994   en la línea 2 anote los puntos pagados por el vendedor aun si usted no los dedujo (a no ser que haya utilizado los puntos pagados por el vendedor para reducir la cantidad de la línea 1). Federal form 1040x usted usó parte de la propiedad como su vivienda y parte de ella para propósitos comerciales o para generar ingresos de alquiler   usted debe asignar las anotaciones en la Hoja de Trabajo A entre la parte personal (columna (a)) y la parte comercial/de alquiler (columna (b)). Federal form 1040x no corresponde ninguno de los puntos anteriores   llene completamente la hoja de trabajo. Federal form 1040x Prev  Up  Next   Home   More Online Publications
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The Federal Form 1040x

Federal form 1040x 2. Federal form 1040x   Possession Source Income Table of Contents Types of IncomeCompensation for Labor or Personal Services Investment Income Sales or Other Dispositions of Property Scholarships, Fellowships, Grants, Prizes, and Awards Effectively Connected Income In order to determine where to file your return and which form(s) you need to complete, you must determine the source of each item of income you received during the tax year. Federal form 1040x Income you received from sources within, or that was effectively connected with the conduct of a trade or business within, the relevant possession must be identified separately from U. Federal form 1040x S. Federal form 1040x or foreign source income. Federal form 1040x This chapter discusses the rules for determining if the source of your income is from: American Samoa, The Commonwealth of the Northern Mariana Islands (CNMI), The Commonwealth of Puerto Rico (Puerto Rico), Guam, or The U. Federal form 1040x S. Federal form 1040x Virgin Islands (USVI). Federal form 1040x Generally, the same rules that apply for determining U. Federal form 1040x S. Federal form 1040x source income also apply for determining possession source income. Federal form 1040x However, there are some important exceptions to these rules. Federal form 1040x Both the general rules and the exceptions are discussed in this chapter. Federal form 1040x U. Federal form 1040x S. Federal form 1040x income rule. Federal form 1040x   This rule states that income is not possession source income if, under the rules of Internal Revenue Code sections 861–865, it is treated as income: From sources within the United States, or Effectively connected with the conduct of a trade or business within the United States. Federal form 1040x Table 2-1 shows the general rules for determining whether income is from sources within the United States. Federal form 1040x Table 2-1. Federal form 1040x General Rules for Determining U. Federal form 1040x S. Federal form 1040x Source of Income Item of Income Factor Determining Source Salaries, wages, and other compensation for labor or personal services Where labor or services performed Pensions Contributions: Where services were performed that earned the pension Investment earnings: Where pension trust is located Interest Residence of payer Dividends Where corporation created or organized Rents Location of property Royalties:   Natural resources Location of property Patents, copyrights, etc. Federal form 1040x Where property is used Sale of business inventory—purchased Where sold Sale of business inventory—produced Allocation if produced and sold in different locations Sale of real property Location of property Sale of personal property Seller's tax home (but see Special Rules for Gains From Dispositions of Certain Property , later, for exceptions) Sale of natural resources Allocation based on fair market value of product at export terminal. Federal form 1040x For more information, see Regulations section 1. Federal form 1040x 863-1(b). Federal form 1040x Types of Income This section looks at the most common types of income received by individuals, and the rules for determining the source of the income. Federal form 1040x Generally, the same rules shown in Table 2-1 are used to determine if you have possession source income. Federal form 1040x Compensation for Labor or Personal Services Income from labor or personal services includes wages, salaries, commissions, fees, per diem allowances, employee allowances and bonuses, and fringe benefits. Federal form 1040x It also includes income earned by sole proprietors and general partners from providing personal services in the course of their trade or business. Federal form 1040x Services performed wholly within a relevant possession. Federal form 1040x   Generally, all pay you receive for services performed in a relevant possession is considered to be from sources within that possession. Federal form 1040x However, there is an exception for income earned as a member of the U. Federal form 1040x S. Federal form 1040x Armed Forces or a civilian spouse. Federal form 1040x U. Federal form 1040x S. Federal form 1040x Armed Forces. Federal form 1040x   If you are a bona fide resident of a relevant possession, your military service pay will be sourced in that possession even if you perform the services in the United States or another possession. Federal form 1040x However, if you are not a bona fide resident of a possession, your military service pay will be income from the  United States even if you perform services in a possession. Federal form 1040x Civilian spouse of active duty member of the U. Federal form 1040x S. Federal form 1040x Armed Forces. Federal form 1040x   If you are a bona fide resident of a U. Federal form 1040x S. Federal form 1040x possession and choose to keep that possession as your tax residence under MSRRA when relocating with your servicemember spouse under military orders, the source of income for your labor or personal services is considered to be that possession. Federal form 1040x Likewise, if your tax residence is in one of the 50 states or the District of Columbia before relocating and you choose to keep it as your tax residence, the source of income for services performed in any of the U. Federal form 1040x S. Federal form 1040x possessions is considered to be the United States and, specifically, your state of residence or the District of Columbia. Federal form 1040x Services performed partly inside and partly outside a relevant possession. Federal form 1040x   If you are an employee and receive compensation for labor or personal services performed both inside and outside the relevant possession, special rules apply in determining the source of the compensation. Federal form 1040x Compensation (other than certain fringe benefits) is sourced on a time basis. Federal form 1040x Certain fringe benefits (such as housing and education) are sourced on a geographical basis. Federal form 1040x   Or, you may be permitted to use an alternative basis to determine the source of compensation. Federal form 1040x See Alternative basis , later. Federal form 1040x   If you are self-employed, determine the source of your income for labor or personal services from self-employment on the basis that most correctly reflects the proper source of that income under the facts and circumstances of your particular case. Federal form 1040x In many cases, the facts and circumstances will call for an apportionment on a time basis as explained next. Federal form 1040x Time basis. Federal form 1040x   Use a time basis to figure your compensation for labor or personal services from the relevant possession (other than the fringe benefits discussed later). Federal form 1040x Do this by multiplying your total compensation (other than the fringe benefits discussed later) by the following fraction:   Number of days you performed  services in the relevant  possession during the year     Total number of days you  performed services during the year           You can use a unit of time less than a day in the above fraction, if appropriate. Federal form 1040x The time period for which the income is made does not have to be a year. Federal form 1040x Instead, you can use another distinct, separate, and continuous time period if you can establish to the satisfaction of the IRS that this other period is more appropriate. Federal form 1040x Example. Federal form 1040x In 2013, you worked in your employer's office in the United States for 60 days and in the Puerto Rico office for 180 days, earning a total of $80,000 for the year. Federal form 1040x Your Puerto Rico source income is $60,000, figured as follows. Federal form 1040x       180 days 240 days × $80,000 = $60,000                 Multi-year compensation. Federal form 1040x   The source of multi-year compensation is generally determined on a time basis over the period to which the compensation is attributable. Federal form 1040x Multi-year compensation is compensation that is included in your income in 1 tax year but is attributable to a period that includes 2 or more tax years. Federal form 1040x You determine the period to which the income is attributable based on the facts and circumstances of your case. Federal form 1040x For more information on multi-year compensation, see Treasury Decision (T. Federal form 1040x D. Federal form 1040x ) 9212 and Regulations section 1. Federal form 1040x 861-4, 2005-35 I. Federal form 1040x R. Federal form 1040x B. Federal form 1040x 429, available at www. Federal form 1040x irs. Federal form 1040x gov/irb/2005-35_IRB/ar14. Federal form 1040x html. Federal form 1040x Certain fringe benefits sourced on a geographical basis. Federal form 1040x   If you received any of the following fringe benefits as compensation for labor or services performed as an employee partly inside and partly outside a relevant possession, you must source that income on a geographical basis. Federal form 1040x Housing. Federal form 1040x Education. Federal form 1040x Local transportation. Federal form 1040x Tax reimbursement. Federal form 1040x Hazardous or hardship duty pay. Federal form 1040x Moving expense reimbursement. Federal form 1040x For information on determining the source of the fringe benefits listed above, see Regulations section 1. Federal form 1040x 861-4. Federal form 1040x Alternative basis. Federal form 1040x   You can determine the source of your compensation under an alternative basis if you establish to the satisfaction of the IRS that, under the facts and circumstances of your case, the alternative basis more properly determines the source of your income than the time or geographical basis. Federal form 1040x If you use an alternative basis, you must keep (and have available for inspection) records to document why the alternative basis more properly determines the source of your income. Federal form 1040x De minimis exception. Federal form 1040x   There is an exception to the rule for determining the source of income earned in a possession. Federal form 1040x Generally, you will not have income from a possession if during a tax year you: Are a U. Federal form 1040x S. Federal form 1040x citizen or resident, Are not a bona fide resident of that possession, Are not employed by or under contract with an individual, partnership, or corporation that is engaged in a trade or business in that possession, Temporarily perform services in that possession for 90 days or less, and Earned $3,000 or less from such services. Federal form 1040x This exception began with income earned during your 2008 tax year. Federal form 1040x Pensions. Federal form 1040x   Generally, pension income has two components: contributions to the pension plan and the earnings accrued from investing those contributions. Federal form 1040x The contribution portion is sourced according to where services were performed that earned the pension. Federal form 1040x The investment earnings portion is sourced according to the location of the pension trust. Federal form 1040x Example. Federal form 1040x You are a U. Federal form 1040x S. Federal form 1040x citizen who worked in Puerto Rico for a U. Federal form 1040x S. Federal form 1040x company. Federal form 1040x All services were performed in Puerto Rico. Federal form 1040x Upon retirement you remained in Puerto Rico and began receiving your pension from the U. Federal form 1040x S. Federal form 1040x pension trust of your employer. Federal form 1040x Distributions from the U. Federal form 1040x S. Federal form 1040x pension trust must be allocated between (1) contributions, which are Puerto Rico source income, and (2) investment earnings, which are U. Federal form 1040x S. Federal form 1040x source income. Federal form 1040x Investment Income This category includes such income as interest, dividends, rents, and royalties. Federal form 1040x Interest income. Federal form 1040x   The source of interest income is generally determined by the residence of the payer. Federal form 1040x Interest paid by corporations created or organized in a relevant possession (possession corporation) or by individuals who are bona fide residents of a relevant possession is considered income from sources within that possession. Federal form 1040x   However, there is an exception to this rule if you are a bona fide resident of a relevant possession, receive interest from a corporation created or organized in that possession, and are a shareholder of that corporation who owns, directly or indirectly, at least 10% of the total voting stock of the corporation. Federal form 1040x See Regulations section 1. Federal form 1040x 937-2(i) for more information. Federal form 1040x Dividends. Federal form 1040x   Generally, dividends paid by a corporation created or organized in a relevant possession will be considered income from sources within that possession. Federal form 1040x There are additional rules for bona fide residents of a relevant possession who receive dividend income from possession corporations, and who own, directly or indirectly, at least 10% of the voting stock of the corporation. Federal form 1040x For more information, see Regulations section 1. Federal form 1040x 937-2(g). Federal form 1040x Rental income. Federal form 1040x   Rents from property located in a relevant possession are treated as income from sources within that possession. Federal form 1040x Royalties. Federal form 1040x   Royalties from natural resources located in a relevant possession are considered income from sources within that possession. Federal form 1040x   Also considered possession source income are royalties received for the use of, or for the privilege of using, in a relevant possession, patents, copyrights, secret processes and formulas, goodwill, trademarks, trade brands, franchises, and other like property. Federal form 1040x Sales or Other Dispositions of Property The source rules for sales or other dispositions of property are varied. Federal form 1040x The most common situations are discussed below. Federal form 1040x Real property. Federal form 1040x   Real property includes land and buildings, and generally anything built on, growing on, or attached to land. Federal form 1040x The location of the property generally determines the source of income from the sale. Federal form 1040x For example, if you are a bona fide resident of Guam and sell your home that is located in Guam, the gain on the sale is sourced in Guam. Federal form 1040x If, however, the home you sold was located in the United States, the gain is U. Federal form 1040x S. Federal form 1040x source income. Federal form 1040x Personal property. Federal form 1040x   The term “personal property” refers to property (such as machinery, equipment, or furniture) that is not real property. Federal form 1040x Generally, gain (or loss) from the sale or other disposition is sourced according to the seller's tax home. Federal form 1040x If personal property is sold by a bona fide resident of a relevant possession, the gain (or loss) from the sale is treated as sourced within that possession. Federal form 1040x   This rule does not apply to the sale of inventory, intangible property, depreciable personal property, or property sold through a foreign office or fixed place of business. Federal form 1040x The rules applying to sales of inventory are discussed below. Federal form 1040x For information on sales of the other types of property mentioned, see Internal Revenue Code section 865. Federal form 1040x Inventory. Federal form 1040x   Your inventory is personal property that is stock in trade or that is held primarily for sale to customers in the ordinary course of your trade or business. Federal form 1040x The source of income from the sale of inventory depends on whether the inventory was purchased or produced. Federal form 1040x Purchased. Federal form 1040x   Income from the sale of inventory that you purchased is sourced where you sell the property. Federal form 1040x Generally, this is where title to the property passes to the buyer. Federal form 1040x Produced. Federal form 1040x   Income from the sale of inventory that you produced in a relevant possession and sold outside that possession (or vice versa) is sourced based on an allocation. Federal form 1040x For information on making the allocation, see Regulations section 1. Federal form 1040x 863-3(f). Federal form 1040x Special Rules for Gains From Dispositions of Certain Property There are special rules for gains from dispositions of certain investment property (for example, stocks, bonds, debt instruments, diamonds, and gold) owned by a U. Federal form 1040x S. Federal form 1040x citizen or resident alien prior to becoming a bona fide resident of a possession. Federal form 1040x You are subject to these special rules if you meet both of the following conditions. Federal form 1040x For the tax year for which the source of the gain must be determined, you are a bona fide resident of the relevant possession. Federal form 1040x For any of the 10 years preceding that year, you were a citizen or resident alien of the United States (other than a bona fide resident of the relevant possession). Federal form 1040x If you meet these conditions, gains from the disposition of this property will not be treated as income from sources within the relevant possession for purposes of the Internal Revenue Code. Federal form 1040x Accordingly, bona fide residents of American Samoa and Puerto Rico, for example, may not exclude the gain on their U. Federal form 1040x S. Federal form 1040x tax return. Federal form 1040x (See chapter 3 for additional filing information. Federal form 1040x ) With respect to the CNMI, Guam, and the USVI, the gain from the disposition of this property will not meet the requirements for certain tax rules that may allow bona fide residents of those possessions to reduce or obtain a rebate of taxes on income from sources within the relevant possessions. Federal form 1040x These rules apply to dispositions after April 11, 2005. Federal form 1040x For details, see Regulations section 1. Federal form 1040x 937-2(f)(1) and Examples 1 and 2 of section 1. Federal form 1040x 937-2(k). Federal form 1040x Example 1. Federal form 1040x In 2007, Cheryl Jones, a U. Federal form 1040x S. Federal form 1040x citizen, lived in the United States and paid $1,000 for 100 shares of stock in the Rose Corporation, a U. Federal form 1040x S. Federal form 1040x corporation listed on the New York Stock Exchange. Federal form 1040x On March 1, 2010, she moved to Puerto Rico and changed her tax home to Puerto Rico on the same date. Federal form 1040x Cheryl satisfied the presence test in 2010 and, under the year-of-move exception, she was considered a bona fide resident of Puerto Rico for the rest of 2010. Federal form 1040x On March 1, 2010, the closing value of Cheryl's stock in the Rose Corporation was $2,000. Federal form 1040x On January 5, 2013, while still a bona fide resident of Puerto Rico, Cheryl sold all her Rose Corporation stock for $7,000. Federal form 1040x Under the earlier rules, none of Cheryl's $6,000 gain will be treated as income from sources within Puerto Rico. Federal form 1040x The source rules discussed in the preceding paragraphs supplement, and may apply in conjunction with, an existing special rule. Federal form 1040x This existing special rule applies if you are a U. Federal form 1040x S. Federal form 1040x citizen or resident alien who becomes a bona fide resident of American Samoa, the CNMI, or Guam, and who has gain from the disposition of certain U. Federal form 1040x S. Federal form 1040x assets during the 10-year period beginning when you became a bona fide resident. Federal form 1040x The gain is U. Federal form 1040x S. Federal form 1040x source income that generally is subject to U. Federal form 1040x S. Federal form 1040x tax if the property is either (1) located in the United States; (2) stock issued by a U. Federal form 1040x S. Federal form 1040x corporation or a debt obligation of a U. Federal form 1040x S. Federal form 1040x person or of the United States, a state (or political subdivision), or the District of Columbia; or (3) property that has a basis in whole or in part by reference to property described in (1) or (2). Federal form 1040x See chapter 3 for filing information. Federal form 1040x Special election. Federal form 1040x   For dispositions after April 11, 2005, you can choose to treat the part of gain (or loss) attributable to the time you held the property while a bona fide resident of the relevant possession (the possession holding period) as gain (or loss) from sources within that possession. Federal form 1040x Make the election by reporting the gain attributable to the possession holding period on your income tax return for the year of disposition. Federal form 1040x This election overrides both of the special rules discussed earlier. Federal form 1040x   There are two methods for figuring the gain for the possession holding period, one for marketable securities and another for other types of investment property. Federal form 1040x Marketable securities. Federal form 1040x   Marketable securities are those actively traded on an established financial market, such as stock in a publicly held corporation. Federal form 1040x Under the special election, allocate the gain (or loss) by figuring the appreciation separately for your possession and U. Federal form 1040x S. Federal form 1040x holding periods. Federal form 1040x   Your possession holding period begins on the first day you do not have a tax home outside the relevant possession. Federal form 1040x The gain (or loss) attributable to the possession holding period is the difference in fair market value of the security at the close of the market on the first and last days of this holding period. Federal form 1040x This is your gain (or loss) that is treated as being from sources within the relevant possession. Federal form 1040x If you were a bona fide resident of the relevant possession for more than one continuous period, combine the gains (or losses) from each possession holding period. Federal form 1040x Example 2. Federal form 1040x Assume the same facts as in Example 1, except that Cheryl makes the special election to allocate the gain between her U. Federal form 1040x S. Federal form 1040x and possession holding periods. Federal form 1040x Cheryl's possession holding period began March 1, 2010, the date her tax home changed to Puerto Rico. Federal form 1040x Therefore, the portion of gain attributable to her possession holding period is $5,000 ($7,000 sale price – $2,000 closing value on first day of the possession holding period). Federal form 1040x By reporting $5,000 of her $6,000 gain as Puerto Rico source income on her 2013 Puerto Rico tax return (and the remainder as non-Puerto Rico source income), Cheryl elects to treat that amount as Puerto Rico source income. Federal form 1040x Other personal property. Federal form 1040x   For personal property other than marketable securities, use a time-based allocation. Federal form 1040x Figure the gain (or loss) attributable to the possession holding period by multiplying your total gain (or loss) by the following fraction. Federal form 1040x      Number of days in the  possession holding period     Total number of days  in your holding period         The result is your gain (or loss) that is treated as being from sources within the relevant possession. Federal form 1040x Example 3. Federal form 1040x In addition to the stock in Rose Corporation, Cheryl acquired a 5% interest in the Alder Partnership on January 1, 2009. Federal form 1040x On March 1, 2010, when she established bona fide residency in Puerto Rico, her partnership interest was not considered a marketable security. Federal form 1040x On September 16, 2013, while still a bona fide resident of Puerto Rico, Cheryl sold her interest in Alder Partnership for a $100,000 gain. Federal form 1040x She had owned the interest for a total of 1,720 days. Federal form 1040x Cheryl's possession holding period (from March 1, 2010, through September 16, 2013) is 1,296 days. Federal form 1040x The portion of her gain attributable to Puerto Rico is $75,349 ($100,000 x (1,296 Puerto Rico days ÷ 1,720 total days)). Federal form 1040x By reporting $75,349 of her $100,000 gain as Puerto Rico source income on her 2013 Puerto Rico tax return (and the remainder as non-Puerto Rico source income), Cheryl elects to treat that amount as Puerto Rico source income. Federal form 1040x Scholarships, Fellowships, Grants, Prizes, and Awards The source of these types of income is generally the residence of the payer, regardless of who actually disburses the funds. Federal form 1040x Therefore, in order to be possession source income, the payer must be a resident of the relevant possession, such as an individual who is a bona fide resident or a corporation created or organized in that possession. Federal form 1040x These rules do not apply to amounts paid as salary or other compensation for services. Federal form 1040x See Compensation for Labor or Personal Services, earlier in this chapter, for the source rules that apply. Federal form 1040x Effectively Connected Income In limited circumstances, some kinds of income from sources outside the relevant possession must be treated as effectively connected with a trade or business in that possession. Federal form 1040x These circumstances are listed below. Federal form 1040x You have an office or other fixed place of business in the relevant possession to which the income can be attributed. Federal form 1040x That office or place of business is a material factor in producing the income. Federal form 1040x The income is produced in the ordinary course of the trade or business carried on through that office or other fixed place of business. Federal form 1040x An office or other fixed place of business is a material factor if it significantly contributes to, and is an essential economic element in, the earning of the income. Federal form 1040x The three kinds of income from sources outside the relevant possession to which these rules apply are the following. Federal form 1040x Rents and royalties for the use of, or for the privilege of using, intangible personal property located outside the relevant possession or from any interest in such property. Federal form 1040x Included are rents or royalties for the use of, or for the privilege of using, outside the relevant possession, patents, copyrights, secret processes and formulas, goodwill, trademarks, trade brands, franchises, and similar properties if the rents or royalties are from the active conduct of a trade or business in the relevant possession. Federal form 1040x Dividends or interest from the active conduct of a banking, financing, or similar business in the relevant possession. Federal form 1040x Income, gain, or loss from the sale or exchange outside the relevant possession, through the office or other fixed place of business in the relevant possession, of: Stock in trade, Property that would be included in inventory if on hand at the end of the tax year, or Property held primarily for sale to customers in the ordinary course of business. Federal form 1040x Item (3) will not apply if you sold the property for use, consumption, or disposition outside the relevant possession and an office or other fixed place of business in a foreign country was a material factor in the sale. Federal form 1040x Example. Federal form 1040x Marcy Jackson is a bona fide resident of American Samoa. Federal form 1040x Her business, which she conducts from an office in American Samoa, is developing and selling specialized computer software. Federal form 1040x A software purchaser will frequently pay Marcy an additional amount to install the software on the purchaser's operating system and to ensure that the software is functioning properly. Federal form 1040x Marcy installs the software at the purchaser's place of business, which may be in American Samoa, in the United States, or in another country. Federal form 1040x The income from selling the software is effectively connected with the conduct of Marcy's business in American Samoa, even though the product's destination may be outside the possession. Federal form 1040x However, the compensation she receives for installing the software (personal services) outside of American Samoa is not effectively connected with the conduct of her business in the possession—the income is sourced where she performs the services. Federal form 1040x Prev  Up  Next   Home   More Online Publications