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File for 2011 taxes Publication 561 - Main Contents Table of Contents What Is Fair Market Value (FMV)?Factors. File for 2011 taxes Stock. File for 2011 taxes Options. File for 2011 taxes Determining Fair Market Value Problems in Determining Fair Market Value Valuation of Various Kinds of PropertyHousehold Goods Used Clothing Jewelry and Gems Paintings, Antiques, and Other Objects of Art Collections Cars, Boats, and Aircraft Inventory Patents Stocks and Bonds Real Estate Interest in a Business Annuities, Interests for Life or Terms of Years, Remainders, and Reversions Certain Life Insurance and Annuity Contracts Partial Interest in Property Not in Trust AppraisalsDeductions of More Than $5,000 Deductions of More Than $500,000 Qualified Appraisal Form 8283 Internal Revenue Service Review of Appraisals Penalty How To Get Tax HelpLow income tax clinics (LITCs). File for 2011 taxes What Is Fair Market Value (FMV)? To figure how much you may deduct for property that you contribute, you must first determine its fair market value on the date of the contribution. File for 2011 taxes Fair market value. File for 2011 taxes   Fair market value (FMV) is the price that property would sell for on the open market. File for 2011 taxes It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts. File for 2011 taxes If you put a restriction on the use of property you donate, the FMV must reflect that restriction. File for 2011 taxes Example 1. File for 2011 taxes If you give used clothing to the Salvation Army, the FMV would be the price that typical buyers actually pay for clothing of this age, condition, style, and use. File for 2011 taxes Usually, such items are worth far less than what you paid for them. File for 2011 taxes Example 2. File for 2011 taxes If you donate land and restrict its use to agricultural purposes, you must value the land at its value for agricultural purposes, even though it would have a higher FMV if it were not restricted. File for 2011 taxes Factors. File for 2011 taxes   In making and supporting the valuation of property, all factors affecting value are relevant and must be considered. File for 2011 taxes These include: The cost or selling price of the item, Sales of comparable properties, Replacement cost, and Opinions of experts. File for 2011 taxes   These factors are discussed later. File for 2011 taxes Also, see Table 1 for a summary of questions to ask as you consider each factor. File for 2011 taxes Date of contribution. File for 2011 taxes   Ordinarily, the date of a contribution is the date that the transfer of the property takes place. File for 2011 taxes Stock. File for 2011 taxes   If you deliver, without any conditions, a properly endorsed stock certificate to a qualified organization or to an agent of the organization, the date of the contribution is the date of delivery. File for 2011 taxes If the certificate is mailed and received through the regular mail, it is the date of mailing. File for 2011 taxes If you deliver the certificate to a bank or broker acting as your agent or to the issuing corporation or its agent, for transfer into the name of the organization, the date of the contribution is the date the stock is transferred on the books of the corporation. File for 2011 taxes Options. File for 2011 taxes   If you grant an option to a qualified organization to buy real property, you have not made a charitable contribution until the organization exercises the option. File for 2011 taxes The amount of the contribution is the FMV of the property on the date the option is exercised minus the exercise price. File for 2011 taxes Example. File for 2011 taxes You grant an option to a local university, which is a qualified organization, to buy real property. File for 2011 taxes Under the option, the university could buy the property at any time during a 2-year period for $40,000. File for 2011 taxes The FMV of the property on the date the option is granted is $50,000. File for 2011 taxes In the following tax year, the university exercises the option. File for 2011 taxes The FMV of the property on the date the option is exercised is $55,000. File for 2011 taxes Therefore, you have made a charitable contribution of $15,000 ($55,000, the FMV, minus $40,000, the exercise price) in the tax year the option is exercised. File for 2011 taxes Determining Fair Market Value Determining the value of donated property would be a simple matter if you could rely only on fixed formulas, rules, or methods. File for 2011 taxes Usually it is not that simple. File for 2011 taxes Using such formulas, etc. File for 2011 taxes , seldom results in an acceptable determination of FMV. File for 2011 taxes There is no single formula that always applies when determining the value of property. File for 2011 taxes This is not to say that a valuation is only guesswork. File for 2011 taxes You must consider all the facts and circumstances connected with the property, such as its desirability, use, and scarcity. File for 2011 taxes For example, donated furniture should not be evaluated at some fixed rate such as 15% of the cost of new replacement furniture. File for 2011 taxes When the furniture is contributed, it may be out of style or in poor condition, therefore having little or no market value. File for 2011 taxes On the other hand, it may be an antique, the value of which could not be determined by using any formula. File for 2011 taxes Cost or Selling Price of the Donated Property The cost of the property to you or the actual selling price received by the qualified organization may be the best indication of its FMV. File for 2011 taxes However, because conditions in the market change, the cost or selling price of property may have less weight if the property was not bought or sold reasonably close to the date of contribution. File for 2011 taxes The cost or selling price is a good indication of the property's value if: The purchase or sale took place close to the valuation date in an open market, The purchase or sale was at “arm's-length,” The buyer and seller knew all relevant facts, The buyer and seller did not have to act, and The market did not change between the date of purchase or sale and the valuation date. File for 2011 taxes Example. File for 2011 taxes Tom Morgan, who is not a dealer in gems, bought an assortment of gems for $5,000 from a promoter. File for 2011 taxes The promoter claimed that the price was “wholesale” even though he and other dealers made similar sales at similar prices to other persons who were not dealers. File for 2011 taxes The promoter said that if Tom kept the gems for more than 1 year and then gave them to charity, Tom could claim a charitable deduction of $15,000, which, according to the promoter, would be the value of the gems at the time of contribution. File for 2011 taxes Tom gave the gems to a qualified charity 13 months after buying them. File for 2011 taxes The selling price for these gems had not changed from the date of purchase to the date he donated them to charity. File for 2011 taxes The best evidence of FMV depends on actual transactions and not on some artificial estimate. File for 2011 taxes The $5,000 charged Tom and others is, therefore, the best evidence of the maximum FMV of the gems. File for 2011 taxes Terms of the purchase or sale. File for 2011 taxes   The terms of the purchase or sale should be considered in determining FMV if they influenced the price. File for 2011 taxes These terms include any restrictions, understandings, or covenants limiting the use or disposition of the property. File for 2011 taxes Rate of increase or decrease in value. File for 2011 taxes   Unless you can show that there were unusual circumstances, it is assumed that the increase or decrease in the value of your donated property from your cost has been at a reasonable rate. File for 2011 taxes For time adjustments, an appraiser may consider published price indexes for information on general price trends, building costs, commodity costs, securities, and works of art sold at auction in arm's-length sales. File for 2011 taxes Example. File for 2011 taxes Bill Brown bought a painting for $10,000. File for 2011 taxes Thirteen months later he gave it to an art museum, claiming a charitable deduction of $15,000 on his tax return. File for 2011 taxes The appraisal of the painting should include information showing that there were unusual circumstances that justify a 50% increase in value for the 13 months Bill held the property. File for 2011 taxes Arm's-length offer. File for 2011 taxes   An arm's-length offer to buy the property close to the valuation date may help to prove its value if the person making the offer was willing and able to complete the transaction. File for 2011 taxes To rely on an offer, you should be able to show proof of the offer and the specific amount to be paid. File for 2011 taxes Offers to buy property other than the donated item will help to determine value if the other property is reasonably similar to the donated property. File for 2011 taxes Sales of Comparable Properties The sales prices of properties similar to the donated property are often important in determining the FMV. File for 2011 taxes The weight to be given to each sale depends on the following. File for 2011 taxes The degree of similarity between the property sold and the donated property. File for 2011 taxes The time of the sale—whether it was close to the valuation date. File for 2011 taxes The circumstances of the sale—whether it was at arm's-length with a knowledgeable buyer and seller, with neither having to act. File for 2011 taxes The conditions of the market in which the sale was made—whether unusually inflated or deflated. File for 2011 taxes The comparable sales method of valuing real estate is explained later under Valuation of Various Kinds of Property. File for 2011 taxes Example 1. File for 2011 taxes Mary Black, who is not a book dealer, paid a promoter $10,000 for 500 copies of a single edition of a modern translation of the Bible. File for 2011 taxes The promoter had claimed that the price was considerably less than the “retail” price, and gave her a statement that the books had a total retail value of $30,000. File for 2011 taxes The promoter advised her that if she kept the Bibles for more than 1 year and then gave them to a qualified organization, she could claim a charitable deduction for the “retail” price of $30,000. File for 2011 taxes Thirteen months later she gave all the Bibles to a church that she selected from a list provided by the promoter. File for 2011 taxes At the time of her donation, wholesale dealers were selling similar quantities of Bibles to the general public for $10,000. File for 2011 taxes The FMV of the Bibles is $10,000, the price at which similar quantities of Bibles were being sold to others at the time of the contribution. File for 2011 taxes Example 2. File for 2011 taxes The facts are the same as in Example 1, except that the promoter gave Mary Black a second option. File for 2011 taxes The promoter said that if Mary wanted a charitable deduction within 1 year of the purchase, she could buy the 500 Bibles at the “retail” price of $30,000, paying only $10,000 in cash and giving a promissory note for the remaining $20,000. File for 2011 taxes The principal and interest on the note would not be due for 12 years. File for 2011 taxes According to the promoter, Mary could then, within 1 year of the purchase, give the Bibles to a qualified organization and claim the full $30,000 retail price as a charitable contribution. File for 2011 taxes She purchased the Bibles under the second option and, 3 months later, gave them to a church, which will use the books for church purposes. File for 2011 taxes At the time of the gift, the promoter was selling similar lots of Bibles for either $10,000 or $30,000. File for 2011 taxes The difference between the two prices was solely at the discretion of the buyer. File for 2011 taxes The promoter was a willing seller for $10,000. File for 2011 taxes Therefore, the value of Mary's contribution of the Bibles is $10,000, the amount at which similar lots of Bibles could be purchased from the promoter by members of the general public. File for 2011 taxes Replacement Cost The cost of buying, building, or manufacturing property similar to the donated item should be considered in determining FMV. File for 2011 taxes However, there must be a reasonable relationship between the replacement cost and the FMV. File for 2011 taxes The replacement cost is the amount it would cost to replace the donated item on the valuation date. File for 2011 taxes Often there is no relationship between the replacement cost and the FMV. File for 2011 taxes If the supply of the donated property is more or less than the demand for it, the replacement cost becomes less important. File for 2011 taxes To determine the replacement cost of the donated property, find the “estimated replacement cost new. File for 2011 taxes ” Then subtract from this figure an amount for depreciation due to the physical condition and obsolescence of the donated property. File for 2011 taxes You should be able to show the relationship between the depreciated replacement cost and the FMV, as well as how you arrived at the “estimated replacement cost new. File for 2011 taxes ” Opinions of Experts Generally, the weight given to an expert's opinion on matters such as the authenticity of a coin or a work of art, or the most profitable and best use of a piece of real estate, depends on the knowledge and competence of the expert and the thoroughness with which the opinion is supported by experience and facts. File for 2011 taxes For an expert's opinion to deserve much weight, the facts must support the opinion. File for 2011 taxes For additional information, see Appraisals, later. File for 2011 taxes Table 1. File for 2011 taxes Factors That Affect FMV IF the factor you are considering is. File for 2011 taxes . File for 2011 taxes . File for 2011 taxes THEN you should ask these questions. File for 2011 taxes . File for 2011 taxes . File for 2011 taxes     cost or selling price Was the purchase or sale of the property reasonably close to the date of contribution? Was any increase or decrease in value, as compared to your cost, at a reasonable rate? Do the terms of purchase or sale limit what can be done with the property? Was there an arm's-length offer to buy the property close to the valuation date?     sales of comparable properties How similar is the property sold to the property donated? How close is the date of sale to the valuation date? Was the sale at arm's-length? What was the condition of the market at the time of sale?     replacement cost What would it cost to replace the donated property? Is there a reasonable relationship between replacement cost and FMV? Is the supply of the donated property more or less than the demand for it?     opinions of experts Is the expert knowledgeable and competent? Is the opinion thorough and supported by facts and experience? Problems in Determining Fair Market Value There are a number of problems in determining the FMV of donated property. File for 2011 taxes Unusual Market Conditions The sale price of the property itself in an arm's-length transaction in an open market is often the best evidence of its value. File for 2011 taxes When you rely on sales of comparable property, the sales must have been made in an open market. File for 2011 taxes If those sales were made in a market that was artificially supported or stimulated so as not to be truly representative, the prices at which the sales were made will not indicate the FMV. File for 2011 taxes For example, liquidation sale prices usually do not indicate the FMV. File for 2011 taxes Also, sales of stock under unusual circumstances, such as sales of small lots, forced sales, and sales in a restricted market, may not represent the FMV. File for 2011 taxes Selection of Comparable Sales Using sales of comparable property is an important method for determining the FMV of donated property. File for 2011 taxes However, the amount of weight given to a sale depends on the degree of similarity between the comparable and the donated properties. File for 2011 taxes The degree of similarity must be close enough so that this selling price would have been given consideration by reasonably well-informed buyers or sellers of the property. File for 2011 taxes Example. File for 2011 taxes You give a rare, old book to your former college. File for 2011 taxes The book is a third edition and is in poor condition because of a missing back cover. File for 2011 taxes You discover that there was a sale for $300, near the valuation date, of a first edition of the book that was in good condition. File for 2011 taxes Although the contents are the same, the books are not at all similar because of the different editions and their physical condition. File for 2011 taxes Little consideration would be given to the selling price of the $300 property by knowledgeable buyers or sellers. File for 2011 taxes Future Events You may not consider unexpected events happening after your donation of property in making the valuation. File for 2011 taxes You may consider only the facts known at the time of the gift, and those that could be reasonably expected at the time of the gift. File for 2011 taxes Example. File for 2011 taxes You give farmland to a qualified charity. File for 2011 taxes The transfer provides that your mother will have the right to all income and full use of the property for her life. File for 2011 taxes Even though your mother dies 1 week after the transfer, the value of the property on the date it is given is its present value, subject to the life interest as estimated from actuarial tables. File for 2011 taxes You may not take a higher deduction because the charity received full use and possession of the land only 1 week after the transfer. File for 2011 taxes Using Past Events to Predict the Future A common error is to rely too much on past events that do not fairly reflect the probable future earnings and FMV. File for 2011 taxes Example. File for 2011 taxes You give all your rights in a successful patent to your favorite charity. File for 2011 taxes Your records show that before the valuation date there were three stages in the patent's history of earnings. File for 2011 taxes First, there was rapid growth in earnings when the invention was introduced. File for 2011 taxes Then, there was a period of high earnings when the invention was being exploited. File for 2011 taxes Finally, there was a decline in earnings when competing inventions were introduced. File for 2011 taxes The entire history of earnings may be relevant in estimating the future earnings. File for 2011 taxes However, the appraiser must not rely too much on the stage of rapid growth in earnings, or of high earnings. File for 2011 taxes The market conditions at those times do not represent the condition of the market at the valuation date. File for 2011 taxes What is most significant is the trend of decline in earnings up to the valuation date. File for 2011 taxes For more information about donations of patents, see Patents, later. File for 2011 taxes Valuation of Various Kinds of Property This section contains information on determining the FMV of ordinary kinds of donated property. File for 2011 taxes For information on appraisals, see Appraisals, later. File for 2011 taxes Household Goods The FMV of used household goods, such as furniture, appliances, and linens, is usually much lower than the price paid when new. File for 2011 taxes Such used property may have little or no market value because of its worn condition. File for 2011 taxes It may be out of style or no longer useful. File for 2011 taxes You cannot take a deduction for household goods donated after August 17, 2006, unless they are in good used condition or better. File for 2011 taxes A household good that is not in good used condition or better for which you take a deduction of more than $500 requires a qualified appraisal. File for 2011 taxes See Deduction over $500 for certain clothing or household items, later. File for 2011 taxes If the property is valuable because it is old or unique, see the discussion under Paintings, Antiques, and Other Objects of Art. File for 2011 taxes Used Clothing Used clothing and other personal items are usually worth far less than the price you paid for them. File for 2011 taxes Valuation of items of clothing does not lend itself to fixed formulas or methods. File for 2011 taxes The price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops, is an indication of the value. File for 2011 taxes You cannot take a deduction for clothing donated after August 17, 2006, unless it is in good used condition or better. File for 2011 taxes An item of clothing that is not in good used condition or better for which you take a deduction of more than $500 requires a qualified appraisal. File for 2011 taxes See Deduction over $500 for certain clothing or household items, later. File for 2011 taxes For valuable furs or very expensive gowns, a Form 8283 may have to be sent with your tax return. File for 2011 taxes Jewelry and Gems Jewelry and gems are of such a specialized nature that it is almost always necessary to get an appraisal by a specialized jewelry appraiser. File for 2011 taxes The appraisal should describe, among other things, the style of the jewelry, the cut and setting of the gem, and whether it is now in fashion. File for 2011 taxes If not in fashion, the possibility of having the property redesigned, recut, or reset should be reported in the appraisal. File for 2011 taxes The stone's coloring, weight, cut, brilliance, and flaws should be reported and analyzed. File for 2011 taxes Sentimental personal value has no effect on FMV. File for 2011 taxes But if the jewelry was owned by a famous person, its value might increase. File for 2011 taxes Paintings, Antiques, and Other Objects of Art Your deduction for contributions of paintings, antiques, and other objects of art, should be supported by a written appraisal from a qualified and reputable source, unless the deduction is $5,000 or less. File for 2011 taxes Examples of information that should be included in appraisals of art objects—paintings in particular—are found later under Qualified Appraisal. File for 2011 taxes Art valued at $20,000 or more. File for 2011 taxes   If you claim a deduction of $20,000 or more for donations of art, you must attach a complete copy of the signed appraisal to your return. File for 2011 taxes For individual objects valued at $20,000 or more, a photograph of a size and quality fully showing the object, preferably an 8 x 10 inch color photograph or a color transparency no smaller than 4 x 5 inches, must be provided upon request. File for 2011 taxes Art valued at $50,000 or more. File for 2011 taxes   If you donate an item of art that has been appraised at $50,000 or more, you can request a Statement of Value for that item from the IRS. File for 2011 taxes You must request the statement before filing the tax return that reports the donation. File for 2011 taxes Your request must include the following. File for 2011 taxes A copy of a qualified appraisal of the item. File for 2011 taxes See Qualified Appraisal, later. File for 2011 taxes A $2,500 check or money order payable to the Internal Revenue Service for the user fee that applies to your request regarding one, two, or three items of art. File for 2011 taxes Add $250 for each item in excess of three. File for 2011 taxes A completed Form 8283, Section B. File for 2011 taxes The location of the IRS territory that has examination responsibility for your return. File for 2011 taxes If your request lacks essential information, you will be notified and given 30 days to provide the missing information. File for 2011 taxes   Send your request to: Internal Revenue Service Attention: Art Appraisal (C:AP:ART) P. File for 2011 taxes O. File for 2011 taxes Box 27720 McPherson Station Washington, DC 20038 Refunds. File for 2011 taxes   You can withdraw your request for a Statement of Value at any time before it is issued. File for 2011 taxes However, the IRS will not refund the user fee if you do. File for 2011 taxes   If the IRS declines to issue a Statement of Value in the interest of efficient tax administration, the IRS will refund the user fee. File for 2011 taxes Authenticity. File for 2011 taxes   The authenticity of the donated art must be determined by the appraiser. File for 2011 taxes Physical condition. File for 2011 taxes   Important items in the valuation of antiques and art are physical condition and extent of restoration. File for 2011 taxes These have a significant effect on the value and must be fully reported in an appraisal. File for 2011 taxes An antique in damaged condition, or lacking the “original brasses,” may be worth much less than a similar piece in excellent condition. File for 2011 taxes Art appraisers. File for 2011 taxes   More weight will usually be given to an appraisal prepared by an individual specializing in the kind and price range of the art being appraised. File for 2011 taxes Certain art dealers or appraisers specialize, for example, in old masters, modern art, bronze sculpture, etc. File for 2011 taxes Their opinions on the authenticity and desirability of such art would usually be given more weight than the opinions of more generalized art dealers or appraisers. File for 2011 taxes They can report more recent comparable sales to support their opinion. File for 2011 taxes   To identify and locate experts on unique, specialized items or collections, you may wish to use the current Official Museum Directory of the American Association of Museums. File for 2011 taxes It lists museums both by state and by category. File for 2011 taxes   To help you locate a qualified appraiser for your donation, you may wish to ask an art historian at a nearby college or the director or curator of a local museum. File for 2011 taxes The Yellow Pages often list specialized art and antique dealers, auctioneers, and art appraisers. File for 2011 taxes You may be able to find a qualified appraiser on the Internet. File for 2011 taxes You may also contact associations of dealers for guidance. File for 2011 taxes Collections Since many kinds of hobby collections may be the subject of a charitable donation, it is not possible to discuss all of the possible collectibles in this publication. File for 2011 taxes Most common are rare books, autographs, sports memorabilia, dolls, manuscripts, stamps, coins, guns, phonograph records, and natural history items. File for 2011 taxes Many of the elements of valuation that apply to paintings and other objects of art, discussed earlier, also apply to miscellaneous collections. File for 2011 taxes Reference material. File for 2011 taxes   Publications available to help you determine the value of many kinds of collections include catalogs, dealers' price lists, and specialized hobby periodicals. File for 2011 taxes When using one of these price guides, you must use the current edition at the date of contribution. File for 2011 taxes However, these sources are not always reliable indicators of FMV and should be supported by other evidence. File for 2011 taxes   For example, a dealer may sell an item for much less than is shown on a price list, particularly after the item has remained unsold for a long time. File for 2011 taxes The price an item sold for in an auction may have been the result of a rigged sale or a mere bidding duel. File for 2011 taxes The appraiser must analyze the reference material, and recognize and make adjustments for misleading entries. File for 2011 taxes If you are donating a valuable collection, you should get an appraisal. File for 2011 taxes If your donation appears to be of little value, you may be able to make a satisfactory valuation using reference materials available at a state, city, college, or museum library. File for 2011 taxes Stamp collections. File for 2011 taxes   Most libraries have catalogs or other books that report the publisher's estimate of values. File for 2011 taxes Generally, two price levels are shown for each stamp: the price postmarked and the price not postmarked. File for 2011 taxes Stamp dealers generally know the value of their merchandise and are able to prepare satisfactory appraisals of valuable collections. File for 2011 taxes Coin collections. File for 2011 taxes   Many catalogs and other reference materials show the writer's or publisher's opinion of the value of coins on or near the date of the publication. File for 2011 taxes Like many other collectors' items, the value of a coin depends on the demand for it, its age, and its rarity. File for 2011 taxes Another important factor is the coin's condition. File for 2011 taxes For example, there is a great difference in the value of a coin that is in mint condition and a similar coin that is only in good condition. File for 2011 taxes   Catalogs usually establish a category for coins, based on their physical condition—mint or uncirculated, extremely fine, very fine, fine, very good, good, fair, or poor—with a different valuation for each category. File for 2011 taxes Books. File for 2011 taxes   The value of books is usually determined by selecting comparable sales and adjusting the prices according to the differences between the comparable sales and the item being evaluated. File for 2011 taxes This is difficult to do and, except for a collection of little value, should be done by a specialized appraiser. File for 2011 taxes Within the general category of literary property, there are dealers who specialize in certain areas, such as Americana, foreign imports, Bibles, and scientific books. File for 2011 taxes Modest value of collection. File for 2011 taxes   If the collection you are donating is of modest value, not requiring a written appraisal, the following information may help you in determining the FMV. File for 2011 taxes   A book that is very old, or very rare, is not necessarily valuable. File for 2011 taxes There are many books that are very old or rare, but that have little or no market value. File for 2011 taxes Condition of book. File for 2011 taxes   The condition of a book may have a great influence on its value. File for 2011 taxes Collectors are interested in items that are in fine, or at least good, condition. File for 2011 taxes When a book has a missing page, a loose binding, tears, stains, or is otherwise in poor condition, its value is greatly lowered. File for 2011 taxes Other factors. File for 2011 taxes   Some other factors in the valuation of a book are the kind of binding (leather, cloth, paper), page edges, and illustrations (drawings and photographs). File for 2011 taxes Collectors usually want first editions of books. File for 2011 taxes However, because of changes or additions, other editions are sometimes worth as much as, or more than, the first edition. File for 2011 taxes Manuscripts, autographs, diaries, and similar items. File for 2011 taxes   When these items are handwritten, or at least signed by famous people, they are often in demand and are valuable. File for 2011 taxes The writings of unknowns also may be of value if they are of unusual historical or literary importance. File for 2011 taxes Determining the value of such material is difficult. File for 2011 taxes For example, there may be a great difference in value between two diaries that were kept by a famous person—one kept during childhood and the other during a later period in his or her life. File for 2011 taxes The appraiser determines a value in these cases by applying knowledge and judgment to such factors as comparable sales and conditions. File for 2011 taxes Signatures. File for 2011 taxes   Signatures, or sets of signatures, that were cut from letters or other papers usually have little or no value. File for 2011 taxes But complete sets of the signatures of U. File for 2011 taxes S. File for 2011 taxes presidents are in demand. File for 2011 taxes Cars, Boats, and Aircraft If you donate a car, a boat, or an aircraft to a charitable organization, its FMV must be determined. File for 2011 taxes Certain commercial firms and trade organizations publish monthly or seasonal guides for different regions of the country, containing complete dealer sale prices or dealer average prices for recent model years. File for 2011 taxes Prices are reported for each make, model, and year. File for 2011 taxes These guides also provide estimates for adjusting for unusual equipment, unusual mileage, and physical condition. File for 2011 taxes The prices are not “official,” and these publications are not considered an appraisal of any specific donated property. File for 2011 taxes But they do provide clues for making an appraisal and suggest relative prices for comparison with current sales and offerings in your area. File for 2011 taxes These publications are sometimes available from public libraries or at a bank, credit union, or finance company. File for 2011 taxes You can also find pricing information about used cars on the Internet. File for 2011 taxes An acceptable measure of the FMV of a donated car, boat, or airplane is an amount not in excess of the price listed in a used vehicle pricing guide for a private party sale, not the dealer retail value, of a similar vehicle. File for 2011 taxes However, the FMV may be less than that amount if the vehicle has engine trouble, body damage, high mileage, or any type of excessive wear. File for 2011 taxes The FMV of a donated vehicle is the same as the price listed in a used vehicle pricing guide for a private party sale only if the guide lists a sales price for a vehicle that is the same make, model, and year, sold in the same area, in the same condition, with the same or similar options or accessories, and with the same or similar warranties as the donated vehicle. File for 2011 taxes Example. File for 2011 taxes You donate a used car in poor condition to a local high school for use by students studying car repair. File for 2011 taxes A used car guide shows the dealer retail value for this type of car in poor condition is $1,600. File for 2011 taxes However, the guide shows the price for a private party sale of the car is only $750. File for 2011 taxes The FMV of the car is considered to be no more than $750. File for 2011 taxes Boats. File for 2011 taxes   Except for inexpensive small boats, the valuation of boats should be based on an appraisal by a marine surveyor because the physical condition is so critical to the value. File for 2011 taxes More information. File for 2011 taxes   Your deduction for a donated car, boat, or airplane generally is limited to the gross proceeds from its sale by the qualified organization. File for 2011 taxes This rule applies if the claimed value of the donated vehicle is more than $500. File for 2011 taxes In certain cases, you can deduct the vehicle's FMV. File for 2011 taxes For details, see Publication 526. File for 2011 taxes Inventory If you donate any inventory item to a charitable organization, the amount of your deductible contribution generally is the FMV of the item, minus any gain you would have realized if you had sold the item at its FMV on the date of the gift. File for 2011 taxes For more information, see Publication 526. File for 2011 taxes Patents To determine the FMV of a patent, you must take into account, among other factors: Whether the patented technology has been made obsolete by other technology; Any restrictions on the donee's use of, or ability to transfer, the patented technology; and The length of time remaining before the patent expires. File for 2011 taxes However, your deduction for a donation of a patent or other intellectual property is its FMV, minus any gain you would have realized if you had sold the property at its FMV on the date of the gift. File for 2011 taxes Generally, this means your deduction is the lesser of the property's FMV or its basis. File for 2011 taxes For details, see Publication 526. File for 2011 taxes Stocks and Bonds The value of stocks and bonds is the FMV of a share or bond on the valuation date. File for 2011 taxes See Date of contribution, earlier, under What Is Fair Market Value (FMV). File for 2011 taxes Selling prices on valuation date. File for 2011 taxes   If there is an active market for the contributed stocks or bonds on a stock exchange, in an over-the-counter market, or elsewhere, the FMV of each share or bond is the average price between the highest and lowest quoted selling prices on the valuation date. File for 2011 taxes For example, if the highest selling price for a share was $11, and the lowest $9, the average price is $10. File for 2011 taxes You get the average price by adding $11 and $9 and dividing the sum by 2. File for 2011 taxes No sales on valuation date. File for 2011 taxes   If there were no sales on the valuation date, but there were sales within a reasonable period before and after the valuation date, you determine FMV by taking the average price between the highest and lowest sales prices on the nearest date before and on the nearest date after the valuation date. File for 2011 taxes Then you weight these averages in inverse order by the respective number of trading days between the selling dates and the valuation date. File for 2011 taxes Example. File for 2011 taxes   On the day you gave stock to a qualified organization, there were no sales of the stock. File for 2011 taxes Sales of the stock nearest the valuation date took place two trading days before the valuation date at an average selling price of $10 and three trading days after the valuation date at an average selling price of $15. File for 2011 taxes The FMV on the valuation date was $12, figured as follows: [(3 x $10) + (2 x $15)] ÷ 5 = $12 Listings on more than one stock exchange. File for 2011 taxes   Stocks or bonds listed on more than one stock exchange are valued based on the prices of the exchange on which they are principally dealt. File for 2011 taxes This applies if these prices are published in a generally available listing or publication of general circulation. File for 2011 taxes If this is not applicable, and the stocks or bonds are reported on a composite listing of combined exchanges in a publication of general circulation, use the composite list. File for 2011 taxes See also Unavailable prices or closely held corporation, later. File for 2011 taxes Bid and asked prices on valuation date. File for 2011 taxes   If there were no sales within a reasonable period before and after the valuation date, the FMV is the average price between the bona fide bid and asked prices on the valuation date. File for 2011 taxes Example. File for 2011 taxes Although there were no sales of Blue Corporation stock on the valuation date, bona fide bid and asked prices were available on that date of $14 and $16, respectively. File for 2011 taxes The FMV is $15, the average price between the bid and asked prices. File for 2011 taxes No prices on valuation date. File for 2011 taxes   If there were no prices available on the valuation date, you determine FMV by taking the average prices between the bona fide bid and asked prices on the closest trading date before and after the valuation date. File for 2011 taxes Both dates must be within a reasonable period. File for 2011 taxes Then you weight these averages in inverse order by the respective number of trading days between the bid and asked dates and the valuation date. File for 2011 taxes Example. File for 2011 taxes On the day you gave stock to a qualified organization, no prices were available. File for 2011 taxes Bona fide bid and asked prices 3 days before the valuation date were $10 and 2 days after the valuation date were $15. File for 2011 taxes The FMV on the valuation date is $13, figured as follows: [(2 x $10) + (3 x $15)] ÷ 5 = $13 Prices only before or after valuation date, but not both. File for 2011 taxes   If no selling prices or bona fide bid and asked prices are available on a date within a reasonable period before the valuation date, but are available on a date within a reasonable period after the valuation date, or vice versa, then the average price between the highest and lowest of such available prices may be treated as the value. File for 2011 taxes Large blocks of stock. File for 2011 taxes   When a large block of stock is put on the market, it may lower the selling price of the stock if the supply is greater than the demand. File for 2011 taxes On the other hand, market forces may exist that will afford higher prices for large blocks of stock. File for 2011 taxes Because of the many factors to be considered, determining the value of large blocks of stock usually requires the help of experts specializing in underwriting large quantities of securities, or in trading in the securities of the industry of which the particular company is a part. File for 2011 taxes Unavailable prices or closely held corporation. File for 2011 taxes   If selling prices or bid and asked prices are not available, or if securities of a closely held corporation are involved, determine the FMV by considering the following factors. File for 2011 taxes For bonds, the soundness of the security, the interest yield, the date of maturity, and other relevant factors. File for 2011 taxes For shares of stock, the company's net worth, prospective earning power and dividend-paying capacity, and other relevant factors. File for 2011 taxes Other factors. File for 2011 taxes   Other relevant factors include: The nature and history of the business, especially its recent history, The goodwill of the business, The economic outlook in the particular industry, The company's position in the industry, its competitors, and its management, and The value of securities of corporations engaged in the same or similar business. File for 2011 taxes For preferred stock, the most important factors are its yield, dividend coverage, and protection of its liquidation preference. File for 2011 taxes   You should keep complete financial and other information on which the valuation is based. File for 2011 taxes This includes copies of reports of examinations of the company made by accountants, engineers, or any technical experts on or close to the valuation date. File for 2011 taxes Restricted securities. File for 2011 taxes   Some classes of stock cannot be traded publicly because of restrictions imposed by the Securities and Exchange Commission, or by the corporate charter or a trust agreement. File for 2011 taxes These restricted securities usually trade at a discount in relation to freely traded securities. File for 2011 taxes   To arrive at the FMV of restricted securities, factors that you must consider include the resale provisions found in the restriction agreements, the relative negotiating strengths of the buyer and seller, and the market experience of freely traded securities of the same class as the restricted securities. File for 2011 taxes Real Estate Because each piece of real estate is unique and its valuation is complicated, a detailed appraisal by a professional appraiser is necessary. File for 2011 taxes The appraiser must be thoroughly trained in the application of appraisal principles and theory. File for 2011 taxes In some instances the opinions of equally qualified appraisers may carry unequal weight, such as when one appraiser has a better knowledge of local conditions. File for 2011 taxes The appraisal report must contain a complete description of the property, such as street address, legal description, and lot and block number, as well as physical features, condition, and dimensions. File for 2011 taxes The use to which the property is put, zoning and permitted uses, and its potential use for other higher and better uses are also relevant. File for 2011 taxes In general, there are three main approaches to the valuation of real estate. File for 2011 taxes An appraisal may require the combined use of two or three methods rather than one method only. File for 2011 taxes 1. File for 2011 taxes Comparable Sales The comparable sales method compares the donated property with several similar properties that have been sold. File for 2011 taxes The selling prices, after adjustments for differences in date of sale, size, condition, and location, would then indicate the estimated FMV of the donated property. File for 2011 taxes If the comparable sales method is used to determine the value of unimproved real property (land without significant buildings, structures, or any other improvements that add to its value), the appraiser should consider the following factors when comparing the potential comparable property and the donated property: Location, size, and zoning or use restrictions, Accessibility and road frontage, and available utilities and water rights, Riparian rights (right of access to and use of the water by owners of land on the bank of a river) and existing easements, rights-of-way, leases, etc. File for 2011 taxes , Soil characteristics, vegetative cover, and status of mineral rights, and Other factors affecting value. File for 2011 taxes For each comparable sale, the appraisal must include the names of the buyer and seller, the deed book and page number, the date of sale and selling price, a property description, the amount and terms of mortgages, property surveys, the assessed value, the tax rate, and the assessor's appraised FMV. File for 2011 taxes The comparable selling prices must be adjusted to account for differences between the sale property and the donated property. File for 2011 taxes Because differences of opinion may arise between appraisers as to the degree of comparability and the amount of the adjustment considered necessary for comparison purposes, an appraiser should document each item of adjustment. File for 2011 taxes Only comparable sales having the least adjustments in terms of items and/or total dollar adjustments should be considered as comparable to the donated property. File for 2011 taxes 2. File for 2011 taxes Capitalization of Income This method capitalizes the net income from the property at a rate that represents a fair return on the particular investment at the particular time, considering the risks involved. File for 2011 taxes The key elements are the determination of the income to be capitalized and the rate of capitalization. File for 2011 taxes 3. File for 2011 taxes Replacement Cost New or Reproduction Cost Minus Observed Depreciation This method, used alone, usually does not result in a determination of FMV. File for 2011 taxes Instead, it generally tends to set the upper limit of value, particularly in periods of rising costs, because it is reasonable to assume that an informed buyer will not pay more for the real estate than it would cost to reproduce a similar property. File for 2011 taxes Of course, this reasoning does not apply if a similar property cannot be created because of location, unusual construction, or some other reason. File for 2011 taxes Generally, this method serves to support the value determined from other methods. File for 2011 taxes When the replacement cost method is applied to improved realty, the land and improvements are valued separately. File for 2011 taxes The replacement cost of a building is figured by considering the materials, the quality of workmanship, and the number of square feet or cubic feet in the building. File for 2011 taxes This cost represents the total cost of labor and material, overhead, and profit. File for 2011 taxes After the replacement cost has been figured, consideration must be given to the following factors: Physical deterioration—the wear and tear on the building itself, Functional obsolescence—usually in older buildings with, for example, inadequate lighting, plumbing, or heating, small rooms, or a poor floor plan, and Economic obsolescence—outside forces causing the whole area to become less desirable. File for 2011 taxes Interest in a Business The FMV of any interest in a business, whether a sole proprietorship or a partnership, is the amount that a willing buyer would pay for the interest to a willing seller after consideration of all relevant factors. File for 2011 taxes The relevant factors to be considered in valuing the business are: The FMV of the assets of the business, The demonstrated earnings capacity of the business, based on a review of past and current earnings, and The other factors used in evaluating corporate stock, if they apply. File for 2011 taxes The value of the goodwill of the business should also be taken into consideration. File for 2011 taxes You should keep complete financial and other information on which you base the valuation. File for 2011 taxes This includes copies of reports of examinations of the business made by accountants, engineers, or any technical experts on or close to the valuation date. File for 2011 taxes Annuities, Interests for Life or Terms of Years, Remainders, and Reversions The value of these kinds of property is their present value, except in the case of annuities under contracts issued by companies regularly engaged in their sale. File for 2011 taxes The valuation of these commercial annuity contracts and of insurance policies is discussed later under Certain Life Insurance and Annuity Contracts. File for 2011 taxes To determine present value, you must know the applicable interest rate and use actuarial tables. File for 2011 taxes Interest rate. File for 2011 taxes   The applicable interest rate varies. File for 2011 taxes It is announced monthly in a news release and published in the Internal Revenue Bulletin as a Revenue Ruling. File for 2011 taxes The interest rate to use is under the heading “Rate Under Section 7520” for a given month and year. File for 2011 taxes You can call the IRS office at 1-800-829-1040 to obtain this rate. File for 2011 taxes Actuarial tables. File for 2011 taxes   You need to refer to actuarial tables to determine a qualified interest in the form of an annuity, any interest for life or a term of years, or any remainder interest to a charitable organization. File for 2011 taxes   Use the valuation tables set forth in IRS Publications 1457, Actuarial Values (Book Aleph), and 1458, Actuarial Values (Book Beth). File for 2011 taxes Both of these publications provide tables containing actuarial factors to be used in determining the present value of an annuity, an interest for life or for a term of years, or a remainder or reversionary interest. File for 2011 taxes For qualified charitable transfers, you can use the factor for the month in which you made the contribution or for either of the 2 months preceding that month. File for 2011 taxes   Publication 1457 also contains actuarial factors for computing the value of a remainder interest in a charitable remainder annuity trust and a pooled income fund. File for 2011 taxes Publication 1458 contains the factors for valuing the remainder interest in a charitable remainder unitrust. File for 2011 taxes You can download Publications 1457 and 1458 from www. File for 2011 taxes irs. File for 2011 taxes gov. File for 2011 taxes In addition, they are available for purchase via the website of the U. File for 2011 taxes S. File for 2011 taxes Government Printing Office, by phone at (202) 512-1800, or by mail from the: Superintendent of Documents P. File for 2011 taxes O. File for 2011 taxes Box 371954 Pittsburgh, PA 15250-7954 Tables containing actuarial factors for transfers to pooled income funds may also be found in Income Tax Regulation 1. File for 2011 taxes 642(c)-6(e)(6), transfers to charitable remainder unitrusts in Regulation 1. File for 2011 taxes 664-4(e), and other transfers in Regulation 20. File for 2011 taxes 2031-7(d)(6). File for 2011 taxes Special factors. File for 2011 taxes   If you need a special factor for an actual transaction, you can request a letter ruling. File for 2011 taxes Be sure to include the date of birth of each person the duration of whose life may affect the value of the interest. File for 2011 taxes Also include copies of the relevant instruments. File for 2011 taxes IRS charges a user fee for providing special factors. File for 2011 taxes   For more information about requesting a ruling, see Revenue Procedure 2006-1 (or annual update), 2006-1 I. File for 2011 taxes R. File for 2011 taxes B. File for 2011 taxes 1. File for 2011 taxes Revenue Procedure 2006-1 is available at www. File for 2011 taxes irs. File for 2011 taxes gov/irb/2006-01_IRB/ar06. File for 2011 taxes html. File for 2011 taxes   For information on the circumstances under which a charitable deduction may be allowed for the donation of a partial interest in property not in trust, see Partial Interest in Property Not in Trust, later. File for 2011 taxes Certain Life Insurance and Annuity Contracts The value of an annuity contract or a life insurance policy issued by a company regularly engaged in the sale of such contracts or policies is the amount that company would charge for a comparable contract. File for 2011 taxes But if the donee of a life insurance policy may reasonably be expected to cash the policy rather than hold it as an investment, then the FMV is the cash surrender value rather than the replacement cost. File for 2011 taxes If an annuity is payable under a combination annuity contract and life insurance policy (for example, a retirement income policy with a death benefit) and there was no insurance element when it was transferred to the charity, the policy is treated as an annuity contract. File for 2011 taxes Partial Interest in Property Not in Trust Generally, no deduction is allowed for a charitable contribution, not made in trust, of less than your entire interest in property. File for 2011 taxes However, this does not apply to a transfer of less than your entire interest if it is a transfer of: A remainder interest in your personal residence or farm, An undivided part of your entire interest in property, or A qualified conservation contribution. File for 2011 taxes Remainder Interest in Real Property The amount of the deduction for a donation of a remainder interest in real property is the FMV of the remainder interest at the time of the contribution. File for 2011 taxes To determine this value, you must know the FMV of the property on the date of the contribution. File for 2011 taxes Multiply this value by the appropriate factor. File for 2011 taxes Publications 1457 and 1458 contain these factors. File for 2011 taxes You must make an adjustment for depreciation or depletion using the factors shown in Publication 1459, Actuarial Values (Book Gimel). File for 2011 taxes You can use the factors for the month in which you made the contribution or for either of the two months preceding that month. File for 2011 taxes See the earlier discussion on Annuities, Interests for Life or Terms of Years, Remainders, and Reversions. File for 2011 taxes You can download Publication 1459 from www. File for 2011 taxes irs. File for 2011 taxes gov. File for 2011 taxes For this purpose, the term “depreciable property” means any property subject to wear and tear or obsolescence, even if not used in a trade or business or for the production of income. File for 2011 taxes If the remainder interest includes both depreciable and nondepreciable property, for example a house and land, the FMV must be allocated between each kind of property at the time of the contribution. File for 2011 taxes This rule also applies to a gift of a remainder interest that includes property that is part depletable and part not depletable. File for 2011 taxes Take into account depreciation or depletion only for the property that is subject to depreciation or depletion. File for 2011 taxes For more information, see section 1. File for 2011 taxes 170A-12 of the Income Tax Regulations. File for 2011 taxes Undivided Part of Your Entire Interest A contribution of an undivided part of your entire interest in property must consist of a part of each and every substantial interest or right you own in the property. File for 2011 taxes It must extend over the entire term of your interest in the property. File for 2011 taxes For example, you are entitled to the income from certain property for your life (life estate) and you contribute 20% of that life estate to a qualified organization. File for 2011 taxes You can claim a deduction for the contribution if you do not have any other interest in the property. File for 2011 taxes To figure the value of a contribution involving a partial interest, see Publication 1457. File for 2011 taxes If the only interest you own in real property is a remainder interest and you transfer part of that interest to a qualified organization, see the previous discussion on valuation of a remainder interest in real property. File for 2011 taxes Qualified Conservation Contribution A qualified conservation contribution is a contribution of a qualified real property interest to a qualified organization to be used only for conservation purposes. File for 2011 taxes Qualified organization. File for 2011 taxes   For purposes of a qualified conservation contribution, a qualified organization is: A governmental unit, A publicly supported charitable, religious, scientific, literary, educational, etc. File for 2011 taxes , organization, or An organization that is controlled by, and operated for the exclusive benefit of, a governmental unit or a publicly supported charity. File for 2011 taxes The organization also must have a commitment to protect the conservation purposes of the donation and must have the resources to enforce the restrictions. File for 2011 taxes Conservation purposes. File for 2011 taxes   Your contribution must be made only for one of the following conservation purposes. File for 2011 taxes Preserving land areas for outdoor recreation by, or for the education of, the general public. File for 2011 taxes Protecting a relatively natural habitat of fish, wildlife, or plants, or a similar ecosystem. File for 2011 taxes Preserving open space, including farmland and forest land, if it yields a significant public benefit. File for 2011 taxes It must be either for the scenic enjoyment of the general public or under a clearly defined federal, state, or local governmental conservation policy. File for 2011 taxes Preserving a historically important land area or a certified historic structure. File for 2011 taxes There must be some visual public access to the property. File for 2011 taxes Factors used in determining the type and amount of public access required include the historical significance of the property, the remoteness or accessibility of the site, and the extent to which intrusions on the privacy of individuals living on the property would be unreasonable. File for 2011 taxes Building in registered historic district. File for 2011 taxes   A contribution after July 25, 2006, of a qualified real property interest that is an easement or other restriction on the exterior of a building in a registered historic district is deductible only if it meets all of the following three conditions. File for 2011 taxes The restriction must preserve the entire exterior of the building and must prohibit any change to the exterior of the building that is inconsistent with its historical character. File for 2011 taxes You and the organization receiving the contribution must enter into a written agreement certifying, that the organization is a qualified organization and that it has the resources and commitment to maintain the property as donated. File for 2011 taxes If you make the contribution in a tax year beginning after August 17, 2006, you must include with your return: A qualified appraisal, Photographs of the building's entire exterior, and A description of all restrictions on development of the building, such as zoning laws and restrictive covenants. File for 2011 taxes   If you make this type of contribution after February 12, 2007, and claim a deduction of more than $10,000, your deduction will not be allowed unless you pay a $500 filing fee. File for 2011 taxes See Form 8283-V, Payment Voucher for Filing Fee Under Section 170(f)(13), and its instructions. File for 2011 taxes Qualified real property interest. File for 2011 taxes   This is any of the following interests in real property. File for 2011 taxes Your entire interest in real estate other than a mineral interest (subsurface oil, gas, or other minerals, and the right of access to these minerals). File for 2011 taxes A remainder interest. File for 2011 taxes A restriction (granted in perpetuity) on the use that may be made of the real property. File for 2011 taxes Valuation. File for 2011 taxes   A qualified real property interest described in (1) should be valued in a manner that is consistent with the type of interest transferred. File for 2011 taxes If you transferred all the interest in the property, the FMV of the property is the amount of the contribution. File for 2011 taxes If you do not transfer the mineral interest, the FMV of the surface rights in the property is the amount of the contribution. File for 2011 taxes   If you owned only a remainder interest or an income interest (life estate), see Undivided Part of Your Entire Interest, earlier. File for 2011 taxes If you owned the entire property but transferred only a remainder interest (item (2)), see Remainder Interest in Real Property, earlier. File for 2011 taxes   In determining the value of restrictions, you should take into account the selling price in arm's-length transactions of other properties that have comparable restrictions. File for 2011 taxes If there are no comparable sales, the restrictions are valued indirectly as the difference between the FMVs of the property involved before and after the grant of the restriction. File for 2011 taxes   The FMV of the property before contribution of the restriction should take into account not only current use but the likelihood that the property, without the restriction, would be developed. File for 2011 taxes You should also consider any zoning, conservation, or historical preservation laws that would restrict development. File for 2011 taxes Granting an easement may increase, rather than reduce, the value of property, and in such a situation no deduction would be allowed. File for 2011 taxes Example. File for 2011 taxes   You own 10 acres of farmland. File for 2011 taxes Similar land in the area has an FMV of $2,000 an acre. File for 2011 taxes However, land in the general area that is restricted solely to farm use has an FMV of $1,500 an acre. File for 2011 taxes Your county wants to preserve open space and prevent further development in your area. File for 2011 taxes   You grant to the county an enforceable open space easement in perpetuity on 8 of the 10 acres, restricting its use to farmland. File for 2011 taxes The value of this easement is $4,000, determined as follows: FMV of the property before granting easement:   $2,000 × 10 acres $20,000 FMV of the property after granting easement:   $1,500 × 8 acres $12,000   $2,000 × 2 acres 4,000 16,000 Value of easement   $4,000   If you later transfer in fee your remaining interest in the 8 acres to another qualified organization, the FMV of your remaining interest is the FMV of the 8 acres reduced by the FMV of the easement granted to the first organization. File for 2011 taxes More information. File for 2011 taxes   For more information about qualified conservation contributions, see Publication 526. File for 2011 taxes Appraisals Appraisals are not necessary for items of property for which you claim a deduction of $5,000 or less. File for 2011 taxes (There is one exception, described next, for certain clothing and household items. File for 2011 taxes ) However, you generally will need an appraisal for donated property for which you claim a deduction of more than $5,000. File for 2011 taxes There are exceptions. File for 2011 taxes See Deductions of More Than $5,000, later. File for 2011 taxes The weight given an appraisal depends on the completeness of the report, the qualifications of the appraiser, and the appraiser's demonstrated knowledge of the donated property. File for 2011 taxes An appraisal must give all the facts on which to base an intelligent judgment of the value of the property. File for 2011 taxes The appraisal will not be given much weight if: All the factors that apply are not considered, The opinion is not supported with facts, such as purchase price and comparable sales, or The opinion is not consistent with known facts. File for 2011 taxes The appraiser's opinion is never more valid than the facts on which it is based; without these facts it is simply a guess. File for 2011 taxes The opinion of a person claiming to be an expert is not binding on the Internal Revenue Service. File for 2011 taxes All facts associated with the donation must be considered. File for 2011 taxes Deduction over $500 for certain clothing or household items. File for 2011 taxes   You must include with your return a qualified appraisal of any single item of clothing or any household item that is not in good used condition or better, that you donated after August 17, 2006, and for which you deduct more than $500. File for 2011 taxes See Household Goods and Used Clothing, earlier. File for 2011 taxes Cost of appraisals. File for 2011 taxes   You may not take a charitable contribution deduction for fees you pay for appraisals of your donated property. File for 2011 taxes However, these fees may qualify as a miscellaneous deduction, subject to the 2% limit, on Schedule A (Form 1040) if paid to determine the amount allowable as a charitable contribution. File for 2011 taxes Deductions of More Than $5,000 Generally, if the claimed deduction for an item or group of similar items of donated property is more than $5,000, you must get a qualified appraisal made by a qualified appraiser, and you must attach Section B of Form 8283 to your tax return. File for 2011 taxes There are exceptions, discussed later. File for 2011 taxes You should keep the appraiser's report with your written records. File for 2011 taxes Records are discussed in Publication 526. File for 2011 taxes The phrase “similar items” means property of the same generic category or type (whether or not donated to the same donee), such as stamp collections, coin collections, lithographs, paintings, photographs, books, nonpublicly traded stock, nonpublicly traded securities other than nonpublicly traded stock, land, buildings, clothing, jewelry, furniture, electronic equipment, household appliances, toys, everyday kitchenware, china, crystal, or silver. File for 2011 taxes For example, if you give books to three schools and you deduct $2,000, $2,500, and $900, respectively, your claimed deduction is more than $5,000 for these books. File for 2011 taxes You must get a qualified appraisal of the books and for each school you must attach a fully completed Form 8283, Section B, to your tax return. File for 2011 taxes Exceptions. File for 2011 taxes   You do not need an appraisal if the property is: Nonpublicly traded stock of $10,000 or less, A vehicle (including a car, boat, or airplane) for which your deduction is limited to the gross proceeds from its sale, Qualified intellectual property, such as a patent, Certain publicly traded securities described next, Inventory and other property donated by a corporation that are “qualified contributions” for the care of the ill, the needy, or infants, within the meaning of section 170(e)(3)(A) of the Internal Revenue Code, or Stock in trade, inventory, or property held primarily for sale to customers in the ordinary course of your trade or business. File for 2011 taxes   Although an appraisal is not required for the types of property just listed, you must provide certain information about a donation of any of these types of property on Form 8283. File for 2011 taxes Publicly traded securities. File for 2011 taxes   Even if your claimed deduction is more than $5,000, neither a qualified appraisal nor Section B of Form 8283 is required for publicly traded securities that are: Listed on a stock exchange in which quotations are published on a daily basis, Regularly traded in a national or regional over-the-counter market for which published quotations are available, or Shares of an open-end investment company (mutual fund) for which quotations are published on a daily basis in a newspaper of general circulation throughout the United States. File for 2011 taxes Publicly traded securities that meet these requirements must be reported on Form 8283, Section A. File for 2011 taxes   A qualified appraisal is not required, but Form 8283, Section B, Parts I and IV, must be completed, for an issue of a security that does not meet the requirements just listed but does meet these requirements: The issue is regularly traded during the computation period (defined later) in a market for which there is an “interdealer quotation system” (defined later), The issuer or agent computes the “average trading price” (defined later) for the same issue for the computation period, The average trading price and total volume of the issue during the computation period are published in a newspaper of general circulation throughout the United States, not later than the last day of the month following the end of the calendar quarter in which the computation period ends, The issuer or agent keeps books and records that list for each transaction during the computation period the date of settlement of the transaction, the name and address of the broker or dealer making the market in which the transaction occurred, and the trading price and volume, and The issuer or agent permits the Internal Revenue Service to review the books and records described in item (4) with respect to transactions during the computation period upon receiving reasonable notice. File for 2011 taxes   An interdealer quotation system is any system of general circulation to brokers and dealers that regularly disseminates quotations of obligations by two or more identified brokers or dealers who are not related to either the issuer or agent who computes the average trading price of the security. File for 2011 taxes A quotation sheet prepared and distributed by a broker or dealer in the regular course of business and containing only quotations of that broker or dealer is not an interdealer quotation system. File for 2011 taxes   The average trading price is the average price of all transactions (weighted by volume), other than original issue or redemption transactions, conducted through a United States office of a broker or dealer who maintains a market in the issue of the security during the computation period. File for 2011 taxes Bid and asked quotations are not taken into account. File for 2011 taxes   The computation period is weekly during October through December and monthly during January through September. File for 2011 taxes The weekly computation periods during October through December begin with the first Monday in October and end with the first Sunday following the last Monday in December. File for 2011 taxes Nonpublicly traded stock. File for 2011 taxes   If you contribute nonpublicly traded stock, for which you claim a deduction of $10,000 or less, a qualified appraisal is not required. File for 2011 taxes However, you must attach Form 8283 to your tax return, with Section B, Parts I and IV, completed. File for 2011 taxes Deductions of More Than $500,000 If you claim a deduction of more than $500,000 for a donation of property, you must attach a qualified appraisal of the property to your return. File for 2011 taxes This does not apply to contributions of cash, inventory, publicly traded stock, or intellectual property. File for 2011 taxes If you do not attach the appraisal, you cannot deduct your contribution, unless your failure to attach the appraisal is due to reasonable cause and not to willful neglect. File for 2011 taxes Qualified Appraisal Generally, if the claimed deduction for an item or group of similar items of donated property is more than $5,000, you must get a qualified appraisal made by a qualified appraiser. File for 2011 taxes You must also complete Form 8283, Section B, and attach it to your tax return. File for 2011 taxes See Deductions of More Than $5,000, earlier. File for 2011 taxes A qualified appraisal is an appraisal document that: Is made, signed, and dated by a qualified appraiser (defined later) in accordance with generally accepted appraisal standards, Meets the relevant requirements of Regulations section 1. File for 2011 taxes 170A-13(c)(3) and Notice 2006-96, 2006-46 I. File for 2011 taxes R. File for 2011 taxes B. File for 2011 taxes 902 (available at www. File for 2011 taxes irs. File for 2011 taxes gov/irb/2006-46_IRB/ar13. File for 2011 taxes html), Relates to an appraisal made not earlier than 60 days before the date of contribution of the appraised property, Does not involve a prohibited appraisal fee, and Includes certain information (covered later). File for 2011 taxes You must receive the qualified appraisal before the due date, including extensions, of the return on which a charitable contribution deduction is first claimed for the donated property. File for 2011 taxes If the deduction is first claimed on an amended return, the qualified appraisal must be received before the date on which the amended return is filed. File for 2011 taxes Form 8283, Section B, must be attached to your tax return. File for 2011 taxes Generally, you do not need to attach the qualified appraisal itself, but you should keep a copy as long as it may be relevant under the tax law. File for 2011 taxes There are four exceptions. File for 2011 taxes If you claim a deduction of $20,000 or more for donations of art, you must attach a complete copy of the appraisal. File for 2011 taxes See Paintings, Antiques, and Other Objects of Art, earlier. File for 2011 taxes If you claim a deduction of more than $500,000 for a donation of property, you must attach the appraisal. File for 2011 taxes See Deductions of More Than $500,000, earlier. File for 2011 taxes If you claim a deduction of more than $500 for an article of clothing, or a household item, that is not in good used condition or better, that you donated after August 17, 2006, you must attach the appraisal. File for 2011 taxes See Deduction over $500 for certain clothing or household items, earlier. File for 2011 taxes If you claim a deduction in a tax year beginning after August 17, 2006, for an easement or other restriction on the exterior of a building in a historic district, you must attach the appraisal. File for 2011 taxes See Building in registered historic district, earlier. File for 2011 taxes Prohibited appraisal fee. File for 2011 taxes   Generally, no part of the fee arrangement for a qualified appraisal can be based on a percentage of the appraised value of the property. File for 2011 taxes If a fee arrangement is based on what is allowed as a deduction, after Internal Revenue Service examination or otherwise, it is treated as a fee based on a percentage of appraised value. File for 2011 taxes However, appraisals are not disqualified when an otherwise prohi
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IRS Withholding Calculator

If you are an employee, the Withholding Calculator can help you determine whether you need to give your employer a new  Form W-4, Employee's Withholding Allowance Certificate to avoid having too much or too little Federal income tax withheld from your pay. You can use your results from the calculator to help fill out the form.

Who Can Benefit From The Withholding Calculator?

  • Employees who would like to change their withholding to reduce their tax refund or their balance due;
  • Employees whose situations are only approximated by the worksheets on the paper W-4 (e.g., anyone with concurrent jobs, or couples in which both are employed; those entitled to file as Head of Household; and those with several children eligible for the Child Tax Credit);
  • Employees with non-wage income in excess of their adjustments and deductions, who would prefer to have tax on that income withheld from their paychecks rather than make periodic separate payments through the estimated tax procedures.

CAUTION:    If you will be subject to alternative minimum tax, self-employment tax, or other taxes; you will probably achieve more accurate withholding by following the instructions in Pub 505: Tax Withholding and Estimated Tax.

Ready to start? Make sure scripting is enabled before using this application. Continue to the Withholding Calculator

Tips For Using This Program

  • Have your most recent pay stubs handy.
  • Have your most recent income tax return handy.
  • Estimate values if necessary, remembering that the results can only be as accurate as the input you provide.

To Change Your Withholding:

  1. Use your results from this calculator to help you complete a new Form W-4, Employee's Withholding Allowance Certificate.
  2. Submit the completed Form to your employer.
Page Last Reviewed or Updated: 02-Jan-2014

IRS Withholding Calculator

 

The File For 2011 Taxes

File for 2011 taxes 1. File for 2011 taxes   Fuel Taxes Table of Contents Definitions Information Returns Registration RequirementsAdditional information. File for 2011 taxes Gasoline and Aviation GasolineTaxable Events Gasoline Blendstocks Diesel Fuel and KeroseneTaxable Events Dyed Diesel Fuel and Dyed Kerosene Alaska and Feedstocks Back-up Tax Diesel-Water Fuel Emulsion Kerosene for Use in AviationTaxable Events Liability For Tax Surtax on any liquid used in a fractional ownership program aircraft as fuel Certificate for Commercial Aviation and Exempt UsesExempt use. File for 2011 taxes Reseller statement. File for 2011 taxes Other Fuels (Including Alternative Fuels)Taxable Events Compressed Natural Gas (CNG)Taxable Events Fuels Used on Inland WaterwaysFishing vessels. File for 2011 taxes Deep-draft ocean-going vessels. File for 2011 taxes Passenger vessels. File for 2011 taxes Ocean-going barges. File for 2011 taxes State or local governments. File for 2011 taxes Cellulosic or Second Generation Biofuel Not Used as Fuel Biodiesel Sold as But Not Used as Fuel Definitions Excise taxes are imposed on all the following fuels. File for 2011 taxes Gasoline, including aviation gasoline and gasoline blendstocks. File for 2011 taxes Diesel fuel, including dyed diesel fuel. File for 2011 taxes Diesel-water fuel emulsion. File for 2011 taxes Kerosene, including dyed kerosene and kerosene used in aviation. File for 2011 taxes Other Fuels (including alternative fuels). File for 2011 taxes Compressed natural gas (CNG). File for 2011 taxes Fuels used in commercial transportation on inland waterways. File for 2011 taxes Any liquid used in a fractional ownership program aircraft as fuel. File for 2011 taxes The following terms are used throughout the discussion of fuel taxes. File for 2011 taxes Other terms are defined in the discussion of the specific fuels to which they pertain. File for 2011 taxes Agri-biodiesel. File for 2011 taxes   Agri-biodiesel means biodiesel derived solely from virgin oils, including esters derived from virgin vegetable oils from corn, soybeans, sunflower seeds, cottonseeds, canola, crambe, rapeseeds, safflowers, flaxseeds, rice bran, mustard seeds, and camelina, and from animal fats. File for 2011 taxes Approved terminal or refinery. File for 2011 taxes   This is a terminal operated by a registrant that is a terminal operator or a refinery operated by a registrant that is a refiner. File for 2011 taxes Biodiesel. File for 2011 taxes   Biodiesel means the monoalkyl esters of long chain fatty acids derived from plant or animal matter that meet the registration requirements for fuels and fuel additives established by the Environmental Protection Agency (EPA) under section 211 of the Clean Air Act, and the requirements of the American Society of Testing Materials (ASTM) D6751. File for 2011 taxes Blended taxable fuel. File for 2011 taxes   This means any taxable fuel produced outside the bulk transfer/terminal system by mixing taxable fuel on which excise tax has been imposed and any other liquid on which excise tax has not been imposed. File for 2011 taxes This does not include a mixture removed or sold during the calendar quarter if all such mixtures removed or sold by the blender contain less than 400 gallons of a liquid on which the tax has not been imposed. File for 2011 taxes Blender. File for 2011 taxes   This is the person that produces blended taxable fuel. File for 2011 taxes Bulk transfer. File for 2011 taxes   This is the transfer of taxable fuel by pipeline or vessel. File for 2011 taxes Bulk transfer/terminal system. File for 2011 taxes   This is the taxable fuel distribution system consisting of refineries, pipelines, vessels, and terminals. File for 2011 taxes Fuel in the supply tank of any engine, or in any tank car, railcar, trailer, truck, or other equipment suitable for ground transportation is not in the bulk transfer/terminal system. File for 2011 taxes Cellulosic biofuel. File for 2011 taxes   Cellulosic biofuel means any liquid fuel produced from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis that meets the registration requirements for fuels and fuel additives established by the EPA under section 211 of the Clean Air Act. File for 2011 taxes Cellulosic biofuel does not include any alcohol with a proof of less than 150 (without regard to denaturants). File for 2011 taxes For fuels sold or used after December 31, 2009, cellulosic biofuel does not include fuel of which more than 4% (determined by weight) is any combination of water and sediment, fuel of which the ash content is more than 1%, or fuel that has an acid number greater than 25. File for 2011 taxes Also see Second generation biofuel below. File for 2011 taxes Diesel-water fuel emulsion. File for 2011 taxes   A diesel-water fuel emulsion means an emulsion at least 14% of which is water. File for 2011 taxes The emulsion additive used to produce the fuel must be registered by a United States manufacturer with the EPA under section 211 of the Clean Air Act as in effect on March 31, 2003. File for 2011 taxes Dry lease aircraft exchange. File for 2011 taxes   See later, under Surtax on any liquid used in a fractional ownership program aircraft as fuel. File for 2011 taxes Enterer. File for 2011 taxes   This is the importer of record (under customs law) for the taxable fuel. File for 2011 taxes However, if the importer of record is acting as an agent, such as a customs broker, the person for whom the agent is acting is the enterer. File for 2011 taxes If there is no importer of record, the owner at the time of entry into the United States is the enterer. File for 2011 taxes Entry. File for 2011 taxes   Taxable fuel is entered into the United States when it is brought into the United States and applicable customs law requires that it be entered for consumption, use, or warehousing. File for 2011 taxes This does not apply to fuel brought into Puerto Rico (which is part of the U. File for 2011 taxes S. File for 2011 taxes customs territory), but does apply to fuel brought into the United States from Puerto Rico. File for 2011 taxes Fractional ownership aircraft program and fractional program aircraft. File for 2011 taxes   See later, under Surtax on any liquid used in a fractional ownership program aircraft as fuel. File for 2011 taxes Measurement of taxable fuel. File for 2011 taxes   Volumes of taxable fuel can be measured on the basis of actual volumetric gallons or gallons adjusted to 60 degrees Fahrenheit. File for 2011 taxes Other fuels. File for 2011 taxes   See Other Fuels (Including Alternative Fuels), later, and Alternative Fuel Credit and Alternative Fuel Mixture Credit in chapter 2. File for 2011 taxes Pipeline operator. File for 2011 taxes   This is the person that operates a pipeline within the bulk transfer/terminal system. File for 2011 taxes Position holder. File for 2011 taxes   This is the person that holds the inventory position in the taxable fuel in the terminal, as reflected in the records of the terminal operator. File for 2011 taxes You hold the inventory position when you have a contractual agreement with the terminal operator for the use of the storage facilities and terminaling services for the taxable fuel. File for 2011 taxes A terminal operator that owns taxable fuel in its terminal is a position holder. File for 2011 taxes Rack. File for 2011 taxes   This is a mechanism capable of delivering fuel into a means of transport other than a pipeline or vessel. File for 2011 taxes Refiner. File for 2011 taxes   This is any person that owns, operates, or otherwise controls a refinery. File for 2011 taxes Refinery. File for 2011 taxes   This is a facility used to produce taxable fuel and from which taxable fuel may be removed by pipeline, by vessel, or at a rack. File for 2011 taxes However, this term does not include a facility where only blended fuel, and no other type of fuel, is produced. File for 2011 taxes For this purpose, blended fuel is any mixture that would be blended taxable fuel if produced outside the bulk transfer/terminal system. File for 2011 taxes Registrant. File for 2011 taxes   This is a taxable fuel registrant (see Registration Requirements, later). File for 2011 taxes Removal. File for 2011 taxes   This is any physical transfer of taxable fuel. File for 2011 taxes It also means any use of taxable fuel other than as a material in the production of taxable fuel or Other Fuels. File for 2011 taxes However, taxable fuel is not removed when it evaporates or is otherwise lost or destroyed. File for 2011 taxes Renewable diesel. File for 2011 taxes   See Renewable Diesel Credits in chapter 2. File for 2011 taxes Sale. File for 2011 taxes   For taxable fuel not in a terminal, this is the transfer of title to, or substantial incidents of ownership in, taxable fuel to the buyer for money, services, or other property. File for 2011 taxes For taxable fuel in a terminal, this is the transfer of the inventory position if the transferee becomes the position holder for that taxable fuel. File for 2011 taxes Second generation biofuel. File for 2011 taxes   This is any liquid fuel derived by, or from, qualified feedstocks, and meets the registration requirements for fuels and fuel additives established by the Environmental Protection Agency under section 211 of the Clean Air Act (42 U. File for 2011 taxes S. File for 2011 taxes C. File for 2011 taxes 7545). File for 2011 taxes It also includes certain liquid fuel which is derived by, or from, any cultivated algae, cyanobacteria, or lemna. File for 2011 taxes It is not alcohol of less than 150 proof (disregard any added denaturants). File for 2011 taxes See Form 6478 for more information. File for 2011 taxes State. File for 2011 taxes   This includes any state, any of its political subdivisions, the District of Columbia, and the American Red Cross. File for 2011 taxes An Indian tribal government is treated as a state only if transactions involve the exercise of an essential tribal government function. File for 2011 taxes Taxable fuel. File for 2011 taxes   This means gasoline, diesel fuel, and kerosene. File for 2011 taxes Terminal. File for 2011 taxes   This is a storage and distribution facility supplied by pipeline or vessel, and from which taxable fuel may be removed at a rack. File for 2011 taxes It does not include a facility at which gasoline blendstocks are used in the manufacture of products other than finished gasoline if no gasoline is removed from the facility. File for 2011 taxes A terminal does not include any facility where finished gasoline, diesel fuel, or kerosene is stored if the facility is operated by a registrant and all such taxable fuel stored at the facility has been previously taxed upon removal from a refinery or terminal. File for 2011 taxes Terminal operator. File for 2011 taxes   This is any person that owns, operates, or otherwise controls a terminal. File for 2011 taxes Throughputter. File for 2011 taxes   This is any person that is a position holder or that owns taxable fuel within the bulk transfer/terminal system (other than in a terminal). File for 2011 taxes Vessel operator. File for 2011 taxes   This is the person that operates a vessel within the bulk transfer/terminal system. File for 2011 taxes However, vessel does not include a deep draft ocean-going vessel. File for 2011 taxes Information Returns Form 720-TO and Form 720-CS are information returns used to report monthly receipts and disbursements of liquid products. File for 2011 taxes A liquid product is any liquid transported into storage at a terminal or delivered out of a terminal. File for 2011 taxes For a list of products, see the product code table in the Instructions for Forms 720-TO and 720-CS. File for 2011 taxes The returns are due the last day of the month following the month in which the transaction occurs. File for 2011 taxes Generally, these returns can be filed on paper or electronically. File for 2011 taxes For information on filing electronically, see Publication 3536, Motor Fuel Excise Tax EDI Guide. File for 2011 taxes Publication 3536 is only available on the IRS website. File for 2011 taxes Form 720-TO. File for 2011 taxes   This information return is used by terminal operators to report receipts and disbursements of all liquid products to and from all approved terminals. File for 2011 taxes Each terminal operator must file a separate form for each approved terminal. File for 2011 taxes Form 720-CS. File for 2011 taxes   This information return must be filed by bulk transport carriers (barges, vessels, and pipelines) who receive liquid product from an approved terminal or deliver liquid product to an approved terminal. File for 2011 taxes Registration Requirements The following discussion applies to excise tax registration requirements for activities relating to fuels only. File for 2011 taxes See Form 637 for other persons who must register and for more information about registration. File for 2011 taxes Persons that are required to be registered. File for 2011 taxes   You are required to be registered if you are a: Blender; Enterer; Pipeline operator; Position holder; Refiner; Terminal operator; Vessel operator; Producer or importer of alcohol, biodiesel, agri-biodiesel, and renewable diesel; or Producer of cellulosic or second generation biofuel. File for 2011 taxes Persons that may register. File for 2011 taxes   You may, but are not required to, register if you are a: Feedstock user, Industrial user, Throughputter that is not a position holder, Ultimate vendor, Diesel-water fuel emulsion producer, Credit card issuer, or Alternative fuel claimant. File for 2011 taxes Ultimate vendors, credit card issuers, and alternative fuel claimants do not need to be registered to buy or sell fuel. File for 2011 taxes However, they must be registered to file claims for certain sales and uses of fuel. File for 2011 taxes See Form 637 for more information. File for 2011 taxes Taxable fuel registrant. File for 2011 taxes   This is an enterer, an industrial user, a refiner, a terminal operator, or a throughputter who received a Letter of Registration under the excise tax registration provisions and whose registration has not been revoked or suspended. File for 2011 taxes The term registrant as used in the discussions of these fuels means a taxable fuel registrant. File for 2011 taxes Additional information. File for 2011 taxes   See the Form 637 instructions for the information you must submit when you apply for registration. File for 2011 taxes Failure to register. File for 2011 taxes   The penalty for failure to register if you must register, unless due to reasonable cause, is $10,000 for the initial failure, and then $1,000 each day thereafter you fail to register. File for 2011 taxes Gasoline and Aviation Gasoline Gasoline. File for 2011 taxes   Gasoline means all products commonly or commercially known or sold as gasoline with an octane rating of 75 or more that are suitable for use as a motor fuel. File for 2011 taxes Gasoline includes any gasoline blend other than: Qualified ethanol and methanol fuel (at least 85 percent of the blend consists of alcohol produced from coal, including peat), Partially exempt ethanol and methanol fuel (at least 85 percent of the blend consists of alcohol produced from natural gas), or Denatured alcohol. File for 2011 taxes Gasoline also includes gasoline blendstocks, discussed later. File for 2011 taxes Aviation gasoline. File for 2011 taxes   This means all special grades of gasoline suitable for use in aviation reciprocating engines and covered by ASTM specification D910 or military specification MIL-G-5572. File for 2011 taxes Taxable Events The tax on gasoline is $. File for 2011 taxes 184 per gallon. File for 2011 taxes The tax on aviation gasoline is $. File for 2011 taxes 194 per gallon. File for 2011 taxes When used in a fractional ownership program aircraft, gasoline also is subject to a surtax of $. File for 2011 taxes 141 per gallon. File for 2011 taxes See Surtax on any liquid used in a fractional ownership program aircraft as fuel, later. File for 2011 taxes Tax is imposed on the removal, entry, or sale of gasoline. File for 2011 taxes Each of these events is discussed later. File for 2011 taxes Also, see the special rules that apply to gasoline blendstocks, later. File for 2011 taxes If the tax is paid on the gasoline in more than one event, a refund may be allowed for the “second” tax paid. File for 2011 taxes See Refunds of Second Tax in chapter 2. File for 2011 taxes Removal from terminal. File for 2011 taxes   All removals of gasoline at a terminal rack are taxable. File for 2011 taxes The position holder for that gasoline is liable for the tax. File for 2011 taxes Two-party exchanges. File for 2011 taxes   In a two-party exchange, the receiving person, not the delivering person, is liable for the tax imposed on the removal of taxable fuel from the terminal at the terminal rack. File for 2011 taxes A two-party exchange means a transaction (other than a sale) where the delivering person and receiving person are both taxable fuel registrants and all of the following apply. File for 2011 taxes The transaction includes a transfer from the delivering person, who holds the inventory position for the taxable fuel in the terminal as reflected in the records of the terminal operator. File for 2011 taxes The exchange transaction occurs before or at the same time as removal across the rack by the receiving person. File for 2011 taxes The terminal operator in its records treats the receiving person as the person that removes the product across the terminal rack for purposes of reporting the transaction on Form 720-TO. File for 2011 taxes The transaction is subject to a written contract. File for 2011 taxes Terminal operator's liability. File for 2011 taxes   The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator and is not a registrant. File for 2011 taxes   However, a terminal operator meeting all the following conditions at the time of the removal will not be liable for the tax. File for 2011 taxes The terminal operator is a registrant. File for 2011 taxes The terminal operator has an unexpired notification certificate (discussed later) from the position holder. File for 2011 taxes The terminal operator has no reason to believe any information on the certificate is false. File for 2011 taxes Removal from refinery. File for 2011 taxes   The removal of gasoline from a refinery is taxable if the removal meets either of the following conditions. File for 2011 taxes It is made by bulk transfer and the refiner, the owner of the gasoline immediately before the removal, or the operator of the pipeline or vessel is not a registrant. File for 2011 taxes It is made at the refinery rack. File for 2011 taxes The refiner is liable for the tax. File for 2011 taxes Exception. File for 2011 taxes   The tax does not apply to a removal of gasoline at the refinery rack if all the following requirements are met. File for 2011 taxes The gasoline is removed from an approved refinery not served by pipeline (other than for receiving crude oil) or vessel. File for 2011 taxes The gasoline is received at a facility operated by a registrant and located within the bulk transfer/terminal system. File for 2011 taxes The removal from the refinery is by railcar. File for 2011 taxes The same person operates the refinery and the facility at which the gasoline is received. File for 2011 taxes Entry into the United States. File for 2011 taxes   The entry of gasoline into the United States is taxable if the entry meets either of the following conditions. File for 2011 taxes It is made by bulk transfer and the enterer or the operator of the pipeline or vessel is not a registrant. File for 2011 taxes It is not made by bulk transfer. File for 2011 taxes The enterer is liable for the tax. File for 2011 taxes Importer of record's liability. File for 2011 taxes   The importer of record is jointly and severally liable for the tax with the enterer if the importer of record is not the enterer of the taxable fuel and the enterer is not a taxable fuel registrant. File for 2011 taxes   However, an importer of record meeting both of the following conditions at the time of the entry will not be liable for the tax. File for 2011 taxes The importer of record has an unexpired notification certificate (discussed later) from the enterer. File for 2011 taxes The importer of record has no reason to believe any information in the certificate is false. File for 2011 taxes Customs bond. File for 2011 taxes   The customs bond will not be charged for the tax imposed on the entry of the gasoline if at the time of entry the surety has an unexpired notification certificate from the enterer and has no reason to believe any information in the certificate is false. File for 2011 taxes Removal from a terminal by unregistered position holder or unregistered pipeline or vessel operator. File for 2011 taxes   The removal by bulk transfer of gasoline from a terminal is taxable if the position holder for the gasoline or the operator of the pipeline or vessel is not a registrant. File for 2011 taxes The position holder is liable for the tax. File for 2011 taxes The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator. File for 2011 taxes However, see Terminal operator's liability under Removal from terminal, earlier, for an exception. File for 2011 taxes Bulk transfers not received at approved terminal or refinery. File for 2011 taxes   The removal by bulk transfer of gasoline from a terminal or refinery, or the entry of gasoline by bulk transfer into the United States, is taxable if the following conditions apply. File for 2011 taxes No tax was previously imposed (as discussed earlier) on any of the following events. File for 2011 taxes The removal from the refinery. File for 2011 taxes The entry into the United States. File for 2011 taxes The removal from a terminal by an unregistered position holder. File for 2011 taxes Upon removal from the pipeline or vessel, the gasoline is not received at an approved terminal or refinery (or at another pipeline or vessel). File for 2011 taxes   The owner of the gasoline when it is removed from the pipeline or vessel is liable for the tax. File for 2011 taxes However, an owner meeting all the following conditions at the time of the removal will not be liable for the tax. File for 2011 taxes The owner is a registrant. File for 2011 taxes The owner has an unexpired notification certificate (discussed later) from the operator of the terminal or refinery where the gasoline is received. File for 2011 taxes The owner has no reason to believe any information on the certificate is false. File for 2011 taxes The operator of the facility where the gasoline is received is liable for the tax if the owner meets these conditions. File for 2011 taxes The operator is jointly and severally liable if the owner does not meet these conditions. File for 2011 taxes Sales to unregistered person. File for 2011 taxes   The sale of gasoline located within the bulk transfer/terminal system to a person that is not a registrant is taxable if tax was not previously imposed under any of the events discussed earlier. File for 2011 taxes   The seller is liable for the tax. File for 2011 taxes However, a seller meeting all the following conditions at the time of the sale will not be liable for the tax. File for 2011 taxes   The seller is a registrant. File for 2011 taxes The seller has an unexpired notification certificate (discussed later) from the buyer. File for 2011 taxes The seller has no reason to believe any information on the certificate is false. File for 2011 taxes The buyer of the gasoline is liable for the tax if the seller meets these conditions. File for 2011 taxes The buyer is jointly and severally liable if the seller does not meet these conditions. File for 2011 taxes Exception. File for 2011 taxes   The tax does not apply to a sale if all of the following apply. File for 2011 taxes The buyer's principal place of business is not in the United States. File for 2011 taxes The sale occurs as the fuel is delivered into a transport vessel with a capacity of at least 20,000 barrels of fuel. File for 2011 taxes The seller is a registrant and the exporter of record. File for 2011 taxes The fuel was exported. File for 2011 taxes Removal or sale of blended gasoline. File for 2011 taxes   The removal or sale of blended gasoline by the blender is taxable. File for 2011 taxes See Blended taxable fuel under Definitions, earlier. File for 2011 taxes   The blender is liable for the tax. File for 2011 taxes The tax is figured on the number of gallons not previously subject to the tax on gasoline. File for 2011 taxes   Persons who blend alcohol with gasoline to produce an alcohol fuel mixture outside the bulk transfer/terminal system must pay the gasoline tax on the volume of alcohol in the mixture. File for 2011 taxes See Form 720 to report this tax. File for 2011 taxes You also must be registered with the IRS as a blender. File for 2011 taxes See Form 637. File for 2011 taxes   However, if an untaxed liquid is sold as taxed taxable fuel and that untaxed liquid is used to produce blended taxable fuel, the person that sold the untaxed liquid is jointly and severally liable for the tax imposed on the blender's sale or removal of the blended taxable fuel. File for 2011 taxes Notification certificate. File for 2011 taxes   The notification certificate is used to notify a person of the registration status of the registrant. File for 2011 taxes A copy of the registrant's letter of registration cannot be used as a notification certificate. File for 2011 taxes A model notification certificate is shown in the Appendix as Model Certificate C. File for 2011 taxes A notification certificate must contain all information necessary to complete the model. File for 2011 taxes   The certificate may be included as part of any business records normally used for a sale. File for 2011 taxes A certificate expires on the earlier of the date the registrant provides a new certificate, or the date the recipient of the certificate is notified that the registrant's registration has been revoked or suspended. File for 2011 taxes The registrant must provide a new certificate if any information on a certificate has changed. File for 2011 taxes Additional persons liable. File for 2011 taxes   When the person liable for the tax willfully fails to pay the tax, joint and several liability for the tax is imposed on: Any officer, employee, or agent of the person who is under a duty to ensure the payment of the tax and who willfully fails to perform that duty, or Anyone who willfully causes the person to fail to pay the tax. File for 2011 taxes Gasoline Blendstocks Gasoline blendstocks may be subject to $. File for 2011 taxes 001 per gallon LUST tax as discussed below. File for 2011 taxes Gasoline includes gasoline blendstocks. File for 2011 taxes The previous discussions apply to these blendstocks. File for 2011 taxes However, if certain conditions are met, the removal, entry, or sale of gasoline blendstocks are taxed at $. File for 2011 taxes 001 per gallon or are not subject to the excise tax. File for 2011 taxes Blendstocks. File for 2011 taxes   Gasoline blendstocks are: Alkylate, Butane, Butene, Catalytically cracked gasoline, Coker gasoline, Ethyl tertiary butyl ether (ETBE), Hexane, Hydrocrackate, Isomerate, Methyl tertiary butyl ether (MTBE), Mixed xylene (not including any separated isomer of xylene), Natural gasoline, Pentane, Pentane mixture, Polymer gasoline, Raffinate, Reformate, Straight-run gasoline, Straight-run naphtha, Tertiary amyl methyl ether (TAME), Tertiary butyl alcohol (gasoline grade) (TBA), Thermally cracked gasoline, and Toluene. File for 2011 taxes   However, gasoline blendstocks do not include any product that cannot be used without further processing in the production of finished gasoline. File for 2011 taxes Not used to produce finished gasoline. File for 2011 taxes   Gasoline blendstocks not used to produce finished gasoline are not taxable (other than LUST) if the following conditions are met. File for 2011 taxes Removals and entries not connected to sale. File for 2011 taxes   Nonbulk removals and entries are not taxable if the person otherwise liable for the tax (position holder, refiner, or enterer) is a registrant. File for 2011 taxes Removals and entries connected to sale. File for 2011 taxes   Nonbulk removals and entries are not taxable if the person otherwise liable for the tax (position holder, refiner, or enterer) is a registrant, and at the time of the sale, meets the following requirements. File for 2011 taxes The person has an unexpired certificate (discussed later) from the buyer. File for 2011 taxes The person has no reason to believe any information in the certificate is false. File for 2011 taxes Sales after removal or entry. File for 2011 taxes   The sale of a gasoline blendstock that was not subject to tax on its nonbulk removal or entry, as discussed earlier, is taxable. File for 2011 taxes The seller is liable for the tax. File for 2011 taxes However, the sale is not taxable if, at the time of the sale, the seller meets the following requirements. File for 2011 taxes The seller has an unexpired certificate (discussed next) from the buyer. File for 2011 taxes The seller has no reason to believe any information in the certificate is false. File for 2011 taxes Certificate of buyer. File for 2011 taxes   The certificate from the buyer certifies the gasoline blendstocks will not be used to produce finished gasoline. File for 2011 taxes The certificate may be included as part of any business records normally used for a sale. File for 2011 taxes A model certificate is shown in the Appendix as Model Certificate D. File for 2011 taxes The certificate must contain all information necessary to complete the model. File for 2011 taxes   A certificate expires on the earliest of the following dates. File for 2011 taxes The date 1 year after the effective date (not earlier than the date signed) of the certificate. File for 2011 taxes The date a new certificate is provided to the seller. File for 2011 taxes The date the seller is notified that the buyer's right to provide a certificate has been withdrawn. File for 2011 taxes The buyer must provide a new certificate if any information on a certificate has changed. File for 2011 taxes   The IRS may withdraw the buyer's right to provide a certificate if that buyer uses the gasoline blendstocks in the production of finished gasoline or resells the blendstocks without getting a certificate from its buyer. File for 2011 taxes Received at approved terminal or refinery. File for 2011 taxes   The nonbulk removal or entry of gasoline blendstocks received at an approved terminal or refinery is not taxable if the person otherwise liable for the tax (position holder, refiner, or enterer) meets all the following requirements. File for 2011 taxes The person is a registrant. File for 2011 taxes The person has an unexpired notification certificate (discussed earlier) from the operator of the terminal or refinery where the gasoline blendstocks are received. File for 2011 taxes The person has no reason to believe any information on the certificate is false. File for 2011 taxes Bulk transfers to registered industrial user. File for 2011 taxes   The removal of gasoline blendstocks from a pipeline or vessel is not taxable (other than LUST) if the blendstocks are received by a registrant that is an industrial user. File for 2011 taxes An industrial user is any person that receives gasoline blendstocks by bulk transfer for its own use in the manufacture of any product other than finished gasoline. File for 2011 taxes Credits or Refunds. File for 2011 taxes   A credit or refund of the gasoline tax may be allowable if gasoline is used for a nontaxable purpose or exempt use. File for 2011 taxes For more information, see chapter 2. File for 2011 taxes Diesel Fuel and Kerosene Generally, diesel fuel and kerosene are taxed in the same manner as gasoline (discussed earlier). File for 2011 taxes However, special rules (discussed later) apply to dyed diesel fuel and dyed kerosene, and to undyed diesel fuel and undyed kerosene sold or used in Alaska for certain nontaxable uses and undyed kerosene used for a feedstock purpose. File for 2011 taxes Diesel fuel means: Any liquid that without further processing or blending is suitable for use as a fuel in a diesel-powered highway vehicle or train, and Transmix. File for 2011 taxes A liquid is suitable for this use if the liquid has practical and commercial fitness for use in the propulsion engine of a diesel-powered highway vehicle or diesel-powered train. File for 2011 taxes A liquid may possess this practical and commercial fitness even though the specified use is not the predominant use of the liquid. File for 2011 taxes However, a liquid does not possess this practical and commercial fitness solely by reason of its possible or rare use as a fuel in the propulsion engine of a diesel-powered highway vehicle or diesel-powered train. File for 2011 taxes Diesel fuel does not include gasoline, kerosene, excluded liquid, No. File for 2011 taxes 5 and No. File for 2011 taxes 6 fuel oils covered by ASTM specification D396, or F-76 (Fuel Naval Distillate) covered by military specification MIL-F-16884. File for 2011 taxes An excluded liquid is either of the following. File for 2011 taxes A liquid that contains less than 4% normal paraffins. File for 2011 taxes A liquid with all the following properties. File for 2011 taxes Distillation range of 125 degrees Fahrenheit or less. File for 2011 taxes Sulfur content of 10 ppm or less. File for 2011 taxes Minimum color of +27 Saybolt. File for 2011 taxes Transmix means a by-product of refined products created by the mixing of different specification products during pipeline transportation. File for 2011 taxes Kerosene. File for 2011 taxes   This means any of the following liquids. File for 2011 taxes One of the two grades of kerosene (No. File for 2011 taxes 1-K and No. File for 2011 taxes 2-K) covered by ASTM specification D3699. File for 2011 taxes Kerosene-type jet fuel covered by ASTM specification D1655 or military specification MIL-DTL-5624T (Grade JP-5) or MIL-DTL-83133E (Grade JP-8). File for 2011 taxes See Kerosene for Use in Aviation, later. File for 2011 taxes   However, kerosene does not include excluded liquid, discussed earlier. File for 2011 taxes   Kerosene also includes any liquid that would be described above but for the presence of a dye of the type used to dye kerosene for a nontaxable use. File for 2011 taxes Diesel-powered highway vehicle. File for 2011 taxes   This is any self-propelled vehicle designed to carry a load over public highways (whether or not also designed to perform other functions) and propelled by a diesel-powered engine. File for 2011 taxes Specially designed mobile machinery for nontransportation functions and vehicles specially designed for off-highway transportation are generally not considered diesel-powered highway vehicles. File for 2011 taxes For more information about these vehicles and for information about vehicles not considered highway vehicles, see Off-Highway Business Use (No. File for 2011 taxes 2) in chapter 2. File for 2011 taxes Diesel-powered train. File for 2011 taxes   This is any diesel-powered equipment or machinery that rides on rails. File for 2011 taxes The term includes a locomotive, work train, switching engine, and track maintenance machine. File for 2011 taxes Taxable Events The tax on diesel fuel and kerosene is $. File for 2011 taxes 244 per gallon. File for 2011 taxes It is imposed on the removal, entry, or sale of diesel fuel and kerosene. File for 2011 taxes Each of these events is discussed later. File for 2011 taxes Only the $. File for 2011 taxes 001 LUST tax applies to dyed diesel fuel and dyed kerosene, discussed later. File for 2011 taxes If the tax is paid on the diesel fuel or kerosene in more than one event, a refund may be allowed for the “second” tax paid. File for 2011 taxes See Refunds of Second Tax in chapter 2. File for 2011 taxes Use in certain intercity and local buses. File for 2011 taxes   Dyed diesel fuel and dyed kerosene cannot be used in certain intercity and local buses. File for 2011 taxes A claim for $. File for 2011 taxes 17 per gallon may be made by the registered ultimate vendor (under certain conditions) or the ultimate purchaser for undyed diesel fuel or undyed kerosene sold for use in certain intercity or local buses. File for 2011 taxes An intercity or local bus is a bus engaged in furnishing (for compensation) passenger land transportation available to the general public. File for 2011 taxes The bus must be engaged in one of the following activities. File for 2011 taxes Scheduled transportation along regular routes regardless of the size of the bus. File for 2011 taxes Nonscheduled transportation if the seating capacity of the bus is at least 20 adults (not including the driver). File for 2011 taxes A bus is available to the general public if the bus is available for hire to more than a limited number of persons, groups, or organizations. File for 2011 taxes Removal from terminal. File for 2011 taxes   All removals of diesel fuel and kerosene at a terminal rack are taxable. File for 2011 taxes The position holder for that fuel is liable for the tax. File for 2011 taxes Two-party exchanges. File for 2011 taxes   In a two-party exchange, the receiving person, not the delivering person, is liable for the tax imposed on the removal of taxable fuel from the terminal at the terminal rack. File for 2011 taxes A two-party exchange means a transaction (other than a sale) where the delivering person and receiving person are both taxable fuel registrants and all of the following apply. File for 2011 taxes The transaction includes a transfer from the delivering person, who holds the inventory position for the taxable fuel in the terminal as reflected in the records of the terminal operator. File for 2011 taxes The exchange transaction occurs before or at the same time as completion of removal across the rack by the receiving person. File for 2011 taxes The terminal operator in its records treats the receiving person as the person that removes the product across the terminal rack for purposes of reporting the transaction on Form 720-TO. File for 2011 taxes The transaction is subject to a written contract. File for 2011 taxes Terminal operator's liability. File for 2011 taxes   The terminal operator is jointly and severally liable for the tax if the terminal operator provides any person with any bill of lading, shipping paper, or similar document indicating that diesel fuel or kerosene is dyed (discussed later). File for 2011 taxes   The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator and is not a registrant. File for 2011 taxes However, a terminal operator will not be liable for the tax in this situation if, at the time of the removal, the following conditions are met. File for 2011 taxes The terminal operator is a registrant. File for 2011 taxes The terminal operator has an unexpired notification certificate (discussed under Gasoline) from the position holder. File for 2011 taxes The terminal operator has no reason to believe any information on the certificate is false. File for 2011 taxes Removal from refinery. File for 2011 taxes   The removal of diesel fuel or kerosene from a refinery is taxable if the removal meets either of the following conditions. File for 2011 taxes It is made by bulk transfer and the refiner, the owner of the fuel immediately before the removal, or the operator of the pipeline or vessel is not a registrant. File for 2011 taxes It is made at the refinery rack. File for 2011 taxes The refiner is liable for the tax. File for 2011 taxes Exception. File for 2011 taxes   The tax does not apply to a removal of diesel fuel or kerosene at the refinery rack if all the following conditions are met. File for 2011 taxes The diesel fuel or kerosene is removed from an approved refinery not served by pipeline (other than for receiving crude oil) or vessel. File for 2011 taxes The diesel fuel or kerosene is received at a facility operated by a registrant and located within the bulk transfer/terminal system. File for 2011 taxes The removal from the refinery is by: Railcar and the same person operates the refinery and the facility at which the diesel fuel or kerosene is received, or For diesel fuel only, a trailer or semi-trailer used exclusively to transport the diesel fuel from a refinery (described in (1)) to a facility (described in (2)) less than 20 miles from the refinery. File for 2011 taxes Entry into the United States. File for 2011 taxes   The entry of diesel fuel or kerosene into the United States is taxable if the entry meets either of the following conditions. File for 2011 taxes It is made by bulk transfer and the enterer or the operator of the pipeline or vessel is not a registrant. File for 2011 taxes It is not made by bulk transfer. File for 2011 taxes The enterer is liable for the tax. File for 2011 taxes Importer of record's liability. File for 2011 taxes   The importer of record is jointly and severally liable for the tax with the enterer if the importer of record is not the enterer of the taxable fuel and the enterer is not a taxable fuel registrant. File for 2011 taxes   However, an importer of record meeting both of the following conditions at the time of the entry will not be liable for the tax. File for 2011 taxes The importer of record has an unexpired notification certificate (discussed under Gasoline) from the enterer. File for 2011 taxes The importer of record has no reason to believe any information in the certificate is false. File for 2011 taxes Customs bond. File for 2011 taxes   The customs bond will not be charged for the tax imposed on the entry of the diesel fuel or kerosene if at the time of entry the surety has an unexpired notification certificate from the enterer and has no reason to believe any information in the certificate is false. File for 2011 taxes Removal from a terminal by unregistered position holder or unregistered pipeline or vessel operator. File for 2011 taxes   The removal by bulk transfer of diesel fuel or kerosene from a terminal is taxable if the position holder for that fuel or the operator of the pipeline or vessel is not a registrant. File for 2011 taxes The position holder is liable for the tax. File for 2011 taxes The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator. File for 2011 taxes However, see Terminal operator's liability under Removal from terminal, earlier, for an exception. File for 2011 taxes Bulk transfers not received at approved terminal or refinery. File for 2011 taxes   The removal by bulk transfer of diesel fuel or kerosene from a terminal or refinery or the entry of diesel fuel or kerosene by bulk transfer into the United States is taxable if the following conditions apply. File for 2011 taxes No tax was previously imposed (as discussed earlier) on any of the following events. File for 2011 taxes The removal from the refinery. File for 2011 taxes The entry into the United States. File for 2011 taxes The removal from a terminal by an unregistered position holder. File for 2011 taxes Upon removal from the pipeline or vessel, the diesel fuel or kerosene is not received at an approved terminal or refinery (or at another pipeline or vessel). File for 2011 taxes   The owner of the diesel fuel or kerosene when it is removed from the pipeline or vessel is liable for the tax. File for 2011 taxes However, an owner meeting all the following conditions at the time of the removal will not be liable for the tax. File for 2011 taxes The owner is a registrant. File for 2011 taxes The owner has an unexpired notification certificate (discussed under Gasoline) from the operator of the terminal or refinery where the diesel fuel or kerosene is received. File for 2011 taxes The owner has no reason to believe any information on the certificate is false. File for 2011 taxes The operator of the facility where the diesel fuel or kerosene is received is liable for the tax if the owner meets these conditions. File for 2011 taxes The operator is jointly and severally liable if the owner does not meet these conditions. File for 2011 taxes Sales to unregistered person. File for 2011 taxes   The sale of diesel fuel or kerosene located within the bulk transfer/terminal system to a person that is not a registrant is taxable if tax was not previously imposed under any of the events discussed earlier. File for 2011 taxes   The seller is liable for the tax. File for 2011 taxes However, a seller meeting all the following conditions at the time of the sale will not be liable for the tax. File for 2011 taxes The seller is a registrant. File for 2011 taxes The seller has an unexpired notification certificate (discussed under Gasoline) from the buyer. File for 2011 taxes The seller has no reason to believe any information on the certificate is false. File for 2011 taxes The buyer of the diesel fuel or kerosene is liable for the tax if the seller meets these conditions. File for 2011 taxes The buyer is jointly and severally liable if the seller does not meet these conditions. File for 2011 taxes Exception. File for 2011 taxes   The tax does not apply to a sale if all of the following apply. File for 2011 taxes The buyer's principal place of business is not in the United States. File for 2011 taxes The sale occurs as the fuel is delivered into a transport vessel with a capacity of at least 20,000 barrels of fuel. File for 2011 taxes The seller is a registrant and the exporter of record. File for 2011 taxes The fuel was exported. File for 2011 taxes Removal or sale of blended diesel fuel or kerosene. File for 2011 taxes   The removal or sale of blended diesel fuel or blended kerosene by the blender is taxable. File for 2011 taxes Blended taxable fuel produced using biodiesel is subject to the tax. File for 2011 taxes See Blended taxable fuel under Definitions, earlier. File for 2011 taxes   The blender is liable for the tax. File for 2011 taxes The tax is figured on the number of gallons not previously subject to the tax. File for 2011 taxes   Persons who blend biodiesel with undyed diesel fuel to produce and sell or use a biodiesel mixture outside the bulk transfer/terminal system must pay the diesel fuel tax on the volume of biodiesel in the mixture. File for 2011 taxes Generally, the biodiesel mixture must be diesel fuel (defined earlier). File for 2011 taxes See Form 720 to report this tax. File for 2011 taxes You also must be registered by the IRS as a blender. File for 2011 taxes See Form 637 for more information. File for 2011 taxes   However, if an untaxed liquid is sold as taxable fuel and that untaxed liquid is used to produce blended taxable fuel, the person that sold the untaxed liquid is jointly and severally liable for the tax imposed on the blender's sale or removal of the blended taxable fuel. File for 2011 taxes Additional persons liable. File for 2011 taxes   When the person liable for the tax willfully fails to pay the tax, joint and several liability for the tax applies to: Any officer, employee, or agent of the person who is under a duty to ensure the payment of the tax and who willfully fails to perform that duty; or Anyone who willfully causes the person to fail to pay the tax. File for 2011 taxes Credits or Refunds. File for 2011 taxes   A credit or refund is allowable for the tax on undyed diesel fuel or undyed kerosene used for a nontaxable use. File for 2011 taxes For more information, see chapter 2. File for 2011 taxes Dyed Diesel Fuel and Dyed Kerosene Dyed diesel fuel and dyed kerosene are subject to $. File for 2011 taxes 001 per gallon LUST tax as discussed below, unless the fuel is for export. File for 2011 taxes The excise tax is not imposed on the removal, entry, or sale of diesel fuel or kerosene (other than the LUST tax) if all the following tests are met. File for 2011 taxes The person otherwise liable for tax (for example, the position holder) is a registrant. File for 2011 taxes In the case of a removal from a terminal, the terminal is an approved terminal. File for 2011 taxes The diesel fuel or kerosene satisfies the dyeing requirements (described next). File for 2011 taxes Dyeing requirements. File for 2011 taxes   Diesel fuel or kerosene satisfies the dyeing requirements only if it satisfies the following requirements. File for 2011 taxes It contains the dye Solvent Red 164 (and no other dye) at a concentration spectrally equivalent to at least 3. File for 2011 taxes 9 pounds of the solid dye standard Solvent Red 26 per thousand barrels of fuel or any dye of a type and in a concentration that has been approved by the Commissioner. File for 2011 taxes Is indelibly dyed by mechanical injection. File for 2011 taxes See section 6 of Notice 2005-80 for transition rules that apply until final regulations are issued by the IRS. File for 2011 taxes Notice required. File for 2011 taxes   A legible and conspicuous notice stating either: DYED DIESEL FUEL, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE or DYED KEROSENE, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE must be: Provided by the terminal operator to any person that receives dyed diesel fuel or dyed kerosene at a terminal rack of that operator, and Posted by a seller on any retail pump or other delivery facility where it sells dyed diesel fuel or dyed kerosene for use by its buyer. File for 2011 taxes   The notice under item (1) must be provided by the time of the removal and must appear on all shipping papers, bills of lading, and similar documents accompanying the removal of the fuel. File for 2011 taxes   Any seller that fails to post the required notice under item (2) is presumed to know that the fuel will be used for a taxable use (a use other than a nontaxable use listed later). File for 2011 taxes That seller is subject to the penalty described next. File for 2011 taxes Penalty. File for 2011 taxes   A penalty is imposed on a person if any of the following situations apply. File for 2011 taxes Any dyed fuel is sold or held for sale by the person for a use the person knows or has reason to know is not a nontaxable use of the fuel. File for 2011 taxes Any dyed fuel is held for use or used by the person for a use other than a nontaxable use and the person knew, or had reason to know, that the fuel was dyed. File for 2011 taxes The person willfully alters, chemically or otherwise, or attempts to so alter, the strength or composition of any dye in dyed fuel. File for 2011 taxes The person has knowledge that a dyed fuel that has been altered, as described in (3) above, sells or holds for sale such fuel for any use for which the person knows or has reason to know is not a nontaxable use of the fuel. File for 2011 taxes   The penalty is the greater of $1,000 or $10 per gallon of the dyed diesel fuel or dyed kerosene involved. File for 2011 taxes After the first violation, the $1,000 portion of the penalty increases depending on the number of violations. File for 2011 taxes   This penalty is in addition to any tax imposed on the fuel. File for 2011 taxes   If the penalty is imposed, each officer, employee, or agent of a business entity who willfully participated in any act giving rise to the penalty is jointly and severally liable with that entity for the penalty. File for 2011 taxes   There is no administrative appeal or review allowed for the third and subsequent penalty imposed by section 6715 on any person except for: Fraud or a mistake in the chemical analysis, or Mathematical calculation of the penalty. File for 2011 taxes   If you are liable for the penalty, you may also be liable for the back-up tax, discussed later. File for 2011 taxes However, the penalty applies only to dyed diesel fuel and dyed kerosene, while the back-up tax may apply to other fuels. File for 2011 taxes The penalty may apply if the fuel is held for sale or use for a taxable use while the back-up tax does not apply unless the fuel is delivered into a fuel supply tank. File for 2011 taxes Exception to penalty. File for 2011 taxes   The penalty under item (3) will not apply in any of the following situations. File for 2011 taxes Diesel fuel or kerosene meeting the dyeing requirements (described earlier) is blended with any undyed liquid and the resulting product meets the dyeing requirements. File for 2011 taxes Diesel fuel or kerosene meeting the dyeing requirements (described earlier) is blended with any other liquid (other than diesel fuel or kerosene) that contains the type and amount of dye required to meet the dyeing requirements. File for 2011 taxes The alteration or attempted alteration occurs in an exempt area of Alaska. File for 2011 taxes See Removal for sale or use in Alaska, later. File for 2011 taxes Diesel fuel or kerosene meeting the dyeing requirements (described earlier) is blended with diesel fuel or kerosene not meeting the dyeing requirements and the blending occurs as part of a nontaxable use (other than export), discussed later. File for 2011 taxes Alaska and Feedstocks Tax of $. File for 2011 taxes 001 per gallon is imposed on: Undyed diesel fuel or undyed kerosene sold or used in Alaska for certain nontaxable uses (see Later sales on page 10). File for 2011 taxes Undyed kerosene used for feedstock purposes. File for 2011 taxes Removal for sale or use in Alaska. File for 2011 taxes   No tax is imposed on the removal, entry, or sale of diesel fuel or kerosene in Alaska for ultimate sale or use in certain areas of Alaska for certain nontaxable uses. File for 2011 taxes The removal or entry of any diesel fuel or kerosene is not taxed if all the following requirements are satisfied. File for 2011 taxes The person otherwise liable for the tax (position holder, refiner, or enterer): Is a registrant, Can show satisfactory evidence of the nontaxable nature of the transaction, and Has no reason to believe the evidence is false. File for 2011 taxes In the case of a removal from a terminal, the terminal is an approved terminal. File for 2011 taxes The owner of the fuel immediately after the removal or entry holds the fuel for its own use in a nontaxable use (discussed later) or is a qualified dealer. File for 2011 taxes   If all three of the requirements above are not met, then tax is imposed at $. File for 2011 taxes 244 per gallon. File for 2011 taxes   A qualified dealer is any person that holds a qualified dealer license from the state of Alaska or has been registered by the IRS as a qualified retailer. File for 2011 taxes Satisfactory evidence may include copies of qualified dealer licenses or exemption certificates obtained for state tax purposes. File for 2011 taxes Later sales. File for 2011 taxes   The excise tax applies to diesel fuel or kerosene sold by a qualified dealer after the removal or entry. File for 2011 taxes The tax is imposed at the time of the sale and the qualified dealer is liable for the tax. File for 2011 taxes However, the sale is not taxable (other than the LUST tax at $. File for 2011 taxes 001 per gallon) if all the following requirements are met. File for 2011 taxes The fuel is sold in Alaska for certain nontaxable uses. File for 2011 taxes The buyer buys the fuel for its own use in a nontaxable use or is a qualified dealer. File for 2011 taxes The seller can show satisfactory evidence of the nontaxable nature of the transaction and has no reason to believe the evidence is false. File for 2011 taxes Feedstock purposes. File for 2011 taxes   The $. File for 2011 taxes 001 per gallon LUST tax is imposed on the removal or entry of undyed kerosene if all the following conditions are met. File for 2011 taxes The person otherwise liable for tax (position holder, refiner, or enterer) is a registrant. File for 2011 taxes In the case of a removal from a terminal, the terminal is an approved terminal. File for 2011 taxes Either: The person otherwise liable for tax uses the kerosene for a feedstock purpose, or The kerosene is sold for use by the buyer for a feedstock purpose and, at the time of the sale, the person otherwise liable for tax has an unexpired certificate (described later) from the buyer and has no reason to believe any information on the certificate is false. File for 2011 taxes   If all of the requirements above are not met, then tax is imposed at $. File for 2011 taxes 244 per gallon. File for 2011 taxes   Kerosene is used for a feedstock purpose when it is used for nonfuel purposes in the manufacture or production of any substance other than gasoline, diesel fuel, or Other Fuels. File for 2011 taxes For example, kerosene is used for a feedstock purpose when it is used as an ingredient in the production of paint, but is not used for a feedstock purpose when it is used to power machinery at a factory where paint is produced. File for 2011 taxes A feedstock user is a person that uses kerosene for a feedstock purpose. File for 2011 taxes A registered feedstock user is a person that has been registered by the IRS as a feedstock user. File for 2011 taxes See Registration Requirements, earlier. File for 2011 taxes Later sales. File for 2011 taxes   The excise tax ($. File for 2011 taxes 244 per gallon) applies to kerosene sold for use by the buyer for a feedstock purpose (item (3)(b) above) if the buyer in that sale later sells the kerosene. File for 2011 taxes The tax is imposed at the time of the later sale and that seller is liable for the tax. File for 2011 taxes Certificate. File for 2011 taxes   The certificate from the buyer certifies the buyer is a registered feedstock user and the kerosene will be used by the buyer for a feedstock purpose. File for 2011 taxes The certificate may be included as part of any business records normally used for a sale. File for 2011 taxes A model certificate is shown in the Appendix as Model Certificate G. File for 2011 taxes Your certificate must contain all information necessary to complete the model. File for 2011 taxes   A certificate expires on the earliest of the following dates. File for 2011 taxes The date 1 year after the effective date (not earlier than the date signed) of the certificate. File for 2011 taxes The date the seller is provided a new certificate or notice that the current certificate is invalid. File for 2011 taxes The date the seller is notified the buyer's registration has been revoked or suspended. File for 2011 taxes   The buyer must provide a new certificate if any information on a certificate has changed. File for 2011 taxes Back-up Tax Tax is imposed on the delivery of any of the following into the fuel supply tank of a diesel-powered highway vehicle. File for 2011 taxes Any dyed diesel fuel or dyed kerosene for other than a nontaxable use. File for 2011 taxes Any undyed diesel fuel or undyed kerosene on which a credit or refund (for fuel used for a nontaxable purpose) has been allowed. File for 2011 taxes Any liquid other than gasoline, diesel fuel, or kerosene. File for 2011 taxes Generally, this back-up tax is imposed at a rate of $. File for 2011 taxes 244 per gallon. File for 2011 taxes Liability for tax. File for 2011 taxes   Generally, the operator of the vehicle into which the fuel is delivered is liable for the tax. File for 2011 taxes In addition, the seller of the diesel fuel or kerosene is jointly and severally liable for the tax if the seller knows or has reason to know that the fuel will be used for other than a nontaxable use. File for 2011 taxes Exemptions from the back-up tax. File for 2011 taxes   The back-up tax does not apply to a delivery of diesel fuel or kerosene for uses 1, 2, 6, 7, 12, 13, 14, and 15 listed under Definitions of Nontaxable Uses in chapter 2. File for 2011 taxes   In addition, since the back-up tax is imposed only on the delivery into the fuel supply tank of a diesel-powered vehicle or train, the tax does not apply to diesel fuel or kerosene used as heating oil or in stationary engines. File for 2011 taxes Diesel-Water Fuel Emulsion Diesel-water fuel emulsion means diesel fuel at least 14% of which is water and for which the emulsion additive is registered by a United States manufacturer with the EPA under section 211 of the Clean Air Act as in effect on March 31, 2003. File for 2011 taxes A reduced tax rate of $. File for 2011 taxes 198 per gallon is imposed on a diesel-water fuel emulsion. File for 2011 taxes To be eligible for the reduced rate, the person who sells, removes, or uses the diesel-water fuel emulsion must be registered by the IRS. File for 2011 taxes If the diesel-water fuel emulsion does not meet the requirements above, or if the person who sells, removes, or uses the fuel is not registered, the diesel-water fuel emulsion is taxed at $. File for 2011 taxes 244 per gallon. File for 2011 taxes Credits or refunds. File for 2011 taxes   The allowance for a credit or refund on a diesel-water fuel emulsion is discussed in chapter 2. File for 2011 taxes Kerosene for Use in Aviation Taxable Events Generally, kerosene is taxed at $. File for 2011 taxes 244 per gallon unless a reduced rate applies (see Diesel Fuel and Kerosene, earlier). File for 2011 taxes For kerosene removed directly from a terminal into the fuel tank of an aircraft for use in noncommercial aviation, the tax rate is $. File for 2011 taxes 219. File for 2011 taxes The rate of $. File for 2011 taxes 219 also applies if kerosene is removed into any aircraft from a qualified refueler truck, tanker, or tank wagon that is loaded with the kerosene from a terminal that is located within an airport. File for 2011 taxes The airport terminal does not need to be a secured airport terminal for this rate to apply. File for 2011 taxes However, the refueler truck, tanker, or tank wagon must meet the requirements discussed under Certain refueler trucks, tankers, and tank wagons, treated as terminals, later. File for 2011 taxes For kerosene removed directly into the fuel tank of an aircraft for use in commercial aviation, the rate of tax is $. File for 2011 taxes 044 per gallon. File for 2011 taxes For kerosene removed into an aircraft from a qualified refueler truck, tanker, or tank wagon, the $. File for 2011 taxes 044 rate applies only if the truck, tanker, or tank wagon is loaded at a terminal that is located in a secured area of the airport. File for 2011 taxes See Terminal located within a secured area of an airport, later. File for 2011 taxes In addition, the operator must provide the position holder with a certificate similar to Model Certificate K in the Appendix. File for 2011 taxes For kerosene removed directly into the fuel tank of an aircraft for a use exempt from tax under section 4041(c) (such as use in an aircraft for the exclusive use of a state or local government), the rate of tax is $. File for 2011 taxes 001. File for 2011 taxes There is no tax on kerosene removed directly into the fuel tank of an aircraft for use in foreign trade. File for 2011 taxes The kerosene must be removed from a qualifying refueler truck, tanker, or tank wagon loaded at a terminal located within a secured area of an airport. File for 2011 taxes See Terminal located within a secured area of an airport, later. File for 2011 taxes In addition, the operator must provide the position holder with a certificate similar to Model Certificate K in the Appendix. File for 2011 taxes The position holder is liable for the $. File for 2011 taxes 001 per gallon tax. File for 2011 taxes For kerosene removed directly from a terminal into the fuel tank of an fractional ownership program aircraft after March 31, 2012, a surtax of $. File for 2011 taxes 141 per gallon applies. File for 2011 taxes Certain refueler trucks, tankers, and tank wagons treated as terminals. File for 2011 taxes   For purposes of the tax imposed on kerosene for use in aviation removed directly into the fuel tank of an aircraft for use in commercial aviation, certain refueler trucks, tankers, and tank wagons are treated as part of a terminal if the following conditions are met. File for 2011 taxes Such terminal is located within an area of an airport. File for 2011 taxes Any kerosene for use in aviation that is loaded in a refueler truck, tanker, or tank wagon at a terminal is for delivery into aircraft at the airport in which the terminal is located. File for 2011 taxes Except in exigent circumstances, such as those identified in Notice 2005-80, no vehicle registered for highway use is loaded with kerosene for use in aviation at the terminal. File for 2011 taxes The refueler truck, tanker, or tank wagon meets the following requirements: Has storage tanks, hose, and coupling equipment designed and used for fueling aircraft, Is not registered for highway use, and Is operated by the terminal operator or a person that makes a daily accounting to the terminal operator of each delivery of fuel from the refueler truck, tanker, or tank wagon. File for 2011 taxes Information reporting will be required by terminal operators regarding this provision. File for 2011 taxes Until the format of this information reporting is issued, taxpayers are required to retain records regarding the daily accounting, but are not required to report such information. File for 2011 taxes Terminal located within a secured area of an airport. File for 2011 taxes   See Notice 2005-4 and Notice 2005-80 for the list of terminals located within a secured area of an airport. File for 2011 taxes This list refers to fueling operations at airport terminals as it applies to the federal excise tax on kerosene for use in aviation, and has nothing to do with the general security of airports either included or not included in the list. File for 2011 taxes Liability For Tax If the kerosene is removed directly into the fuel tank of an aircraft for use in commercial aviation, the operator of the aircraft in commercial aviation is liable for the tax on the removal at the rate of $. File for 2011 taxes 044 per gallon. File for 2011 taxes However, the position holder is liable for the LUST tax for kerosene for use in aviation removed directly into the fuel tank of an aircraft for use exempt from tax under section 4041(c) (except foreign trade). File for 2011 taxes For example, for kerosene removed directly into the aircraft for use in military aircraft, the position holder is liable for the tax. File for 2011 taxes For the aircraft operator to be liable for the tax $. File for 2011 taxes 044 rate, the position holder must meet the following requirements: Is a taxable fuel registrant, Has an unexpired certificate (a model certificate is shown in the Appendix as Model Certificate K) from the operator of the aircraft, and Has no reason to believe any of the information in the certificate is false. File for 2011 taxes Commercial aviation. File for 2011 taxes   Commercial aviation is any use of an aircraft in the business of transporting persons or property by air for pay. File for 2011 taxes However, commercial aviation does not include any of the following uses. File for 2011 taxes Any use exclusively for the purpose of skydiving. File for 2011 taxes Certain air transportation by seaplane. File for 2011 taxes See Seaplanes under Transportation of Persons by Air in chapter 4. File for 2011 taxes Any use of an aircraft owned or leased by a member of an affiliated group and unavailable for hire by nonmembers. File for 2011 taxes For more information, see Aircraft used by affiliated corporations under Special Rules on Transportation Taxes in chapter 4. File for 2011 taxes Any use of an aircraft that has a maximum certificated takeoff weight of 6,000 pounds or less, unless the aircraft is operated on an established line. File for 2011 taxes For more information, see Small aircraft under Special Rules on Transportation Taxes in chapter 4. File for 2011 taxes Any use where the surtax on fuel used in a fractional ownership program aircraft is imposed. File for 2011 taxes See Surtax on any liquid used in a fractional ownership program aircraft as fuel below. File for 2011 taxes Surtax on any liquid used in a fractional ownership program aircraft as fuel Fuel used in a fractional ownership program aircraft (as defined below) after March 31, 2012, is subject to a surtax of $. File for 2011 taxes 141 per gallon. File for 2011 taxes The fractional ownership program manager is liable for the tax. File for 2011 taxes The surtax applies in addition to any other taxes imposed on the removal, entry, use, or sale of the fuel. File for 2011 taxes If the surtax is imposed, the following air transportation taxes do not apply. File for 2011 taxes Transportation of persons by air. File for 2011 taxes Transportation of property by air. File for 2011 taxes Use of international air travel facilities. File for 2011 taxes These taxes are described under Air Transportation Taxes, later. File for 2011 taxes A fractional ownership program aircraft flight is considered noncommercial aviation, for the rules for kerosene used in noncommercial aviation, see Kerosene for Use in Aviation above. File for 2011 taxes Fractional ownership aircraft program    is a program under which:  A single fractional ownership program manager provides fractional ownership program management services on behalf of the fractional owners; There are one or more fractional owners per fractional program aircraft, with at least one fractional program aircraft having more than one owner; For at least two fractional program aircraft, none of the ownership interests in the aircraft are less than the minimum fractional ownership interest or held by the program manager; There exists a dry-lease aircraft exchange arrangement among all of the fractional owners; and There are multi-year program agreements covering the fractional ownership, fractional ownership program management services, and dry-lease aircraft exchange aspects of the program. File for 2011 taxes Fractional program aircraft. File for 2011 taxes   Any aircraft that, in any fractional ownership aircraft program, is listed as a fractional program aircraft in the management specifications issued to the manager of such program by Federal Aviation Administration under subpart K of part 91 title 14, Code of Federal Regulations, and is registered in the U. File for 2011 taxes S. File for 2011 taxes   Fractional program aircraft are not considered used for transportation of a qualified fractional owner, or on account of such qualified fractional owner when they are used for flight demonstration, maintenance or crew training. File for 2011 taxes In such situations, the flight is not commercial aviation. File for 2011 taxes Instead, the tax on the fuel used in the flight is imposed at the non-commercial aviation rate. File for 2011 taxes Fractional owner. File for 2011 taxes   Any person owning any interest (including the entire interest) in a fractional program aircraft. File for 2011 taxes Dry lease aircraft exchange. File for 2011 taxes   An agreement, documented by the written program agreements, under which the fractional program aircraft are available, on an as-needed basis without crew, to each fractional owner. File for 2011 taxes Special rule relating to deadhead service. File for 2011 taxes   A fractional program aircraft will not be considered to be used on account of a qualified fractional owner when it is used in deadhead service and a person other than a qualified fractional owner is separately charged for such service. File for 2011 taxes More information. File for 2011 taxes   See section 4043 for more information on the surtax. File for 2011 taxes Certificate for Commercial Aviation and Exempt Uses A certificate is required from the aircraft operator: To support aircraft operator liability for tax on removal of kerosene for use in aviation directly into the fuel tank of an aircraft in commercial aviation, or For exempt uses. File for 2011 taxes Certificate. File for 2011 taxes   The certificate may be included as part of any business records normally used for a sale. File for 2011 taxes See Model Certificate K in the Appendix. File for 2011 taxes   A certificate expires on the earliest of the following dates. File for 2011 taxes The date 1 year after the effective date (not earlier than the date signed) of the certificate. File for 2011 taxes The date the buyer provides the seller a new certificate or notice that the current certificate is invalid. File for 2011 taxes The date the IRS or the buyer notifies the seller that the buyer's right to provide a certificate has been withdrawn. File for 2011 taxes   The buyer must provide a new certificate if any information on a certificate has changed. File for 2011 taxes   The IRS may withdraw the buyer's right to provide a certificate if the buyer uses the kerosene for use in aviation to which a certificate relates other than as stated in the certificate. File for 2011 taxes Exempt use. File for 2011 taxes   The rate on kerosene for use in aviation is $. File for 2011 taxes 001 (LUST tax) if it is removed from any refinery or terminal directly into the fuel tank of an aircraft for an exempt use. File for 2011 taxes An exempt use includes kerosene for the exclusive use of a state or local government. File for 2011 taxes There is no tax on kerosene removed directly into the fuel tank of an aircraft for use in foreign trade. File for 2011 taxes Flash title transaction. File for 2011 taxes   A position holder is not liable for tax if, among other conditions, it obtains a certificate (described above) from the operator of the aircraft into which the kerosene is delivered. File for 2011 taxes In a “flash title transaction” the position holder sells the kerosene to a wholesale distributor (reseller) that in turn sells the kerosene to the aircraft operator as the kerosene is being removed from a terminal into the fuel tank of an aircraft. File for 2011 taxes In this case, the position holder will be treated as having a certificate from the operator of the aircraft if: The aircraft operator puts the reseller's name, address, and EIN on the certificate in place of the position holder's information; and The reseller provides the position holder with a statement of the kerosene reseller. File for 2011 taxes Reseller statement. File for 2011 taxes   This is a statement that is signed under penalties of perjury by a person with authority to bind the reseller; is provided at the bottom or on the back of the certificate (or in an attached document); and contains: The reseller's name, address, and EIN; The position holder's name, address, and EIN; and A statement that the reseller has no reason to believe that any information in the accompanying aircraft operator's certificate is false. File for 2011 taxes Credits or Refunds. File for 2011 taxes   A claim may be made by the ultimate purchaser (the operator) for taxed kerosene for use in aviation used in commercial aviation (other than foreign trade) and noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia). File for 2011 taxes A claim may be made by a registered ultimate vendor for certain sales. File for 2011 taxes For more information, see chapter 2. File for 2011 taxes Other Fuels (Including Alternative Fuels) Other Fuels means any liquid except gas oil, fuel oil, or any product taxable under section 4081. File for 2011 taxes Other Fuels include alternative fuels. File for 2011 taxes Alternative fuels are: Liquefied petroleum gas (LPG), “P Series” fuels, Compressed natural gas (CNG) (discussed later), Liquefied hydrogen, Any liquid fuel derived from coal (including peat) through the Fischer-Tropsch process, Liquid fuel derived from biomass, Liquefied natural gas (LNG), and Liquefied gas derived from biomass. File for 2011 taxes Liquefied petroleum gas includes propane, butane, pentane, or mixtures of those products. File for 2011 taxes Qualified methanol and ethanol fuels. File for 2011 taxes   Qualified ethanol and methanol means any liquid at least 85 percent of which consists of alcohol produced from coal, including peat. File for 2011 taxes The tax rates are listed in the Instructions for Form 720. File for 2011 taxes Partially exempt methanol and ethanol fuels. File for 2011 taxes   A reduced tax rate applies to these fuels. File for 2011 taxes Partially exempt ethanol and methanol means any liquid at least 85 percent of which consists of alcohol produced from natural gas. File for 2011 taxes The tax rates are listed in the Instructions for Form 720. File for 2011 taxes Motor vehicles. File for 2011 taxes   Motor vehicles include all types of vehicles, whether or not registered (or required to be registered) for highway use, that have both the following characteristics. File for 2011 taxes They are propelled by a motor. File for 2011 taxes They are designed for carrying or towing loads from one place to another, regardless of the type of material or load carried or t