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Filing 1040x With Form 982

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Filing 1040x With Form 982

Filing 1040x with form 982 8. Filing 1040x with form 982   Dividends and Other Distributions Table of Contents Reminder Introduction Useful Items - You may want to see: General InformationDividends not reported on Form 1099-DIV. Filing 1040x with form 982 Reporting tax withheld. Filing 1040x with form 982 Nominees. Filing 1040x with form 982 Ordinary DividendsQualified Dividends Dividends Used to Buy More Stock Money Market Funds Capital Gain DistributionsBasis adjustment. Filing 1040x with form 982 Nondividend DistributionsLiquidating Distributions Distributions of Stock and Stock Rights Other DistributionsInformation reporting requirement. Filing 1040x with form 982 Alternative minimum tax treatment. Filing 1040x with form 982 How To Report Dividend IncomeInvestment interest deducted. Filing 1040x with form 982 Reminder Foreign-source income. Filing 1040x with form 982  If you are a U. Filing 1040x with form 982 S. Filing 1040x with form 982 citizen with dividend income from sources outside the United States (foreign-source income), you must report that income on your tax return unless it is exempt by U. Filing 1040x with form 982 S. Filing 1040x with form 982 law. Filing 1040x with form 982 This is true whether you reside inside or outside the United States and whether or not you receive a Form 1099 from the foreign payer. Filing 1040x with form 982 Introduction This chapter discusses the tax treatment of: Ordinary dividends, Capital gain distributions, Nondividend distributions, and Other distributions you may receive from a corporation or a mutual fund. Filing 1040x with form 982 This chapter also explains how to report dividend income on your tax return. Filing 1040x with form 982 Dividends are distributions of money, stock, or other property paid to you by a corporation or by a mutual fund. Filing 1040x with form 982 You also may receive dividends through a partnership, an estate, a trust, or an association that is taxed as a corporation. Filing 1040x with form 982 However, some amounts you receive that are called dividends are actually interest income. Filing 1040x with form 982 (See Dividends that are actually interest under Taxable Interest in chapter 7. Filing 1040x with form 982 ) Most distributions are paid in cash (or check). Filing 1040x with form 982 However, distributions can consist of more stock, stock rights, other property, or services. Filing 1040x with form 982 Useful Items - You may want to see: Publication 514 Foreign Tax Credit for Individuals 550 Investment Income and Expenses Form (and Instructions) Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends General Information This section discusses general rules for dividend income. Filing 1040x with form 982 Tax on unearned income of certain children. Filing 1040x with form 982   Part of a child's 2013 unearned income may be taxed at the parent's tax rate. Filing 1040x with form 982 If it is, Form 8615, Tax for Certain Children Who Have Unearned Income, must be completed and attached to the child's tax return. Filing 1040x with form 982 If not, Form 8615 is not required and the child's income is taxed at his or her own tax rate. Filing 1040x with form 982    Some parents can choose to include the child's interest and dividends on the parent's return if certain requirements are met. Filing 1040x with form 982 Use Form 8814, Parents' Election To Report Child's Interest and Dividends, for this purpose. Filing 1040x with form 982   For more information about the tax on unearned income of children and the parents' election, see chapter 31. Filing 1040x with form 982 Beneficiary of an estate or trust. Filing 1040x with form 982    Dividends and other distributions you receive as a beneficiary of an estate or trust are generally taxable income. Filing 1040x with form 982 You should receive a Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc. Filing 1040x with form 982 , from the fiduciary. Filing 1040x with form 982 Your copy of Schedule K-1 (Form 1041) and its instructions will tell you where to report the income on your Form 1040. Filing 1040x with form 982 Social security number (SSN) or individual taxpayer identification number (ITIN). Filing 1040x with form 982    You must give your SSN or ITIN to any person required by federal tax law to make a return, statement, or other document that relates to you. Filing 1040x with form 982 This includes payers of dividends. Filing 1040x with form 982 If you do not give your SSN or ITIN to the payer of dividends, you may have to pay a penalty. Filing 1040x with form 982 For more information on SSNs and ITINs, see Social Security Number (SSN) in chapter 1. Filing 1040x with form 982 Backup withholding. Filing 1040x with form 982   Your dividend income is generally not subject to regular withholding. Filing 1040x with form 982 However, it may be subject to backup withholding to ensure that income tax is collected on the income. Filing 1040x with form 982 Under backup withholding, the payer of dividends must withhold, as income tax, on the amount you are paid, applying the appropriate withholding rate. Filing 1040x with form 982   Backup withholding may also be required if the IRS has determined that you underreported your interest or dividend income. Filing 1040x with form 982 For more information, see Backup Withholding in chapter 4. Filing 1040x with form 982 Stock certificate in two or more names. Filing 1040x with form 982   If two or more persons hold stock as joint tenants, tenants by the entirety, or tenants in common, each person's share of any dividends from the stock is determined by local law. Filing 1040x with form 982 Form 1099-DIV. Filing 1040x with form 982   Most corporations and mutual funds use Form 1099-DIV, Dividends and Distributions, to show you the distributions you received from them during the year. Filing 1040x with form 982 Keep this form with your records. Filing 1040x with form 982 You do not have to attach it to your tax return. Filing 1040x with form 982 Dividends not reported on Form 1099-DIV. Filing 1040x with form 982   Even if you do not receive Form 1099-DIV, you must still report all your taxable dividend income. Filing 1040x with form 982 For example, you may receive distributive shares of dividends from partnerships or S corporations. Filing 1040x with form 982 These dividends are reported to you on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Filing 1040x with form 982 , and Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, Credits, etc. Filing 1040x with form 982 Reporting tax withheld. Filing 1040x with form 982   If tax is withheld from your dividend income, the payer must give you a Form 1099-DIV that indicates the amount withheld. Filing 1040x with form 982 Nominees. Filing 1040x with form 982   If someone receives distributions as a nominee for you, that person should give you a Form 1099-DIV, which will show distributions received on your behalf. Filing 1040x with form 982 Form 1099-MISC. Filing 1040x with form 982   Certain substitute payments in lieu of dividends or tax-exempt interest received by a broker on your behalf must be reported to you on Form 1099-MISC, Miscellaneous Income, or a similar statement. Filing 1040x with form 982 See Reporting Substitute Payments under Short Sales in chapter 4 of Publication 550 for more information about reporting these payments. Filing 1040x with form 982 Incorrect amount shown on a Form 1099. Filing 1040x with form 982   If you receive a Form 1099 that shows an incorrect amount (or other incorrect information), you should ask the issuer for a corrected form. Filing 1040x with form 982 The new Form 1099 you receive will be marked “Corrected. Filing 1040x with form 982 ” Dividends on stock sold. Filing 1040x with form 982   If stock is sold, exchanged, or otherwise disposed of after a dividend is declared but before it is paid, the owner of record (usually the payee shown on the dividend check) must include the dividend in income. Filing 1040x with form 982 Dividends received in January. Filing 1040x with form 982   If a mutual fund (or other regulated investment company) or real estate investment trust (REIT) declares a dividend (including any exempt-interest dividend or capital gain distribution) in October, November, or December, payable to shareholders of record on a date in one of those months but actually pays the dividend during January of the next calendar year, you are considered to have received the dividend on December 31. Filing 1040x with form 982 You report the dividend in the year it was declared. Filing 1040x with form 982 Ordinary Dividends Ordinary (taxable) dividends are the most common type of distribution from a corporation or a mutual fund. Filing 1040x with form 982 They are paid out of earnings and profits and are ordinary income to you. Filing 1040x with form 982 This means they are not capital gains. Filing 1040x with form 982 You can assume that any dividend you receive on common or preferred stock is an ordinary dividend unless the paying corporation or mutual fund tells you otherwise. Filing 1040x with form 982 Ordinary dividends will be shown in box 1a of the Form 1099-DIV you receive. Filing 1040x with form 982 Qualified Dividends Qualified dividends are the ordinary dividends subject to the same 0%, 15%, or 20% maximum tax rate that applies to net capital gain. Filing 1040x with form 982 They should be shown in box 1b of the Form 1099-DIV you receive. Filing 1040x with form 982 The maximum rate of tax on qualified dividends is: 0% on any amount that otherwise would be taxed at a 10% or 15% rate. Filing 1040x with form 982 15% on any amount that otherwise would be taxed at rates greater than 15% but less than 39. Filing 1040x with form 982 6%. Filing 1040x with form 982 20% on any amount that otherwise would be taxed at a 39. Filing 1040x with form 982 6% rate. Filing 1040x with form 982 To qualify for the maximum rate, all of the following requirements must be met. Filing 1040x with form 982 The dividends must have been paid by a U. Filing 1040x with form 982 S. Filing 1040x with form 982 corporation or a qualified foreign corporation. Filing 1040x with form 982 (See Qualified foreign corporation , later. Filing 1040x with form 982 ) The dividends are not of the type listed later under Dividends that are not qualified dividends . Filing 1040x with form 982 You meet the holding period (discussed next). Filing 1040x with form 982 Holding period. Filing 1040x with form 982   You must have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. Filing 1040x with form 982 The ex-dividend date is the first date following the declaration of a dividend on which the buyer of a stock is not entitled to receive the next dividend payment. Filing 1040x with form 982 Instead, the seller will get the dividend. Filing 1040x with form 982   When counting the number of days you held the stock, include the day you disposed of the stock, but not the day you acquired it. Filing 1040x with form 982 See the examples later. Filing 1040x with form 982 Exception for preferred stock. Filing 1040x with form 982   In the case of preferred stock, you must have held the stock more than 90 days during the 181-day period that begins 90 days before the ex-dividend date if the dividends are due to periods totaling more than 366 days. Filing 1040x with form 982 If the preferred dividends are due to periods totaling less than 367 days, the holding period in the previous paragraph applies. Filing 1040x with form 982 Example 1. Filing 1040x with form 982 You bought 5,000 shares of XYZ Corp. Filing 1040x with form 982 common stock on July 9, 2013. Filing 1040x with form 982 XYZ Corp. Filing 1040x with form 982 paid a cash dividend of 10 cents per share. Filing 1040x with form 982 The ex-dividend date was July 16, 2013. Filing 1040x with form 982 Your Form 1099-DIV from XYZ Corp. Filing 1040x with form 982 shows $500 in box 1a (ordinary dividends) and in box 1b (qualified dividends). Filing 1040x with form 982 However, you sold the 5,000 shares on August 12, 2013. Filing 1040x with form 982 You held your shares of XYZ Corp. Filing 1040x with form 982 for only 34 days of the 121-day period (from July 10, 2013, through August 12, 2013). Filing 1040x with form 982 The 121-day period began on May 17, 2013 (60 days before the ex-dividend date), and ended on September 14, 2013. Filing 1040x with form 982 You have no qualified dividends from XYZ Corp. Filing 1040x with form 982 because you held the XYZ stock for less than 61 days. Filing 1040x with form 982 Example 2. Filing 1040x with form 982 Assume the same facts as in Example 1 except that you bought the stock on July 15, 2013 (the day before the ex-dividend date), and you sold the stock on September 16, 2013. Filing 1040x with form 982 You held the stock for 63 days (from July 16, 2013, through September 16, 2013). Filing 1040x with form 982 The $500 of qualified dividends shown in box 1b of your Form 1099-DIV are all qualified dividends because you held the stock for 61 days of the 121-day period (from July 16, 2013, through September 14, 2013). Filing 1040x with form 982 Example 3. Filing 1040x with form 982 You bought 10,000 shares of ABC Mutual Fund common stock on July 9, 2013. Filing 1040x with form 982 ABC Mutual Fund paid a cash dividend of 10 cents a share. Filing 1040x with form 982 The ex-dividend date was July 16, 2013. Filing 1040x with form 982 The ABC Mutual Fund advises you that the portion of the dividend eligible to be treated as qualified dividends equals 2 cents per share. Filing 1040x with form 982 Your Form 1099-DIV from ABC Mutual Fund shows total ordinary dividends of $1,000 and qualified dividends of $200. Filing 1040x with form 982 However, you sold the 10,000 shares on August 12, 2013. Filing 1040x with form 982 You have no qualified dividends from ABC Mutual Fund because you held the ABC Mutual Fund stock for less than 61 days. Filing 1040x with form 982 Holding period reduced where risk of loss is diminished. Filing 1040x with form 982   When determining whether you met the minimum holding period discussed earlier, you cannot count any day during which you meet any of the following conditions. Filing 1040x with form 982 You had an option to sell, were under a contractual obligation to sell, or had made (and not closed) a short sale of substantially identical stock or securities. Filing 1040x with form 982 You were grantor (writer) of an option to buy substantially identical stock or securities. Filing 1040x with form 982 Your risk of loss is diminished by holding one or more other positions in substantially similar or related property. Filing 1040x with form 982   For information about how to apply condition (3), see Regulations section 1. Filing 1040x with form 982 246-5. Filing 1040x with form 982 Qualified foreign corporation. Filing 1040x with form 982   A foreign corporation is a qualified foreign corporation if it meets any of the following conditions. Filing 1040x with form 982 The corporation is incorporated in a U. Filing 1040x with form 982 S. Filing 1040x with form 982 possession. Filing 1040x with form 982 The corporation is eligible for the benefits of a comprehensive income tax treaty with the United States that the Treasury Department determines is satisfactory for this purpose and that includes an exchange of information program. Filing 1040x with form 982 For a list of those treaties, see Table 8-1. Filing 1040x with form 982 The corporation does not meet (1) or (2) above, but the stock for which the dividend is paid is readily tradable on an established securities market in the United States. Filing 1040x with form 982 See Readily tradable stock , later. Filing 1040x with form 982 Exception. Filing 1040x with form 982   A corporation is not a qualified foreign corporation if it is a passive foreign investment company during its tax year in which the dividends are paid or during its previous tax year. Filing 1040x with form 982 Readily tradable stock. Filing 1040x with form 982   Any stock (such as common, ordinary, or preferred) or an American depositary receipt in respect of that stock is considered to satisfy requirement (3) under Qualified foreign corporation , if it is listed on a national securities exchange that is registered under section 6 of the Securities Exchange Act of 1934 or on the Nasdaq Stock Market. Filing 1040x with form 982 For a list of the exchanges that meet these requirements, see www. Filing 1040x with form 982 sec. Filing 1040x with form 982 gov/divisions/marketreg/mrexchanges. Filing 1040x with form 982 shtml. Filing 1040x with form 982 Dividends that are not qualified dividends. Filing 1040x with form 982   The following dividends are not qualified dividends. Filing 1040x with form 982 They are not qualified dividends even if they are shown in box 1b of Form 1099-DIV. Filing 1040x with form 982 Capital gain distributions. Filing 1040x with form 982 Dividends paid on deposits with mutual savings banks, cooperative banks, credit unions, U. Filing 1040x with form 982 S. Filing 1040x with form 982 building and loan associations, U. Filing 1040x with form 982 S. Filing 1040x with form 982 savings and loan associations, federal savings and loan associations, and similar financial institutions. Filing 1040x with form 982 (Report these amounts as interest income. Filing 1040x with form 982 ) Dividends from a corporation that is a tax-exempt organization or farmer's cooperative during the corporation's tax year in which the dividends were paid or during the corporation's previous tax year. Filing 1040x with form 982 Dividends paid by a corporation on employer securities held on the date of record by an employee stock ownership plan (ESOP) maintained by that corporation. Filing 1040x with form 982 Dividends on any share of stock to the extent you are obligated (whether under a short sale or otherwise) to make related payments for positions in substantially similar or related property. Filing 1040x with form 982 Payments in lieu of dividends, but only if you know or have reason to know the payments are not qualified dividends. Filing 1040x with form 982 Payments shown in Form 1099-DIV, box 1b, from a foreign corporation to the extent you know or have reason to know the payments are not qualified dividends. Filing 1040x with form 982 Table 8-1. Filing 1040x with form 982 Income Tax Treaties Income tax treaties the United States has with the following countries satisfy requirement (2) under Qualified foreign corporation. Filing 1040x with form 982 Australia Indonesia Romania Austria Ireland Russian Bangladesh Israel Federation Barbados Italy Slovak Belgium Jamaica Republic Bulgaria Japan Slovenia Canada Kazakhstan South Africa China Korea Spain Cyprus Latvia Sri Lanka Czech Lithuania Sweden Republic Luxembourg Switzerland Denmark Malta Thailand Egypt Mexico Trinidad and Estonia Morocco Tobago Finland Netherlands Tunisia France New Zealand Turkey Germany Norway Ukraine Greece Pakistan United Hungary Philippines Kingdom Iceland Poland Venezuela India Portugal     Dividends Used to Buy More Stock The corporation in which you own stock may have a dividend reinvestment plan. Filing 1040x with form 982 This plan lets you choose to use your dividends to buy (through an agent) more shares of stock in the corporation instead of receiving the dividends in cash. Filing 1040x with form 982 Most mutual funds also permit shareholders to automatically reinvest distributions in more shares in the fund, instead of receiving cash. Filing 1040x with form 982 If you use your dividends to buy more stock at a price equal to its fair market value, you still must report the dividends as income. Filing 1040x with form 982 If you are a member of a dividend reinvestment plan that lets you buy more stock at a price less than its fair market value, you must report as dividend income the fair market value of the additional stock on the dividend payment date. Filing 1040x with form 982 You also must report as dividend income any service charge subtracted from your cash dividends before the dividends are used to buy the additional stock. Filing 1040x with form 982 But you may be able to deduct the service charge. Filing 1040x with form 982 See chapter 28 for more information about deducting expenses of producing income. Filing 1040x with form 982 In some dividend reinvestment plans, you can invest more cash to buy shares of stock at a price less than fair market value. Filing 1040x with form 982 If you choose to do this, you must report as dividend income the difference between the cash you invest and the fair market value of the stock you buy. Filing 1040x with form 982 When figuring this amount, use the fair market value of the stock on the dividend payment date. Filing 1040x with form 982 Money Market Funds Report amounts you receive from money market funds as dividend income. Filing 1040x with form 982 Money market funds are a type of mutual fund and should not be confused with bank money market accounts that pay interest. Filing 1040x with form 982 Capital Gain Distributions Capital gain distributions (also called capital gain dividends) are paid to you or credited to your account by mutual funds (or other regulated investment companies) and real estate investment trusts (REITs). Filing 1040x with form 982 They will be shown in box 2a of the Form 1099-DIV you receive from the mutual fund or REIT. Filing 1040x with form 982 Report capital gain distributions as long-term capital gains, regardless of how long you owned your shares in the mutual fund or REIT. Filing 1040x with form 982 Undistributed capital gains of mutual funds and REITs. Filing 1040x with form 982    Some mutual funds and REITs keep their long-term capital gains and pay tax on them. Filing 1040x with form 982 You must treat your share of these gains as distributions, even though you did not actually receive them. Filing 1040x with form 982 However, they are not included on Form 1099-DIV. Filing 1040x with form 982 Instead, they are reported to you in box 1a of Form 2439. Filing 1040x with form 982   Report undistributed capital gains (box 1a of Form 2439) as long-term capital gains on Schedule D (Form 1040), column (h), line 11. Filing 1040x with form 982   The tax paid on these gains by the mutual fund or REIT is shown in box 2 of Form 2439. Filing 1040x with form 982 You take credit for this tax by including it on Form 1040, line 71, and checking box a on that line. Filing 1040x with form 982 Attach Copy B of Form 2439 to your return, and keep Copy C for your records. Filing 1040x with form 982 Basis adjustment. Filing 1040x with form 982   Increase your basis in your mutual fund, or your interest in a REIT, by the difference between the gain you report and the credit you claim for the tax paid. Filing 1040x with form 982 Additional information. Filing 1040x with form 982   For more information on the treatment of distributions from mutual funds, see Publication 550. Filing 1040x with form 982 Nondividend Distributions A nondividend distribution is a distribution that is not paid out of the earnings and profits of a corporation or a mutual fund. Filing 1040x with form 982 You should receive a Form 1099-DIV or other statement showing the nondividend distribution. Filing 1040x with form 982 On Form 1099-DIV, a nondividend distribution will be shown in box 3. Filing 1040x with form 982 If you do not receive such a statement, you report the distribution as an ordinary dividend. Filing 1040x with form 982 Basis adjustment. Filing 1040x with form 982   A nondividend distribution reduces the basis of your stock. Filing 1040x with form 982 It is not taxed until your basis in the stock is fully recovered. Filing 1040x with form 982 This nontaxable portion is also called a return of capital; it is a return of your investment in the stock of the company. Filing 1040x with form 982 If you buy stock in a corporation in different lots at different times, and you cannot definitely identify the shares subject to the nondividend distribution, reduce the basis of your earliest purchases first. Filing 1040x with form 982   When the basis of your stock has been reduced to zero, report any additional nondividend distribution you receive as a capital gain. Filing 1040x with form 982 Whether you report it as a long-term or short-term capital gain depends on how long you have held the stock. Filing 1040x with form 982 See Holding Period in chapter 14. Filing 1040x with form 982 Example. Filing 1040x with form 982 You bought stock in 2000 for $100. Filing 1040x with form 982 In 2003, you received a nondividend distribution of $80. Filing 1040x with form 982 You did not include this amount in your income, but you reduced the basis of your stock to $20. Filing 1040x with form 982 You received a nondividend distribution of $30 in 2013. Filing 1040x with form 982 The first $20 of this amount reduced your basis to zero. Filing 1040x with form 982 You report the other $10 as a long-term capital gain for 2013. Filing 1040x with form 982 You must report as a long-term capital gain any nondividend distribution you receive on this stock in later years. Filing 1040x with form 982 Liquidating Distributions Liquidating distributions, sometimes called liquidating dividends, are distributions you receive during a partial or complete liquidation of a corporation. Filing 1040x with form 982 These distributions are, at least in part, one form of a return of capital. Filing 1040x with form 982 They may be paid in one or more installments. Filing 1040x with form 982 You will receive Form 1099-DIV from the corporation showing you the amount of the liquidating distribution in box 8 or 9. Filing 1040x with form 982 For more information on liquidating distributions, see chapter 1 of Publication 550. Filing 1040x with form 982 Distributions of Stock and Stock Rights Distributions by a corporation of its own stock are commonly known as stock dividends. Filing 1040x with form 982 Stock rights (also known as “stock options”) are distributions by a corporation of rights to acquire the corporation's stock. Filing 1040x with form 982 Generally, stock dividends and stock rights are not taxable to you, and you do not report them on your return. Filing 1040x with form 982 Taxable stock dividends and stock rights. Filing 1040x with form 982   Distributions of stock dividends and stock rights are taxable to you if any of the following apply. Filing 1040x with form 982 You or any other shareholder have the choice to receive cash or other property instead of stock or stock rights. Filing 1040x with form 982 The distribution gives cash or other property to some shareholders and an increase in the percentage interest in the corporation's assets or earnings and profits to other shareholders. Filing 1040x with form 982 The distribution is in convertible preferred stock and has the same result as in (2). Filing 1040x with form 982 The distribution gives preferred stock to some common stock shareholders and common stock to other common stock shareholders. Filing 1040x with form 982 The distribution is on preferred stock. Filing 1040x with form 982 (The distribution, however, is not taxable if it is an increase in the conversion ratio of convertible preferred stock made solely to take into account a stock dividend, stock split, or similar event that would otherwise result in reducing the conversion right. Filing 1040x with form 982 )   The term “stock” includes rights to acquire stock, and the term “shareholder” includes a holder of rights or of convertible securities. Filing 1040x with form 982 If you receive taxable stock dividends or stock rights, include their fair market value at the time of distribution in your income. Filing 1040x with form 982 Preferred stock redeemable at a premium. Filing 1040x with form 982   If you hold preferred stock having a redemption price higher than its issue price, the difference (the redemption premium) generally is taxable as a constructive distribution of additional stock on the preferred stock. Filing 1040x with form 982 For more information, see chapter 1 of Publication 550. Filing 1040x with form 982 Basis. Filing 1040x with form 982   Your basis in stock or stock rights received in a taxable distribution is their fair market value when distributed. Filing 1040x with form 982 If you receive stock or stock rights that are not taxable to you, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550 for information on how to figure their basis. Filing 1040x with form 982 Fractional shares. Filing 1040x with form 982    You may not own enough stock in a corporation to receive a full share of stock if the corporation declares a stock dividend. Filing 1040x with form 982 However, with the approval of the shareholders, the corporation may set up a plan in which fractional shares are not issued but instead are sold, and the cash proceeds are given to the shareholders. Filing 1040x with form 982 Any cash you receive for fractional shares under such a plan is treated as an amount realized on the sale of the fractional shares. Filing 1040x with form 982 Report this transaction on Form 8949, Sales and Other Dispositions of Capital Assets. Filing 1040x with form 982 Enter your gain or loss, the difference between the cash you receive and the basis of the fractional shares sold, in column (h) of Schedule D (Form 1040) in Part I or Part II, whichever is appropriate. Filing 1040x with form 982    Report these transactions on Form 8949 with the correct box checked. Filing 1040x with form 982   For more information on Form 8949 and Schedule D (Form 1040), see chapter 4 of Publication 550. Filing 1040x with form 982 Also see the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040). Filing 1040x with form 982 Example. Filing 1040x with form 982 You own one share of common stock that you bought on January 3, 2004, for $100. Filing 1040x with form 982 The corporation declared a common stock dividend of 5% on June 29, 2013. Filing 1040x with form 982 The fair market value of the stock at the time the stock dividend was declared was $200. Filing 1040x with form 982 You were paid $10 for the fractional-share stock dividend under a plan described in the discussion above. Filing 1040x with form 982 You figure your gain or loss as follows: Fair market value of old stock $200. Filing 1040x with form 982 00 Fair market value of stock dividend (cash received) +10. Filing 1040x with form 982 00 Fair market value of old stock and stock dividend $210. Filing 1040x with form 982 00 Basis (cost) of old stock after the stock dividend (($200 ÷ $210) × $100) $95. Filing 1040x with form 982 24 Basis (cost) of stock dividend (($10 ÷ $210) × $100) + 4. Filing 1040x with form 982 76 Total $100. Filing 1040x with form 982 00 Cash received $10. Filing 1040x with form 982 00 Basis (cost) of stock dividend − 4. Filing 1040x with form 982 76 Gain $5. Filing 1040x with form 982 24 Because you had held the share of stock for more than 1 year at the time the stock dividend was declared, your gain on the stock dividend is a long-term capital gain. Filing 1040x with form 982 Scrip dividends. Filing 1040x with form 982   A corporation that declares a stock dividend may issue you a scrip certificate that entitles you to a fractional share. Filing 1040x with form 982 The certificate is generally nontaxable when you receive it. Filing 1040x with form 982 If you choose to have the corporation sell the certificate for you and give you the proceeds, your gain or loss is the difference between the proceeds and the portion of your basis in the corporation's stock allocated to the certificate. Filing 1040x with form 982   However, if you receive a scrip certificate that you can choose to redeem for cash instead of stock, the certificate is taxable when you receive it. Filing 1040x with form 982 You must include its fair market value in income on the date you receive it. Filing 1040x with form 982 Other Distributions You may receive any of the following distributions during the year. Filing 1040x with form 982 Exempt-interest dividends. Filing 1040x with form 982   Exempt-interest dividends you receive from a mutual fund or other regulated investment company, including those received from a qualified fund of funds in any tax year beginning after December 22, 2010, are not included in your taxable income. Filing 1040x with form 982 Exempt-interest dividends should be shown in box 10 of Form 1099-DIV. Filing 1040x with form 982 Information reporting requirement. Filing 1040x with form 982   Although exempt-interest dividends are not taxable, you must show them on your tax return if you have to file a return. Filing 1040x with form 982 This is an information reporting requirement and does not change the exempt-interest dividends to taxable income. Filing 1040x with form 982 Alternative minimum tax treatment. Filing 1040x with form 982   Exempt-interest dividends paid from specified private activity bonds may be subject to the alternative minimum tax. Filing 1040x with form 982 See Alternative Minimum Tax (AMT) in chapter 30 for more information. Filing 1040x with form 982 Dividends on insurance policies. Filing 1040x with form 982    Insurance policy dividends the insurer keeps and uses to pay your premiums are not taxable. Filing 1040x with form 982 However, you must report as taxable interest income the interest that is paid or credited on dividends left with the insurance company. Filing 1040x with form 982    If dividends on an insurance contract (other than a modified endowment contract) are distributed to you, they are a partial return of the premiums you paid. Filing 1040x with form 982 Do not include them in your gross income until they are more than the total of all net premiums you paid for the contract. Filing 1040x with form 982 Report any taxable distributions on insurance policies on Form 1040, line 21. Filing 1040x with form 982 Dividends on veterans' insurance. Filing 1040x with form 982   Dividends you receive on veterans' insurance policies are not taxable. Filing 1040x with form 982 In addition, interest on dividends left with the Department of Veterans Affairs is not taxable. Filing 1040x with form 982 Patronage dividends. Filing 1040x with form 982   Generally, patronage dividends you receive in money from a cooperative organization are included in your income. Filing 1040x with form 982   Do not include in your income patronage dividends you receive on: Property bought for your personal use, or Capital assets or depreciable property bought for use in your business. Filing 1040x with form 982 But you must reduce the basis (cost) of the items bought. Filing 1040x with form 982 If the dividend is more than the adjusted basis of the assets, you must report the excess as income. Filing 1040x with form 982   These rules are the same whether the cooperative paying the dividend is a taxable or tax-exempt cooperative. Filing 1040x with form 982 Alaska Permanent Fund dividends. Filing 1040x with form 982    Do not report these amounts as dividends. Filing 1040x with form 982 Instead, report these amounts on Form 1040, line 21; Form 1040A, line 13; or Form 1040EZ, line 3. Filing 1040x with form 982 How To Report Dividend Income Generally, you can use either Form 1040 or Form 1040A to report your dividend income. Filing 1040x with form 982 Report the total of your ordinary dividends on line 9a of Form 1040 or Form 1040A. Filing 1040x with form 982 Report qualified dividends on line 9b of Form 1040 or Form 1040A. Filing 1040x with form 982 If you receive capital gain distributions, you may be able to use Form 1040A or you may have to use Form 1040. Filing 1040x with form 982 See Exceptions to filing Form 8949 and Schedule D (Form 1040) in chapter 16. Filing 1040x with form 982 If you receive nondividend distributions required to be reported as capital gains, you must use Form 1040. Filing 1040x with form 982 You cannot use Form 1040EZ if you receive any dividend income. Filing 1040x with form 982 Form 1099-DIV. Filing 1040x with form 982   If you owned stock on which you received $10 or more in dividends and other distributions, you should receive a Form 1099-DIV. Filing 1040x with form 982 Even if you do not receive Form 1099-DIV, you must report all your dividend income. Filing 1040x with form 982   See Form 1099-DIV for more information on how to report dividend income. Filing 1040x with form 982 Form 1040A or 1040. Filing 1040x with form 982    You must complete Schedule B (Form 1040A or 1040), Part II, and attach it to your Form 1040A or 1040, if: Your ordinary dividends (Form 1099-DIV, box 1a) are more than $1,500, or You received, as a nominee, dividends that actually belong to someone else. Filing 1040x with form 982 If your ordinary dividends are more than $1,500, you must also complete Schedule B (Form 1040A or 1040), Part III. Filing 1040x with form 982   List on Schedule B (Form 1040A or 1040), Part II, line 5, each payer's name and the ordinary dividends you received. Filing 1040x with form 982 If your securities are held by a brokerage firm (in “street name”), list the name of the brokerage firm shown on Form 1099-DIV as the payer. Filing 1040x with form 982 If your stock is held by a nominee who is the owner of record, and the nominee credited or paid you dividends on the stock, show the name of the nominee and the dividends you received or for which you were credited. Filing 1040x with form 982   Enter on line 6 the total of the amounts listed on line 5. Filing 1040x with form 982 Also enter this total on line 9a of Form 1040A or 1040. Filing 1040x with form 982 Qualified dividends. Filing 1040x with form 982   Report qualified dividends (Form 1099-DIV, box 1b) on line 9b of Form 1040 or Form 1040A. Filing 1040x with form 982 The amount in box 1b is already included in box 1a. Filing 1040x with form 982 Do not add the amount in box 1b to, or substract it from, the amount in box 1a. Filing 1040x with form 982   Do not include any of the following on line 9b. Filing 1040x with form 982 Qualified dividends you received as a nominee. Filing 1040x with form 982 See Nominees under How to Report Dividend Income in chapter 1 of Publication 550. Filing 1040x with form 982 Dividends on stock for which you did not meet the holding period. Filing 1040x with form 982 See Holding period , earlier under Qualified Dividends. Filing 1040x with form 982 Dividends on any share of stock to the extent you are obligated (whether under a short sale or otherwise) to make related payments for positions in substantially similar or related property. Filing 1040x with form 982 Payments in lieu of dividends, but only if you know or have reason to know the payments are not qualified dividends. Filing 1040x with form 982 Payments shown in Form 1099-DIV, box 1b, from a foreign corporation to the extent you know or have reason to know the payments are not qualified dividends. Filing 1040x with form 982   If you have qualified dividends, you must figure your tax by completing the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040 or 1040A instructions or the Schedule D Tax Worksheet in the Schedule D (Form 1040) instructions, whichever applies. Filing 1040x with form 982 Enter qualified dividends on line 2 of the worksheet. Filing 1040x with form 982 Investment interest deducted. Filing 1040x with form 982   If you claim a deduction for investment interest, you may have to reduce the amount of your qualified dividends that are eligible for the 0%, 15%, or 20% tax rate. Filing 1040x with form 982 Reduce it by the qualified dividends you choose to include in investment income when figuring the limit on your investment interest deduction. Filing 1040x with form 982 This is done on the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet. Filing 1040x with form 982 For more information about the limit on investment interest, see Investment expenses in chapter 23. Filing 1040x with form 982 Expenses related to dividend income. Filing 1040x with form 982   You may be able to deduct expenses related to dividend income if you itemize your deductions on Schedule A (Form 1040). Filing 1040x with form 982 See chapter 28 for general information about deducting expenses of producing income. Filing 1040x with form 982 More information. Filing 1040x with form 982    For more information about how to report dividend income, see chapter 1 of Publication 550 or the instructions for the form you must file. Filing 1040x with form 982 Prev  Up  Next   Home   More Online Publications
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The Filing 1040x With Form 982

Filing 1040x with form 982 Publication 554 - Introductory Material Table of Contents What's New Reminders IntroductionVolunteer Income Tax Assistance and Tax Counseling for the Elderly. Filing 1040x with form 982 Ordering forms and publications. Filing 1040x with form 982 Tax questions. Filing 1040x with form 982 What's New Alternative minimum tax exemption increased. Filing 1040x with form 982  The AMT exemption amount has increased to $51,900 ($80,800 if married filing jointly or qualifying widow(er); $40,400 if married filing separately). Filing 1040x with form 982 Earned income credit. Filing 1040x with form 982  The maximum amount of income you can earn and still get the credit has increased. Filing 1040x with form 982 You may be able to take the credit if you earn less than: $14,340 ($19,680 if married filing jointly), do not have a qualifying child, and are at least 25 years old and under 65, $37,870 ($43,210 if married filing jointly), and you have one qualifying child, $43,038 ($48,378 if married filing jointly), and you have two qualifying children, or $46,227 ($51,567 if married filing jointly), and you have three or more qualifying children. Filing 1040x with form 982 For more information, see Earned Income Credit , later. Filing 1040x with form 982 Exemption phaseout. Filing 1040x with form 982  You lose at least part of the benefit of your exemptions if your adjusted gross income is above a certain amount. Filing 1040x with form 982 For 2013, the phaseout begins at $150,000 for married individuals filing separate returns; $250,000 for single individuals; $275,000 for heads of household; and $300,000 for married individuals filing joint returns or qualifying widow(er)s. Filing 1040x with form 982 For more information, see Phaseout of Exemptions in Publication 501. Filing 1040x with form 982 Limit on itemized deductions. Filing 1040x with form 982   Beginning January 1, 2013, itemized deductions for taxpayers with adjusted gross incomes above $150,000 may be reduced. Filing 1040x with form 982 See Overall limitation , later. Filing 1040x with form 982 Medical and dental expenses. Filing 1040x with form 982   Beginning January 1, 2013, taxpayers 65 and older can deduct only the part of their medical and dental expenses that exceed 7. Filing 1040x with form 982 5% of their adjusted gross income (10% for taxpayers under 65). Filing 1040x with form 982 Same-sex marriages. Filing 1040x with form 982  If you have a same-sex spouse whom you legally married in a state (or foreign country) that recognizes same-sex marriage, you and your spouse generally must use the married filing jointly or married filing separately filing status on your 2013 return, even if you and your spouse now live in a state (or foreign country) that does not recognize same-sex marriage. Filing 1040x with form 982 For more information, see Publication 501. Filing 1040x with form 982 Reminders Future developments. Filing 1040x with form 982  For the latest information about developments related to Publication 554, such as legislation enacted after it was published, go to www. Filing 1040x with form 982 irs. Filing 1040x with form 982 gov/pub554. Filing 1040x with form 982 Tax return preparers. Filing 1040x with form 982  Choose your preparer carefully. Filing 1040x with form 982 If you pay someone to prepare your return, the preparer is required, under the law, to sign the return and fill in the other blanks in the Paid Preparer's area of your return. Filing 1040x with form 982 Remember, however, that you are still responsible for the accuracy of every item entered on your return. Filing 1040x with form 982 If there is any underpayment, you are responsible for paying it, plus any interest and penalty that may be due. Filing 1040x with form 982 Sale of home by surviving spouse. Filing 1040x with form 982  If you are an unmarried widow or widower, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home. Filing 1040x with form 982 For more information, see Sale of Home , later. Filing 1040x with form 982 Third party designee. Filing 1040x with form 982  You can check the “Yes” box in the Third Party Designee area of your return to authorize the IRS to discuss your return with your preparer, a friend, family member, or any other person you choose. Filing 1040x with form 982 This allows the IRS to call the person you identified as your designee to answer any questions that may arise during the processing of your return. Filing 1040x with form 982 It also allows your designee to perform certain actions. Filing 1040x with form 982 See your income tax return instructions for details. Filing 1040x with form 982 Employment tax withholding. Filing 1040x with form 982  Your wages are subject to withholding for income tax, social security tax, and Medicare tax even if you are receiving social security benefits. Filing 1040x with form 982 Photographs of missing children. Filing 1040x with form 982  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Filing 1040x with form 982 Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Filing 1040x with form 982 You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Filing 1040x with form 982 Introduction The purpose of this publication is to provide a general overview of selected topics that are of interest to older taxpayers. Filing 1040x with form 982 The publication will help you determine if you need to file a return and, if so, what items to report on your return. Filing 1040x with form 982 Each topic is discussed only briefly, so you will find references to other free IRS publications that provide more detail on these topics if you need it. Filing 1040x with form 982 Table I has a list of questions you may have about filing your federal tax return. Filing 1040x with form 982 To the right of each question is the location of the answer in this publication. Filing 1040x with form 982 Also, at the back of this publication there is an index to help you search for the topic you need. Filing 1040x with form 982 While most federal income tax laws apply equally to all taxpayers, regardless of age, there are some provisions that give special treatment to older taxpayers. Filing 1040x with form 982 The following are some examples. Filing 1040x with form 982 Higher gross income threshold for filing. Filing 1040x with form 982 You must be age 65 or older at the end of the year to get this benefit. Filing 1040x with form 982 You are considered age 65 on the day before your 65th birthday. Filing 1040x with form 982 Therefore, you are considered age 65 at the end of the year if your 65th birthday is on or before January 1 of the following year. Filing 1040x with form 982 Higher standard deduction. Filing 1040x with form 982 If you do not itemize deductions, you are entitled to a higher standard deduction if you are age 65 or older at the end of the year. Filing 1040x with form 982 You are considered age 65 at the end of the year if your 65th birthday is on or before January 1 of the following year. Filing 1040x with form 982 Credit for the elderly or the disabled. Filing 1040x with form 982 If you qualify, you may benefit from the credit for the elderly or the disabled. Filing 1040x with form 982 To determine if you qualify and how to figure this credit, see Credit for the Elderly or the Disabled , later. Filing 1040x with form 982 Return preparation assistance. Filing 1040x with form 982   The IRS wants to make it easier for you to file your federal tax return. Filing 1040x with form 982 You may find it helpful to visit a Volunteer Income Tax Assistance (VITA), Tax Counseling for the Elderly (TCE), or American Association of Retired Persons (AARP) Tax-Aide site near you. Filing 1040x with form 982 Volunteer Income Tax Assistance and Tax Counseling for the Elderly. Filing 1040x with form 982   These programs provide free help for low-income taxpayers and taxpayers age 60 or older to fill in and file their returns. Filing 1040x with form 982 For the VITA/TCE site nearest you, contact your local IRS office. Filing 1040x with form 982 For more information, see Free help with your tax return under How To Get Tax Help. Filing 1040x with form 982   For the location of an AARP Tax-Aide site in your community, call 1-888-227-7669. Filing 1040x with form 982 When asked, be ready to press in or speak your 5-digit ZIP code. Filing 1040x with form 982 Or, you can visit their website on the Internet at www. Filing 1040x with form 982 aarp. Filing 1040x with form 982 org/money/taxaide. Filing 1040x with form 982 Comments and suggestions. Filing 1040x with form 982   We welcome your comments about this publication and your suggestions for future editions. Filing 1040x with form 982   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Filing 1040x with form 982 NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Filing 1040x with form 982 Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Filing 1040x with form 982   You can send your comments from www. Filing 1040x with form 982 irs. Filing 1040x with form 982 gov/formspubs/. Filing 1040x with form 982 Click on “More Information” and then on “Comment on Tax Forms and Publications. Filing 1040x with form 982 ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Filing 1040x with form 982 Ordering forms and publications. Filing 1040x with form 982   Visit www. Filing 1040x with form 982 irs. Filing 1040x with form 982 gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 business days after your request is received. Filing 1040x with form 982 Internal Revenue Service 1201 N. Filing 1040x with form 982 Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Filing 1040x with form 982   If you have a tax question, check the information available on IRS. Filing 1040x with form 982 gov or call 1-800-829-1040. Filing 1040x with form 982 We cannot answer tax questions sent to either of the above addresses. Filing 1040x with form 982 Table I. Filing 1040x with form 982 What You Should Know About Federal Taxes Note. Filing 1040x with form 982 The following is a list of questions you may have about filling out your federal income tax return. Filing 1040x with form 982  To the right of each question is the location of the answer in this publication. Filing 1040x with form 982 What I Should Know Where To Find the Answer Do I need to file a return? See chapter 1. Filing 1040x with form 982 Is my income taxable or nontaxable?  If it is nontaxable, must I still report it? See chapter 2. Filing 1040x with form 982 How do I report benefits I received from the Social Security Administration or the Railroad Retirement Board?  Are these benefits taxable? See Social Security and Equivalent Railroad Retirement Benefits in chapter 2. Filing 1040x with form 982 Must I report the sale of my home?  If I had a gain, is any part of it taxable? See Sale of Home in chapter 2. Filing 1040x with form 982 What are some of the items that I can deduct to reduce my income? See chapters 3 and 4. Filing 1040x with form 982 How do I report the amounts I set aside for my IRA? See Individual Retirement Arrangement (IRA) Contributions and Deductions in chapter 3. Filing 1040x with form 982 Would it be better for me to claim the standard deduction or itemize my deductions? See chapter 4. Filing 1040x with form 982 What are some of the credits I can claim to reduce my tax? See chapter 5 for discussions on the credit for the elderly or the disabled, the child and dependent care credit, and the earned income credit. Filing 1040x with form 982 Must I make estimated tax payments? See chapter 6. Filing 1040x with form 982 How do I contact the IRS or get more information? See chapter 7. Filing 1040x with form 982 Prev  Up  Next   Home   More Online Publications