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Filing 1040x

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Filing 1040x

Filing 1040x 2. Filing 1040x   Ordinary or Capital Gain or Loss Table of Contents IntroductionSection 1231 transactions. Filing 1040x Topics - This chapter discusses: Useful Items - You may want to see: Capital Assets Noncapital AssetsCommodities derivative dealer. Filing 1040x Sales and Exchanges Between Related PersonsGain Is Ordinary Income Nondeductible Loss Other DispositionsSale of a Business Dispositions of Intangible Property Subdivision of Land Timber Precious Metals and Stones, Stamps, and Coins Coal and Iron Ore Conversion Transactions Introduction You must classify your gains and losses as either ordinary or capital (and your capital gains or losses as either short-term or long-term). Filing 1040x You must do this to figure your net capital gain or loss. Filing 1040x For individuals, a net capital gain may be taxed at a different tax rate than ordinary income. Filing 1040x See Capital Gains Tax Rates in chapter 4. Filing 1040x Your deduction for a net capital loss may be limited. Filing 1040x See Treatment of Capital Losses in chapter 4. Filing 1040x Capital gain or loss. Filing 1040x   Generally, you will have a capital gain or loss if you sell or exchange a capital asset. Filing 1040x You also may have a capital gain if your section 1231 transactions result in a net gain. Filing 1040x Section 1231 transactions. Filing 1040x   Section 1231 transactions are sales and exchanges of property held longer than 1 year and either used in a trade or business or held for the production of rents or royalties. Filing 1040x They also include certain involuntary conversions of business or investment property, including capital assets. Filing 1040x See Section 1231 Gains and Losses in chapter 3 for more information. Filing 1040x Topics - This chapter discusses: Capital assets Noncapital assets Sales and exchanges between  related persons Other dispositions Useful Items - You may want to see: Publication 550 Investment Income and Expenses Form (and Instructions) Schedule D (Form 1040) Capital Gains and Losses 4797 Sales of Business Property 8594 Asset Acquisition Statement Under Section 1060 8949 Sales and Other Dispositions of Capital Assets See chapter 5 for information about getting publications and forms. Filing 1040x Capital Assets Almost everything you own and use for personal purposes, pleasure, or investment is a capital asset. Filing 1040x For exceptions, see Noncapital Assets, later. Filing 1040x The following items are examples of capital assets. Filing 1040x Stocks and bonds. Filing 1040x A home owned and occupied by you and your family. Filing 1040x Timber grown on your home property or investment property, even if you make casual sales of the timber. Filing 1040x Household furnishings. Filing 1040x A car used for pleasure or commuting. Filing 1040x Coin or stamp collections. Filing 1040x Gems and jewelry. Filing 1040x Gold, silver, and other metals. Filing 1040x Personal-use property. Filing 1040x   Generally, property held for personal use is a capital asset. Filing 1040x Gain from a sale or exchange of that property is a capital gain. Filing 1040x Loss from the sale or exchange of that property is not deductible. Filing 1040x You can deduct a loss relating to personal-use property only if it results from a casualty or theft. Filing 1040x Investment property. Filing 1040x   Investment property (such as stocks and bonds) is a capital asset, and a gain or loss from its sale or exchange is a capital gain or loss. Filing 1040x This treatment does not apply to property used to produce rental income. Filing 1040x See Business assets, later, under Noncapital Assets. Filing 1040x Release of restriction on land. Filing 1040x   Amounts you receive for the release of a restrictive covenant in a deed to land are treated as proceeds from the sale of a capital asset. Filing 1040x Noncapital Assets A noncapital asset is property that is not a capital asset. Filing 1040x The following kinds of property are not capital assets. Filing 1040x Stock in trade, inventory, and other property you hold mainly for sale to customers in your trade or business. Filing 1040x Inventories are discussed in Publication 538, Accounting Periods and Methods. Filing 1040x But, see the Tip below. Filing 1040x Accounts or notes receivable acquired in the ordinary course of a trade or business for services rendered or from the sale of any properties described in (1), above. Filing 1040x Depreciable property used in your trade or business or as rental property (including section 197 intangibles defined later), even if the property is fully depreciated (or amortized). Filing 1040x Sales of this type of property are discussed in chapter 3. Filing 1040x Real property used in your trade or business or as rental property, even if the property is fully depreciated. Filing 1040x A copyright; a literary, musical, or artistic composition; a letter; a memorandum; or similar property (such as drafts of speeches, recordings, transcripts, manuscripts, drawings, or photographs): Created by your personal efforts, Prepared or produced for you (in the case of a letter, memorandum, or similar property), or Received from a person who created the property or for whom the property was prepared under circumstances (for example, by gift) entitling you to the basis of the person who created the property, or for whom it was prepared or produced. Filing 1040x But, see the Tip below. Filing 1040x U. Filing 1040x S. Filing 1040x Government publications you got from the government for free or for less than the normal sales price or that you acquired under circumstances entitling you to the basis of someone who got the publications for free or for less than the normal sales price. Filing 1040x Any commodities derivative financial instrument (discussed later) held by a commodities derivatives dealer unless it meets both of the following requirements. Filing 1040x It is established to the satisfaction of the IRS that the instrument has no connection to the activities of the dealer as a dealer. Filing 1040x The instrument is clearly identified in the dealer's records as meeting (a) by the end of the day on which it was acquired, originated, or entered into. Filing 1040x Any hedging transaction (defined later) that is clearly identified as a hedging transaction by the end of the day on which it was acquired, originated, or entered into. Filing 1040x Supplies of a type you regularly use or consume in the ordinary course of your trade or business. Filing 1040x You can elect to treat as capital assets certain self-created musical compositions or copyrights you sold or exchanged. Filing 1040x See chapter 4 of Publication 550 for details. Filing 1040x Property held mainly for sale to customers. Filing 1040x   Stock in trade, inventory, and other property you hold mainly for sale to customers in your trade or business are not capital assets. Filing 1040x Inventories are discussed in Publication 538. Filing 1040x Business assets. Filing 1040x   Real property and depreciable property used in your trade or business or as rental property (including section 197 intangibles defined later under Dispositions of Intangible Property) are not capital assets. Filing 1040x The sale or disposition of business property is discussed in chapter 3. Filing 1040x Letters and memoranda. Filing 1040x   Letters, memoranda, and similar property (such as drafts of speeches, recordings, transcripts, manuscripts, drawings, or photographs) are not treated as capital assets (as discussed earlier) if your personal efforts created them or if they were prepared or produced for you. Filing 1040x Nor is this property a capital asset if your basis in it is determined by reference to the person who created it or the person for whom it was prepared. Filing 1040x For this purpose, letters and memoranda addressed to you are considered prepared for you. Filing 1040x If letters or memoranda are prepared by persons under your administrative control, they are considered prepared for you whether or not you review them. Filing 1040x Commodities derivative financial instrument. Filing 1040x   A commodities derivative financial instrument is a commodities contract or other financial instrument for commodities (other than a share of corporate stock, a beneficial interest in a partnership or trust, a note, bond, debenture, or other evidence of indebtedness, or a section 1256 contract) the value or settlement price of which is calculated or determined by reference to a specified index (as defined in section 1221(b) of the Internal Revenue Code). Filing 1040x Commodities derivative dealer. Filing 1040x   A commodities derivative dealer is a person who regularly offers to enter into, assume, offset, assign, or terminate positions in commodities derivative financial instruments with customers in the ordinary course of a trade or business. Filing 1040x Hedging transaction. Filing 1040x   A hedging transaction is any transaction you enter into in the normal course of your trade or business primarily to manage any of the following. Filing 1040x Risk of price changes or currency fluctuations involving ordinary property you hold or will hold. Filing 1040x Risk of interest rate or price changes or currency fluctuations for borrowings you make or will make, or ordinary obligations you incur or will incur. Filing 1040x Sales and Exchanges Between Related Persons This section discusses the rules that may apply to the sale or exchange of property between related persons. Filing 1040x If these rules apply, gains may be treated as ordinary income and losses may not be deductible. Filing 1040x See Transfers to Spouse in chapter 1 for rules that apply to spouses. Filing 1040x Gain Is Ordinary Income If a gain is recognized on the sale or exchange of property to a related person, the gain may be ordinary income even if the property is a capital asset. Filing 1040x It is ordinary income if the sale or exchange is a depreciable property transaction or a controlled partnership transaction. Filing 1040x Depreciable property transaction. Filing 1040x   Gain on the sale or exchange of property, including a leasehold or a patent application, that is depreciable property in the hands of the person who receives it is ordinary income if the transaction is either directly or indirectly between any of the following pairs of entities. Filing 1040x A person and the person's controlled entity or entities. Filing 1040x A taxpayer and any trust in which the taxpayer (or his or her spouse) is a beneficiary unless the beneficiary's interest in the trust is a remote contingent interest; that is, the value of the interest computed actuarially is 5% or less of the value of the trust property. Filing 1040x An executor and a beneficiary of an estate unless the sale or exchange is in satisfaction of a pecuniary bequest (a bequest for a sum of money). Filing 1040x An employer (or any person related to the employer under rules (1), (2), or (3)) and a welfare benefit fund (within the meaning of section 419(e) of the Internal Revenue Code) that is controlled directly or indirectly by the employer (or any person related to the employer). Filing 1040x Controlled entity. Filing 1040x   A person's controlled entity is either of the following. Filing 1040x A corporation in which more than 50% of the value of all outstanding stock, or a partnership in which more than 50% of the capital interest or profits interest, is directly or indirectly owned by or for that person. Filing 1040x An entity whose relationship with that person is one of the following. Filing 1040x A corporation and a partnership if the same persons own more than 50% in value of the outstanding stock of the corporation and more than 50% of the capital interest or profits interest in the partnership. Filing 1040x Two corporations that are members of the same controlled group as defined in section 1563(a) of the Internal Revenue Code, except that “more than 50%” is substituted for “at least 80%” in that definition. Filing 1040x Two S corporations, if the same persons own more than 50% in value of the outstanding stock of each corporation. Filing 1040x Two corporations, one of which is an S corporation, if the same persons own more than 50% in value of the outstanding stock of each corporation. Filing 1040x Controlled partnership transaction. Filing 1040x   A gain recognized in a controlled partnership transaction may be ordinary income. Filing 1040x The gain is ordinary income if it results from the sale or exchange of property that, in the hands of the party who receives it, is a noncapital asset such as trade accounts receivable, inventory, stock in trade, or depreciable or real property used in a trade or business. Filing 1040x   A controlled partnership transaction is a transaction directly or indirectly between either of the following pairs of entities. Filing 1040x A partnership and a person who directly or indirectly owns more than 50% of the capital interest or profits interest in the partnership. Filing 1040x Two partnerships, if the same persons directly or indirectly own more than 50% of the capital interests or profits interests in both partnerships. Filing 1040x Determining ownership. Filing 1040x   In the transactions under Depreciable property transaction and Controlled partnership transaction, earlier, use the following rules to determine the ownership of stock or a partnership interest. Filing 1040x Stock or a partnership interest directly or indirectly owned by or for a corporation, partnership, estate, or trust is considered owned proportionately by or for its shareholders, partners, or beneficiaries. Filing 1040x (However, for a partnership interest owned by or for a C corporation, this applies only to shareholders who directly or indirectly own 5% or more in value of the stock of the corporation. Filing 1040x ) An individual is considered as owning the stock or partnership interest directly or indirectly owned by or for his or her family. Filing 1040x Family includes only brothers, sisters, half-brothers, half-sisters, spouse, ancestors, and lineal descendants. Filing 1040x For purposes of applying (1) or (2), above, stock or a partnership interest constructively owned by a person under (1) is treated as actually owned by that person. Filing 1040x But stock or a partnership interest constructively owned by an individual under (2) is not treated as owned by the individual for reapplying (2) to make another person the constructive owner of that stock or partnership interest. Filing 1040x Nondeductible Loss A loss on the sale or exchange of property between related persons is not deductible. Filing 1040x This applies to both direct and indirect transactions, but not to distributions of property from a corporation in a complete liquidation. Filing 1040x For the list of related persons, see Related persons next. Filing 1040x If a sale or exchange is between any of these related persons and involves the lump-sum sale of a number of blocks of stock or pieces of property, the gain or loss must be figured separately for each block of stock or piece of property. Filing 1040x The gain on each item is taxable. Filing 1040x The loss on any item is nondeductible. Filing 1040x Gains from the sales of any of these items may not be offset by losses on the sales of any of the other items. Filing 1040x Related persons. Filing 1040x   The following is a list of related persons. Filing 1040x Members of a family, including only brothers, sisters, half-brothers, half-sisters, spouse, ancestors (parents, grandparents, etc. Filing 1040x ), and lineal descendants (children, grandchildren, etc. Filing 1040x ). Filing 1040x An individual and a corporation if the individual directly or indirectly owns more than 50% in value of the outstanding stock of the corporation. Filing 1040x Two corporations that are members of the same controlled group as defined in section 267(f) of the Internal Revenue Code. Filing 1040x A trust fiduciary and a corporation if the trust or the grantor of the trust directly or indirectly owns more than 50% in value of the outstanding stock of the corporation. Filing 1040x A grantor and fiduciary, and the fiduciary and beneficiary, of any trust. Filing 1040x Fiduciaries of two different trusts, and the fiduciary and beneficiary of two different trusts, if the same person is the grantor of both trusts. Filing 1040x A tax-exempt educational or charitable organization and a person who directly or indirectly controls the organization, or a member of that person's family. Filing 1040x A corporation and a partnership if the same persons own more than 50% in value of the outstanding stock of the corporation and more than 50% of the capital interest or profits interest in the partnership. Filing 1040x Two S corporations if the same persons own more than 50% in value of the outstanding stock of each corporation. Filing 1040x Two corporations, one of which is an S corporation, if the same persons own more than 50% in value of the outstanding stock of each corporation. Filing 1040x An executor and a beneficiary of an estate unless the sale or exchange is in satisfaction of a pecuniary bequest. Filing 1040x Two partnerships if the same persons directly or indirectly own more than 50% of the capital interests or profits interests in both partnerships. Filing 1040x A person and a partnership if the person directly or indirectly owns more than 50% of the capital interest or profits interest in the partnership. Filing 1040x Partnership interests. Filing 1040x   The nondeductible loss rule does not apply to a sale or exchange of an interest in the partnership between the related persons described in (12) or (13) above. Filing 1040x Controlled groups. Filing 1040x   Losses on transactions between members of the same controlled group described in (3) earlier are deferred rather than denied. Filing 1040x   For more information, see section 267(f) of the Internal Revenue Code. Filing 1040x Ownership of stock or partnership interests. Filing 1040x   In determining whether an individual directly or indirectly owns any of the outstanding stock of a corporation or an interest in a partnership for a loss on a sale or exchange, the following rules apply. Filing 1040x Stock or a partnership interest directly or indirectly owned by or for a corporation, partnership, estate, or trust is considered owned proportionately by or for its shareholders, partners, or beneficiaries. Filing 1040x (However, for a partnership interest owned by or for a C corporation, this applies only to shareholders who directly or indirectly own 5% or more in value of the stock of the corporation. Filing 1040x ) An individual is considered as owning the stock or partnership interest directly or indirectly owned by or for his or her family. Filing 1040x Family includes only brothers, sisters, half-brothers, half-sisters, spouse, ancestors, and lineal descendants. Filing 1040x An individual owning (other than by applying (2)) any stock in a corporation is considered to own the stock directly or indirectly owned by or for his or her partner. Filing 1040x For purposes of applying (1), (2), or (3), stock or a partnership interest constructively owned by a person under (1) is treated as actually owned by that person. Filing 1040x But stock or a partnership interest constructively owned by an individual under (2) or (3) is not treated as owned by the individual for reapplying either (2) or (3) to make another person the constructive owner of that stock or partnership interest. Filing 1040x Indirect transactions. Filing 1040x   You cannot deduct your loss on the sale of stock through your broker if under a prearranged plan a related person or entity buys the same stock you had owned. Filing 1040x This does not apply to a cross-trade between related parties through an exchange that is purely coincidental and is not prearranged. Filing 1040x Property received from a related person. Filing 1040x   If, in a purchase or exchange, you received property from a related person who had a loss that was not allowable and you later sell or exchange the property at a gain, you recognize the gain only to the extent it is more than the loss previously disallowed to the related person. Filing 1040x This rule applies only to the original transferee. Filing 1040x Example 1. Filing 1040x Your brother sold stock to you for $7,600. Filing 1040x His cost basis was $10,000. Filing 1040x His loss of $2,400 was not deductible. Filing 1040x You later sell the same stock to an unrelated party for $10,500, realizing a gain of $2,900 ($10,500 − $7,600). Filing 1040x Your recognized gain is only $500, the gain that is more than the $2,400 loss not allowed to your brother. Filing 1040x Example 2. Filing 1040x Assume the same facts as in Example 1, except that you sell the stock for $6,900 instead of $10,500. Filing 1040x Your recognized loss is only $700 ($7,600 − $6,900). Filing 1040x You cannot deduct the loss not allowed to your brother. Filing 1040x Other Dispositions This section discusses rules for determining the treatment of gain or loss from various dispositions of property. Filing 1040x Sale of a Business The sale of a business usually is not a sale of one asset. Filing 1040x Instead, all the assets of the business are sold. Filing 1040x Generally, when this occurs, each asset is treated as being sold separately for determining the treatment of gain or loss. Filing 1040x A business usually has many assets. Filing 1040x When sold, these assets must be classified as capital assets, depreciable property used in the business, real property used in the business, or property held for sale to customers, such as inventory or stock in trade. Filing 1040x The gain or loss on each asset is figured separately. Filing 1040x The sale of capital assets results in capital gain or loss. Filing 1040x The sale of real property or depreciable property used in the business and held longer than 1 year results in gain or loss from a section 1231 transaction (discussed in chapter 3). Filing 1040x The sale of inventory results in ordinary income or loss. Filing 1040x Partnership interests. Filing 1040x   An interest in a partnership or joint venture is treated as a capital asset when sold. Filing 1040x The part of any gain or loss from unrealized receivables or inventory items will be treated as ordinary gain or loss. Filing 1040x For more information, see Disposition of Partner's Interest in Publication 541. Filing 1040x Corporation interests. Filing 1040x   Your interest in a corporation is represented by stock certificates. Filing 1040x When you sell these certificates, you usually realize capital gain or loss. Filing 1040x For information on the sale of stock, see chapter 4 in Publication 550. Filing 1040x Corporate liquidations. Filing 1040x   Corporate liquidations of property generally are treated as a sale or exchange. Filing 1040x Gain or loss generally is recognized by the corporation on a liquidating sale of its assets. Filing 1040x Gain or loss generally is recognized also on a liquidating distribution of assets as if the corporation sold the assets to the distributee at fair market value. Filing 1040x   In certain cases in which the distributee is a corporation in control of the distributing corporation, the distribution may not be taxable. Filing 1040x For more information, see section 332 of the Internal Revenue Code and the related regulations. Filing 1040x Allocation of consideration paid for a business. Filing 1040x   The sale of a trade or business for a lump sum is considered a sale of each individual asset rather than of a single asset. Filing 1040x Except for assets exchanged under any nontaxable exchange rules, both the buyer and seller of a business must use the residual method (explained later) to allocate the consideration to each business asset transferred. Filing 1040x This method determines gain or loss from the transfer of each asset and how much of the consideration is for goodwill and certain other intangible property. Filing 1040x It also determines the buyer's basis in the business assets. Filing 1040x Consideration. Filing 1040x   The buyer's consideration is the cost of the assets acquired. Filing 1040x The seller's consideration is the amount realized (money plus the fair market value of property received) from the sale of assets. Filing 1040x Residual method. Filing 1040x   The residual method must be used for any transfer of a group of assets that constitutes a trade or business and for which the buyer's basis is determined only by the amount paid for the assets. Filing 1040x This applies to both direct and indirect transfers, such as the sale of a business or the sale of a partnership interest in which the basis of the buyer's share of the partnership assets is adjusted for the amount paid under section 743(b) of the Internal Revenue Code. Filing 1040x Section 743(b) applies if a partnership has an election in effect under section 754 of the Internal Revenue Code. Filing 1040x   A group of assets constitutes a trade or business if either of the following applies. Filing 1040x Goodwill or going concern value could, under any circumstances, attach to them. Filing 1040x The use of the assets would constitute an active trade or business under section 355 of the Internal Revenue Code. Filing 1040x   The residual method provides for the consideration to be reduced first by the amount of Class I assets (defined below). Filing 1040x The consideration remaining after this reduction must be allocated among the various business assets in a certain order. Filing 1040x See Classes of assets next for the complete order. Filing 1040x Classes of assets. Filing 1040x   The following definitions are the classifications for deemed or actual asset acquisitions. Filing 1040x Allocate the consideration among the assets in the following order. Filing 1040x The amount allocated to an asset, other than a Class VII asset, cannot exceed its fair market value on the purchase date. Filing 1040x The amount you can allocate to an asset also is subject to any applicable limits under the Internal Revenue Code or general principles of tax law. Filing 1040x Class I assets are cash and general deposit accounts (including checking and savings accounts but excluding certificates of deposit). Filing 1040x Class II assets are certificates of deposit, U. Filing 1040x S. Filing 1040x Government securities, foreign currency, and actively traded personal property, including stock and securities. Filing 1040x Class III assets are accounts receivable, other debt instruments, and assets that you mark to market at least annually for federal income tax purposes. Filing 1040x However, see section 1. Filing 1040x 338-6(b)(2)(iii) of the regulations for exceptions that apply to debt instruments issued by persons related to a target corporation, contingent debt instruments, and debt instruments convertible into stock or other property. Filing 1040x Class IV assets are property of a kind that would properly be included in inventory if on hand at the end of the tax year or property held by the taxpayer primarily for sale to customers in the ordinary course of business. Filing 1040x Class V assets are all assets other than Class I, II, III, IV, VI, and VII assets. Filing 1040x    Note. Filing 1040x Furniture and fixtures, buildings, land, vehicles, and equipment, which constitute all or part of a trade or business are generally Class V assets. Filing 1040x Class VI assets are section 197 intangibles (other than goodwill and going concern value). Filing 1040x Class VII assets are goodwill and going concern value (whether the goodwill or going concern value qualifies as a section 197 intangible). Filing 1040x   If an asset described in one of the classifications described above can be included in more than one class, include it in the lower numbered class. Filing 1040x For example, if an asset is described in both Class II and Class IV, choose Class II. Filing 1040x Example. Filing 1040x The total paid in the sale of the assets of Company SKB is $21,000. Filing 1040x No cash or deposit accounts or similar accounts were sold. Filing 1040x The company's U. Filing 1040x S. Filing 1040x Government securities sold had a fair market value of $3,200. Filing 1040x The only other asset transferred (other than goodwill and going concern value) was inventory with a fair market value of $15,000. Filing 1040x Of the $21,000 paid for the assets of Company SKB, $3,200 is allocated to U. Filing 1040x S. Filing 1040x Government securities, $15,000 to inventory assets, and the remaining $2,800 to goodwill and going concern value. Filing 1040x Agreement. Filing 1040x   The buyer and seller may enter into a written agreement as to the allocation of any consideration or the fair market value of any of the assets. Filing 1040x This agreement is binding on both parties unless the IRS determines the amounts are not appropriate. Filing 1040x Reporting requirement. Filing 1040x   Both the buyer and seller involved in the sale of business assets must report to the IRS the allocation of the sales price among section 197 intangibles and the other business assets. Filing 1040x Use Form 8594, Asset Acquisition Statement Under Section 1060, to provide this information. Filing 1040x Generally, the buyer and seller should each attach Form 8594 to their federal income tax return for the year in which the sale occurred. Filing 1040x See the Instructions for Form 8594. Filing 1040x Dispositions of Intangible Property Intangible property is any personal property that has value but cannot be seen or touched. Filing 1040x It includes such items as patents, copyrights, and the goodwill value of a business. Filing 1040x Gain or loss on the sale or exchange of amortizable or depreciable intangible property held longer than 1 year (other than an amount recaptured as ordinary income) is a section 1231 gain or loss. Filing 1040x The treatment of section 1231 gain or loss and the recapture of amortization and depreciation as ordinary income are explained in chapter 3. Filing 1040x See chapter 8 of Publication 535, Business Expenses, for information on amortizable intangible property and chapter 1 of Publication 946, How To Depreciate Property, for information on intangible property that can and cannot be depreciated. Filing 1040x Gain or loss on dispositions of other intangible property is ordinary or capital depending on whether the property is a capital asset or a noncapital asset. Filing 1040x The following discussions explain special rules that apply to certain dispositions of intangible property. Filing 1040x Section 197 Intangibles Section 197 intangibles are certain intangible assets acquired after August 10, 1993 (after July 25, 1991, if chosen), and held in connection with the conduct of a trade or business or an activity entered into for profit whose costs are amortized over 15 years. Filing 1040x They include the following assets. Filing 1040x Goodwill. Filing 1040x Going concern value. Filing 1040x Workforce in place. Filing 1040x Business books and records, operating systems, and other information bases. Filing 1040x Patents, copyrights, formulas, processes, designs, patterns, know how, formats, and similar items. Filing 1040x Customer-based intangibles. Filing 1040x Supplier-based intangibles. Filing 1040x Licenses, permits, and other rights granted by a governmental unit. Filing 1040x Covenants not to compete entered into in connection with the acquisition of a business. Filing 1040x Franchises, trademarks, and trade names. Filing 1040x See chapter 8 of Publication 535 for a description of each intangible. Filing 1040x Dispositions. Filing 1040x   You cannot deduct a loss from the disposition or worthlessness of a section 197 intangible you acquired in the same transaction (or series of related transactions) as another section 197 intangible you still hold. Filing 1040x Instead, you must increase the adjusted basis of your retained section 197 intangible by the nondeductible loss. Filing 1040x If you retain more than one section 197 intangible, increase each intangible's adjusted basis. Filing 1040x Figure the increase by multiplying the nondeductible loss by a fraction, the numerator (top number) of which is the retained intangible's adjusted basis on the date of the loss and the denominator (bottom number) of which is the total adjusted basis of all retained intangibles on the date of the loss. Filing 1040x   In applying this rule, members of the same controlled group of corporations and commonly controlled businesses are treated as a single entity. Filing 1040x For example, a corporation cannot deduct a loss on the sale of a section 197 intangible if, after the sale, a member of the same controlled group retains other section 197 intangibles acquired in the same transaction as the intangible sold. Filing 1040x Covenant not to compete. Filing 1040x   A covenant not to compete (or similar arrangement) that is a section 197 intangible cannot be treated as disposed of or worthless before you have disposed of your entire interest in the trade or business for which the covenant was entered into. Filing 1040x Members of the same controlled group of corporations and commonly controlled businesses are treated as a single entity in determining whether a member has disposed of its entire interest in a trade or business. Filing 1040x Anti-churning rules. Filing 1040x   Anti-churning rules prevent a taxpayer from converting section 197 intangibles that do not qualify for amortization into property that would qualify for amortization. Filing 1040x However, these rules do not apply to part of the basis of property acquired by certain related persons if the transferor elects to do both the following. Filing 1040x Recognize gain on the transfer of the property. Filing 1040x Pay income tax on the gain at the highest tax rate. Filing 1040x   If the transferor is a partnership or S corporation, the partnership or S corporation (not the partners or shareholders) can make the election. Filing 1040x But each partner or shareholder must pay the tax on his or her share of gain. Filing 1040x   To make the election, you, as the transferor, must attach a statement containing certain information to your income tax return for the year of the transfer. Filing 1040x You must file the tax return by the due date (including extensions). Filing 1040x You must also notify the transferee of the election in writing by the due date of the return. Filing 1040x   If you timely filed your return without making the election, you can make the election by filing an amended return within 6 months after the due date of the return (excluding extensions). Filing 1040x Attach the statement to the amended return and write “Filed pursuant to section 301. Filing 1040x 9100-2” at the top of the statement. Filing 1040x File the amended return at the same address the original return was filed. Filing 1040x For more information about making the election, see Regulations section 1. Filing 1040x 197-2(h)(9). Filing 1040x For information about reporting the tax on your income tax return, see the Instructions for Form 4797. Filing 1040x Patents The transfer of a patent by an individual is treated as a sale or exchange of a capital asset held longer than 1 year. Filing 1040x This applies even if the payments for the patent are made periodically during the transferee's use or are contingent on the productivity, use, or disposition of the patent. Filing 1040x For information on the treatment of gain or loss on the transfer of capital assets, see chapter 4. Filing 1040x This treatment applies to your transfer of a patent if you meet all the following conditions. Filing 1040x You are the holder of the patent. Filing 1040x You transfer the patent other than by gift, inheritance, or devise. Filing 1040x You transfer all substantial rights to the patent or an undivided interest in all such rights. Filing 1040x You do not transfer the patent to a related person. Filing 1040x Holder. Filing 1040x   You are the holder of a patent if you are either of the following. Filing 1040x The individual whose effort created the patent property and who qualifies as the original and first inventor. Filing 1040x The individual who bought an interest in the patent from the inventor before the invention was tested and operated successfully under operating conditions and who is neither related to, nor the employer of, the inventor. Filing 1040x All substantial rights. Filing 1040x   All substantial rights to patent property are all rights that have value when they are transferred. Filing 1040x A security interest (such as a lien), or a reservation calling for forfeiture for nonperformance, is not treated as a substantial right for these rules and may be kept by you as the holder of the patent. Filing 1040x   All substantial rights to a patent are not transferred if any of the following apply to the transfer. Filing 1040x The rights are limited geographically within a country. Filing 1040x The rights are limited to a period less than the remaining life of the patent. Filing 1040x The rights are limited to fields of use within trades or industries and are less than all the rights that exist and have value at the time of the transfer. Filing 1040x The rights are less than all the claims or inventions covered by the patent that exist and have value at the time of the transfer. Filing 1040x Related persons. Filing 1040x   This tax treatment does not apply if the transfer is directly or indirectly between you and a related person as defined earlier in the list under Nondeductible Loss, with the following changes. Filing 1040x Members of your family include your spouse, ancestors, and lineal descendants, but not your brothers, sisters, half-brothers, or half-sisters. Filing 1040x Substitute “25% or more” ownership for “more than 50%. Filing 1040x ”   If you fit within the definition of a related person independent of family status, the brother-sister exception in (1), earlier, does not apply. Filing 1040x For example, a transfer between a brother and a sister as beneficiary and fiduciary of the same trust is a transfer between related persons. Filing 1040x The brother-sister exception does not apply because the trust relationship is independent of family status. Filing 1040x Franchise, Trademark, or Trade Name If you transfer or renew a franchise, trademark, or trade name for a price contingent on its productivity, use, or disposition, the amount you receive generally is treated as an amount realized from the sale of a noncapital asset. Filing 1040x A franchise includes an agreement that gives one of the parties the right to distribute, sell, or provide goods, services, or facilities within a specified area. Filing 1040x Significant power, right, or continuing interest. Filing 1040x   If you keep any significant power, right, or continuing interest in the subject matter of a franchise, trademark, or trade name that you transfer or renew, the amount you receive is ordinary royalty income rather than an amount realized from a sale or exchange. Filing 1040x   A significant power, right, or continuing interest in a franchise, trademark, or trade name includes, but is not limited to, the following rights in the transferred interest. Filing 1040x A right to disapprove any assignment of the interest, or any part of it. Filing 1040x A right to end the agreement at will. Filing 1040x A right to set standards of quality for products used or sold, or for services provided, and for the equipment and facilities used to promote such products or services. Filing 1040x A right to make the recipient sell or advertise only your products or services. Filing 1040x A right to make the recipient buy most supplies and equipment from you. Filing 1040x A right to receive payments based on the productivity, use, or disposition of the transferred item of interest if those payments are a substantial part of the transfer agreement. Filing 1040x Subdivision of Land If you own a tract of land and, to sell or exchange it, you subdivide it into individual lots or parcels, the gain normally is ordinary income. Filing 1040x However, you may receive capital gain treatment on at least part of the proceeds provided you meet certain requirements. Filing 1040x See section 1237 of the Internal Revenue Code. Filing 1040x Timber Standing timber held as investment property is a capital asset. Filing 1040x Gain or loss from its sale is reported as a capital gain or loss on Form 8949, and Schedule D (Form 1040), as applicable. Filing 1040x If you held the timber primarily for sale to customers, it is not a capital asset. Filing 1040x Gain or loss on its sale is ordinary business income or loss. Filing 1040x It is reported in the gross receipts or sales and cost of goods sold items of your return. Filing 1040x Farmers who cut timber on their land and sell it as logs, firewood, or pulpwood usually have no cost or other basis for that timber. Filing 1040x These sales constitute a very minor part of their farm businesses. Filing 1040x In these cases, amounts realized from such sales, and the expenses of cutting, hauling, etc. Filing 1040x , are ordinary farm income and expenses reported on Schedule F (Form 1040), Profit or Loss From Farming. Filing 1040x Different rules apply if you owned the timber longer than 1 year and elect to either: Treat timber cutting as a sale or exchange, or Enter into a cutting contract. Filing 1040x Timber is considered cut on the date when, in the ordinary course of business, the quantity of felled timber is first definitely determined. Filing 1040x This is true whether the timber is cut under contract or whether you cut it yourself. Filing 1040x Under the rules discussed below, disposition of the timber is treated as a section 1231 transaction. Filing 1040x See chapter 3. Filing 1040x Gain or loss is reported on Form 4797. Filing 1040x Christmas trees. Filing 1040x   Evergreen trees, such as Christmas trees, that are more than 6 years old when severed from their roots and sold for ornamental purposes are included in the term timber. Filing 1040x They qualify for both rules discussed below. Filing 1040x Election to treat cutting as a sale or exchange. Filing 1040x   Under the general rule, the cutting of timber results in no gain or loss. Filing 1040x It is not until a sale or exchange occurs that gain or loss is realized. Filing 1040x But if you owned or had a contractual right to cut timber, you can elect to treat the cutting of timber as a section 1231 transaction in the year the timber is cut. Filing 1040x Even though the cut timber is not actually sold or exchanged, you report your gain or loss on the cutting for the year the timber is cut. Filing 1040x Any later sale results in ordinary business income or loss. Filing 1040x See Example, later. Filing 1040x   To elect this treatment, you must: Own or hold a contractual right to cut the timber for a period of more than 1 year before it is cut, and Cut the timber for sale or for use in your trade or business. Filing 1040x Making the election. Filing 1040x   You make the election on your return for the year the cutting takes place by including in income the gain or loss on the cutting and including a computation of the gain or loss. Filing 1040x You do not have to make the election in the first year you cut timber. Filing 1040x You can make it in any year to which the election would apply. Filing 1040x If the timber is partnership property, the election is made on the partnership return. Filing 1040x This election cannot be made on an amended return. Filing 1040x   Once you have made the election, it remains in effect for all later years unless you cancel it. Filing 1040x   If you previously elected to treat the cutting of timber as a sale or exchange, you may revoke this election without the consent of the IRS. Filing 1040x The prior election (and revocation) is disregarded for purposes of making a subsequent election. Filing 1040x See Form T (Timber), Forest Activities Schedule, for more information. Filing 1040x Gain or loss. Filing 1040x   Your gain or loss on the cutting of standing timber is the difference between its adjusted basis for depletion and its fair market value on the first day of your tax year in which it is cut. Filing 1040x   Your adjusted basis for depletion of cut timber is based on the number of units (feet board measure, log scale, or other units) of timber cut during the tax year and considered to be sold or exchanged. Filing 1040x Your adjusted basis for depletion is also based on the depletion unit of timber in the account used for the cut timber, and should be figured in the same manner as shown in section 611 of the Internal Revenue Code and the related regulations. Filing 1040x   Timber depletion is discussed in chapter 9 of Publication 535. Filing 1040x Example. Filing 1040x In April 2013, you had owned 4,000 MBF (1,000 board feet) of standing timber longer than 1 year. Filing 1040x It had an adjusted basis for depletion of $40 per MBF. Filing 1040x You are a calendar year taxpayer. Filing 1040x On January 1, 2013, the timber had a fair market value (FMV) of $350 per MBF. Filing 1040x It was cut in April for sale. Filing 1040x On your 2013 tax return, you elect to treat the cutting of the timber as a sale or exchange. Filing 1040x You report the difference between the fair market value and your adjusted basis for depletion as a gain. Filing 1040x This amount is reported on Form 4797 along with your other section 1231 gains and losses to figure whether it is treated as capital gain or as ordinary gain. Filing 1040x You figure your gain as follows. Filing 1040x FMV of timber January 1, 2013 $1,400,000 Minus: Adjusted basis for depletion 160,000 Section 1231 gain $1,240,000 The fair market value becomes your basis in the cut timber and a later sale of the cut timber including any by-product or tree tops will result in ordinary business income or loss. Filing 1040x Outright sales of timber. Filing 1040x   Outright sales of timber by landowners qualify for capital gains treatment using rules similar to the rules for certain disposal of timber under a contract with retained economic interest (defined below). Filing 1040x However, for outright sales, the date of disposal is not deemed to be the date the timber is cut because the landowner can elect to treat the payment date as the date of disposal (see below). Filing 1040x Cutting contract. Filing 1040x   You must treat the disposal of standing timber under a cutting contract as a section 1231 transaction if all the following apply to you. Filing 1040x You are the owner of the timber. Filing 1040x You held the timber longer than 1 year before its disposal. Filing 1040x You kept an economic interest in the timber. Filing 1040x   You have kept an economic interest in standing timber if, under the cutting contract, the expected return on your investment is conditioned on the cutting of the timber. Filing 1040x   The difference between the amount realized from the disposal of the timber and its adjusted basis for depletion is treated as gain or loss on its sale. Filing 1040x Include this amount on Form 4797 along with your other section 1231 gains or losses to figure whether it is treated as capital or ordinary gain or loss. Filing 1040x Date of disposal. Filing 1040x   The date of disposal is the date the timber is cut. Filing 1040x However, for outright sales by landowners or if you receive payment under the contract before the timber is cut, you can elect to treat the date of payment as the date of disposal. Filing 1040x   This election applies only to figure the holding period of the timber. Filing 1040x It has no effect on the time for reporting gain or loss (generally when the timber is sold or exchanged). Filing 1040x   To make this election, attach a statement to the tax return filed by the due date (including extensions) for the year payment is received. Filing 1040x The statement must identify the advance payments subject to the election and the contract under which they were made. Filing 1040x   If you timely filed your return for the year you received payment without making the election, you still can make the election by filing an amended return within 6 months after the due date for that year's return (excluding extensions). Filing 1040x Attach the statement to the amended return and write “Filed pursuant to section 301. Filing 1040x 9100-2” at the top of the statement. Filing 1040x File the amended return at the same address the original return was filed. Filing 1040x Owner. Filing 1040x   The owner of timber is any person who owns an interest in it, including a sublessor and the holder of a contract to cut the timber. Filing 1040x You own an interest in timber if you have the right to cut it for sale on your own account or for use in your business. Filing 1040x Tree stumps. Filing 1040x   Tree stumps are a capital asset if they are on land held by an investor who is not in the timber or stump business as a buyer, seller, or processor. Filing 1040x Gain from the sale of stumps sold in one lot by such a holder is taxed as a capital gain. Filing 1040x However, tree stumps held by timber operators after the saleable standing timber was cut and removed from the land are considered by-products. Filing 1040x Gain from the sale of stumps in lots or tonnage by such operators is taxed as ordinary income. Filing 1040x   See Form T (Timber) and its separate instructions for more information about dispositions of timber. Filing 1040x Precious Metals and Stones, Stamps, and Coins Gold, silver, gems, stamps, coins, etc. Filing 1040x , are capital assets except when they are held for sale by a dealer. Filing 1040x Any gain or loss from their sale or exchange generally is a capital gain or loss. Filing 1040x If you are a dealer, the amount received from the sale is ordinary business income. Filing 1040x Coal and Iron Ore You must treat the disposal of coal (including lignite) or iron ore mined in the United States as a section 1231 transaction if both the following apply to you. Filing 1040x You owned the coal or iron ore longer than 1 year before its disposal. Filing 1040x You kept an economic interest in the coal or iron ore. Filing 1040x For this rule, the date the coal or iron ore is mined is considered the date of its disposal. Filing 1040x Your gain or loss is the difference between the amount realized from disposal of the coal or iron ore and the adjusted basis you use to figure cost depletion (increased by certain expenses not allowed as deductions for the tax year). Filing 1040x This amount is included on Form 4797 along with your other section 1231 gains and losses. Filing 1040x You are considered an owner if you own or sublet an economic interest in the coal or iron ore in place. Filing 1040x If you own only an option to buy the coal in place, you do not qualify as an owner. Filing 1040x In addition, this gain or loss treatment does not apply to income realized by an owner who is a co-adventurer, partner, or principal in the mining of coal or iron ore. Filing 1040x The expenses of making and administering the contract under which the coal or iron ore was disposed of and the expenses of preserving the economic interest kept under the contract are not allowed as deductions in figuring taxable income. Filing 1040x Rather, their total, along with the adjusted depletion basis, is deducted from the amount received to determine gain. Filing 1040x If the total of these expenses plus the adjusted depletion basis is more than the amount received, the result is a loss. Filing 1040x Special rule. Filing 1040x   The above treatment does not apply if you directly or indirectly dispose of the iron ore or coal to any of the following persons. Filing 1040x A related person whose relationship to you would result in the disallowance of a loss (see Nondeductible Loss under Sales and Exchanges Between Related Persons, earlier). Filing 1040x An individual, trust, estate, partnership, association, company, or corporation owned or controlled directly or indirectly by the same interests that own or control your business. Filing 1040x Conversion Transactions Recognized gain on the disposition or termination of any position held as part of certain conversion transactions is treated as ordinary income. Filing 1040x This applies if substantially all your expected return is attributable to the time value of your net investment (like interest on a loan) and the transaction is any of the following. Filing 1040x An applicable straddle (generally, any set of offsetting positions with respect to personal property, including stock). Filing 1040x A transaction in which you acquire property and, at or about the same time, you contract to sell the same or substantially identical property at a specified price. Filing 1040x Any other transaction that is marketed and sold as producing capital gain from a transaction in which substantially all of your expected return is due to the time value of your net investment. Filing 1040x For more information, see chapter 4 of Publication 550. Filing 1040x Prev  Up  Next   Home   More Online Publications
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The Filing 1040x

Filing 1040x Index Symbols 10% owners, Ten-percent owners. Filing 1040x 501(c) organizations, Foreign Governments and Certain Other Foreign Organizations 80/20 company, Dividends paid by a domestic corporation (an existing 80/20 company). Filing 1040x A Acceptance agent, Unexpected payment. Filing 1040x Accounts, offshore, Offshore accounts. Filing 1040x Alien Illegal, Illegal aliens. Filing 1040x Nonresident, Nonresident alien. Filing 1040x Resident, Resident alien. Filing 1040x Alimony, Pensions, Annuities, and Alimony (Income Code 14), Alimony payments. Filing 1040x Allocation information, Failure to provide allocation information. Filing 1040x American Samoa, U. Filing 1040x S. Filing 1040x Virgin Islands and American Samoa corporations. Filing 1040x Amount to withhold, Determination of amount to withhold. Filing 1040x Annuities, Pensions, Annuities, and Alimony (Income Code 14), Pensions and annuities. Filing 1040x Artists and athletes Earnings of, Artists and Athletes (Income Codes 42 and 43) Special events and promotions, Artists and Athletes (Income Codes 42 and 43) Assistance (see Tax help) Awards, Other Grants, Prizes, and Awards B Backup withholding, Withholding and Reporting Obligations, Primary NRA and Form 1099 responsibility assumed. Filing 1040x Banks, interest received by, Banks. Filing 1040x Beneficial owner, Beneficial Owners Bonds sold between interest dates, Sales of bonds between interest dates. Filing 1040x Branch profits tax, Corporation subject to branch profits tax. Filing 1040x C Canada, Exception 3. Filing 1040x , Deposit interest paid to nonresident alien individuals in 2012. Filing 1040x , Deposit interest paid to certain nonresident alien individuals in 2013. Filing 1040x Capital gains, Capital gains (Income Code 9). Filing 1040x Central withholding agreements, Income Code 43. Filing 1040x Consent dividends, Consent dividends. Filing 1040x , Consent dividends. Filing 1040x Contingent interest, Contingent interest. Filing 1040x Controlled foreign corporations, interest paid to, Controlled foreign corporations. Filing 1040x Controlling foreign corporations, Interest paid to controlling foreign corporations (Income Code 3). Filing 1040x Covenant not to compete, Covenant not to compete. Filing 1040x Crew members, Crew members. Filing 1040x D Dependent personal services, Pay for dependent personal services (Income Code 17). Filing 1040x Allowance for personal exemptions, Withholding exemptions. Filing 1040x Defined, Pay for dependent personal services (Income Code 17). Filing 1040x Exempt from withholding, Graduated rates. Filing 1040x Depositing taxes How to, Depositing Withheld Taxes When to, When Deposits Are Required Deposits, Interest on deposits (Income Code 29). Filing 1040x Disregarded entities, Disregarded entities. Filing 1040x Dividends Direct dividend rate, Dividends qualifying for direct dividend rate (Income Code 7). Filing 1040x Domestic corporation, Dividends paid by a domestic corporation (an existing 80/20 company). Filing 1040x Foreign corporations, Dividends paid by foreign corporations (Income Code 8). Filing 1040x In general, Dividends Documentary evidence, Documentary evidence. Filing 1040x , Documentary Evidence, Documentary evidence. Filing 1040x Documentation From foreign beneficial owners and U. Filing 1040x S. Filing 1040x payees, Documentation From foreign intermediaries and foreign flow-through entities, Foreign Intermediaries and Foreign Flow-Through Entities Presumptions in the absence of, Presumption Rules Qualified intermediaries, Documentation. Filing 1040x E Effectively connected income, Effectively Connected Income Defined, Effectively Connected Income Foreign partners, Partnership Withholding on Effectively Connected Income EFTPS, Electronic deposit requirement. Filing 1040x Electronic deposit rules, Electronic deposit requirement. Filing 1040x Employees, Employees. Filing 1040x , Employee. Filing 1040x Employer, Employer. Filing 1040x F Federal unemployment tax, Federal unemployment tax (FUTA). Filing 1040x Fellowship grants, Scholarships and Fellowship Grants (Income Code 15) Fellowship income, Scholarships, fellowships, and grants. Filing 1040x Financial institutions, Branches of financial institutions. Filing 1040x FIRPTA withholding, U. Filing 1040x S. Filing 1040x real property interest. Filing 1040x , U. Filing 1040x S. Filing 1040x Real Property Interest Fiscally transparent entity, Fiscally transparent entity. Filing 1040x Fixed or determinable annual or periodic income, Fixed or Determinable Annual or Periodical Income (FDAP) Flow-through entities, Flow-Through Entities, Nonqualified Intermediaries Foreign, Foreign partner. Filing 1040x 501(c) organizations, Foreign Governments and Certain Other Foreign Organizations Bank, U. Filing 1040x S. Filing 1040x branches of foreign banks and foreign insurance companies. Filing 1040x , Income paid to U. Filing 1040x S. Filing 1040x branch of foreign bank or insurance company. Filing 1040x Charitable organizations, Other foreign organizations, associations, and charitable institutions. Filing 1040x Corporations, Foreign corporations. Filing 1040x Governments, Foreign Governments and Certain Other Foreign Organizations Insurance company, U. Filing 1040x S. Filing 1040x branches of foreign banks and foreign insurance companies. Filing 1040x , Income paid to U. Filing 1040x S. Filing 1040x branch of foreign bank or insurance company. Filing 1040x Intermediary, Foreign Intermediaries Organizations and associations, Other foreign organizations, associations, and charitable institutions. Filing 1040x Partner, Who Must Withhold Partnerships, nonwithholding, Foreign partnerships. Filing 1040x Person, Foreign Persons Private foundation, Foreign private foundations. Filing 1040x , Foreign Governments and Certain Other Foreign Organizations Status, Establishment of foreign status. Filing 1040x Trusts, Foreign simple and grantor trust. Filing 1040x Form 1042, Withholding and Reporting Obligations, Form 1042 filing. Filing 1040x , Responsibilities of WT. Filing 1040x , Form 1042. Filing 1040x 1042-S, Withholding and Reporting Obligations, Form 1042-S reporting. Filing 1040x , Form 1042-S reporting. Filing 1040x , Form 1042 filing. Filing 1040x , Form 1042-S. Filing 1040x 1099, Withholding and Reporting Obligations, Primary NRA and Form 1099 responsibility assumed. Filing 1040x 1099-S, Form 1099-S, Proceeds From Real Estate Transactions. Filing 1040x 4419, Electronic reporting. Filing 1040x 7004, Extension to file Form 1042. Filing 1040x 8233, Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual. Filing 1040x 8288, Reporting and Paying the Tax, Form 8288, U. Filing 1040x S. Filing 1040x Withholding Tax Return for Dispositions by Foreign Persons of U. Filing 1040x S. Filing 1040x Real Property Interests. Filing 1040x 8288-A, Reporting and Paying the Tax, Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U. Filing 1040x S. Filing 1040x Real Property Interests. Filing 1040x 8288-B, Categories (1), (2), and (3). Filing 1040x 8804, Form 8804, Annual Return for Partnership Withholding Tax (Section 1446). Filing 1040x 8805, Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax. Filing 1040x 8813, Form 8813, Partnership Withholding Tax Payment Voucher (Section 1446). Filing 1040x 8833, Claiming treaty benefits. Filing 1040x 940, Federal unemployment tax (FUTA). Filing 1040x 941, Reporting requirements for wages and withheld taxes paid to nonresident aliens. Filing 1040x 972, Consent dividends. Filing 1040x SS-4, U. Filing 1040x S. Filing 1040x Taxpayer Identification Numbers SS-5, U. Filing 1040x S. Filing 1040x Taxpayer Identification Numbers W-2, Reporting requirements for wages and withheld taxes paid to nonresident aliens. Filing 1040x , Form W-2. Filing 1040x W-4, Alternate withholding procedure. Filing 1040x , Form W-4, Employee's Withholding Allowance Certificate. Filing 1040x , Withholding exemptions. Filing 1040x , Special instructions for Form W-4. Filing 1040x W-7, U. Filing 1040x S. Filing 1040x Taxpayer Identification Numbers W-8BEN, Beneficial Owners W-8ECI, Documentary evidence. Filing 1040x W-8EXP, Form W-8ECI, Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States. Filing 1040x W-8IMY, Foreign Intermediaries and Foreign Flow-Through Entities W-9, U. Filing 1040x S. Filing 1040x Taxpayer Identification Numbers Free tax services, How To Get Tax Help FUTA, Federal unemployment tax (FUTA). Filing 1040x G Gambling winnings, Gambling winnings (Income Code 28). Filing 1040x Graduated rates, Graduated rates. Filing 1040x Graduated withholding, Wages Paid to Employees— Graduated Withholding Grant income, Scholarships, fellowships, and grants. Filing 1040x Grants, Scholarships and Fellowship Grants (Income Code 15), Other Grants, Prizes, and Awards Green card test, Resident alien. Filing 1040x Guam, Guam or Northern Mariana Islands corporations. Filing 1040x H Help (see Tax help) I Identification number, taxpayer, U. Filing 1040x S. Filing 1040x Taxpayer Identification Numbers, Identification numbers. Filing 1040x Illegal aliens, Illegal aliens. Filing 1040x Important reminders, Reminders Income Fixed or determinable annual or periodical, Fixed or Determinable Annual or Periodical Income (FDAP) Interest, Interest Notional principal contract, Notional principal contract income. Filing 1040x Other than effectively connected, Income Not Effectively Connected Personal service, Personal service income. Filing 1040x Source of, Source of Income Transportation, Transportation income. Filing 1040x Income code 01, Interest paid by U. Filing 1040x S. Filing 1040x obligors—general (Income Code 1). Filing 1040x 02, Interest on real property mortgages (Income Code 2). Filing 1040x 03, Interest paid to controlling foreign corporations (Income Code 3). Filing 1040x 04, Interest paid by foreign corporations (Income Code 4). Filing 1040x 06, Dividends paid by U. Filing 1040x S. Filing 1040x corporations — general (Income Code 6). Filing 1040x 07, Dividends qualifying for direct dividend rate (Income Code 7). Filing 1040x 08, Dividends paid by foreign corporations (Income Code 8). Filing 1040x 09, Capital gains (Income Code 9). Filing 1040x 10, Industrial royalties (Income Code 10). Filing 1040x 11, Motion picture or television copyright royalties (Income Code 11). Filing 1040x 12, Other royalties (for example, copyright, recording, publishing) (Income Code 12). Filing 1040x 13, Real Property Income and Natural Resources Royalties (Income Code 13) 14, Pensions, Annuities, and Alimony (Income Code 14) 15, Scholarships and Fellowship Grants (Income Code 15) 16, Pay for independent personal services (Income Code 16). Filing 1040x 17, Pay for dependent personal services (Income Code 17). Filing 1040x 18, Pay for teaching (Income Code 18). Filing 1040x 19, Pay during studying and training (Income Code 19). Filing 1040x 20, Artists and Athletes (Income Codes 42 and 43) 24, Reporting and Paying the Tax 25, Reporting and Paying the Tax 26, Reporting and Paying the Tax 27, Publicly Traded Partnerships 28, Gambling winnings (Income Code 28). Filing 1040x 29, Interest on deposits (Income Code 29). Filing 1040x 30, Original issue discount (Income Code 30). Filing 1040x 50, Other income (Income Code 50). Filing 1040x Independent personal services Defined, Pay for independent personal services (Income Code 16). Filing 1040x Exempt from withholding, Pay for independent personal services (Income Code 16). Filing 1040x , 30% rate. Filing 1040x India, Students and business apprentices from India. Filing 1040x Indirect account holders, Indirect Account Holders Installment payment, Installment payments. Filing 1040x , Installment payments. Filing 1040x Insurance proceeds, Insurance proceeds. Filing 1040x Interest Contingent, Contingent interest. Filing 1040x Controlling foreign corporations, Interest paid to controlling foreign corporations (Income Code 3). Filing 1040x Deposits, Interest on deposits (Income Code 29). Filing 1040x Foreign business arrangements, Interest from foreign business arrangements. Filing 1040x Foreign corporations, Interest paid by foreign corporations (Income Code 4). Filing 1040x Income, Interest Portfolio, Portfolio interest. Filing 1040x , Interest that does not qualify as portfolio interest. Filing 1040x Real property mortgages, Interest on real property mortgages (Income Code 2). Filing 1040x Intermediary Foreign, Foreign Intermediaries Nonqualified, Nonqualified intermediary. Filing 1040x Qualified, Qualified intermediary. Filing 1040x , Qualified Intermediaries International organizations, Foreign Governments and Certain Other Foreign Organizations ITIN, U. Filing 1040x S. Filing 1040x Taxpayer Identification Numbers K Knowledge, standards of, Standards of Knowledge L Liability of withholding agent, Liability for tax. Filing 1040x M Magnetic media reporting, Electronic reporting. Filing 1040x Marketable securities, Marketable securities. Filing 1040x Mexico, Exception 3. Filing 1040x Missing children, Reminders More information (see Tax help) Mortgages, Interest on real property mortgages (Income Code 2). Filing 1040x N Non-registered obligations, Obligations not in registered form. Filing 1040x Nonqualified intermediary, Nonqualified intermediary. Filing 1040x , Nonqualified Intermediaries Nonresident alien Defined, Nonresident alien. Filing 1040x Married to U. Filing 1040x S. Filing 1040x citizen or resident, Married to U. Filing 1040x S. Filing 1040x citizen or resident alien. Filing 1040x Nonwage pay, Pay that is not wages. Filing 1040x Northern Mariana Islands, Guam or Northern Mariana Islands corporations. Filing 1040x Notional principal contract income, Notional principal contract income. Filing 1040x NRA withholding In general, Withholding of Tax Income subject to, Income Subject to NRA Withholding Persons subject to, Persons Subject to NRA Withholding O Obligations Registered, Obligations in registered form. Filing 1040x Obligations: Not in registered form, Obligations not in registered form. Filing 1040x Offshore accounts, Offshore accounts. Filing 1040x Original issue discount, Original issue discount (Income Code 30). Filing 1040x Overwithholding, adjustment for, Adjustment for Overwithholding P Partner, Foreign partner. Filing 1040x Partner, foreign, Who Must Withhold Partnerships Effectively connected income of foreign partners, Partnership Withholding on Effectively Connected Income Foreign, Foreign partnerships. Filing 1040x Publicly traded, Publicly Traded Partnerships Smaller, Smaller partnerships and trusts. Filing 1040x , Smaller partnerships and trusts. Filing 1040x , Smaller partnerships and trusts. Filing 1040x Withholding foreign, Withholding foreign partnership and foreign trust. Filing 1040x , Withholding Foreign Partnerships Pay for personal services Artists and athletes, Artists and Athletes (Income Codes 42 and 43) Dependent personal services, Pay for dependent personal services (Income Code 17). Filing 1040x Employees, Wages Paid to Employees— Graduated Withholding Exempt from withholding, Pay for Personal Services Performed Independent personal services, Pay for independent personal services (Income Code 16). Filing 1040x Salaries and wages, Wages Paid to Employees— Graduated Withholding Scholarship or fellowship recipient, Pay for services rendered. Filing 1040x Studying, Pay during studying and training (Income Code 19). Filing 1040x Teaching, Pay for teaching (Income Code 18). Filing 1040x Training, Pay during studying and training (Income Code 19). Filing 1040x Payee, Identifying the Payee Penalties Deposit, Penalty for failure to make deposits on time. Filing 1040x Form 1042, Penalties Form 8804, Penalties. Filing 1040x Form 8805, Penalties. Filing 1040x Magnetic media, Failure to file electronically. Filing 1040x Trust fund recovery, Trust fund recovery penalty. Filing 1040x Pensions, Pension payments. Filing 1040x , Pensions, Annuities, and Alimony (Income Code 14), Pensions and annuities. Filing 1040x Per diem, Per diem paid by the U. Filing 1040x S. Filing 1040x Government. Filing 1040x Personal service income, Personal service income. Filing 1040x Pooled withholding information, Pooled withholding information. Filing 1040x Portfolio interest, Portfolio interest. Filing 1040x , Interest that does not qualify as portfolio interest. Filing 1040x Presumption Corporation, Presumption Rules Individual, Presumption Rules Partnership, Presumption Rules Rules, Presumption Rules Trust, Presumption Rules Private foundation, foreign, Foreign private foundations. Filing 1040x Prizes, Other Grants, Prizes, and Awards Publications (see Tax help) Puerto Rico, Resident of a U. Filing 1040x S. Filing 1040x possession. Filing 1040x , Exception 4. Filing 1040x Q QI withholding agreement, QI withholding agreement. Filing 1040x Qualified intermediary, Qualified intermediary. Filing 1040x , Qualified Intermediaries Qualified investment entity (QIE) Distributions paid by, Qualified investment entities. Filing 1040x Dividends paid by, Dividends paid by U. Filing 1040x S. Filing 1040x corporations — general (Income Code 6). Filing 1040x R Racing purses, Racing purses. Filing 1040x Real property interest Disposition of, U. Filing 1040x S. Filing 1040x Real Property Interest Withholding certificates, Withholding Certificates Reason to know, Reason To Know Refund procedures Qualified intermediaries, Collective refund procedures. Filing 1040x Registered obligations, Obligations in registered form. Filing 1040x Researchers, Tax treaties. Filing 1040x Resident alien defined, Resident alien. Filing 1040x Returns required, Returns Required Royalties, Royalties, Real Property Income and Natural Resources Royalties (Income Code 13) Ryukyu Islands, Income from U. Filing 1040x S. Filing 1040x Savings Bonds of residents of the Ryukyu Islands or the Trust Territory of the Pacific Islands. Filing 1040x S Salaries, Wages Paid to Employees— Graduated Withholding Saving clause, Nonresident alien who becomes a resident alien. Filing 1040x Scholarship, Scholarships, fellowships, and grants. Filing 1040x , Scholarships and Fellowship Grants (Income Code 15) Securities, Marketable securities. Filing 1040x , Income from securities. Filing 1040x Services performed outside the U. Filing 1040x S. Filing 1040x , Services performed outside the United States. Filing 1040x Short-term obligation, Short-term obligations. Filing 1040x Social security, Social security and Medicare tax. Filing 1040x Source of income, Source of Income Standards of knowledge, Standards of Knowledge Substantial presence test, Resident alien. Filing 1040x T Tax Reporting and paying, Reporting and Paying the Tax Tax help, How To Get Tax Help Tax treaties Claiming benefits, Claiming treaty benefits. Filing 1040x Dependent personal services, Tax treaties. Filing 1040x Entertainers and athletes, Tax treaties. Filing 1040x Gains, Tax treaties. Filing 1040x Gambling winnings, Tax treaties. Filing 1040x Independent personal services, Tax treaties. Filing 1040x Student, Tax treaties. Filing 1040x Students and trainees, Tax treaties. Filing 1040x Tables, Tax Treaty Tables Teaching, Tax treaties. Filing 1040x Tax-exempt entities, Foreign Governments and Certain Other Foreign Organizations Taxpayer Advocate, Taxpayer Advocate Service. Filing 1040x Taxpayer identification number (TIN), U. Filing 1040x S. Filing 1040x Taxpayer Identification Numbers, Identification numbers. Filing 1040x Exceptions, Exceptions to TIN requirement. Filing 1040x Teachers, Pay for teaching (Income Code 18). Filing 1040x Ten-percent owners, Ten-percent owners. Filing 1040x Territorial limits, Territorial limits. Filing 1040x Totalization agreements, Social security and Medicare tax. Filing 1040x Transportation income, Transportation income. Filing 1040x Travel expenses, Travel expenses. Filing 1040x Trust Territory of the Pacific Islands, Income from U. Filing 1040x S. Filing 1040x Savings Bonds of residents of the Ryukyu Islands or the Trust Territory of the Pacific Islands. Filing 1040x Trusts Foreign, Foreign simple and grantor trust. Filing 1040x Smaller, Smaller partnerships and trusts. Filing 1040x Withholding foreign, Withholding foreign partnership and foreign trust. Filing 1040x , Withholding Foreign Trusts TTY/TDD information, How To Get Tax Help U U. Filing 1040x S. Filing 1040x agent of foreign person, U. Filing 1040x S. Filing 1040x agent of foreign person. Filing 1040x U. Filing 1040x S. Filing 1040x branch Foreign bank, U. Filing 1040x S. Filing 1040x branches of foreign banks and foreign insurance companies. Filing 1040x , Income paid to U. Filing 1040x S. Filing 1040x branch of foreign bank or insurance company. Filing 1040x Foreign insurance company, U. Filing 1040x S. Filing 1040x branches of foreign banks and foreign insurance companies. Filing 1040x , Income paid to U. Filing 1040x S. Filing 1040x branch of foreign bank or insurance company. Filing 1040x Foreign person, U. Filing 1040x S. Filing 1040x branches of foreign persons. Filing 1040x U. Filing 1040x S. Filing 1040x national, 30% rate. Filing 1040x U. Filing 1040x S. Filing 1040x real property interest, U. Filing 1040x S. Filing 1040x real property interest. Filing 1040x U. Filing 1040x S. Filing 1040x savings bonds, Income from U. Filing 1040x S. Filing 1040x Savings Bonds of residents of the Ryukyu Islands or the Trust Territory of the Pacific Islands. Filing 1040x U. Filing 1040x S. Filing 1040x territorial limits, Territorial limits. Filing 1040x U. Filing 1040x S. Filing 1040x Virgin Islands, U. Filing 1040x S. Filing 1040x Virgin Islands and American Samoa corporations. Filing 1040x Unexpected payment, Unexpected payment. Filing 1040x W Wages Paid to employees, Wages Paid to Employees— Graduated Withholding Pay that is not, Pay that is not wages. Filing 1040x When to withhold, When to withhold. Filing 1040x Withhold, amount to, Determination of amount to withhold. Filing 1040x Withhold, when to, When to withhold. Filing 1040x Withholding Agreements, QI withholding agreement. Filing 1040x , WP and WT withholding agreements. Filing 1040x , Withholding agreements. Filing 1040x , Income Code 43. Filing 1040x Alternative procedure, Alternative procedure. Filing 1040x Certificate, Withholding Certificates, Withholding certificate. Filing 1040x Rate pool, Pooled withholding information. Filing 1040x Real property, U. Filing 1040x S. Filing 1040x Real Property Interest Withholding agent Defined, Withholding Agent Liability, Liability for tax. Filing 1040x Returns required, Returns Required Tax deposit requirements, Depositing Withheld Taxes Withholding exemptions and reductions Dependent personal services, Graduated rates. Filing 1040x Exemption, Withholding exemption. Filing 1040x Final payment exemption, Final payment exemption. Filing 1040x Foreign governments, Foreign Governments and Certain Other Foreign Organizations International organizations, Foreign Governments and Certain Other Foreign Organizations Real property interest, Withholding Certificates Researchers, Tax treaties. Filing 1040x Scholarships and fellowship grants, Alternate withholding procedure. Filing 1040x Students, Tax treaties. Filing 1040x Withholding agreements, Withholding agreements. Filing 1040x , Income Code 43. Filing 1040x Prev  Up     Home   More Online Publications