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Form 1040x Amended Us Individual Income Tax Return

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Form 1040x Amended Us Individual Income Tax Return

Form 1040x amended us individual income tax return Publication 925 - Main Content Table of Contents Passive Activity LimitsWho Must Use These Rules? Passive Activity Loss Passive Activity Credit Publicly Traded Partnership Excess Farm Loss Passive Activities Activities That Are Not Passive Activities Passive Activity Income and Deductions Grouping Your Activities Recharacterization of Passive Income Dispositions How To Report Your Passive Activity Loss Comprehensive ExampleGeneral Information At-Risk LimitsWho Is Affected? Activities Covered by the At-Risk Rules At-Risk Amounts Amounts Not At Risk Reductions of Amounts At Risk Recapture Rule How To Get Tax HelpLow Income Taxpayer Clinics Passive Activity Limits Who Must Use These Rules? The passive activity rules apply to: Individuals, Estates, Trusts (other than grantor trusts), Personal service corporations, and Closely held corporations. Form 1040x amended us individual income tax return Even though the rules do not apply to grantor trusts, partnerships, and S corporations directly, they do apply to the owners of these entities. Form 1040x amended us individual income tax return For information about personal service corporations and closely held corporations, including definitions and how the passive activity rules apply to these corporations, see Form 8810 and its instructions. Form 1040x amended us individual income tax return Before applying the passive activity limits, you must first determine the amount of the deductions disallowed under the basis, excess farm loss, or at-risk rules. Form 1040x amended us individual income tax return See Passive Activity Deductions, later. Form 1040x amended us individual income tax return Passive Activity Loss Generally, the passive activity loss for the tax year is not allowed. Form 1040x amended us individual income tax return However, there is a special allowance under which some or all of your passive activity loss may be allowed. Form 1040x amended us individual income tax return See Special $25,000 allowance , later. Form 1040x amended us individual income tax return Definition of passive activity loss. Form 1040x amended us individual income tax return    Generally, your passive activity loss for the tax year is the excess of your passive activity deductions over your passive activity gross income. Form 1040x amended us individual income tax return See Passive Activity Income and Deductions , later. Form 1040x amended us individual income tax return   For a closely held corporation, the passive activity loss is the excess of passive activity deductions over the sum of passive activity gross income and net active income. Form 1040x amended us individual income tax return For details on net active income, see the Instructions for Form 8810. Form 1040x amended us individual income tax return For the definition of passive activity gross income, see Passive Activity Income , later. Form 1040x amended us individual income tax return For the definition of passive activity deductions, see Passive Activity Deductions , later. Form 1040x amended us individual income tax return Identification of Disallowed Passive Activity Deductions If all or a part of your passive activity loss is disallowed for the tax year, you may need to allocate the disallowed passive activity loss among different passive activities and among different deductions within a passive activity. Form 1040x amended us individual income tax return Allocation of disallowed passive activity loss among activities. Form 1040x amended us individual income tax return   If all or any part of your passive activity loss is disallowed for the tax year, a ratable portion of the loss (if any) from each of your passive activities is disallowed. Form 1040x amended us individual income tax return The ratable portion of a loss from an activity is computed by multiplying the passive activity loss that is disallowed for the tax year by the fraction obtained by dividing: The loss from the activity for the tax year; by The sum of the losses for the tax year from all activities having losses for the tax year. Form 1040x amended us individual income tax return Use Worksheet 5 of Form 8582 to figure the ratable portion of the loss from each activity that is disallowed. Form 1040x amended us individual income tax return Loss from an activity. Form 1040x amended us individual income tax return   The term “loss from an activity” means: The amount by which the passive activity deductions (defined later) from the activity for the tax year exceed the passive activity gross income (defined later) from the activity for the tax year; reduced by Any part of such amount that is allowed under the Special $25,000 Allowance , later. Form 1040x amended us individual income tax return   If your passive activity gross income from significant participation passive activities (defined later) for the tax year is more than your passive activity deductions from those activities for the tax year, those activities shall be treated, solely for purposes of figuring your loss from the activity, as a single activity that does not have a loss for such taxable year. Form 1040x amended us individual income tax return See Significant Participation Passive Activities , later. Form 1040x amended us individual income tax return Example. Form 1040x amended us individual income tax return John Pine holds interests in three passive activities, A, B, and C. Form 1040x amended us individual income tax return The gross income and deductions from these activities for the taxable year are as follows:   A B C Total Gross income $7,000 $4,000 $12,000 $23,000 Deductions (16,000) (20,000) (8,000) (44,000)           Net income (loss) ($9,000) ($16,000) $4,000 ($21,000)   John Pine’s $21,000 passive activity loss for the taxable year is disallowed. Form 1040x amended us individual income tax return Therefore, a ratable portion of the losses from activities A and B is disallowed. Form 1040x amended us individual income tax return He figures the disallowed portion of each loss as follows: A: $21,000 x $9,000/$25,000 $7,560 B: $21,000 x $16,000/$25,000 13,440     Total $21,000 Allocation within loss activities. Form 1040x amended us individual income tax return   If all or any part of your loss from an activity is disallowed under Allocation of disallowed passive activity loss among activities for the tax year, a ratable portion of each of your passive activity deductions (defined later), other than an excluded deduction (defined below) from such activity is disallowed. Form 1040x amended us individual income tax return The ratable portion of a passive activity deduction is the amount of the disallowed portion of the loss from the activity for the tax year multiplied by the fraction obtained by dividing: The amount of such deduction; by The sum of all of your passive activity deductions (other than excluded deductions) from that activity from the tax year. Form 1040x amended us individual income tax return Excluded deductions. Form 1040x amended us individual income tax return    “Excluded deduction” means any passive activity deduction that is taken into account in computing your net income from an item of property for a taxable year in which an amount of the taxpayer's gross income from such item of property is treated as not from a passive activity. Form 1040x amended us individual income tax return See Recharacterization of Passive Income , later. Form 1040x amended us individual income tax return Separately identified deductions. Form 1040x amended us individual income tax return   In identifying the deductions from an activity that are disallowed, you do not need to account separately for a deduction unless such deduction may, if separately taken into account, result in an income tax liability for any tax year different from that which would result were such deduction not taken into account separately. Form 1040x amended us individual income tax return   Use Form 8582, Worksheet 7, for any activity if you have passive activity deductions for that activity that must be separately identified. Form 1040x amended us individual income tax return   Deductions that must be accounted for separately include (but are not limited to) the following deductions. Form 1040x amended us individual income tax return Deductions that arise in a rental real estate activity in tax years in which you actively participate in such activity. Form 1040x amended us individual income tax return See Active participation , later. Form 1040x amended us individual income tax return Deductions that arise in a rental real estate activity in tax years in which you do not actively participate in such activity. Form 1040x amended us individual income tax return See Active participation , later. Form 1040x amended us individual income tax return Losses from sales or exchanges of capital assets. Form 1040x amended us individual income tax return Section 1231 losses. Form 1040x amended us individual income tax return See Section 1231 Gains and Losses in Publication 544, Sales and Other Disposition of Assets, for more information. Form 1040x amended us individual income tax return Carryover of Disallowed Deductions In the case of an activity with respect to which any deductions or credits are disallowed for a taxable year (the loss activity), the disallowed deductions are allocated among your activities for the next tax year in a manner that reasonably reflects the extent to which each activity continues the loss activity. Form 1040x amended us individual income tax return The disallowed deductions or credits allocated to an activity under the preceding sentence are treated as deductions or credits from the activity for the next tax year. Form 1040x amended us individual income tax return For more information, see Regulations section 1. Form 1040x amended us individual income tax return 469-1(f)(4). Form 1040x amended us individual income tax return Passive Activity Credit Generally, the passive activity credit for the tax year is disallowed. Form 1040x amended us individual income tax return The passive activity credit is the amount by which the sum of all your credits subject to the passive activity rules exceed your regular tax liability allocable to all passive activities for the tax year. Form 1040x amended us individual income tax return Credits that are included in figuring the general business credit are subject to the passive activity rules. Form 1040x amended us individual income tax return See the Instructions for Form 8582-CR for more information. Form 1040x amended us individual income tax return Publicly Traded Partnership You must apply the rules in this part separately to your income or loss from a passive activity held through a publicly traded partnership (PTP). Form 1040x amended us individual income tax return You also must apply the limit on passive activity credits separately to your credits from a passive activity held through a PTP. Form 1040x amended us individual income tax return You can offset deductions from passive activities of a PTP only against income or gain from passive activities of the same PTP. Form 1040x amended us individual income tax return Likewise, you can offset credits from passive activities of a PTP only against the tax on the net passive income from the same PTP. Form 1040x amended us individual income tax return This separate treatment rule also applies to a regulated investment company holding an interest in a PTP for the items attributable to that interest. Form 1040x amended us individual income tax return For more information on how to apply the passive activity loss rules to PTPs, and on how to apply the limit on passive activity credits to PTPs, see Publicly Traded Partnerships (PTPs) in the Instructions for Forms 8582 and 8582-CR, respectively. Form 1040x amended us individual income tax return Excess Farm Loss If you receive an applicable subsidy for any tax year and you have an excess farm loss for the tax year, special rules apply. Form 1040x amended us individual income tax return These rules do not apply to C corporations. Form 1040x amended us individual income tax return For information, see the Instructions for Schedule F (Form 1040), Profit or Loss From Farming. Form 1040x amended us individual income tax return Passive Activities There are two kinds of passive activities. Form 1040x amended us individual income tax return Trade or business activities in which you do not materially participate during the year. Form 1040x amended us individual income tax return Rental activities, even if you do materially participate in them, unless you are a real estate professional. Form 1040x amended us individual income tax return Material participation in a trade or business is discussed later, under Activities That Are Not Passive Activities . Form 1040x amended us individual income tax return Treatment of former passive activities. Form 1040x amended us individual income tax return   A former passive activity is an activity that was a passive activity in any earlier tax year, but is not a passive activity in the current tax year. Form 1040x amended us individual income tax return You can deduct a prior year's unallowed loss from the activity up to the amount of your current year net income from the activity. Form 1040x amended us individual income tax return Treat any remaining prior year unallowed loss like you treat any other passive loss. Form 1040x amended us individual income tax return   In addition, any prior year unallowed passive activity credits from a former passive activity offset the allocable part of your current year tax liability. Form 1040x amended us individual income tax return The allocable part of your current year tax liability is that part of this year's tax liability that is allocable to the current year net income from the former passive activity. Form 1040x amended us individual income tax return You figure this after you reduce your net income from the activity by any prior year unallowed loss from that activity (but not below zero). Form 1040x amended us individual income tax return Trade or Business Activities A trade or business activity is an activity that: Involves the conduct of a trade or business (that is, deductions would be allowable under section 162 of the Internal Revenue Code if other limitations, such as the passive activity rules, did not apply), Is conducted in anticipation of starting a trade or business, or Involves research or experimental expenditures that are deductible under Internal Revenue Code section 174 (or that would be deductible if you chose to deduct rather than capitalize them). Form 1040x amended us individual income tax return A trade or business activity does not include a rental activity or the rental of property that is incidental to an activity of holding the property for investment. Form 1040x amended us individual income tax return You generally report trade or business activities on Schedule C, C-EZ, F, or in Part II or III of Schedule E. Form 1040x amended us individual income tax return Rental Activities A rental activity is a passive activity even if you materially participated in that activity, unless you materially participated as a real estate professional. Form 1040x amended us individual income tax return See Real Estate Professional under Activities That Are Not Passive Activities, later. Form 1040x amended us individual income tax return An activity is a rental activity if tangible property (real or personal) is used by customers or held for use by customers, and the gross income (or expected gross income) from the activity represents amounts paid (or to be paid) mainly for the use of the property. Form 1040x amended us individual income tax return It does not matter whether the use is under a lease, a service contract, or some other arrangement. Form 1040x amended us individual income tax return Exceptions. Form 1040x amended us individual income tax return   Your activity is not a rental activity if any of the following apply. Form 1040x amended us individual income tax return The average period of customer use of the property is 7 days or less. Form 1040x amended us individual income tax return You figure the average period of customer use by dividing the total number of days in all rental periods by the number of rentals during the tax year. Form 1040x amended us individual income tax return If the activity involves renting more than one class of property, multiply the average period of customer use of each class by a fraction. Form 1040x amended us individual income tax return The numerator of the fraction is the gross rental income from that class of property and the denominator is the activity's total gross rental income. Form 1040x amended us individual income tax return The activity's average period of customer use will equal the sum of the amounts for each class. Form 1040x amended us individual income tax return The average period of customer use of the property, as figured in (1) above, is 30 days or less and you provide significant personal services with the rentals. Form 1040x amended us individual income tax return Significant personal services include only services performed by individuals. Form 1040x amended us individual income tax return To determine if personal services are significant, all relevant facts and circumstances are taken into consideration, including the frequency of the services, the type and amount of labor required to perform the services, and the value of the services relative to the amount charged for use of the property. Form 1040x amended us individual income tax return Significant personal services do not include the following. Form 1040x amended us individual income tax return Services needed to permit the lawful use of the property, Services to repair or improve property that would extend its useful life for a period substantially longer than the average rental, and Services that are similar to those commonly provided with long-term rentals of real estate, such as cleaning and maintenance of common areas or routine repairs. Form 1040x amended us individual income tax return You provide extraordinary personal services in making the rental property available for customer use. Form 1040x amended us individual income tax return Services are extraordinary personal services if they are performed by individuals and the customers' use of the property is incidental to their receipt of the services. Form 1040x amended us individual income tax return The rental is incidental to a nonrental activity. Form 1040x amended us individual income tax return The rental of property is incidental to an activity of holding property for investment if the main purpose of holding the property is to realize a gain from its appreciation and the gross rental income from the property is less than 2% of the smaller of the property's unadjusted basis or fair market value. Form 1040x amended us individual income tax return The unadjusted basis of property is its cost not reduced by depreciation or any other basis adjustment. Form 1040x amended us individual income tax return The rental of property is incidental to a trade or business activity if all of the following apply. Form 1040x amended us individual income tax return You own an interest in the trade or business activity during the year. Form 1040x amended us individual income tax return The rental property was used mainly in that trade or business activity during the current year, or during at least 2 of the 5 preceding tax years. Form 1040x amended us individual income tax return Your gross rental income from the property is less than 2% of the smaller of its unadjusted basis or fair market value. Form 1040x amended us individual income tax return Lodging provided to an employee or the employee's spouse or dependents is incidental to the activity or activities in which the employee performs services if the lodging is furnished for the employer's convenience. Form 1040x amended us individual income tax return You customarily make the rental property available during defined business hours for nonexclusive use by various customers. Form 1040x amended us individual income tax return You provide the property for use in a nonrental activity in your capacity as an owner of an interest in the partnership, S corporation, or joint venture conducting that activity. Form 1040x amended us individual income tax return    If you meet any of the exceptions listed above, see the instructions for Form 8582 for information about how to report any income or loss from the activity. Form 1040x amended us individual income tax return Special $25,000 allowance. Form 1040x amended us individual income tax return   If you or your spouse actively participated in a passive rental real estate activity, the amount of the passive activity loss that is disallowed is decreased and you therefore can deduct up to $25,000 of loss from the activity from your nonpassive income. Form 1040x amended us individual income tax return This special allowance is an exception to the general rule disallowing the passive activity loss. Form 1040x amended us individual income tax return Similarly, you can offset credits from the activity against the tax on up to $25,000 of nonpassive income after taking into account any losses allowed under this exception. Form 1040x amended us individual income tax return   If you are married, filing a separate return, and lived apart from your spouse for the entire tax year, your special allowance cannot be more than $12,500. Form 1040x amended us individual income tax return If you lived with your spouse at any time during the year and are filing a separate return, you cannot use the special allowance to reduce your nonpassive income or tax on nonpassive income. Form 1040x amended us individual income tax return   The maximum special allowance is reduced if your modified adjusted gross income exceeds certain amounts. Form 1040x amended us individual income tax return See Phaseout rule , later. Form 1040x amended us individual income tax return Example. Form 1040x amended us individual income tax return Kate, a single taxpayer, has $70,000 in wages, $15,000 income from a limited partnership, a $26,000 loss from rental real estate activities in which she actively participated, and is not subject to the modified adjusted gross income phaseout rule. Form 1040x amended us individual income tax return She can use $15,000 of her $26,000 loss to offset her $15,000 passive income from the partnership. Form 1040x amended us individual income tax return She actively participated in her rental real estate activities, so she can use the remaining $11,000 rental real estate loss to offset $11,000 of her nonpassive income (wages). Form 1040x amended us individual income tax return Commercial revitalization deduction (CRD). Form 1040x amended us individual income tax return   The special allowance must first be applied to losses from rental real estate activities figured without the CRD. Form 1040x amended us individual income tax return Any remaining part of the special allowance is available for the CRD from the rental real estate activities and is not subject to the active participation rules or the phaseout based on modified adjusted gross income. Form 1040x amended us individual income tax return You cannot claim a CRD for a building placed in service after December 31, 2009. Form 1040x amended us individual income tax return Active participation. Form 1040x amended us individual income tax return   Active participation is not the same as material participation (defined later). Form 1040x amended us individual income tax return Active participation is a less stringent standard than material participation. Form 1040x amended us individual income tax return For example, you may be treated as actively participating if you make management decisions in a significant and bona fide sense. Form 1040x amended us individual income tax return Management decisions that count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and similar decisions. Form 1040x amended us individual income tax return   Only individuals can actively participate in rental real estate activities. Form 1040x amended us individual income tax return However, a decedent's estate is treated as actively participating for its tax years ending less than 2 years after the decedent's death, if the decedent would have satisfied the active participation requirement for the activity for the tax year the decedent died. Form 1040x amended us individual income tax return   A decedent's qualified revocable trust can also be treated as actively participating if both the trustee and the executor (if any) of the estate choose to treat the trust as part of the estate. Form 1040x amended us individual income tax return The choice applies to tax years ending after the decedent's death and before: 2 years after the decedent's death if no estate tax return is required, or 6 months after the estate tax liability is finally determined if an estate tax return is required. Form 1040x amended us individual income tax return   The choice is irrevocable and cannot be made later than the due date for the estate's first income tax return (including any extensions). Form 1040x amended us individual income tax return   Limited partners are not treated as actively participating in a partnership's rental real estate activities. Form 1040x amended us individual income tax return   You are not treated as actively participating in a rental real estate activity unless your interest in the activity (including your spouse's interest) was at least 10% (by value) of all interests in the activity throughout the year. Form 1040x amended us individual income tax return   Active participation is not required to take the low-income housing credit, the rehabilitation investment credit, or CRD from rental real estate activities. Form 1040x amended us individual income tax return Example. Form 1040x amended us individual income tax return Mike, a single taxpayer, had the following income and loss during the tax year: Salary $42,300 Dividends 300 Interest 1,400 Rental loss (4,000) The rental loss came from a house Mike owned. Form 1040x amended us individual income tax return He advertised and rented the house to the current tenant himself. Form 1040x amended us individual income tax return He also collected the rents and did the repairs or hired someone to do them. Form 1040x amended us individual income tax return Even though the rental loss is a loss from a passive activity, Mike can use the entire $4,000 loss to offset his other income because he actively participated. Form 1040x amended us individual income tax return Phaseout rule. Form 1040x amended us individual income tax return   The maximum special allowance of $25,000 ($12,500 for married individuals filing separate returns and living apart at all times during the year) is reduced by 50% of the amount of your modified adjusted gross income that is more than $100,000 ($50,000 if you are married filing separately). Form 1040x amended us individual income tax return If your modified adjusted gross income is $150,000 or more ($75,000 or more if you are married filing separately), you generally cannot use the special allowance. Form 1040x amended us individual income tax return    Modified adjusted gross income for this purpose is your adjusted gross income figured without the following. Form 1040x amended us individual income tax return Taxable social security and tier 1 railroad retirement benefits. Form 1040x amended us individual income tax return Deductible contributions to individual retirement accounts (IRAs) and section 501(c)(18) pension plans. Form 1040x amended us individual income tax return The exclusion from income of interest from qualified U. Form 1040x amended us individual income tax return S. Form 1040x amended us individual income tax return savings bonds used to pay qualified higher education expenses. Form 1040x amended us individual income tax return The exclusion from income of amounts received from an employer's adoption assistance program. Form 1040x amended us individual income tax return Passive activity income or loss included on Form 8582. Form 1040x amended us individual income tax return Any rental real estate loss allowed because you materially participated in the rental activity as a Real Estate Professional (as discussed later, under Activities That Are Not Passive Activities). Form 1040x amended us individual income tax return Any overall loss from a publicly traded partnership (see Publicly Traded Partnerships (PTPs) in the instructions for Form 8582). Form 1040x amended us individual income tax return The deduction for the employer-equivalent portion of self-employment tax. Form 1040x amended us individual income tax return The deduction for domestic production activities. Form 1040x amended us individual income tax return The deduction allowed for interest on student loans. Form 1040x amended us individual income tax return The deduction for qualified tuition and related expenses. Form 1040x amended us individual income tax return Example. Form 1040x amended us individual income tax return During 2013, John was unmarried and was not a real estate professional. Form 1040x amended us individual income tax return For 2013, he had $120,000 in salary and a $31,000 loss from his rental real estate activities in which he actively participated. Form 1040x amended us individual income tax return His modified adjusted gross income is $120,000. Form 1040x amended us individual income tax return When he files his 2013 return, he can deduct only $15,000 of his passive activity loss. Form 1040x amended us individual income tax return He must carry over the remaining $16,000 passive activity loss to 2014. Form 1040x amended us individual income tax return He figures his deduction and carryover as follows: Adjusted gross income, modified as required $120,000       Minus amount not subject to phaseout 100,000 Amount subject to phaseout rule $20,000 Multiply by 50% × 50% Required reduction to special allowance $10,000 Maximum special allowance $25,000 Minus required reduction (see above) 10,000 Adjusted special allowance $15,000 Passive loss from rental real estate $31,000 Deduction allowable/Adjusted  special allowance (see above) 15,000       Amount that must be carried forward $16,000 Exceptions to the phaseout rules. Form 1040x amended us individual income tax return   A higher phaseout range applies to rehabilitation investment credits from rental real estate activities. Form 1040x amended us individual income tax return For those credits, the phaseout of the $25,000 special allowance starts when your modified adjusted gross income exceeds $200,000 ($100,000 if you are a married individual filing a separate return and living apart at all times during the year). Form 1040x amended us individual income tax return   There is no phaseout of the $25,000 special allowance for low-income housing credits or for the CRD. Form 1040x amended us individual income tax return Ordering rules. Form 1040x amended us individual income tax return   If you have more than one of the exceptions to the phaseout rules in the same tax year, you must apply the $25,000 phaseout against your passive activity losses and credits in the following order. Form 1040x amended us individual income tax return The portion of passive activity losses not attributable to the CRD. Form 1040x amended us individual income tax return The portion of passive activity losses attributable to the CRD. Form 1040x amended us individual income tax return The portion of passive activity credits attributable to credits other than the rehabilitation and low-income housing credits. Form 1040x amended us individual income tax return The portion of passive activity credits attributable to the rehabilitation credit. Form 1040x amended us individual income tax return The portion of passive activity credits attributable to the low-income housing credit. Form 1040x amended us individual income tax return Activities That Are Not Passive Activities The following are not passive activities. Form 1040x amended us individual income tax return Trade or business activities in which you materially participated for the tax year. Form 1040x amended us individual income tax return A working interest in an oil or gas well which you hold directly or through an entity that does not limit your liability (such as a general partner interest in a partnership). Form 1040x amended us individual income tax return It does not matter whether you materially participated in the activity for the tax year. Form 1040x amended us individual income tax return However, if your liability was limited for part of the year (for example, you converted your general partner interest to a limited partner interest during the year) and you had a net loss from the well for the year, some of your income and deductions from the working interest may be treated as passive activity gross income and passive activity deductions. Form 1040x amended us individual income tax return  See Temporary Regulations section 1. Form 1040x amended us individual income tax return 469-1T(e)(4)(ii). Form 1040x amended us individual income tax return The rental of a dwelling unit that you also used for personal purposes during the year for more than the greater of 14 days or 10% of the number of days during the year that the home was rented at a fair rental. Form 1040x amended us individual income tax return An activity of trading personal property for the account of those who own interests in the activity. Form 1040x amended us individual income tax return See Temporary Regulations section 1. Form 1040x amended us individual income tax return 469-1T(e)(6). Form 1040x amended us individual income tax return Rental real estate activities in which you materially participated as a real estate professional. Form 1040x amended us individual income tax return See Real Estate Professional , later. Form 1040x amended us individual income tax return You should not enter income and losses from these activities on Form 8582. Form 1040x amended us individual income tax return Instead, enter them on the forms or schedules you would normally use. Form 1040x amended us individual income tax return Material Participation A trade or business activity is not a passive activity if you materially participated in the activity. Form 1040x amended us individual income tax return Material participation tests. Form 1040x amended us individual income tax return    You materially participated in a trade or business activity for a tax year if you satisfy any of the following tests. Form 1040x amended us individual income tax return You participated in the activity for more than 500 hours. Form 1040x amended us individual income tax return Your participation was substantially all the participation in the activity of all individuals for the tax year, including the participation of individuals who did not own any interest in the activity. Form 1040x amended us individual income tax return You participated in the activity for more than 100 hours during the tax year, and you participated at least as much as any other individual (including individuals who did not own any interest in the activity) for the year. Form 1040x amended us individual income tax return The activity is a significant participation activity, and you participated in all significant participation activities for more than 500 hours. Form 1040x amended us individual income tax return A significant participation activity is any trade or business activity in which you participated for more than 100 hours during the year and in which you did not materially participate under any of the material participation tests, other than this test. Form 1040x amended us individual income tax return See Significant Participation Passive Activities , under Recharacterization of Passive Income, later. Form 1040x amended us individual income tax return You materially participated in the activity for any 5 (whether or not consecutive) of the 10 immediately preceding tax years. Form 1040x amended us individual income tax return The activity is a personal service activity in which you materially participated for any 3 (whether or not consecutive) preceding tax years. Form 1040x amended us individual income tax return An activity is a personal service activity if it involves the performance of personal services in the fields of health (including veterinary services), law, engineering, architecture, accounting, actuarial science, performing arts, consulting, or any other trade or business in which capital is not a material income-producing factor. Form 1040x amended us individual income tax return Based on all the facts and circumstances, you participated in the activity on a regular, continuous, and substantial basis during the year. Form 1040x amended us individual income tax return   You did not materially participate in the activity under test (7) if you participated in the activity for 100 hours or less during the year. Form 1040x amended us individual income tax return Your participation in managing the activity does not count in determining whether you materially participated under this test if: Any person other than you received compensation for managing the activity, or Any individual spent more hours during the tax year managing the activity than you did (regardless of whether the individual was compensated for the management services). Form 1040x amended us individual income tax return Participation. Form 1040x amended us individual income tax return   In general, any work you do in connection with an activity in which you own an interest is treated as participation in the activity. Form 1040x amended us individual income tax return Work not usually performed by owners. Form 1040x amended us individual income tax return   You do not treat the work you do in connection with an activity as participation in the activity if both of the following are true. Form 1040x amended us individual income tax return The work is not work that is customarily done by the owner of that type of activity. Form 1040x amended us individual income tax return One of your main reasons for doing the work is to avoid the disallowance of any loss or credit from the activity under the passive activity rules. Form 1040x amended us individual income tax return Participation as an investor. Form 1040x amended us individual income tax return   You do not treat the work you do in your capacity as an investor in an activity as participation unless you are directly involved in the day-to-day management or operations of the activity. Form 1040x amended us individual income tax return Work you do as an investor includes: Studying and reviewing financial statements or reports on operations of the activity, Preparing or compiling summaries or analyses of the finances or operations of the activity for your own use, and Monitoring the finances or operations of the activity in a nonmanagerial capacity. Form 1040x amended us individual income tax return Spouse's participation. Form 1040x amended us individual income tax return   Your participation in an activity includes your spouse's participation. Form 1040x amended us individual income tax return This applies even if your spouse did not own any interest in the activity and you and your spouse do not file a joint return for the year. Form 1040x amended us individual income tax return Proof of participation. Form 1040x amended us individual income tax return You can use any reasonable method to prove your participation in an activity for the year. Form 1040x amended us individual income tax return You do not have to keep contemporaneous daily time reports, logs, or similar documents if you can establish your participation in some other way. Form 1040x amended us individual income tax return For example, you can show the services you performed and the approximate number of hours spent by using an appointment book, calendar, or narrative summary. Form 1040x amended us individual income tax return Limited partners. Form 1040x amended us individual income tax return   If you owned an activity as a limited partner, you generally are not treated as materially participating in the activity. Form 1040x amended us individual income tax return However, you are treated as materially participating in the activity if you met test (1), (5), or (6) under Material participation tests , discussed earlier, for the tax year. Form 1040x amended us individual income tax return   You are not treated as a limited partner, however, if you also were a general partner in the partnership at all times during the partnership's tax year ending with or within your tax year (or, if shorter, during that part of the partnership's tax year in which you directly or indirectly owned your limited partner interest). Form 1040x amended us individual income tax return Retired or disabled farmer and surviving spouse of a farmer. Form 1040x amended us individual income tax return   If you are a retired or disabled farmer, you are treated as materially participating in a farming activity if you materially participated for 5 or more of the 8 years before your retirement or disability. Form 1040x amended us individual income tax return Similarly, if you are a surviving spouse of a farmer, you are treated as materially participating in a farming activity if the real property used in the activity meets the estate tax rules for special valuation of farm property passed from a qualifying decedent, and you actively manage the farm. Form 1040x amended us individual income tax return Corporations. Form 1040x amended us individual income tax return   A closely held corporation or a personal service corporation is treated as materially participating in an activity only if one or more shareholders holding more than 50% by value of the outstanding stock of the corporation materially participate in the activity. Form 1040x amended us individual income tax return   A closely held corporation can also satisfy the material participation standard by meeting the first two requirements for the qualifying business exception from the at-risk limits. Form 1040x amended us individual income tax return See Special exception for qualified corporations under Activities Covered by the At-Risk Rules, later. Form 1040x amended us individual income tax return Real Estate Professional Generally, rental activities are passive activities even if you materially participated in them. Form 1040x amended us individual income tax return However, if you qualified as a real estate professional, rental real estate activities in which you materially participated are not passive activities. Form 1040x amended us individual income tax return For this purpose, each interest you have in a rental real estate activity is a separate activity, unless you choose to treat all interests in rental real estate activities as one activity. Form 1040x amended us individual income tax return See the Instructions for Schedule E (Form 1040), Supplemental Income and Loss, for information about making this choice. Form 1040x amended us individual income tax return If you qualified as a real estate professional for 2013, report income or losses from rental real estate activities in which you materially participated as nonpassive income or losses, and complete line 43 of Schedule E (Form 1040). Form 1040x amended us individual income tax return If you also have an unallowed loss from these activities from an earlier year when you did not qualify, see Treatment of former passive activities under Passive Activities, earlier. Form 1040x amended us individual income tax return Qualifications. Form 1040x amended us individual income tax return   You qualified as a real estate professional for the year if you met both of the following requirements. Form 1040x amended us individual income tax return More than half of the personal services you performed in all trades or businesses during the tax year were performed in real property trades or businesses in which you materially participated. Form 1040x amended us individual income tax return You performed more than 750 hours of services during the tax year in real property trades or businesses in which you materially participated. Form 1040x amended us individual income tax return   Do not count personal services you performed as an employee in real property trades or businesses unless you were a 5% owner of your employer. Form 1040x amended us individual income tax return You were a 5% owner if you owned (or are considered to have owned) more than 5% of your employer's outstanding stock, outstanding voting stock, or capital or profits interest. Form 1040x amended us individual income tax return   If you file a joint return, do not count your spouse's personal services to determine whether you met the preceding requirements. Form 1040x amended us individual income tax return However, you can count your spouse's participation in an activity in determining if you materially participated. Form 1040x amended us individual income tax return Real property trades or businesses. Form 1040x amended us individual income tax return   A real property trade or business is a trade or business that does any of the following with real property. Form 1040x amended us individual income tax return Develops or redevelops it. Form 1040x amended us individual income tax return Constructs or reconstructs it. Form 1040x amended us individual income tax return Acquires it. Form 1040x amended us individual income tax return Converts it. Form 1040x amended us individual income tax return Rents or leases it. Form 1040x amended us individual income tax return Operates or manages it. Form 1040x amended us individual income tax return Brokers it. Form 1040x amended us individual income tax return Closely held corporations. Form 1040x amended us individual income tax return   A closely held corporation can qualify as a real estate professional if more than 50% of the gross receipts for its tax year came from real property trades or businesses in which it materially participated. Form 1040x amended us individual income tax return Passive Activity Income and Deductions In figuring your net income or loss from a passive activity, take into account only passive activity income and passive activity deductions. Form 1040x amended us individual income tax return Self-charged interest. Form 1040x amended us individual income tax return   Certain self-charged interest income or deductions may be treated as passive activity gross income or passive activity deductions if the loan proceeds are used in a passive activity. Form 1040x amended us individual income tax return   Generally, self-charged interest income and deductions result from loans between you and a partnership or S corporation in which you had a direct or indirect ownership interest. Form 1040x amended us individual income tax return This includes both loans you made to the partnership or S corporation and loans the partnership or S corporation made to you. Form 1040x amended us individual income tax return   It also includes loans from one partnership or S corporation to another partnership or S corporation if each owner in the borrowing entity has the same proportional ownership interest in the lending entity. Form 1040x amended us individual income tax return    Exception. Form 1040x amended us individual income tax return The self-charged interest rules do not apply to your interest in a partnership or S corporation if the entity made an election under Regulations section 1. Form 1040x amended us individual income tax return 469-7(g) to avoid the application of these rules. Form 1040x amended us individual income tax return For more details on the self-charged interest rules, see Regulations section 1. Form 1040x amended us individual income tax return 469-7. Form 1040x amended us individual income tax return Passive Activity Income Passive activity income includes all income from passive activities and generally includes gain from disposition of an interest in a passive activity or property used in a passive activity. Form 1040x amended us individual income tax return Passive activity income does not include the following items. Form 1040x amended us individual income tax return Income from an activity that is not a passive activity. Form 1040x amended us individual income tax return These activities are discussed under Activities That Are Not Passive Activities , earlier. Form 1040x amended us individual income tax return Portfolio income. Form 1040x amended us individual income tax return This includes interest, dividends, annuities, and royalties not derived in the ordinary course of a trade or business. Form 1040x amended us individual income tax return It includes gain or loss from the disposition of property that produces these types of income or that is held for investment. Form 1040x amended us individual income tax return The exclusion for portfolio income does not apply to self-charged interest treated as passive activity income. Form 1040x amended us individual income tax return For more information on self-charged interest, see Self-charged interest , earlier. Form 1040x amended us individual income tax return Personal service income. Form 1040x amended us individual income tax return This includes salaries, wages, commissions, self-employment income from trade or business activities in which you materially participated, deferred compensation, taxable social security and other retirement benefits, and payments from partnerships to partners for personal services. Form 1040x amended us individual income tax return Income from positive section 481 adjustments allocated to activities other than passive activities. Form 1040x amended us individual income tax return (Section 481 adjustments are adjustments that must be made due to changes in your accounting method. Form 1040x amended us individual income tax return ) Income or gain from investments of working capital. Form 1040x amended us individual income tax return Income from an oil or gas property if you treated any loss from a working interest in the property for any tax year beginning after 1986 as a nonpassive loss, as discussed in item (2) under Activities That Are Not Passive Activities , earlier. Form 1040x amended us individual income tax return This also applies to income from other oil and gas property the basis of which is determined wholly or partly by the basis of the property in the preceding sentence. Form 1040x amended us individual income tax return Any income from intangible property, such as a patent, copyright, or literary, musical, or artistic composition, if your personal efforts significantly contributed to the creation of the property. Form 1040x amended us individual income tax return Any other income that must be treated as nonpassive income. Form 1040x amended us individual income tax return See Recharacterization of Passive Income , later. Form 1040x amended us individual income tax return Overall gain from any interest in a publicly traded partnership. Form 1040x amended us individual income tax return See Publicly Traded Partnerships (PTPs) in the instructions for Form 8582. Form 1040x amended us individual income tax return State, local, and foreign income tax refunds. Form 1040x amended us individual income tax return Income from a covenant not to compete. Form 1040x amended us individual income tax return Reimbursement of a casualty or theft loss included in gross income to recover all or part of a prior year loss deduction, if the loss deduction was not a passive activity deduction. Form 1040x amended us individual income tax return Alaska Permanent Fund dividends. Form 1040x amended us individual income tax return Cancellation of debt income, if at the time the debt is discharged the debt is not allocated to passive activities under the interest expense allocation rules. Form 1040x amended us individual income tax return See chapter 4 of Publication 535, Business Expenses, for information about the rules for allocating interest. Form 1040x amended us individual income tax return Disposition of property interests. Form 1040x amended us individual income tax return   Gain on the disposition of an interest in property generally is passive activity income if, at the time of the disposition, the property was used in an activity that was a passive activity in the year of disposition. Form 1040x amended us individual income tax return The gain generally is not passive activity income if, at the time of disposition, the property was used in an activity that was not a passive activity in the year of disposition. Form 1040x amended us individual income tax return An exception to this general rule may apply if you previously used the property in a different activity. Form 1040x amended us individual income tax return Exception for more than one use in the preceding 12 months. Form 1040x amended us individual income tax return   If you used the property in more than one activity during the 12-month period before its disposition, you must allocate the gain between the activities on a basis that reasonably reflects the property's use during that period. Form 1040x amended us individual income tax return Any gain allocated to a passive activity is passive activity income. Form 1040x amended us individual income tax return   For this purpose, an allocation of the gain solely to the activity in which the property was mainly used during that period reasonably reflects the property's use if the fair market value of your interest in the property is not more than the lesser of: $10,000, or 10% of the total of the fair market value of your interest in the property and the fair market value of all other property used in that activity immediately before the disposition. Form 1040x amended us individual income tax return Exception for substantially appreciated property. Form 1040x amended us individual income tax return   The gain is passive activity income if the fair market value of the property at disposition was more than 120% of its adjusted basis and either of the following conditions applies. Form 1040x amended us individual income tax return You used the property in a passive activity for 20% of the time you held your interest in the property. Form 1040x amended us individual income tax return You used the property in a passive activity for the entire 24-month period before its disposition. Form 1040x amended us individual income tax return If neither condition applies, the gain is not passive activity income. Form 1040x amended us individual income tax return However, it is treated as portfolio income only if you held the property for investment for more than half of the time you held it in nonpassive activities. Form 1040x amended us individual income tax return   For this purpose, treat property you held through a corporation (other than an S corporation) or other entity whose owners receive only portfolio income as property held in a nonpassive activity and as property held for investment. Form 1040x amended us individual income tax return Also, treat the date you agree to transfer your interest for a fixed or determinable amount as the disposition date. Form 1040x amended us individual income tax return   If you used the property in more than one activity during the 12-month period before its disposition, this exception applies only to the part of the gain allocated to a passive activity under the rules described in the preceding discussion. Form 1040x amended us individual income tax return Disposition of property converted to inventory. Form 1040x amended us individual income tax return   If you disposed of property that you had converted to inventory from its use in another activity (for example, you sold condominium units you previously held for use in a rental activity), a special rule may apply. Form 1040x amended us individual income tax return Under this rule, you disregard the property's use as inventory and treat it as if it were still used in that other activity at the time of disposition. Form 1040x amended us individual income tax return This rule applies only if you meet all of the following conditions. Form 1040x amended us individual income tax return At the time of disposition, you held your interest in the property in a dealing activity (an activity that involves holding the property or similar property mainly for sale to customers in the ordinary course of a trade or business). Form 1040x amended us individual income tax return Your other activities included a nondealing activity (an activity that does not involve holding similar property for sale to customers in the ordinary course of a trade or business) in which you used the property for more than 80% of the period you held it. Form 1040x amended us individual income tax return You did not acquire or hold your interest in the property for the main purpose of selling it to customers in the ordinary course of a trade or business. Form 1040x amended us individual income tax return Passive Activity Deductions Generally, a deduction is a passive activity deduction for a taxable year if and only if such deduction either: Arises in connection with the conduct of an activity that is a passive activity for the tax year; or Is treated as a deduction from an activity for the tax year because it was disallowed by the passive activity rules in the preceding year and carried forward to the tax year. Form 1040x amended us individual income tax return For purposes of item (1), above, an item of deduction arises in the taxable year in which the item would be allowable as a deduction under the taxpayer's method of accounting if taxable income for all taxable years were determined without regard to the passive activity rules and without regard to the basis, excess farm loss, and at-risk limits. Form 1040x amended us individual income tax return See Coordination with other limitations on deductions that apply before the passive activity rules , later. Form 1040x amended us individual income tax return Passive activity deductions generally include losses from dispositions of property used in a passive activity at the time of the disposition and losses from a disposition of less than your entire interest in a passive activity. Form 1040x amended us individual income tax return Exceptions. Form 1040x amended us individual income tax return   Passive activity deductions do not include the following items. Form 1040x amended us individual income tax return Deductions for expenses (other than interest expense) that are clearly and directly allocable to portfolio income. Form 1040x amended us individual income tax return Qualified home mortgage interest, capitalized interest expenses, and other interest expenses (other than self-charged interest) properly allocable to passive activities. Form 1040x amended us individual income tax return For more information on self-charged interest, see Self-charged interest under Passive Activity Income and Deductions, earlier. Form 1040x amended us individual income tax return Losses from dispositions of property that produce portfolio income or property held for investment. Form 1040x amended us individual income tax return State, local, and foreign income taxes. Form 1040x amended us individual income tax return Miscellaneous itemized deductions that may be disallowed because of the 2%-of-adjusted-gross-income limit. Form 1040x amended us individual income tax return Charitable contribution deductions. Form 1040x amended us individual income tax return Net operating loss deductions. Form 1040x amended us individual income tax return Percentage depletion carryovers for oil and gas wells. Form 1040x amended us individual income tax return Capital loss carrybacks and carryovers. Form 1040x amended us individual income tax return Items of deduction from a passive activity that are disallowed under the limits on deductions that apply before the passive activity rules. Form 1040x amended us individual income tax return See Coordination with other limitations on deductions that apply before the passive activity rules , later. Form 1040x amended us individual income tax return Deductions and losses that would have been allowed for tax years beginning before 1987 but for basis or at-risk limits. Form 1040x amended us individual income tax return Net negative section 481 adjustments allocated to activities other than passive activities. Form 1040x amended us individual income tax return (Section 481 adjustments are adjustments required due to changes in accounting methods. Form 1040x amended us individual income tax return ) Casualty and theft losses, unless losses similar in cause and severity recur regularly in the activity. Form 1040x amended us individual income tax return The deduction for the employer-equivalent portion of self-employment tax. Form 1040x amended us individual income tax return Coordination with other limitations on deductions that apply before the passive activity rules. Form 1040x amended us individual income tax return   An item of deduction from a passive activity that is disallowed for a tax year under the basis or at-risk limitations is not a passive activity deduction for the tax year. Form 1040x amended us individual income tax return The following sections provide rules for figuring the extent to which items of deduction from a passive activity are disallowed for a tax year under the basis or at-risk limitations. Form 1040x amended us individual income tax return Proration of deductions disallowed under basis limitations. Form 1040x amended us individual income tax return   If any amount of your distributive share of a partnership's loss for the tax year is disallowed under the basis limitation, a ratable portion of your distributive share of each item of deduction or loss of the partnership is disallowed for the tax year. Form 1040x amended us individual income tax return For this purpose, the ratable portion of an item of deduction or loss is the amount of such item multiplied by the fraction obtained by dividing: The amount of your distributive share of partnership loss that is disallowed for the taxable year; by The sum of your distributive shares of all items of deduction and loss of the partnership for the tax year. Form 1040x amended us individual income tax return   If any amount of your pro rata share of an S corporation's loss for the tax year is disallowed under the basis limitation, a ratable portion of your pro rata share of each item of deduction or loss of the S corporation is disallowed for the tax year. Form 1040x amended us individual income tax return For this purpose, the ratable portion of an item of deduction or loss is the amount of such item multiplied by the fraction obtained by dividing: The amount of your share of S corporation loss that is disallowed for the tax year; by The sum of your pro rata shares of all items of deduction and loss of the corporation for the tax year. Form 1040x amended us individual income tax return Proration of deductions disallowed under at-risk limitation. Form 1040x amended us individual income tax return   If any amount of your loss from an activity (as defined in Activities Covered by the At-Risk Rules , later) is disallowed under the at-risk rules for the tax year, a ratable portion of each item of deduction or loss from the activity is disallowed for the tax year. Form 1040x amended us individual income tax return For this purpose, the ratable portion of an item of deduction or loss is the amount of such item multiplied by the fraction obtained by dividing: The amount of the loss from the activity that is disallowed for the tax year; by The sum of all deductions from the activity for the taxable year. Form 1040x amended us individual income tax return Coordination of basis and at-risk limitations. Form 1040x amended us individual income tax return   The portion of any item of deduction or loss that is disallowed for the tax year under the basis limitations is not taken into account for the taxable year in determining the loss from an activity (as defined in Activities Covered by the At-Risk Rules , later) for purposes of applying the at-risk rules. Form 1040x amended us individual income tax return Separately identified items of deduction and loss. Form 1040x amended us individual income tax return   In identifying the items of deduction and loss from an activity that are not disallowed under the basis and at-risk limitations (and that therefore may be treated as passive activity deductions), you need not account separately for any item of deduction or loss unless such item may, if separately taken into account, result in an income tax liability different from that which would result were such item of deduction or loss taken into account separately. Form 1040x amended us individual income tax return   Items of deduction or loss that must be accounted for separately include (but are not limited to) items of deduction or loss that: Are attributable to separate activities. Form 1040x amended us individual income tax return See Grouping Your Activities , later. Form 1040x amended us individual income tax return Arise in a rental real estate activity in tax years in which you actively participate in such activity; Arise in a rental real estate activity in taxable years in which you do not actively participate in such activity; Arose in a taxable year beginning before 1987 and were not allowed for such taxable year under the basis or at-risk limitations; Are taken into account under section 613A(d) (relating to limitations on certain depletion deductions); Are taken into account under section 1211 (relating to the limitation on capital losses); Are taken into account under section 1231 (relating to property used in a trade or business and involuntary conversions). Form 1040x amended us individual income tax return See Section 1231 Gains and Losses in Publication 544 for more information. Form 1040x amended us individual income tax return Are attributable to pre-enactment interests in activities. Form 1040x amended us individual income tax return See Regulations section 1. Form 1040x amended us individual income tax return 469-11T(c). Form 1040x amended us individual income tax return Grouping Your Activities You can treat one or more trade or business activities, or rental activities, as a single activity if those activities form an appropriate economic unit for measuring gain or loss under the passive activity rules. Form 1040x amended us individual income tax return Grouping is important for a number of reasons. Form 1040x amended us individual income tax return If you group two activities into one larger activity, you need only show material participation in the activity as a whole. Form 1040x amended us individual income tax return But if the two activities are separate, you must show material participation in each one. Form 1040x amended us individual income tax return On the other hand, if you group two activities into one larger activity and you dispose of one of the two, then you have disposed of only part of your entire interest in the activity. Form 1040x amended us individual income tax return But if the two activities are separate and you dispose of one of them, then you have disposed of your entire interest in that activity. Form 1040x amended us individual income tax return Grouping can also be important in determining whether you meet the 10% ownership requirement for actively participating in a rental real estate activity. Form 1040x amended us individual income tax return Appropriate Economic Units Generally, to determine if activities form an appropriate economic unit, you must consider all the relevant facts and circumstances. Form 1040x amended us individual income tax return You can use any reasonable method of applying the relevant facts and circumstances in grouping activities. Form 1040x amended us individual income tax return The following factors have the greatest weight in determining whether activities form an appropriate economic unit. Form 1040x amended us individual income tax return All of the factors do not have to apply to treat more than one activity as a single activity. Form 1040x amended us individual income tax return The factors that you should consider are: The similarities and differences in the types of trades or businesses, The extent of common control, The extent of common ownership, The geographical location, and The interdependencies between or among activities, which may include the extent to which the activities: Buy or sell goods between or among themselves, Involve products or services that are generally provided together, Have the same customers, Have the same employees, or Use a single set of books and records to account for the activities. Form 1040x amended us individual income tax return Example 1. Form 1040x amended us individual income tax return John Jackson owns a bakery and a movie theater at a shopping mall in Baltimore and a bakery and movie theater in Philadelphia. Form 1040x amended us individual income tax return Based on all the relevant facts and circumstances, there may be more than one reasonable method for grouping John's activities. Form 1040x amended us individual income tax return For example, John may be able to group the movie theaters and the bakeries into: One activity, A movie theater activity and a bakery activity, A Baltimore activity and a Philadelphia activity, or Four separate activities. Form 1040x amended us individual income tax return Example 2. Form 1040x amended us individual income tax return Betty is a partner in ABC partnership, which sells nonfood items to grocery stores. Form 1040x amended us individual income tax return Betty is also a partner in DEF (a trucking business). Form 1040x amended us individual income tax return ABC and DEF are under common control. Form 1040x amended us individual income tax return The main part of DEF's business is transporting goods for ABC. Form 1040x amended us individual income tax return DEF is the only trucking business in which Betty is involved. Form 1040x amended us individual income tax return Based on the rules of this section, Betty treats ABC's wholesale activity and DEF's trucking activity as a single activity. Form 1040x amended us individual income tax return Consistency and disclosure requirement. Form 1040x amended us individual income tax return   Generally, when you group activities into appropriate economic units, you may not regroup those activities in a later tax year. Form 1040x amended us individual income tax return You must meet any disclosure requirements of the IRS when you first group your activities and when you add or dispose of any activities in your groupings. Form 1040x amended us individual income tax return   However, if the original grouping is clearly inappropriate or there is a material change in the facts and circumstances that makes the original grouping clearly inappropriate, you must regroup the activities and comply with any disclosure requirements of the IRS. Form 1040x amended us individual income tax return   See Disclosure Requirement , later. Form 1040x amended us individual income tax return Regrouping by the IRS. Form 1040x amended us individual income tax return   If any of the activities resulting from your grouping is not an appropriate economic unit and one of the primary purposes of your grouping (or failure to regroup) is to avoid the passive activity rules, the IRS may regroup your activities. Form 1040x amended us individual income tax return Rental activities. Form 1040x amended us individual income tax return   In general, you cannot group a rental activity with a trade or business activity. Form 1040x amended us individual income tax return However, you can group them together if the activities form an appropriate economic unit and: The rental activity is insubstantial in relation to the trade or business activity, The trade or business activity is insubstantial in relation to the rental activity, or Each owner of the trade or business activity has the same ownership interest in the rental activity, in which case the part of the rental activity that involves the rental of items of property for use in the trade or business activity may be grouped with the trade or business activity. Form 1040x amended us individual income tax return Example. Form 1040x amended us individual income tax return Herbert and Wilma are married and file a joint return. Form 1040x amended us individual income tax return Healthy Food, an S corporation, is a grocery store business. Form 1040x amended us individual income tax return Herbert is Healthy Food's only shareholder. Form 1040x amended us individual income tax return Plum Tower, an S corporation, owns and rents out the building. Form 1040x amended us individual income tax return Wilma is Plum Tower's only shareholder. Form 1040x amended us individual income tax return Plum Tower rents part of its building to Healthy Food. Form 1040x amended us individual income tax return Plum Tower's grocery store rental business and Healthy Food's grocery business are not insubstantial in relation to each other. Form 1040x amended us individual income tax return Herbert and Wilma file a joint return, so they are treated as one taxpayer for purposes of the passive activity rules. Form 1040x amended us individual income tax return The same owner (Herbert and Wilma) owns both Healthy Food and Plum Tower with the same ownership interest (100% in each). Form 1040x amended us individual income tax return If the grouping forms an appropriate economic unit, as discussed earlier, Herbert and Wilma can group Plum Tower's grocery store rental and Healthy Food's grocery business into a single trade or business activity. Form 1040x amended us individual income tax return Grouping of real and personal property rentals. Form 1040x amended us individual income tax return   In general, you cannot treat an activity involving the rental of real property and an activity involving the rental of personal property as a single activity. Form 1040x amended us individual income tax return However, you can treat them as a single activity if you provide the personal property in connection with the real property or the real property in connection with the personal property. Form 1040x amended us individual income tax return Certain activities may not be grouped. Form 1040x amended us individual income tax return   In general, if you own an interest as a limited partner or a limited entrepreneur in one of the following activities, you may not group that activity with any other activity in another type of business. Form 1040x amended us individual income tax return Holding, producing, or distributing motion picture films or video tapes. Form 1040x amended us individual income tax return Farming. Form 1040x amended us individual income tax return Leasing any section 1245 property (as defined in section 1245(a)(3) of the Internal Revenue Code). Form 1040x amended us individual income tax return For a list of section 1245 property, see Section 1245 property under Activities Covered by the At-Risk Rules , later. Form 1040x amended us individual income tax return Exploring for, or exploiting, oil and gas resources. Form 1040x amended us individual income tax return Exploring for, or exploiting, geothermal deposits. Form 1040x amended us individual income tax return   If you own an interest as a limited partner or a limited entrepreneur in an activity described in the list above, you may group that activity with another activity in the same type of business if the grouping forms an appropriate economic unit as discussed earlier. Form 1040x amended us individual income tax return Limited entrepreneur. Form 1040x amended us individual income tax return   A limited entrepreneur is a person who: Has an interest in an enterprise other than as a limited partner, and Does not actively participate in the management of the enterprise. Form 1040x amended us individual income tax return Activities conducted through another entity. Form 1040x amended us individual income tax return   A personal service corporation, closely held corporation, partnership, or S corporation must group its activities using the rules discussed in this section. Form 1040x amended us individual income tax return Once the entity groups its activities, you, as the partner or shareholder of the entity, may group those activities (following the rules of this section): With each other, With activities conducted directly by you, or With activities conducted through other entities. Form 1040x amended us individual income tax return    You may not treat activities grouped together by the entity as separate activities. Form 1040x amended us individual income tax return Personal service and closely held corporations. Form 1040x amended us individual income tax return   You may group an activity conducted through a personal service or closely held corporation with your other activities only to determine whether you materially or significantly participated in those other activities. Form 1040x amended us individual income tax return See Material Participation , earlier, and Significant Participation Passive Activities , later. Form 1040x amended us individual income tax return Publicly traded partnership (PTP). Form 1040x amended us individual income tax return   You may not group activities conducted through a PTP with any other activity, including an activity conducted through another PTP. Form 1040x amended us individual income tax return Partial dispositions. Form 1040x amended us individual income tax return   If you dispose of substantially all of an activity during your tax year, you may treat the part disposed of as a separate activity. Form 1040x amended us individual income tax return However, you can do this only if you can show with reasonable certainty: The amount of deductions and credits disallowed in prior years under the passive activity rules that is allocable to the part of the activity disposed of, and The amount of gross income and any other deductions and credits for the current tax year that is allocable to the part of the activity disposed of. Form 1040x amended us individual income tax return Disclosure Requirement For tax years beginning after January 24, 2010, the following disclosure requirements for groupings apply. Form 1040x amended us individual income tax return You are required to report certain changes to your groupings that occur during the tax year to the IRS. Form 1040x amended us individual income tax return If you fail to report these changes, each trade or business activity or rental activity will be treated as a separate activity. Form 1040x amended us individual income tax return You will be considered to have made a timely disclosure if you filed all affected income tax returns consistent with the claimed grouping and make the required disclosure on the income tax return for the year in which you first discovered the failure to disclose. Form 1040x amended us individual income tax return If the IRS discovered the failure to disclose, you must have reasonable cause for not making the required disclosure. Form 1040x amended us individual income tax return New grouping. Form 1040x amended us individual income tax return   You must file a written statement with your original income tax return for the first tax year in which two or more activities are originally grouped into a single activity. Form 1040x amended us individual income tax return The statement must provide the names, addresses, and employer identification numbers (EINs), if applicable, for the activities being grouped as a single activity. Form 1040x amended us individual income tax return In addition, the statement must contain a declaration that the grouped activities make up an appropriate economic unit for the measurement of gain or loss under the passive activity rules. Form 1040x amended us individual income tax return Addition to an existing grouping. Form 1040x amended us individual income tax return   You must file a written statement with your original income tax return for the tax year in which you add a new activity to an existing group. Form 1040x amended us individual income tax return The statement must provide the name, address, and EIN, if applicable, for the activity that is being added and for the activities in the existing group. Form 1040x amended us individual income tax return In addition, the statement must contain a declaration that the activities make up an appropriate economic unit for the measurement of gain or loss under the passive activity rules. Form 1040x amended us individual income tax return Regrouping. Form 1040x amended us individual income tax return   You must file a written statement with your original income tax return for the tax year in which you regroup the activities. Form 1040x amended us individual income tax return The statement must provide the names, addresses, and EINs, if applicable, for the activities that are being regrouped. Form 1040x amended us individual income tax return If two or more activities are being regrouped into a single activity, the statement must contain a declaration that the regrouped activities make up an appropriate economic unit for the measurement of gain or loss under the passive activity rules. Form 1040x amended us individual income tax return In addition, the statement must contain an explanation of the material change in the facts and circumstances that made the original grouping clearly inappropriate. Form 1040x amended us individual income tax return Groupings by partnerships and S corporations. Form 1040x amended us individual income tax return   Partnerships and S corporations are not subject to the rules for new grouping, addition to an existing grouping, or regrouping. Form 1040x amended us individual income tax return Instead, they must comply with the disclosure instructions for grouping activities provided in their Form 1065, U. Form 1040x amended us individual income tax return S. Form 1040x amended us individual income tax return Return of Partnership Income, or Form 1120S, U. Form 1040x amended us individual income tax return S. Form 1040x amended us individual income tax return Income Tax Return for an S Corporation, whichever is applicable. Form 1040x amended us individual income tax return   The partner or shareholder is not required to make a separate disclosure of the groupings disclosed by the entity unless the partner or shareholder: Groups together any of the activities that the entity does not group together, Groups the entity's activities with activities conducted directly by the partner or shareholder, or Groups an entity's activities with activities conducted through another entity. Form 1040x amended us individual income tax return   A partner or shareholder may not treat activities grouped together by the entity as separate activities. Form 1040x amended us individual income tax return Recharacterization of Passive Income Net income from the following passive activities may have to be recharacterized and excluded from passive activity income. Form 1040x amended us individual income tax return Significant participation passive activities, Rental of property when less than 30% of the unadjusted basis of the property is subject to depreciation, Equity-financed lending activities, Rental of property incidental to development activities, Rental of property to nonpassive activities, and Licensing of intangible property by  pass-through entities. Form 1040x amended us individual income tax return If you are engaged in or have an interest in one of these activities during the tax year (either directly or through a partnership or an S corporation), combine the income and losses from the activity to determine if you have a net loss or net income from that activity. Form 1040x amended us individual income tax return If the result is a net loss, treat the income and losses the same as any other income or losses from that type of passive activity (trade or business activity or rental activity). Form 1040x amended us individual income tax return If the result is net income, do not enter any of the income or losses from the activity or property on Form 8582 or its worksheets. Form 1040x amended us individual income tax return Instead, enter income or losses on the form and schedules you normally use. Form 1040x amended us individual income tax return However, see Significant Participation Passive Activities , later, if the activity is a significant participation passive activity and you also have a net loss from a different significant participation passive activity. Form 1040x amended us individual income tax return Limit on recharacterized passive income. Form 1040x amended us individual income tax return   The total amount that you treat as nonpassive income under the rules described later in this discussion for significant participation passive activities, rental of nondepreciable property, and equity-financed lending activities cannot exceed the greatest amount that you treat as nonpassive income under any one of these rules. Form 1040x amended us individual income tax return Investment income and investment expense. Form 1040x amended us individual income tax return   To figure your investment interest expense limitation on Form 4952, treat as investment income any net passive income recharacterized as nonpassive income from rental of nondepreciable property, equity-financed lending activity, or licensing of intangible property by a pass-through entity. Form 1040x amended us individual income tax return Significant Participation Passive Activities A significant participation passive activity is any trade or business activity in which you participated for more than 100 hours during the tax year but did not materially participate. Form 1040x amended us individual income tax return If your gross income from all significant participation passive activities is more than your deductions from those activities, a part of your net income from each significant participation passive activity is treated as nonpassive income. Form 1040x amended us individual income tax return Corporations. Form 1040x amended us individual income tax return   An activity of a personal service corporation or closely held corporation is a significant participation passive activity if both of the following statements are true. Form 1040x amended us individual income tax return The corporation is not treated as materially participating in the activity for the year. Form 1040x amended us individual income tax return One or more individuals, each of whom is treated as significantly participating in the activity, directly or indirectly hold (in total) more than 50% (by value) of the corporation's outstanding stock. Form 1040x amended us individual income tax return Worksheet A. Form 1040x amended us individual income tax return   Complete Worksheet A. Form 1040x amended us individual income tax return Significant Participation Passive Activities , below, if you have income or losses from any significant participation activity. Form 1040x amended us individual income tax return Begin by entering the name of each activity in the left column. Form 1040x amended us individual income tax return Column (a). Form 1040x amended us individual income tax return   Enter the number of hours you participated in each activity and total the column. Form 1040x amended us individual income tax return   If the total is more than 500, do not complete Worksheet A or B. Form 1040x amended us individual income tax return None of the activities are passive activities because you satisfy test 4 for material participation. Form 1040x amended us individual income tax return (See Material participation tests , earlier. Form 1040x amended us individual income tax return ) Report all the income and losses from these activities on the forms and schedules you normally use. Form 1040x amended us individual income tax return Do not include the income and losses on Form 8582. Form 1040x amended us individual income tax return Column (b). Form 1040x amended us individual income tax return   Enter the net loss, if any, from the activity. Form 1040x amended us individual income tax return Net loss from an activity means either: The activity's current year net loss (if any) plus prior year unallowed losses (if any), or The excess of prior year unallowed losses over the current year net income (if any). Form 1040x amended us individual income tax return Enter -0- here if the prior year unallowed loss is the same as the current year net income. Form 1040x amended us individual income tax return Column (c). Form 1040x amended us individual income tax return   Enter net income (if any) from the activity. Form 1040x amended us individual income tax return Net income means the excess of the current year's net income from the activity over any prior year unallowed losses from the activity. Form 1040x amended us individual income tax return Column (d). Form 1040x amended us individual income tax return   Combine amounts in the Totals row for columns (b) and (c) and enter the total net income or net loss in the Totals row of column (d). Form 1040x amended us individual income tax return If column (d) is a net loss, skip Worksheet B, Significant Participation Activities With Net Income. Form 1040x amended us individual income tax return Include the income and losses in Worksheet 3 of Form 8582 (or Worksheet 2 in the Form 88
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Multifamily Housing Office

The Multifamily Housing Office administers the Department of Housing and Urban Development's multifamily housing programs through a network of local offices across the country.

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The Form 1040x Amended Us Individual Income Tax Return

Form 1040x amended us individual income tax return Publication 529 - Main Content Table of Contents Deductions Subject to the 2% LimitUnreimbursed Employee Expenses Tax Preparation Fees Other Expenses Deductions Not Subject to the 2% LimitList of Deductions Nondeductible ExpensesList of Nondeductible Expenses How To ReportWho can use Form 2106-EZ. Form 1040x amended us individual income tax return Computer used in a home office. Form 1040x amended us individual income tax return Example How To Get Tax HelpLow Income Taxpayer Clinics Deductions Subject to the 2% Limit You can deduct certain expenses as miscellaneous itemized deductions on Schedule A (Form 1040 or Form 1040NR). Form 1040x amended us individual income tax return You can claim the amount of expenses that is more than 2% of your adjusted gross income. Form 1040x amended us individual income tax return You figure your deduction on Schedule A by subtracting 2% of your adjusted gross income from the total amount of these expenses. Form 1040x amended us individual income tax return Your adjusted gross income is the amount on Form 1040, line 38, or Form 1040NR, line 37. Form 1040x amended us individual income tax return Generally, you apply the 2% limit after you apply any other deduction limit. Form 1040x amended us individual income tax return For example, you apply the 50% (or 80%) limit on business-related meals and entertainment (discussed later under Travel, Transportation, Meals, Entertainment, Gifts, and Local Lodging ) before you apply the 2% limit. Form 1040x amended us individual income tax return Deductions subject to the 2% limit are discussed in the following three categories. Form 1040x amended us individual income tax return Unreimbursed employee expenses (Schedule A (Form 1040), line 21 or Schedule A (Form 1040NR), line 7). Form 1040x amended us individual income tax return Tax preparation fees (Schedule A (Form 1040), line 22 or Schedule A (Form 1040NR), line 8). Form 1040x amended us individual income tax return Other expenses (Schedule A (Form 1040), line 23 or Schedule A (Form 1040NR), line 9). Form 1040x amended us individual income tax return Unreimbursed Employee Expenses Generally, the following expenses are deducted on Schedule A (Form 1040), line 21, or Schedule A (Form 1040NR), line 7. Form 1040x amended us individual income tax return You can deduct only unreimbursed employee expenses that are: Paid or incurred during your tax year, For carrying on your trade or business of being an employee, and Ordinary and necessary. Form 1040x amended us individual income tax return An expense is ordinary if it is common and accepted in your trade, business, or profession. Form 1040x amended us individual income tax return An expense is necessary if it is appropriate and helpful to your business. Form 1040x amended us individual income tax return An expense does not have to be required to be considered necessary. Form 1040x amended us individual income tax return You may be able to deduct the following items as unreimbursed employee expenses. Form 1040x amended us individual income tax return Business bad debt of an employee. Form 1040x amended us individual income tax return Business liability insurance premiums. Form 1040x amended us individual income tax return Damages paid to a former employer for breach of an employment contract. Form 1040x amended us individual income tax return Depreciation on a computer your employer requires you to use in your work. Form 1040x amended us individual income tax return Dues to a chamber of commerce if membership helps you do your job. Form 1040x amended us individual income tax return Dues to professional societies. Form 1040x amended us individual income tax return Educator expenses. Form 1040x amended us individual income tax return Home office or part of your home used regularly and exclusively in your work. Form 1040x amended us individual income tax return Job search expenses in your present occupation. Form 1040x amended us individual income tax return Laboratory breakage fees. Form 1040x amended us individual income tax return Legal fees related to your job. Form 1040x amended us individual income tax return Licenses and regulatory fees. Form 1040x amended us individual income tax return Malpractice insurance premiums. Form 1040x amended us individual income tax return Medical examinations required by an employer. Form 1040x amended us individual income tax return Occupational taxes. Form 1040x amended us individual income tax return Passport for a business trip. Form 1040x amended us individual income tax return Repayment of an income aid payment received under an employer's plan. Form 1040x amended us individual income tax return Research expenses of a college professor. Form 1040x amended us individual income tax return Rural mail carriers' vehicle expenses. Form 1040x amended us individual income tax return Subscriptions to professional journals and trade magazines related to your work. Form 1040x amended us individual income tax return Tools and supplies used in your work. Form 1040x amended us individual income tax return Travel, transportation, meals, entertainment, gifts, and local lodging related to your work. Form 1040x amended us individual income tax return Union dues and expenses. Form 1040x amended us individual income tax return Work clothes and uniforms if required and not suitable for everyday use. Form 1040x amended us individual income tax return Work-related education. Form 1040x amended us individual income tax return Business Bad Debt A business bad debt is a loss from a debt created or acquired in your trade or business. Form 1040x amended us individual income tax return Any other worthless debt is a business bad debt only if there is a very close relationship between the debt and your trade or business when the debt becomes worthless. Form 1040x amended us individual income tax return A debt has a very close relationship to your trade or business of being an employee if your main motive for incurring the debt is a business reason. Form 1040x amended us individual income tax return Example. Form 1040x amended us individual income tax return You make a bona fide loan to the corporation you work for. Form 1040x amended us individual income tax return It fails to pay you back. Form 1040x amended us individual income tax return You had to make the loan in order to keep your job. Form 1040x amended us individual income tax return You have a business bad debt as an employee. Form 1040x amended us individual income tax return More information. Form 1040x amended us individual income tax return   For more information on business bad debts, see chapter 10 in Publication 535. Form 1040x amended us individual income tax return For information on nonbusiness bad debts, see chapter 4 in Publication 550, Investment Income and Expenses. Form 1040x amended us individual income tax return Business Liability Insurance You can deduct insurance premiums you paid for protection against personal liability for wrongful acts on the job. Form 1040x amended us individual income tax return Damages for Breach of Employment Contract If you break an employment contract, you can deduct damages you pay your former employer if the damages are attributable to the pay you received from that employer. Form 1040x amended us individual income tax return Depreciation on Computers You can claim a depreciation deduction for a computer that you use in your work as an employee if its use is: For the convenience of your employer, and Required as a condition of your employment. Form 1040x amended us individual income tax return For the convenience of your employer. Form 1040x amended us individual income tax return   This means that your use of the computer is for a substantial business reason of your employer. Form 1040x amended us individual income tax return You must consider all facts in making this determination. Form 1040x amended us individual income tax return Use of your computer during your regular working hours to carry on your employer's business is generally for the convenience of your employer. Form 1040x amended us individual income tax return Required as a condition of your employment. Form 1040x amended us individual income tax return   This means that you cannot properly perform your duties without the computer. Form 1040x amended us individual income tax return Whether you can properly perform your duties without it depends on all the facts and circumstances. Form 1040x amended us individual income tax return It is not necessary that your employer explicitly requires you to use your computer. Form 1040x amended us individual income tax return But neither is it enough that your employer merely states that your use of the item is a condition of your employment. Form 1040x amended us individual income tax return Example. Form 1040x amended us individual income tax return You are an engineer with an engineering firm. Form 1040x amended us individual income tax return You occasionally take work home at night rather than work late at the office. Form 1040x amended us individual income tax return You own and use a computer that is similar to the one you use at the office to complete your work at home. Form 1040x amended us individual income tax return Since your use of the computer is not for the convenience of your employer and is not required as a condition of your employment, you cannot claim a depreciation deduction for it. Form 1040x amended us individual income tax return Which depreciation method to use. Form 1040x amended us individual income tax return   The depreciation method you use depends on whether you meet the more-than-50%-use test. Form 1040x amended us individual income tax return More-than-50%-use test met. Form 1040x amended us individual income tax return   You meet this test if you use the computer more than 50% in your work. Form 1040x amended us individual income tax return If you meet this test, you can claim accelerated depreciation under the General Depreciation System (GDS). Form 1040x amended us individual income tax return In addition, you may be able to take the section 179 deduction for the year you place the item in service. Form 1040x amended us individual income tax return More-than-50%-use test not met. Form 1040x amended us individual income tax return   If you do not meet the more-than-50%-use test, you are limited to the straight line method of depreciation under the Alternative Depreciation System (ADS). Form 1040x amended us individual income tax return You also cannot claim the section 179 deduction. Form 1040x amended us individual income tax return (But if you use your computer in a home office, see the exception below. Form 1040x amended us individual income tax return ) Investment use. Form 1040x amended us individual income tax return   Your use of a computer in connection with investments (described later under Other Expenses ) does not count as use in your work. Form 1040x amended us individual income tax return However, you can combine your investment use with your work use in figuring your depreciation deduction. Form 1040x amended us individual income tax return Exception for computer used in a home office. Form 1040x amended us individual income tax return   The more-than-50%-use test does not apply to a computer used only in a part of your home that meets the requirements described later under Home Office . Form 1040x amended us individual income tax return You can claim accelerated depreciation using GDS for a computer used in a qualifying home office, even if you do not use it more than 50% in your work. Form 1040x amended us individual income tax return You also may be able to take a section 179 deduction for the year you place the computer in service. Form 1040x amended us individual income tax return See Computer used in a home office under How To Report, later. Form 1040x amended us individual income tax return More information. Form 1040x amended us individual income tax return   For more information on depreciation and the section 179 deduction for computers and other items used in a home office, see Business Furniture and Equipment in Publication 587. Form 1040x amended us individual income tax return Publication 946 has detailed information about the section 179 deduction and depreciation deductions using GDS and ADS. Form 1040x amended us individual income tax return Reporting your depreciation deduction. Form 1040x amended us individual income tax return    See How To Report, later, for information about reporting a deduction for depreciation. Form 1040x amended us individual income tax return You must keep records to prove your percentage of business and investment use. Form 1040x amended us individual income tax return Dues to Chambers of Commerce and Professional Societies You may be able to deduct dues paid to professional organizations (such as bar associations and medical associations) and to chambers of commerce and similar organizations, if membership helps you carry out the duties of your job. Form 1040x amended us individual income tax return Similar organizations include: Boards of trade, Business leagues, Civic or public service organizations, Real estate boards, and Trade associations. Form 1040x amended us individual income tax return Lobbying and political activities. Form 1040x amended us individual income tax return    You may not be able to deduct that part of your dues that is for certain lobbying and political activities. Form 1040x amended us individual income tax return See Lobbying Expenses under Nondeductible Expenses, later. Form 1040x amended us individual income tax return Educator Expenses If you were an eligible educator in 2013, you can deduct up to $250 of qualified expenses you paid in 2013 as an adjustment to gross income on Form 1040, line 23, rather than as a miscellaneous itemized deduction. Form 1040x amended us individual income tax return If you file Form 1040A, you can deduct these expenses on line 16. Form 1040x amended us individual income tax return If you and your spouse are filing jointly and both of you were eligible educators, the maximum deduction is $500. Form 1040x amended us individual income tax return However, neither spouse can deduct more than $250 of his or her qualified expenses. Form 1040x amended us individual income tax return Eligible educator. Form 1040x amended us individual income tax return   An eligible educator is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide in school for at least 900 hours during a school year. Form 1040x amended us individual income tax return Qualified expenses. Form 1040x amended us individual income tax return   Qualified expenses include ordinary and necessary expenses paid in connection with books, supplies, equipment (including computer equipment, software, and services), and other materials used in the classroom. Form 1040x amended us individual income tax return An ordinary expense is one that is common and accepted in your educational field. Form 1040x amended us individual income tax return A necessary expense is one that is helpful and appropriate for your profession as an educator. Form 1040x amended us individual income tax return An expense does not have to be required to be considered necessary. Form 1040x amended us individual income tax return   Qualified expenses do not include expenses for home schooling or for nonathletic supplies for courses in health or physical education. Form 1040x amended us individual income tax return You must reduce your qualified expenses by the following amounts. Form 1040x amended us individual income tax return Excludable U. Form 1040x amended us individual income tax return S. Form 1040x amended us individual income tax return series EE and I savings bond interest from Form 8815. Form 1040x amended us individual income tax return Nontaxable qualified state tuition program earnings. Form 1040x amended us individual income tax return Nontaxable earnings from Coverdell education savings accounts. Form 1040x amended us individual income tax return Any reimbursements you received for those expenses that were not reported to you on your Form W-2, box 1. Form 1040x amended us individual income tax return Educator expenses over limit. Form 1040x amended us individual income tax return   If you were an educator in 2013 and you had qualified expenses that you cannot take as an adjustment to gross income, you can deduct the rest as an itemized deduction subject to the 2% limit. Form 1040x amended us individual income tax return Home Office If you use a part of your home regularly and exclusively for business purposes, you may be able to deduct a part of the operating expenses and depreciation of your home. Form 1040x amended us individual income tax return You can claim this deduction for the business use of a part of your home only if you use that part of your home regularly and exclusively: As your principal place of business for any trade or business, As a place to meet or deal with your patients, clients, or customers in the normal course of your trade or business, or In the case of a separate structure not attached to your home, in connection with your trade or business. Form 1040x amended us individual income tax return The regular and exclusive business use must be for the convenience of your employer and not just appropriate and helpful in your job. Form 1040x amended us individual income tax return Principal place of business. Form 1040x amended us individual income tax return   If you have more than one place of business, the business part of your home is your principal place of business if: You use it regularly and exclusively for administrative or management activities of your trade or business, and You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. Form 1040x amended us individual income tax return   Otherwise, the location of your principal place of business generally depends on the relative importance of the activities performed at each location and the time spent at each location. Form 1040x amended us individual income tax return You should keep records that will give the information needed to figure the deduction according to these rules. Form 1040x amended us individual income tax return Also keep canceled checks, substitute checks, or account statements and receipts of the expenses paid to prove the deductions you claim. Form 1040x amended us individual income tax return More information. Form 1040x amended us individual income tax return   See Publication 587 for more detailed information and a worksheet for figuring the deduction. Form 1040x amended us individual income tax return Job Search Expenses You can deduct certain expenses you have in looking for a new job in your present occupation, even if you do not get a new job. Form 1040x amended us individual income tax return You cannot deduct these expenses if: You are looking for a job in a new occupation, There was a substantial break between the ending of your last job and your looking for a new one, or You are looking for a job for the first time. Form 1040x amended us individual income tax return Employment and outplacement agency fees. Form 1040x amended us individual income tax return    You can deduct employment and outplacement agency fees you pay in looking for a new job in your present occupation. Form 1040x amended us individual income tax return Employer pays you back. Form 1040x amended us individual income tax return   If, in a later year, your employer pays you back for employment agency fees, you must include the amount you receive in your gross income up to the amount of your tax benefit in the earlier year. Form 1040x amended us individual income tax return See Recoveries in Publication 525. Form 1040x amended us individual income tax return Employer pays the employment agency. Form 1040x amended us individual income tax return   If your employer pays the fees directly to the employment agency and you are not responsible for them, you do not include them in your gross income. Form 1040x amended us individual income tax return Résumé. Form 1040x amended us individual income tax return   You can deduct amounts you spend for preparing and mailing copies of a résumé to prospective employers if you are looking for a new job in your present occupation. Form 1040x amended us individual income tax return Travel and transportation expenses. Form 1040x amended us individual income tax return   If you travel to an area and, while there, you look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area. Form 1040x amended us individual income tax return You can deduct the travel expenses if the trip is primarily to look for a new job. Form 1040x amended us individual income tax return The amount of time you spend on personal activity compared to the amount of time you spend in looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job. Form 1040x amended us individual income tax return   Even if you cannot deduct the travel expenses to and from an area, you can deduct the expenses of looking for a new job in your present occupation while in the area. Form 1040x amended us individual income tax return    You can choose to use the standard mileage rate to figure your car expenses. Form 1040x amended us individual income tax return The 2013 rate for business use of a vehicle is 56½ cents per mile. Form 1040x amended us individual income tax return See Publication 463 for more information on travel and car expenses. Form 1040x amended us individual income tax return Legal Fees You can deduct legal fees related to doing or keeping your job. Form 1040x amended us individual income tax return Licenses and Regulatory Fees You can deduct the amount you pay each year to state or local governments for licenses and regulatory fees for your trade, business, or profession. Form 1040x amended us individual income tax return Occupational Taxes You can deduct an occupational tax charged at a flat rate by a locality for the privilege of working or conducting a business in the locality. Form 1040x amended us individual income tax return If you are an employee, you can claim occupational taxes only as a miscellaneous deduction subject to the 2% limit; you cannot claim them as a deduction for taxes elsewhere on your return. Form 1040x amended us individual income tax return Repayment of Income Aid Payment An “income aid payment” is one that is received under an employer's plan to aid employees who lose their jobs because of lack of work. Form 1040x amended us individual income tax return If you repay a lump-sum income aid payment that you received and included in income in an earlier year, you can deduct the repayment. Form 1040x amended us individual income tax return Research Expenses of a College Professor If you are a college professor, you can deduct your research expenses, including travel expenses, for teaching, lecturing, or writing and publishing on subjects that relate directly to your teaching duties. Form 1040x amended us individual income tax return You must have undertaken the research as a means of carrying out the duties expected of a professor and without expectation of profit apart from salary. Form 1040x amended us individual income tax return However, you cannot deduct the cost of travel as a form of education. Form 1040x amended us individual income tax return Rural Mail Carriers' Vehicle Expenses If your expenses to use a vehicle in performing services as a rural mail carrier are more than the amount of your reimbursements, you can deduct the unreimbursed expenses. Form 1040x amended us individual income tax return See chapter 4 of Publication 463 for more information. Form 1040x amended us individual income tax return Tools Used in Your Work Generally, you can deduct amounts you spend for tools used in your work if the tools wear out and are thrown away within 1 year from the date of purchase. Form 1040x amended us individual income tax return You can depreciate the cost of tools that have a useful life substantially beyond the tax year. Form 1040x amended us individual income tax return For more information about depreciation, see Publication 946. Form 1040x amended us individual income tax return Travel, Transportation, Meals, Entertainment, Gifts, and Local Lodging If you are an employee and have ordinary and necessary business-related expenses for travel away from home, local transportation, entertainment, and gifts, you may be able to deduct these expenses. Form 1040x amended us individual income tax return Generally, you must file Form 2106 or Form 2106-EZ to claim these expenses. Form 1040x amended us individual income tax return Travel expenses. Form 1040x amended us individual income tax return   Travel expenses are those incurred while traveling away from home for your employer. Form 1040x amended us individual income tax return You can deduct travel expenses paid or incurred in connection with a temporary work assignment. Form 1040x amended us individual income tax return Generally, you cannot deduct travel expenses paid or incurred in connection with an indefinite work assignment. Form 1040x amended us individual income tax return   Travel expenses may include: The cost of getting to and from your business destination (air, rail, bus, car, etc. Form 1040x amended us individual income tax return ), Meals and lodging while away from home, Taxi fares, Baggage charges, and Cleaning and laundry expenses. Form 1040x amended us individual income tax return   Travel expenses are discussed more fully in chapter 1 of Publication 463. Form 1040x amended us individual income tax return Temporary work assignment. Form 1040x amended us individual income tax return    If your assignment or job away from home in a single location is realistically expected to last (and does in fact last) for 1 year or less, it is temporary, unless there are facts and circumstances that indicate it is not. Form 1040x amended us individual income tax return Indefinite work assignment. Form 1040x amended us individual income tax return   If your assignment or job away from home in a single location is realistically expected to last for more than 1 year, it is indefinite, whether or not it actually lasts for more than 1 year. Form 1040x amended us individual income tax return If your assignment or job away from home in a single location is realistically expected to last for 1 year or less, but at some later date it is realistically expected to exceed 1 year, it will be treated as temporary (in the absence of facts and circumstances indicating otherwise) until the date that your realistic expectation changes, and it will be treated as indefinite after that date. Form 1040x amended us individual income tax return Federal crime investigation and prosecution. Form 1040x amended us individual income tax return   If you are a federal employee participating in a federal crime investigation or prosecution, you are not subject to the 1-year rule for deducting temporary travel expenses. Form 1040x amended us individual income tax return This means that you may be able to deduct travel expenses even if you are away from your tax home for more than 1 year. Form 1040x amended us individual income tax return   To qualify, the Attorney General must certify that you are traveling: For the Federal Government, In a temporary duty status, and To investigate, prosecute, or provide support services for the investigation or prosecution of a federal crime. Form 1040x amended us individual income tax return Armed Forces reservists traveling more than 100 miles from home. Form 1040x amended us individual income tax return   If you are a member of a reserve component of the Armed Forces of the United States and you travel more than 100 miles away from home in connection with your performance of services as a member of the reserves, you can deduct some of your travel expenses as an adjustment to gross income rather than as a miscellaneous itemized deduction. Form 1040x amended us individual income tax return The amount of expenses you can deduct as an adjustment to gross income is limited to the regular federal per diem rate (for lodging, meals, and incidental expenses) and the standard mileage rate (for car expenses) plus any parking fees, ferry fees, and tolls. Form 1040x amended us individual income tax return The balance, if any, is reported on Schedule A. Form 1040x amended us individual income tax return   You are a member of a reserve component of the Armed Forces of the United States if you are in the Army, Naval, Marine Corps, Air Force, Coast Guard Reserve, the Army National Guard of the United States, the Air National Guard of the United States, or the Reserve Corps of the Public Health Service. Form 1040x amended us individual income tax return   For more information on travel expenses, see Publication 463. Form 1040x amended us individual income tax return Local transportation expenses. Form 1040x amended us individual income tax return   Local transportation expenses are the expenses of getting from one workplace to another when you are not traveling away from home. Form 1040x amended us individual income tax return They include the cost of transportation by air, rail, bus, taxi, and the cost of using your car. Form 1040x amended us individual income tax return   You can choose to use the standard mileage rate to figure your car expenses. Form 1040x amended us individual income tax return The 2013 rate for business use of a vehicle is 56½ cents per mile. Form 1040x amended us individual income tax return    In general, the costs of commuting between your residence and your place of business are nondeductible. Form 1040x amended us individual income tax return Work at two places in a day. Form 1040x amended us individual income tax return   If you work at two places in a day, whether or not for the same employer, you can generally deduct the expenses of getting from one workplace to the other. Form 1040x amended us individual income tax return Temporary work location. Form 1040x amended us individual income tax return   You can deduct expenses incurred in going between your home and a temporary work location if at least one of the following applies. Form 1040x amended us individual income tax return The work location is outside the metropolitan area where you live and normally work. Form 1040x amended us individual income tax return You have at least one regular work location (other than your home) for the same trade or business. Form 1040x amended us individual income tax return (If this applies, the distance between your home and the temporary work location does not matter. Form 1040x amended us individual income tax return )   For this purpose, a work location is generally considered temporary if your work there is realistically expected to last (and does in fact last) for 1 year or less. Form 1040x amended us individual income tax return It is not temporary if your work there is realistically expected to last for more than 1 year, even if it actually lasts for 1 year or less. Form 1040x amended us individual income tax return If your work there initially is realistically expected to last for 1 year or less, but later is realistically expected to last for more than 1 year, the work location is generally considered temporary until the date your realistic expectation changes and not temporary after that date. Form 1040x amended us individual income tax return For more information, see chapter 1 of Publication 463. Form 1040x amended us individual income tax return Home office. Form 1040x amended us individual income tax return   You can deduct expenses incurred in going between your home and a workplace if your home is your principal place of business for the same trade or business. Form 1040x amended us individual income tax return (In this situation, whether the other workplace is temporary or regular and its distance from your home do not matter. Form 1040x amended us individual income tax return ) See Home Office , earlier, for a discussion on the use of your home as your principal place of business. Form 1040x amended us individual income tax return Meals and entertainment. Form 1040x amended us individual income tax return   Generally, you can deduct entertainment expenses (including entertainment-related meals) only if they are directly related to the active conduct of your trade or business. Form 1040x amended us individual income tax return However, the expense only needs to be associated with the active conduct of your trade or business if it directly precedes or follows a substantial and bona fide business-related discussion. Form 1040x amended us individual income tax return   You can deduct only 50% of your business-related meal and entertainment expenses unless the expenses meet certain exceptions. Form 1040x amended us individual income tax return You apply this 50% limit before you apply the 2%-of-adjusted-gross-income limit. Form 1040x amended us individual income tax return Meals when subject to “hours of service” limits. Form 1040x amended us individual income tax return   You can deduct 80% of your business-related meal expenses if you consume the meals during or incident to any period subject to the Department of Transportation's “hours of service” limits. Form 1040x amended us individual income tax return You apply this 80% limit before you apply the 2%-of-adjusted-gross-income limit. Form 1040x amended us individual income tax return Gift expenses. Form 1040x amended us individual income tax return   You can generally deduct up to $25 of business gifts you give to any one individual during the year. Form 1040x amended us individual income tax return The following items do not count toward the $25 limit. Form 1040x amended us individual income tax return Identical, widely distributed items costing $4 or less that have your name clearly and permanently imprinted. Form 1040x amended us individual income tax return Signs, racks, and promotional materials to be displayed on the business premises of the recipient. Form 1040x amended us individual income tax return Local lodging. Form 1040x amended us individual income tax return   If your employer provides or requires you to obtain lodging while you are not traveling away from home, you can deduct the cost of the lodging if it is: on a temporary basis, necessary for you to participate in or be available for a business meeting or employer function, and the costs are ordinary and necessary, but not lavish or extravagant. Form 1040x amended us individual income tax return   If your employer provides the lodging or reimburses you for the cost of the lodging, you can deduct the cost only if the value or the reimbursement is included in your gross income because it is reported as wages on your Form W-2. Form 1040x amended us individual income tax return Additional information. Form 1040x amended us individual income tax return    See Publication 463 for more information on travel, transportation, meal, entertainment, and gift expenses, and reimbursements for these expenses. Form 1040x amended us individual income tax return Union Dues and Expenses You can deduct dues and initiation fees you pay for union membership. Form 1040x amended us individual income tax return You can also deduct assessments for benefit payments to unemployed union members. Form 1040x amended us individual income tax return However, you cannot deduct the part of the assessments or contributions that provides funds for the payment of sick, accident, or death benefits. Form 1040x amended us individual income tax return Also, you cannot deduct contributions to a pension fund even if the union requires you to make the contributions. Form 1040x amended us individual income tax return You may not be able to deduct amounts you pay to the union that are related to certain lobbying and political activities. Form 1040x amended us individual income tax return See Lobbying Expenses under Nondeductible Expenses, later. Form 1040x amended us individual income tax return Work Clothes and Uniforms You can deduct the cost and upkeep of work clothes if the following two requirements are met. Form 1040x amended us individual income tax return You must wear them as a condition of your employment. Form 1040x amended us individual income tax return The clothes are not suitable for everyday wear. Form 1040x amended us individual income tax return It is not enough that you wear distinctive clothing. Form 1040x amended us individual income tax return The clothing must be specifically required by your employer. Form 1040x amended us individual income tax return Nor is it enough that you do not, in fact, wear your work clothes away from work. Form 1040x amended us individual income tax return The clothing must not be suitable for taking the place of your regular clothing. Form 1040x amended us individual income tax return Examples of workers who may be able to deduct the cost and upkeep of work clothes are: delivery workers, firefighters, health care workers, law enforcement officers, letter carriers, professional athletes, and transportation workers (air, rail, bus, etc. Form 1040x amended us individual income tax return ). Form 1040x amended us individual income tax return Musicians and entertainers can deduct the cost of theatrical clothing and accessories that are not suitable for everyday wear. Form 1040x amended us individual income tax return However, work clothing consisting of white cap, white shirt or white jacket, white bib overalls, and standard work shoes, which a painter is required by his union to wear on the job, is not distinctive in character or in the nature of a uniform. Form 1040x amended us individual income tax return Similarly, the costs of buying and maintaining blue work clothes worn by a welder at the request of a foreman are not deductible. Form 1040x amended us individual income tax return Protective clothing. Form 1040x amended us individual income tax return   You can deduct the cost of protective clothing required in your work, such as safety shoes or boots, safety glasses, hard hats, and work gloves. Form 1040x amended us individual income tax return   Examples of workers who may be required to wear safety items are: carpenters, cement workers, chemical workers, electricians, fishing boat crew members, machinists, oil field workers, pipe fitters, steamfitters, and truck drivers. Form 1040x amended us individual income tax return Military uniforms. Form 1040x amended us individual income tax return   You generally cannot deduct the cost of your uniforms if you are on full-time active duty in the armed forces. Form 1040x amended us individual income tax return However, if you are an armed forces reservist, you can deduct the unreimbursed cost of your uniform if military regulations restrict you from wearing it except while on duty as a reservist. Form 1040x amended us individual income tax return In figuring the deduction, you must reduce the cost by any nontaxable allowance you receive for these expenses. Form 1040x amended us individual income tax return   If local military rules do not allow you to wear fatigue uniforms when you are off duty, you can deduct the amount by which the cost of buying and keeping up these uniforms is more than the uniform allowance you receive. Form 1040x amended us individual income tax return   If you are a student at an armed forces academy, you cannot deduct the cost of your uniforms if they replace regular clothing. Form 1040x amended us individual income tax return However, you can deduct the cost of insignia, shoulder boards, and related items. Form 1040x amended us individual income tax return    You can deduct the cost of your uniforms if you are a civilian faculty or staff member of a military school. Form 1040x amended us individual income tax return Work-Related Education You can deduct expenses you have for education, even if the education may lead to a degree, if the education meets at least one of the following two tests. Form 1040x amended us individual income tax return It maintains or improves skills required in your present work. Form 1040x amended us individual income tax return It is required by your employer or the law to keep your salary, status, or job, and the requirement serves a business purpose of your employer. Form 1040x amended us individual income tax return You cannot deduct expenses you have for education, even though one or both of the preceding tests are met, if the education: Is needed to meet the minimum educational requirements to qualify you in your trade or business, or Is part of a program of study that will lead to qualifying you in a new trade or business. Form 1040x amended us individual income tax return If your education qualifies, you can deduct expenses for tuition, books, supplies, laboratory fees, and similar items, and certain transportation costs. Form 1040x amended us individual income tax return If the education qualifies you for a new trade or business, you cannot deduct the educational expenses even if you do not intend to enter that trade or business. Form 1040x amended us individual income tax return Travel as education. Form 1040x amended us individual income tax return   You cannot deduct the cost of travel that in itself constitutes a form of education. Form 1040x amended us individual income tax return For example, a French teacher who travels to France to maintain general familiarity with the French language and culture cannot deduct the cost of the trip as an educational expense. Form 1040x amended us individual income tax return More information. Form 1040x amended us individual income tax return    See Publication 970, Tax Benefits for Education, for a complete discussion of the deduction for work-related education expenses. Form 1040x amended us individual income tax return Education Expenses During Unemployment If you stop working for a year or less in order to get education in order to maintain or improve skills needed in your present work and then return to the same general type of work, your absence is considered temporary. Form 1040x amended us individual income tax return Education that you get during a temporary absence is qualifying work-related education if it maintains or improves skills needed in your present work. Form 1040x amended us individual income tax return Tax Preparation Fees You can usually deduct tax preparation fees on the return for the year in which you pay them. Form 1040x amended us individual income tax return Thus, on your 2013 return, you can deduct fees paid in 2013 for preparing your 2012 return. Form 1040x amended us individual income tax return These fees include the cost of tax preparation software programs and tax publications. Form 1040x amended us individual income tax return They also include any fee you paid for electronic filing of your return. Form 1040x amended us individual income tax return See Tax preparation fees under How To Report, later. Form 1040x amended us individual income tax return Other Expenses You can deduct certain other expenses as miscellaneous itemized deductions subject to the 2%-of-adjusted-gross-income limit. Form 1040x amended us individual income tax return On Schedule A (Form 1040), line 23, or Schedule A (Form 1040NR), line 9, you can deduct the ordinary and necessary expenses that you pay: To produce or collect income that must be included in your gross income, To manage, conserve, or maintain property held for producing such income, or To determine, contest, pay, or claim a refund of any tax. Form 1040x amended us individual income tax return You can deduct expenses you pay for the purposes in (1) and (2) above only if they are reasonable and closely related to these purposes. Form 1040x amended us individual income tax return These other expenses include the following items. Form 1040x amended us individual income tax return Appraisal fees for a casualty loss or charitable contribution. Form 1040x amended us individual income tax return Casualty and theft losses from property used in performing services as an employee. Form 1040x amended us individual income tax return Clerical help and office rent in caring for investments. Form 1040x amended us individual income tax return Depreciation on home computers used for investments. Form 1040x amended us individual income tax return Excess deductions (including administrative expenses) allowed a beneficiary on termination of an estate or trust. Form 1040x amended us individual income tax return Fees to collect interest and dividends. Form 1040x amended us individual income tax return Hobby expenses, but generally not more than hobby income. Form 1040x amended us individual income tax return Indirect miscellaneous deductions from pass-through entities. Form 1040x amended us individual income tax return Investment fees and expenses. Form 1040x amended us individual income tax return Legal fees related to producing or collecting taxable income or getting tax advice. Form 1040x amended us individual income tax return Loss on deposits in an insolvent or bankrupt financial institution. Form 1040x amended us individual income tax return Loss on traditional IRAs or Roth IRAs, when all amounts have been distributed to you. Form 1040x amended us individual income tax return Repayments of income. Form 1040x amended us individual income tax return Repayments of social security benefits. Form 1040x amended us individual income tax return Safe deposit box rental, except for storing jewelry and other personal effects. Form 1040x amended us individual income tax return Service charges on dividend reinvestment plans. Form 1040x amended us individual income tax return Tax advice fees. Form 1040x amended us individual income tax return Trustee's fees for your IRA, if separately billed and paid. Form 1040x amended us individual income tax return If the expenses you pay produce income that is only partially taxable, see Tax-Exempt Income Expenses, later, under Nondeductible Expenses. Form 1040x amended us individual income tax return Appraisal Fees You can deduct appraisal fees if you pay them to figure a casualty loss or the fair market value of donated property. Form 1040x amended us individual income tax return Casualty and Theft Losses You can deduct a casualty or theft loss as a miscellaneous itemized deduction subject to the 2% limit if you used the damaged or stolen property in performing services as an employee. Form 1040x amended us individual income tax return First report the loss in Section B of Form 4684, Casualties and Thefts. Form 1040x amended us individual income tax return You may also have to include the loss on Form 4797, Sales of Business Property, if you are otherwise required to file that form. Form 1040x amended us individual income tax return To figure your deduction, add all casualty or theft losses from this type of property included on Form 4684, lines 32 and 38b, or Form 4797, line 18a. Form 1040x amended us individual income tax return For more information on casualty and theft losses, see Publication 547, Casualties, Disasters, and Thefts. Form 1040x amended us individual income tax return Clerical Help and Office Rent You can deduct office expenses, such as rent and clerical help, that you have in connection with your investments and collecting the taxable income on them. Form 1040x amended us individual income tax return Credit or Debit Card Convenience Fees You can deduct the convenience fee charged by the card processor for paying your income tax (including estimated tax payments) by credit or debit card. Form 1040x amended us individual income tax return The fees are deductible on the return for the year in which you paid them. Form 1040x amended us individual income tax return For example, fees charged to payments made in 2013 can be claimed on the 2013 tax return. Form 1040x amended us individual income tax return Depreciation on Home Computer You can deduct depreciation on your home computer if you use it to produce income (for example, to manage your investments that produce taxable income). Form 1040x amended us individual income tax return You generally must depreciate the computer using the straight line method over the Alternative Depreciation System (ADS) recovery period. Form 1040x amended us individual income tax return But if you work as an employee and also use the computer in that work, see Depreciation on Computers under Unreimbursed Employee Expenses, earlier. Form 1040x amended us individual income tax return For more information on depreciation, see Publication 946. Form 1040x amended us individual income tax return Excess Deductions of an Estate If an estate's total deductions in its last tax year are more than its gross income for that year, the beneficiaries succeeding to the estate's property can deduct the excess. Form 1040x amended us individual income tax return Do not include deductions for the estate's personal exemption and charitable contributions when figuring the estate's total deductions. Form 1040x amended us individual income tax return The beneficiaries can claim the deduction only for the tax year in which, or with which, the estate terminates, whether the year of termination is a normal year or a short tax year. Form 1040x amended us individual income tax return For more information, see Termination of Estate in Publication 559, Survivors, Executors, and Administrators. Form 1040x amended us individual income tax return Fees To Collect Interest and Dividends You can deduct fees you pay to a broker, bank, trustee, or similar agent to collect your taxable bond interest or dividends on shares of stock. Form 1040x amended us individual income tax return But you cannot deduct a fee you pay to a broker to buy investment property, such as stocks or bonds. Form 1040x amended us individual income tax return You must add the fee to the cost of the property. Form 1040x amended us individual income tax return You cannot deduct the fee you pay to a broker to sell securities. Form 1040x amended us individual income tax return You can use the fee only to figure gain or loss from the sale. Form 1040x amended us individual income tax return See the instructions for Schedule D (Form 1040) for information on how to report the fee. Form 1040x amended us individual income tax return Hobby Expenses You can generally deduct hobby expenses, but only up to the amount of hobby income. Form 1040x amended us individual income tax return A hobby is not a business because it is not carried on to make a profit. Form 1040x amended us individual income tax return See Not-for-Profit Activities in chapter 1 of Publication 535. Form 1040x amended us individual income tax return Indirect Deductions of Pass-Through Entities Pass-through entities include partnerships, S corporations, and mutual funds that are not publicly offered. Form 1040x amended us individual income tax return Deductions of pass-through entities are passed through to the partners or shareholders. Form 1040x amended us individual income tax return The partners or shareholders can deduct their share of passed-through deductions for investment expenses as miscellaneous itemized deductions subject to the 2% limit. Form 1040x amended us individual income tax return Example. Form 1040x amended us individual income tax return You are a member of an investment club that is formed solely to invest in securities. Form 1040x amended us individual income tax return The club is treated as a partnership. Form 1040x amended us individual income tax return The partnership's income is solely from taxable dividends, interest, and gains from sales of securities. Form 1040x amended us individual income tax return In this case, you can deduct your share of the partnership's operating expenses as miscellaneous itemized deductions subject to the 2% limit. Form 1040x amended us individual income tax return However, if the investment club partnership has investments that also produce nontaxable income, you cannot deduct your share of the partnership's expenses that produce the nontaxable income. Form 1040x amended us individual income tax return Publicly offered mutual funds. Form 1040x amended us individual income tax return   Publicly offered mutual funds do not pass deductions for investment expenses through to shareholders. Form 1040x amended us individual income tax return A mutual fund is “publicly offered” if it is: Continuously offered pursuant to a public offering, Regularly traded on an established securities market, or Held by or for at least 500 persons at all times during the tax year. Form 1040x amended us individual income tax return   A publicly offered mutual fund will send you a Form 1099-DIV, Dividends and Distributions, or a substitute form, showing the net amount of dividend income (gross dividends minus investment expenses). Form 1040x amended us individual income tax return This net figure is the amount you report on your return as income. Form 1040x amended us individual income tax return You cannot further deduct investment expenses related to publicly offered mutual funds because they are already included as part of the net income amount. Form 1040x amended us individual income tax return Information returns. Form 1040x amended us individual income tax return   You should receive information returns from pass-through entities. Form 1040x amended us individual income tax return Partnerships and S corporations. Form 1040x amended us individual income tax return   These entities issue Schedule K-1, which lists the items and amounts you must report, and identifies the tax return schedules and lines to use. Form 1040x amended us individual income tax return Nonpublicly offered mutual funds. Form 1040x amended us individual income tax return   These funds will send you a Form 1099-DIV, or a substitute form, showing your share of gross income and investment expenses. Form 1040x amended us individual income tax return You can claim the expenses only as a miscellaneous itemized deduction subject to the 2% limit. Form 1040x amended us individual income tax return Investment Fees and Expenses You can deduct investment fees, custodial fees, trust administration fees, and other expenses you paid for managing your investments that produce taxable income. Form 1040x amended us individual income tax return Legal Expenses You can usually deduct legal expenses that you incur in attempting to produce or collect taxable income or that you pay in connection with the determination, collection, or refund of any tax. Form 1040x amended us individual income tax return You can also deduct legal expenses that are: Related to either doing or keeping your job, such as those you paid to defend yourself against criminal charges arising out of your trade or business, For tax advice related to a divorce if the bill specifies how much is for tax advice and it is determined in a reasonable way, or To collect taxable alimony. Form 1040x amended us individual income tax return You can deduct expenses of resolving tax issues relating to profit or loss from business (Schedule C or C-EZ), rentals or royalties (Schedule E), or farm income and expenses (Schedule F) on the appropriate schedule. Form 1040x amended us individual income tax return You deduct expenses of resolving nonbusiness tax issues on Schedule A (Form 1040 or Form 1040NR). Form 1040x amended us individual income tax return See Tax Preparation Fees, earlier. Form 1040x amended us individual income tax return Unlawful discrimination claims. Form 1040x amended us individual income tax return   You may be able to deduct, as an adjustment to income on Form 1040, line 36, or Form 1040NR, line 35, rather than as a miscellaneous itemized deduction, attorney fees and court costs for actions settled or decided after October 22, 2004, involving a claim of unlawful discrimination, a claim against the U. Form 1040x amended us individual income tax return S. Form 1040x amended us individual income tax return Government, or a claim made under section 1862(b)(3)(A) of the Social Security Act. Form 1040x amended us individual income tax return However, the amount you can deduct on Form 1040, line 36, or Form 1040NR, line 35, is limited to the amount of the judgment or settlement you are including in income for the tax year. Form 1040x amended us individual income tax return See Publication 525 for more information. Form 1040x amended us individual income tax return Loss on Deposits A loss on deposits can occur when a bank, credit union, or other financial institution becomes insolvent or bankrupt. Form 1040x amended us individual income tax return If you can reasonably estimate the amount of your loss on money you have on deposit in a financial institution that becomes insolvent or bankrupt, you can generally choose to deduct it in the current year even though its exact amount has not been finally determined. Form 1040x amended us individual income tax return If elected, the casualty loss is subject to certain deduction limitations. Form 1040x amended us individual income tax return The election is made on Form 4684. Form 1040x amended us individual income tax return Once you make this choice, you cannot change it without IRS approval. Form 1040x amended us individual income tax return If none of the deposit is federally insured, you can deduct the loss in either of the following ways. Form 1040x amended us individual income tax return As an ordinary loss (as a miscellaneous itemized deduction subject to the 2% limit). Form 1040x amended us individual income tax return Write the name of the financial institution and “Insolvent Financial Institution” beside the amount on Schedule A (Form 1040), line 23, or Schedule A (Form 1040NR), line 9. Form 1040x amended us individual income tax return This deduction is limited to $20,000 ($10,000 if you are married filing separately) for each financial institution, reduced by any expected state insurance proceeds. Form 1040x amended us individual income tax return As a casualty loss. Form 1040x amended us individual income tax return Report it on Form 4684 first and then on Schedule A (Form 1040). Form 1040x amended us individual income tax return See Publication 547 for details. Form 1040x amended us individual income tax return As a nonbusiness bad debt. Form 1040x amended us individual income tax return Report it on Schedule D (Form 1040). Form 1040x amended us individual income tax return If any part of the deposit is federally insured, you can deduct the loss only as a casualty loss. Form 1040x amended us individual income tax return Exception. Form 1040x amended us individual income tax return   You cannot make this choice if you are a 1%-or-more-owner or an officer of the financial institution, or are related to such owner or officer. Form 1040x amended us individual income tax return For a definition of “related,” see Deposit in Insolvent or Bankrupt Financial Institution in chapter 4 of Publication 550. Form 1040x amended us individual income tax return Actual loss different from estimated loss. Form 1040x amended us individual income tax return   If you make this choice and your actual loss is less than your estimated loss, you must include the excess in income. Form 1040x amended us individual income tax return See Recoveries in Publication 525. Form 1040x amended us individual income tax return If your actual loss is more than your estimated loss, treat the excess loss as explained under Choice not made, next. Form 1040x amended us individual income tax return Choice not made. Form 1040x amended us individual income tax return   If you do not make this choice (or if you have an excess actual loss after choosing to deduct your estimated loss), treat your loss (or excess loss) as a nonbusiness bad debt (deductible as a short-term capital loss) in the year its amount is finally determined. Form 1040x amended us individual income tax return See Nonbusiness Bad Debts in chapter 4 of Publication 550. Form 1040x amended us individual income tax return Loss on IRA If you have a loss on your traditional IRA (or Roth IRA) investment, you can deduct the loss as a miscellaneous itemized deduction subject to the 2% limit, but only when all the amounts in all your traditional IRA (or Roth IRA) accounts have been distributed to you and the total distributions are less than your unrecovered basis. Form 1040x amended us individual income tax return For more information, see Publication 590, Individual Retirement Arrangements (IRAs). Form 1040x amended us individual income tax return Repayments of Income If you had to repay an amount that you included in income in an earlier year, you may be able to deduct the amount you repaid. Form 1040x amended us individual income tax return If the amount you had to repay was ordinary income of $3,000 or less, the deduction is subject to the 2% limit. Form 1040x amended us individual income tax return If it was more than $3,000, see Repayments Under Claim of Right under Deductions Not Subject to the 2% Limit, later. Form 1040x amended us individual income tax return Repayments of Social Security Benefits If the total of the amounts in box 5 (net benefits for 2013) of all your Forms SSA-1099, Social Security Benefit Statement, and Forms RRB-1099, Payments By the Railroad Retirement Board, is a negative figure (a figure in parentheses), you may be able to take a miscellaneous itemized deduction subject to the 2% limit. Form 1040x amended us individual income tax return The amount you can deduct is the part of the negative figure that represents an amount you included in gross income in an earlier year. Form 1040x amended us individual income tax return The amount in box 5 of Form SSA-1099 or RRB-1099 is the net amount of your benefits for the year. Form 1040x amended us individual income tax return It will be a negative figure if the amount of benefits you repaid in 2013 (box 4) is more than the gross amount of benefits paid to you in 2013 (box 3). Form 1040x amended us individual income tax return If the deduction is more than $3,000, you will have to use a special computation to figure your tax. Form 1040x amended us individual income tax return See Publication 915, Social Security and Equivalent Railroad Retirement Benefits, for additional information. Form 1040x amended us individual income tax return Safe Deposit Box Rent You can deduct safe deposit box rent if you use the box to store taxable income-producing stocks, bonds, or investment-related papers and documents. Form 1040x amended us individual income tax return You cannot deduct the rent if you use the box only for jewelry, other personal items, or tax-exempt securities. Form 1040x amended us individual income tax return Service Charges on Dividend Reinvestment Plans You can deduct service charges you pay as a subscriber in a dividend reinvestment plan. Form 1040x amended us individual income tax return These service charges include payments for: Holding shares acquired through a plan, Collecting and reinvesting cash dividends, and Keeping individual records and providing detailed statements of accounts. Form 1040x amended us individual income tax return Trustee's Administrative Fees for IRA Trustee's administrative fees that are billed separately and paid by you in connection with your IRA are deductible (if they are ordinary and necessary) as a miscellaneous itemized deduction subject to the 2% limit. Form 1040x amended us individual income tax return Deductions Not Subject to the 2% Limit You can deduct the items listed below as miscellaneous itemized deductions. Form 1040x amended us individual income tax return They are not subject to the 2% limit. Form 1040x amended us individual income tax return Report these items on Schedule A (Form 1040), line 28, or Schedule A (Form 1040NR), line 14. Form 1040x amended us individual income tax return List of Deductions Amortizable premium on taxable bonds. Form 1040x amended us individual income tax return Casualty and theft losses from income-producing property. Form 1040x amended us individual income tax return Federal estate tax on income in respect of a decedent. Form 1040x amended us individual income tax return Gambling losses up to the amount of gambling winnings. Form 1040x amended us individual income tax return Impairment-related work expenses of persons with disabilities. Form 1040x amended us individual income tax return Loss from other activities from Schedule K-1 (Form 1065-B), box 2. Form 1040x amended us individual income tax return Losses from Ponzi-type investment schemes. Form 1040x amended us individual income tax return Repayments of more than $3,000 under a claim of right. Form 1040x amended us individual income tax return Unrecovered investment in an annuity. Form 1040x amended us individual income tax return Amortizable Premium on Taxable Bonds In general, if the amount you pay for a bond is greater than its stated principal amount, the excess is bond premium. Form 1040x amended us individual income tax return You can elect to amortize the premium on taxable bonds. Form 1040x amended us individual income tax return The amortization of the premium is generally an offset to interest income on the bond rather than a separate deduction item. Form 1040x amended us individual income tax return Pre-1998 election to amortize bond premium. Form 1040x amended us individual income tax return   Generally, if you first elected to amortize bond premium before 1998, the above treatment of the premium does not apply to bonds you acquired before 1988. Form 1040x amended us individual income tax return Bonds acquired after October 22, 1986, and before 1988. Form 1040x amended us individual income tax return   The amortization of the premium on these bonds is investment interest expense subject to the investment interest limit, unless you chose to treat it as an offset to interest income on the bond. Form 1040x amended us individual income tax return Bonds acquired before October 23, 1986. Form 1040x amended us individual income tax return   The amortization of the premium on these bonds is a miscellaneous itemized deduction not subject to the 2% limit. Form 1040x amended us individual income tax return Deduction for excess premium. Form 1040x amended us individual income tax return   On certain bonds (such as bonds that pay a variable rate of interest or that provide for an interest-free period), the amount of bond premium allocable to a period may exceed the amount of stated interest allocable to the period. Form 1040x amended us individual income tax return If this occurs, treat the excess as a miscellaneous itemized deduction that is not subject to the 2% limit. Form 1040x amended us individual income tax return However, the amount deductible is limited to the amount by which your total interest inclusions on the bond in prior periods exceed the total amount you treated as a bond premium deduction on the bond in prior periods. Form 1040x amended us individual income tax return If any of the excess bond premium cannot be deducted because of the limit, this amount is carried forward to the next period and is treated as bond premium allocable to that period. Form 1040x amended us individual income tax return    Pre-1998 choice to amortize bond premium. Form 1040x amended us individual income tax return If you made the choice to amortize the premium on taxable bonds before 1998, you can deduct the bond premium amortization that is more than your interest income only for bonds acquired during 1998 and later years. Form 1040x amended us individual income tax return More information. Form 1040x amended us individual income tax return    For more information on bond premium, see Bond Premium Amortization in chapter 3 of Publication 550. Form 1040x amended us individual income tax return Casualty and Theft Losses of Income-Producing Property You can deduct a casualty or theft loss as a miscellaneous itemized deduction not subject to the 2% limit if the damaged or stolen property was income-producing property (property held for investment, such as stocks, notes, bonds, gold, silver, vacant lots, and works of art). Form 1040x amended us individual income tax return First report the loss in Section B of Form 4684. Form 1040x amended us individual income tax return You may also have to include the loss on Form 4797, Sales of Business Property, if you are otherwise required to file that form. Form 1040x amended us individual income tax return To figure your deduction, add all casualty or theft losses from this type of property included on Form 4684, lines 32 and 38b, or Form 4797, line 18a. Form 1040x amended us individual income tax return For more information on casualty and theft losses, see Publication 547. Form 1040x amended us individual income tax return Federal Estate Tax on Income in Respect of a Decedent You can deduct the federal estate tax attributable to income in respect of a decedent that you as a beneficiary include in your gross income. Form 1040x amended us individual income tax return Income in respect of the decedent is gross income that the decedent would have received had death not occurred and that was not properly includible in the decedent's final income tax return. Form 1040x amended us individual income tax return See Publication 559 for information about figuring the amount of this deduction. Form 1040x amended us individual income tax return Gambling Losses Up to the Amount of Gambling Winnings You must report the full amount of your gambling winnings for the year on Form 1040, line 21. Form 1040x amended us individual income tax return You deduct your gambling losses for the year on Schedule A (Form 1040), line 28. Form 1040x amended us individual income tax return You cannot deduct gambling losses that are more than your winnings. Form 1040x amended us individual income tax return Generally, nonresident aliens cannot deduct gambling losses on Schedule A (Form 1040NR). Form 1040x amended us individual income tax return You cannot reduce your gambling winnings by your gambling losses and report the difference. Form 1040x amended us individual income tax return You must report the full amount of your winnings as income and claim your losses (up to the amount of winnings) as an itemized deduction. Form 1040x amended us individual income tax return Therefore, your records should show your winnings separately from your losses. Form 1040x amended us individual income tax return Diary of winnings and losses. Form 1040x amended us individual income tax return You must keep an accurate diary or similar record of your losses and winnings. Form 1040x amended us individual income tax return Your diary should contain at least the following information. Form 1040x amended us individual income tax return The date and type of your specific wager or wagering activity. Form 1040x amended us individual income tax return The name and address or location of the gambling establishment. Form 1040x amended us individual income tax return The names of other persons present with you at the gambling establishment. Form 1040x amended us individual income tax return The amount(s) you won or lost. Form 1040x amended us individual income tax return Proof of winnings and losses. Form 1040x amended us individual income tax return   In addition to your diary, you should also have other documentation. Form 1040x amended us individual income tax return You can generally prove your winnings and losses through Form W-2G, Certain Gambling Winnings, Form 5754, Statement by Person(s) Receiving Gambling Winnings, wagering tickets, canceled checks, substitute checks, credit records, bank withdrawals, and statements of actual winnings or payment slips provided to you by the gambling establishment. Form 1040x amended us individual income tax return   For specific wagering transactions, you can use the following items to support your winnings and losses. Form 1040x amended us individual income tax return    These recordkeeping suggestions are intended as general guidelines to help you establish your winnings and losses. Form 1040x amended us individual income tax return They are not all-inclusive. Form 1040x amended us individual income tax return Your tax liability depends on your particular facts and circumstances. Form 1040x amended us individual income tax return Keno. Form 1040x amended us individual income tax return   Copies of the keno tickets you purchased that were validated by the gambling establishment, copies of your casino credit records, and copies of your casino check cashing records. Form 1040x amended us individual income tax return Slot machines. Form 1040x amended us individual income tax return   A record of the machine number and all winnings by date and time the machine was played. Form 1040x amended us individual income tax return Table games (twenty-one (blackjack), craps, poker, baccarat, roulette, wheel of fortune, etc. Form 1040x amended us individual income tax return ). Form 1040x amended us individual income tax return   The number of the table at which you were playing. Form 1040x amended us individual income tax return Casino credit card data indicating whether the credit was issued in the pit or at the cashier's cage. Form 1040x amended us individual income tax return Bingo. Form 1040x amended us individual income tax return   A record of the number of games played, cost of tickets purchased, and amounts collected on winning tickets. Form 1040x amended us individual income tax return Supplemental records include any receipts from the casino, parlor, etc. Form 1040x amended us individual income tax return Racing (horse, harness, dog, etc. Form 1040x amended us individual income tax return ). Form 1040x amended us individual income tax return   A record of the races, amounts of wagers, amounts collected on winning tickets, and amounts lost on losing tickets. Form 1040x amended us individual income tax return Supplemental records include unredeemed tickets and payment records from the racetrack. Form 1040x amended us individual income tax return Lotteries. Form 1040x amended us individual income tax return   A record of ticket purchases, dates, winnings, and losses. Form 1040x amended us individual income tax return Supplemental records include unredeemed tickets, payment slips, and winnings statements. Form 1040x amended us individual income tax return Impairment-Related Work Expenses If you have a physical or mental disability that limits your being employed, or substantially limits one or more of your major life activities, such as performing manual tasks, walking, speaking, breathing, learning, and working, you can deduct your impairment-related work expenses. Form 1040x amended us individual income tax return Impairment-related work expenses are ordinary and necessary business expenses for attendant care services at your place of work and other expenses in connection with your place of work that are necessary for you to be able to work. Form 1040x amended us individual income tax return Example. Form 1040x amended us individual income tax return You are blind. Form 1040x amended us individual income tax return You must use a reader to do your work. Form 1040x amended us individual income tax return You use the reader both during your regular working hours at your place of work and outside your regular working hours away from your place of work. Form 1040x amended us individual income tax return The reader's services are only for your work. Form 1040x amended us individual income tax return You can deduct your expenses for the reader as impairment-related work expenses. Form 1040x amended us individual income tax return Self-employed. Form 1040x amended us individual income tax return   If you are self-employed, enter your impairment-related work expenses on the appropriate form (Schedule C, C-EZ, E, or F) used to report your business income and expenses. Form 1040x amended us individual income tax return See Impairment-related work expenses. Form 1040x amended us individual income tax return , later under How To Report. Form 1040x amended us individual income tax return Loss From Other Activities From Schedule K-1 (Form 1065-B), Box 2 If the amount reported in Schedule K-1 (Form 1065-B), box 2, is a loss, report it on Schedule A (Form 1040), line 28, or Schedule A (Form 1040NR), line 14 (only if effectively connected with a U. Form 1040x amended us individual income tax return S. Form 1040x amended us individual income tax return trade or business). Form 1040x amended us individual income tax return It is not subject to the passive activity limitations. Form 1040x amended us individual income tax return Officials Paid on a Fee Basis If you are a fee-basis official, you can claim your expenses in performing services in that job as an adjustment to income rather than as a miscellaneous itemized deduction. Form 1040x amended us individual income tax return See Publication 463 for more information. Form 1040x amended us individual income tax return Performing Artists If you are a qualified performing artist, you can deduct your employee business expenses as an adjustment to income rather than as a miscellaneous itemized deduction. Form 1040x amended us individual income tax return If you are an employee, complete Form 2106 or Form 2106-EZ. Form 1040x amended us individual income tax return See Publication 463 for more information. Form 1040x amended us individual income tax return Losses From Ponzi-type Investment Schemes These losses are deductible as theft losses of income-producing property on your tax return for the year the loss was discovered. Form 1040x amended us individual income tax return You figure the deductible loss in Section B of Form 4684. Form 1040x amended us individual income tax return However, if you qualify to use Revenue Procedure 2009-20 (as modified by Revenue Procedure 2011-58) and you choose to follow the procedures in the guidance, complete Section C of Form 4684 before completing Section B. Form 1040x amended us individual income tax return Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. Form 1040x amended us individual income tax return You do not need to complete Appendix A. Form 1040x amended us individual income tax return See the Form 4684 instructions and Publication 547, Casualties, Disasters, and Thefts, for more information. Form 1040x amended us individual income tax return Repayments Under Claim of Right If you had to repay more than $3,000 that you included in your income in an earlier year because at the time you thought you had an unrestricted right to it, you may be able to deduct the amount you repaid, or take a credit against your tax. Form 1040x amended us individual income tax return See Repayments in Publication 525 for more information. Form 1040x amended us individual income tax return Unrecovered Investment in Annuity A retiree who contributed to the cost of an annuity can exclude from income a part of each payment received as a tax-free return of the retiree's investment. Form 1040x amended us individual income tax return If the retiree dies before the entire investment is recovered tax free, any unrecovered investment can be deducted on the retiree's final income tax return. Form 1040x amended us individual income tax return See Publication 575, Pension and Annuity Income, for more information about the tax treatment of pensions and annuities. Form 1040x amended us individual income tax return Nondeductible Expenses You cannot deduct the following expenses. Form 1040x amended us individual income tax return List of Nondeductible Expenses Adoption expenses. Form 1040x amended us individual income tax return Broker's commissions. Form 1040x amended us individual income tax return Burial or funeral expenses, including the cost of a cemetery lot. Form 1040x amended us individual income tax return Campaign expenses. Form 1040x amended us individual income tax return Capital expenses. Form 1040x amended us individual income tax return Check-writing fees. Form 1040x amended us individual income tax return Club dues. Form 1040x amended us individual income tax return Commuting expenses. Form 1040x amended us individual income tax return Fees and licenses, such as car licenses, marriage licenses, and dog tags. Form 1040x amended us individual income tax return Fines and penalties, such as parking tickets. Form 1040x amended us individual income tax return Health spa expenses. Form 1040x amended us individual income tax return Hobby losses—but see Hobby Expenses, earlier. Form 1040x amended us individual income tax return Home repairs, insurance, and rent. Form 1040x amended us individual income tax return Home security system. Form 1040x amended us individual income tax return Illegal bribes and kickbacks—see Bribes and kickbacks in chapter 11 of Publication 535. Form 1040x amended us individual income tax return Investment-related seminars. Form 1040x amended us individual income tax return Life insurance premiums paid by the insured. Form 1040x amended us individual income tax return Lobbying expenses. Form 1040x amended us individual income tax return Losses from the sale of your home, furniture, personal car, etc. Form 1040x amended us individual income tax return Lost or misplaced cash or property. Form 1040x amended us individual income tax return Lunches with co-workers. Form 1040x amended us individual income tax return Meals while working late. Form 1040x amended us individual income tax return Medical expenses as business expenses other than medical examinations required by your employer. Form 1040x amended us individual income tax return Personal disability insurance premiums. Form 1040x amended us individual income tax return Personal legal expenses. Form 1040x amended us individual income tax return Personal, living, or family expenses. Form 1040x amended us individual income tax return Political contributions. Form 1040x amended us individual income tax return Professional accreditation fees. Form 1040x amended us individual income tax return Professional reputation, expenses to improve. Form 1040x amended us individual income tax return Relief fund contributions. Form 1040x amended us individual income tax return Residential telephone line. Form 1040x amended us individual income tax return Stockholders' meeting, expenses of attending. Form 1040x amended us individual income tax return Tax-exempt income, expenses of earning or collecting. Form 1040x amended us individual income tax return The value of wages never received or lost vacation time. Form 1040x amended us individual income tax return Travel expenses for another individual. Form 1040x amended us individual income tax return Voluntary unemployment benefit fund contributions. Form 1040x amended us individual income tax return Wristwatches. Form 1040x amended us individual income tax return Adoption Expenses You cannot deduct the expenses of adopting a child but you may be able to take a credit for those expenses. Form 1040x amended us individual income tax return For details, see Form 8839, Qualified Adoption Expenses. Form 1040x amended us individual income tax return Commissions Commissions paid on the purchase of securities are not deductible, either as business or nonbusiness expenses. Form 1040x amended us individual income tax return Instead, these fees must be added to the taxpayer's cost of the securities. Form 1040x amended us individual income tax return Commissions paid on the sale are deductible as business expenses only by dealers. Form 1040x amended us individual income tax return Campaign Expenses You cannot deduct campaign expenses of a candidate for any office, even if the candidate is running for reelection to the office. Form 1040x amended us individual income tax return These include qualification and registration fees for primary elections. Form 1040x amended us individual income tax return Legal fees. Form 1040x amended us individual income tax return   You cannot deduct legal fees paid to defend charges that arise from participation in a political campaign. Form 1040x amended us individual income tax return Capital Expenses You cannot currently deduct amounts paid to buy property that has a useful life substantially beyond the tax year or amounts paid to increase the value or prolong the life of property. Form 1040x amended us individual income tax return If you use such property in your work, you may be able to take a depreciation deduction. Form 1040x amended us individual income tax return See Publication 946. Form 1040x amended us individual income tax return If the property is a car used in your work, also see Publication 463. Form 1040x amended us individual income tax return Check-Writing Fees on Personal Account If you have a personal checking account, you cannot deduct fees charged by the bank for the privilege of writing checks, even if the account pays interest. Form 1040x amended us individual income tax return Club Dues Generally, you cannot deduct the cost of membership in any club organized for business, pleasure, recreation, or other social purpose. Form 1040x amended us individual income tax return This includes business, social, athletic, luncheon, sporting, airline, hotel, golf, and country clubs. Form 1040x amended us individual income tax return You cannot deduct dues paid to an organization if one of its main purposes is to: Conduct entertainment activities for members or their guests, or Provide members or their guests with access to entertainment facilities. Form 1040x amended us individual income tax return Dues paid to airline, hotel, and luncheon clubs are not deductible. Form 1040x amended us individual income tax return Commuting Expenses You cannot deduct commuting expenses (the cost of transportation between your home and your main or regular place of work). Form 1040x amended us individual income tax return If you haul tools, instruments, or other items in your car to and from work, you can deduct only the additional cost of hauling the items, such as the rent on a trailer to carry the items. Form 1040x amended us individual income tax return Fines or Penalties You cannot deduct fines or penalties you pay to a governmental unit for violating a law. Form 1040x amended us individual income tax return This includes an amount paid in settlement of your actual or potential liability for a fine or penalty (civil or criminal). Form 1040x amended us individual income tax return Fines or penalties include parking tickets, tax penalties, and penalties deducted from teachers' paychecks after an illegal strike. Form 1040x amended us individual income tax return Health Spa Expenses You cannot deduct health spa expenses, even if there is a job requirement to stay in excellent physical condition, such as might be required of a law enforcement officer. Form 1040x amended us individual income tax return Home Security System You cannot deduct the cost of a home security system as a miscellaneous deduction. Form 1040x amended us individual income tax return However, you may be able to claim a deduction for a home security system as a business expense if you have a home office. Form 1040x amended us individual income tax return See Home Office under Unreimbursed Employee Expenses, earlier, and Publication 587. Form 1040x amended us individual income tax return Investment-Related Seminars You cannot deduct any expenses for attending a convention, seminar, or similar meeting for investment purposes. Form 1040x amended us individual income tax return Life Insurance Premiums You cannot deduct premiums you pay on your life insurance. Form 1040x amended us individual income tax return You may be able to deduct, as alimony, premiums you pay on life insurance policies assigned to your former spouse. Form 1040x amended us individual income tax return See Publication 504, Divorced or Separated Individuals, for information on alimony. Form 1040x amended us individual income tax return Lobbying Expenses You generally cannot deduct amounts paid or incurred for lobbying expenses. Form 1040x amended us individual income tax return These include expenses to: Influence legislation, Participate, or intervene, in any political campaign for, or against, any candidate for public office, Attempt to influence the general public, or segments of the public, about elections, legislative matters, or referendums, or Communicate directly with covered executive branch officials in any attempt to influence the official actions or positions of those officials. Form 1040x amended us individual income tax return Lobbying expenses also include any amounts paid or incurred for research, preparation, planning, or coordination of any of these activities. Form 1040x amended us individual income tax return Covered executive branch official. Form 1040x amended us individual income tax return   A covered executive branch official, for the purpose of (4) above, is any of the following officials. Form 1040x amended us individual income tax return The President. Form 1040x amended us individual income tax return The Vice President. Form 1040x amended us individual income tax return Any officer or employee of the White House Office of the Executive Office of the President, and the two most senior level officers of each of the other agencies in the Executive Office. Form 1040x amended us individual income tax return Any individual serving in a position in Level I of the Executive Schedule under section 5312 of Title 5, United States Code, any other individual designated by the President as having Cabinet-level status, and any immediate deputy of one of these individuals. Form 1040x amended us individual income tax return Dues used for lobbying. Form 1040x amended us individual income tax return   If a tax-exempt organization notifies you that part of the dues or other amounts you pay to the organization are used to pay nondeductible lobbying expenses, you cannot deduct that part. Form 1040x amended us individual income tax return Exceptions. Form 1040x amended us individual income tax return   You can deduct certain lobbying expenses if they are ordinary and necessary expenses of carrying on your trade or business. Form 1040x amended us individual income tax return You can deduct expenses for attempting to influence the legislation of any local council or similar governing body (local legislation). Form 1040x amended us individual income tax return An Indian tribal government is considered a local council or similar governing body. Form 1040x amended us individual income tax return You can deduct in-house expenses for influencing legislation or communicating directly with a covered executive branch official if the expenses for the tax year are not more than $2,000 (not counting overhead expenses). Form 1040x amended us individual income tax return If you are a professional lobbyist, you can deduct the expenses you incur in the trade or business of lobbying on behalf of another person. Form 1040x amended us individual income tax return Payments by the other person to you for lobbying activities cannot be deducted. Form 1040x amended us individual income tax return Lost or Mislaid Cash or Property You cannot deduct a loss based on the mere disappearance of money or property. Form 1040x amended us individual income tax return However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. Form 1040x amended us individual income tax return See Publication 547. Form 1040x amended us individual income tax return Example. Form 1040x amended us individual income tax return A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. Form 1040x amended us individual income tax return The diamond falls from the ring and is never found. Form 1040x amended us individual income tax return The loss of the diamond is a casualty. Form 1040x amended us individual income tax return Lunches With Co-workers You cannot deduct the expenses of lunches with co-workers, except while traveling away from home on business. Form 1040x amended us individual income tax return See Publication 463 for information on deductible expenses while traveling away from home. Form 1040x amended us individual income tax return Meals While Working Late You cannot deduct the cost of meals while working late. Form 1040x amended us individual income tax return However, you may be able to claim a deduction if the cost of the meals is a deductible entertainment expense, or if you are traveling away from home. Form 1040x amended us individual income tax return See Publication 463 for information on deductible entertainment expenses and expenses while traveling away from home. Form 1040x amended us individual income tax return Personal Legal Expenses You cannot deduct personal legal expenses such as those for the following. Form 1040x amended us individual income tax return Custody of children. Form 1040x amended us individual income tax return Breach of promise to marry suit. Form 1040x amended us individual income tax return Civil or criminal charges resulting from a personal relationship. Form 1040x amended us individual income tax return Damages for personal injury (except certain whistleblower claims and unlawful discrimination claims). Form 1040x amended us individual income tax return For more information about unlawful discrimination claims, see Deductions Subject to the 2% Limit, earlier. Form 1040x amended us individual income tax return Preparation of a title (or defense or perfection of a title). Form 1040x amended us individual income tax return Preparation of a will. Form 1040x amended us individual income tax return Property claims or property settlement in a divorce. Form 1040x amended us individual income tax return You cannot deduct these expenses even if a result of the legal proceeding is the loss of income-producing property. Form 1040x amended us individual income tax return Political Contributions You cannot deduct contributions made to a political candidate, a campaign committee, or a newsletter fund. Form 1040x amended us individual income tax return Advertisements in convention bulletins and admissions to dinners or programs that benefit a political party or political candidate are not deductible. Form 1040x amended us individual income tax return Professional Accreditation Fees You cannot deduct professional accreditation fees such as the following. Form 1040x amended us individual income tax return Accounting certificate fees paid for the initial right to practice accounting. Form 1040x amended us individual income tax return Bar exam fees and incidental expenses in securing initial admission to the bar. Form 1040x amended us individual income tax return Medical and dental license fees paid to get initial licensing. Form 1040x amended us individual income tax return Professional Reputation You cannot deduct expenses of radio and TV appearances to increase your personal prestige or establish your professional reputation. Form 1040x amended us individual income tax return Relief Fund Contributions You cannot deduct contributions paid to a private plan that pays benefits to any covered employee who cannot work because of any injury or illness not related to the job. Form 1040x amended us individual income tax return Residential Telephone Service You cannot deduct any charge (including taxes) for basic local telephone service for the first telephone line to your residence, even if it is used in a trade or business. Form 1040x amended us individual income tax return Stockholders' Meetings You cannot deduct transportation and other expenses you pay to attend stockholders' meetings of companies in which you own stock but have no other interest. Form 1040x amended us individual income tax return You cannot deduct these expenses even if you are attending the meeting to get information that would be useful in making further investments. Form 1040x amended us individual income tax return Tax-Exempt Income Expenses You cannot deduct expenses to produce tax-exempt income. Form 1040x amended us individual income tax return You cannot deduct interest on a debt incurred or continued to buy or carry tax-exempt securities. Form 1040x amended us individual income tax return If you have expenses to p