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Free State Filing Turbotax

How To File An Amendment On TaxesFree Federal Tax ReturnDownload 2012 Tax FormsHr Block Tax FilingH&r Block At Home Deluxe State 2012 Download2012 Tax Forms IrsHow To Ammend Your TaxesIndividual Income Tax ReturnEz 1040 Form 2012Irs Tax Return Forms 20121040nrez10401040ez Form And InstructionsHr Block 2005 TaxesAarp Tax Help LocationsWhen Can I File An Amended Tax ReturnFree Turbo Tax 1040ezState Tax Return FreeFree Tax FormsFree Tax Filing Online State And FederalFree State Tax E FileLate TaxTurbo Tax For 2012 Sign InWhere To Find 2011 Tax Forms1040x Amended Tax Return FormIrs Free File 2011Tax Forms For College Students2012 Taxes OnlineE File 1040x FreeOnline Tax SoftwareHow To File A Tax Extension1040ez Filing OnlineFree Irs Tax FilingHow To File An Amended Tax Return 2013Free Taxes For MilitaryForm 1040ez BookletHow Can I Amend My 2012 Tax ReturnFederal Ez FormH & R Block Com2012 Tax Filing

Free State Filing Turbotax

Free state filing turbotax Index A Alternative annuity option How to report, How to report. Free state filing turbotax Lump-sum payment, Alternative Annuity Option Annual leave, Annual leave. Free state filing turbotax Annuity Starting date, Annuity starting date. Free state filing turbotax Statement, Annuity statement. Free state filing turbotax With survivor benefit, CSRS or FERS Survivor Annuity Without survivor benefit, Choosing a survivor annuity after retirement. Free state filing turbotax Assistance (see Tax help) B Benefits, how to report, How To Report Benefits C Child's temporary annuity, Surviving spouse with child. Free state filing turbotax Community property laws, Community property laws. Free state filing turbotax Contributions, refund of, Refund of Contributions Cost (contributions to retirement plan), Your cost. Free state filing turbotax Credit for the elderly or the disabled, Credit for the Elderly or the Disabled D Death benefit, FERS Death Benefit Deduction for estate tax, Income Tax Deduction for Estate Tax Paid Disability retirement, Part III Rules for Disability Retirement and Credit for the Elderly or the Disabled Disabled child, Disabled child. Free state filing turbotax Distributions Qualified domestic relations order (QDRO), Qualified domestic relations order (QDRO). Free state filing turbotax Withholding from TSP payments, Withholding from certain lump-sum payments. Free state filing turbotax E Estate tax, Federal Estate Tax, Income Tax Deduction for Estate Tax Paid Estimated tax, Tax Withholding and Estimated Tax, Estimated tax. Free state filing turbotax F Federal Employees' Compensation Act (FECA), Federal Employees' Compensation Act (FECA). Free state filing turbotax Filing requirements, Filing Requirements Form 1099-R, Withholding from Thrift Savings Plan payments. Free state filing turbotax CSA 1099R, Form CSA 1099R. Free state filing turbotax CSF 1099R, Form CSF 1099R. Free state filing turbotax W-4P-A, Withholding certificate. Free state filing turbotax Free tax services, Free help with your tax return. Free state filing turbotax G General Rule, General Rule, General Rule. Free state filing turbotax Gift tax, Federal Gift Tax H Help (see Tax help) I Income in respect of a decedent, Income Tax Deduction for Estate Tax Paid Income tax withholding, Tax Withholding and Estimated Tax, Withholding. Free state filing turbotax L Lump-sum CSRS or FERS payment, Lump-Sum CSRS or FERS Payment, Lump-Sum CSRS or FERS Payment Lump-sum payment Alternative annuity option, Alternative Annuity Option Installments, Lump-sum payment in installments. Free state filing turbotax Withholding, Withholding from certain lump-sum payments. Free state filing turbotax M Mandatory retirement age, Mandatory retirement age. Free state filing turbotax Marital deduction, Marital deduction. Free state filing turbotax Minimum retirement age, Minimum retirement age. Free state filing turbotax N Nonresident alien retiree, Nonresident Aliens P Permanently and totally disabled, Permanently and totally disabled. Free state filing turbotax Physician's statement, Physician's statement. Free state filing turbotax Public safety officers Dependents, Dependents of public safety officers. Free state filing turbotax Insurance premiums, Distributions Used To Pay Insurance Premiums for Public Safety Officers Survivors, Survivors of Slain Public Safety Officers Publications (see Tax help) Q Qualified domestic relations order (QDRO), Qualified domestic relations order (QDRO). Free state filing turbotax R Reemployment after retirement, Reemployment After Retirement Refund of contributions, Refund of Contributions Retirees, rules for, Part II Rules for Retirees Retirement during the past year, Retirement During the Past Year Rollovers Nonspouse beneficiary, Rollovers by nonspouse beneficiary. Free state filing turbotax Rollover rules, Rollover Rules To Roth IRAs, Rollovers to Roth IRAs Roth Thrift Savings Plan, Roth TSP balance. Free state filing turbotax S Simplified Method, Simplified Method, Simplified Method. Free state filing turbotax Substantial gainful activity, Permanently and totally disabled. Free state filing turbotax Survivor annuity, Choosing a survivor annuity after retirement. Free state filing turbotax , CSRS or FERS Survivor Annuity, CSRS or FERS Survivor Annuity Survivors of federal employees, Part IV Rules for Survivors of Federal Employees Survivors of federal retirees, Part V Rules for Survivors of Federal Retirees T Tax help, How To Get Tax Help Thrift Savings Plan, Thrift Savings Plan. Free state filing turbotax , Thrift Savings Plan Roth option, Roth TSP balance. Free state filing turbotax TTY/TDD information, How To Get Tax Help U Uniformed services Thrift Savings Plan, Reminders Unused annual leave, Payment for unused annual leave. Free state filing turbotax V Voluntary contributions, Voluntary contributions. Free state filing turbotax , Voluntary contributions. Free state filing turbotax , Voluntary Contributions W Withholding certificate, Withholding certificate. Free state filing turbotax Withholding of income tax, Tax Withholding and Estimated Tax, Withholding. Free state filing turbotax Worksheets Lump-sum payment at end of survivor annuity, Lump-sum payment at end of survivor annuity. Free state filing turbotax Lump-sum payment to the estate or other beneficiary, Lump-Sum CSRS or FERS Payment Nonresident alien retiree, Nonresident Aliens Simplified Method, Worksheet A. Free state filing turbotax Simplified Method Prev  Up     Home   More Online Publications
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Page Last Reviewed or Updated: 14-Mar-2014

The Free State Filing Turbotax

Free state filing turbotax Depreciation Table of Contents Introduction Special Depreciation AllowanceQualified Property Election Not To Claim the Allowance Rules for Returns Filed Before June 1, 2002 Passenger Automobiles New York Liberty Zone BenefitsSpecial Liberty Zone Depreciation Allowance Increased Section 179 Deduction Liberty Zone Leasehold Improvement Property If you depreciate business property that you acquired and placed in service after September 10, 2001, new law contains provisions that may affect your depreciation deduction for that property. Free state filing turbotax Publication 946, How To Depreciate Property, contains information on depreciation. Free state filing turbotax However, Publication 946 does not contain the new provisions because it was printed before the law was enacted. Free state filing turbotax The new provisions are in the Supplement to Publication 946, which is reprinted below. Free state filing turbotax Supplement to Publication 946 How To Depreciate Property   Introduction After Publication 946 was printed, the Job Creation and Worker Assistance Act of 2002 was signed into law by the President. Free state filing turbotax The new law made several changes in the tax rules explained in the publication. Free state filing turbotax Some of the changes apply to property placed in service during 2001. Free state filing turbotax This supplemental publication describes those changes and explains what you should do if you are affected by them. Free state filing turbotax The situations and examples in Publication 946 do not reflect any of the changes made by the Job Creation and Worker Assistance Act of 2002. Free state filing turbotax The new law contains the following provisions. Free state filing turbotax 30% depreciation deductions (special depreciation allowance and special New York Liberty Zone (Liberty Zone) depreciation allowance) for the year qualified property is placed in service after September 10, 2001. Free state filing turbotax An increased dollar limit on the section 179 deduction for qualified Liberty Zone property purchased after September 10, 2001. Free state filing turbotax A shorter recovery period for qualified Liberty Zone leasehold improvement property placed in service after September 10, 2001. Free state filing turbotax An increase in the maximum depreciation deduction for 2001 for a qualified passenger automobile placed in service after September 10, 2001. Free state filing turbotax If you believe you qualify for an increased deduction under any of these new rules, you must file the revised 2001 Form 4562 (dated March 2002) for 2001 calendar or fiscal years and 2000 fiscal years ending after September 10, 2001. Free state filing turbotax If you have already filed a tax return, this supplemental publication explains how to claim these benefits and how to elect not to claim the special depreciation allowance or special Liberty Zone depreciation allowance. Free state filing turbotax See Table 2 at the end of the supplement for an overview of the rules that apply if you filed your return before June 1, 2002. Free state filing turbotax Special Depreciation Allowance You can take a special depreciation allowance for qualified property you place in service after September 10, 2001. Free state filing turbotax The allowance is an additional deduction of 30% of the property's depreciable basis. Free state filing turbotax To figure the depreciable basis, you must first multiply the property's cost or other basis by the percentage of business/investment use and then reduce that amount by any section 179 deduction and certain other deductions and credits for the property. Free state filing turbotax See What Is the Basis for Depreciation? on page 23 in Publication 946 for more information on figuring depreciable basis. Free state filing turbotax The allowance is deductible for both regular tax and alternative minimum tax (AMT) purposes. Free state filing turbotax There is no AMT adjustment required for any depreciation figured on the remaining basis of the property. Free state filing turbotax In the year you claim the allowance (generally the year you place the property in service), you must reduce the depreciable basis of the property by the allowance before figuring your regular depreciation deduction. Free state filing turbotax Example 1. Free state filing turbotax On November 1, 2001, you bought and placed in service in your business qualified property that cost $100,000. Free state filing turbotax You did not elect to claim a section 179 deduction. Free state filing turbotax You can deduct 30% of the cost ($30,000) as a special depreciation allowance for 2001. Free state filing turbotax You use the remaining $70,000 of cost to figure your regular depreciation deduction for 2001 and later years. Free state filing turbotax Example 2. Free state filing turbotax The facts are the same as in Example 1, except that you choose to deduct $24,000 of the property's cost as a section 179 deduction. Free state filing turbotax You use the remaining $76,000 of cost to figure your special depreciation allowance of $22,800 ($76,000 × 30%). Free state filing turbotax You use the remaining $53,200 of cost to figure your regular depreciation deduction for 2001 and later years. Free state filing turbotax Qualified Property To qualify for the special depreciation allowance, your property must meet the following requirements. Free state filing turbotax It is new property of one of the following types. Free state filing turbotax Property depreciated under the modified accelerated cost recovery system (MACRS) with a recovery period of 20 years or less. Free state filing turbotax See Can You Use MACRS To Depreciate Your Property and Which Recovery Period Applies? on pages 7 and 23, respectively, in Publication 946. Free state filing turbotax Water utility property. Free state filing turbotax See 25-year property on page 22 in Publication 946. Free state filing turbotax Computer software that is not a section 197 intangible as described in Computer software on page 5 in Publication 946. Free state filing turbotax (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. Free state filing turbotax ) Qualified leasehold improvement property (defined later). Free state filing turbotax It meets the following tests (explained later under Tests To Be Met). Free state filing turbotax Acquisition date test. Free state filing turbotax Placed in service date test. Free state filing turbotax Original use test. Free state filing turbotax It is not excepted property (explained later under Excepted Property). Free state filing turbotax Qualified leasehold improvement property. Free state filing turbotax    Generally, this is any improvement to an interior part of a building that is nonresidential real property, provided all of the following requirements are met. Free state filing turbotax The improvement is made under or pursuant to a lease by the lessee (or any sublessee) or the lessor of that part of the building. Free state filing turbotax That part of the building is to be occupied exclusively by the lessee (or any sublessee) of that part. Free state filing turbotax The improvement is placed in service more than 3 years after the date the building was first placed in service. Free state filing turbotax   However, a qualified leasehold improvement does not include any improvement for which the expenditure is attributable to any of the following. Free state filing turbotax The enlargement of the building. Free state filing turbotax Any elevator or escalator. Free state filing turbotax Any structural component benefiting a common area. Free state filing turbotax The internal structural framework of the building. Free state filing turbotax   Generally, a binding commitment to enter into a lease is treated as a lease and the parties to the commitment are treated as the lessor and lessee. Free state filing turbotax However, a binding commitment between related persons is not treated as a lease. Free state filing turbotax Related persons. Free state filing turbotax   For this purpose, the following are related persons. Free state filing turbotax Members of an affiliated group. Free state filing turbotax The persons listed in items (1) through (9) under Related persons on page 8 of Publication 946 (except that “80% or more” should be substituted for “more than 10%” each place it appears). Free state filing turbotax An executor and a beneficiary of the same estate. Free state filing turbotax Tests To Be Met To qualify for the special depreciation allowance, the property must meet all of the following tests. Free state filing turbotax Acquisition date test. Free state filing turbotax    Generally, you must have acquired the property either: After September 10, 2001, and before September 11, 2004, but only if no written binding contract for the acquisition was in effect before September 11, 2001, or Pursuant to a written binding contract entered into after September 10, 2001, and before September 11, 2004. Free state filing turbotax   Property you manufacture, construct, or produce for your own use meets this test if you began the manufacture, construction, or production of the property after September 10, 2001, and before September 11, 2004. Free state filing turbotax Placed in service date test. Free state filing turbotax   Generally, the property must be placed in service for use in your trade or business or for the production of income after September 10, 2001, and before January 1, 2005. Free state filing turbotax   If you sold property you placed in service after September 10, 2001, and you leased it back within 3 months after the property was originally placed in service, the property is treated as placed in service no earlier than the date it is used under the leaseback. Free state filing turbotax Original use test. Free state filing turbotax   The original use of the property must have begun with you after September 10, 2001. Free state filing turbotax “Original use” means the first use to which the property is put, whether or not by you. Free state filing turbotax Additional capital expenditures you incurred after September 10, 2001, to recondition or rebuild your property meet the original use test. Free state filing turbotax Excepted Property The following property does not qualify for the special depreciation allowance. Free state filing turbotax Property used by any person before September 11, 2001. Free state filing turbotax Property required to be depreciated using ADS. Free state filing turbotax This includes listed property used 50% or less in a qualified business use. Free state filing turbotax Qualified New York Liberty Zone leasehold improvement property (defined next). Free state filing turbotax Qualified New York Liberty Zone leasehold improvement property. Free state filing turbotax   This is any qualified leasehold improvement property (as defined earlier) if all of the following requirements are met. Free state filing turbotax The improvement is to a building located in the New York Liberty Zone (defined later under New York Liberty Zone Benefits). Free state filing turbotax The improvement is placed in service after September 10, 2001, and before January 1, 2007. Free state filing turbotax No written binding contract for the improvement was in effect before September 11, 2001. Free state filing turbotax Election Not To Claim the Allowance You can elect not to claim the special depreciation allowance for qualified property. Free state filing turbotax If you make this election for any property, it applies to all property in the same property class placed in service during the year. Free state filing turbotax To make this election, attach a statement to your return indicating you elect not to claim the allowance and the class of property for which you are making the election. Free state filing turbotax When to make election. Free state filing turbotax   Generally, you must make the election on a timely filed tax return (including extensions) for the year in which you place the property in service. Free state filing turbotax   However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the original return (not including extensions). Free state filing turbotax Attach the election statement to the amended return. Free state filing turbotax At the top of the election statement, write “Filed pursuant to section 301. Free state filing turbotax 9100–2. Free state filing turbotax ” Revoking an election. Free state filing turbotax   Once you elect not to deduct the special depreciation allowance for a class of property, you cannot revoke the election without IRS consent. Free state filing turbotax A request to revoke the election is subject to a user fee. Free state filing turbotax Rules for Returns Filed Before June 1, 2002 The following rules apply if you placed qualified property in service after September 10, 2001, and filed your return before June 1, 2002. Free state filing turbotax The rules apply to returns for the following years. Free state filing turbotax 2000 fiscal years that end after September 10, 2001. Free state filing turbotax 2001 calendar and fiscal years. Free state filing turbotax Claiming the allowance. Free state filing turbotax   If you did not claim the allowance on your return and did not make the election not to claim the allowance, you can do either of the following to claim the allowance. Free state filing turbotax File an amended return by the due date (not including extensions) of your return for the year following the year the property was placed in service. Free state filing turbotax Write “Filed Pursuant to Rev. Free state filing turbotax Proc. Free state filing turbotax 2002–33” at the top of the amended return. Free state filing turbotax File Form 3115, Application for Change in Accounting Method, with your return for the year following the year the property was placed in service. Free state filing turbotax Your return must be filed by the due date (including extensions). Free state filing turbotax Write “Automatic Change Filed Under Rev. Free state filing turbotax Proc. Free state filing turbotax 2002–33” on the appropriate line of Form 3115. Free state filing turbotax You must also file a copy (with signature) of the completed Form 3115 with the IRS National Office no later than when you file the original with your return. Free state filing turbotax For more information about filing Form 3115, including the address to send it to, see Revenue Procedure 2002–9, Revenue Procedure 2002–19, and Revenue Procedure 2002–33. Free state filing turbotax Example 1. Free state filing turbotax You are an individual and you use the calendar year. Free state filing turbotax You placed qualified property in service for your business in December 2001. Free state filing turbotax You filed your 2001 income tax return before April 15, 2002. Free state filing turbotax You did not claim the special depreciation allowance for the property and did not make the election not to claim the allowance. Free state filing turbotax You can claim the special allowance by filing an amended 2001 return by April 15, 2003, with “Filed Pursuant to Rev. Free state filing turbotax Proc. Free state filing turbotax 2002–33” at the top of the amended return. Free state filing turbotax You must file an amended return by April 15, 2003, even if you get an extension of time to file your 2002 tax return. Free state filing turbotax Example 2. Free state filing turbotax The facts concerning your 2001 return are the same as in Example 1. Free state filing turbotax In addition, you got an automatic 4-month extension of time (to August 15, 2003) to file your 2002 return. Free state filing turbotax You can claim the special allowance by filing a Form 3115 (with “Filed Pursuant to Rev. Free state filing turbotax Proc. Free state filing turbotax 2002–33” on the appropriate line) with your 2002 return by August 15, 2003. Free state filing turbotax You must also file a copy of this Form 3115 with the IRS National Office no later than when you file your 2002 return. Free state filing turbotax Electing not to claim the allowance. Free state filing turbotax   Generally, you have elected not to claim the special depreciation allowance for a class of property if you: Filed your return timely (including extensions) for the year you placed qualified property in service and indicated on a statement with the return that you are not claiming the allowance, or Filed your return timely and filed an amended return within 6 months of the due date of the original return (not including extensions) and indicated on a statement with the amended return that you are not claiming the allowance. Free state filing turbotax The statement must indicate that you are not deducting the special depreciation allowance and the class of property to which the election applies. Free state filing turbotax The statement can be either attached to or written on the return. Free state filing turbotax You can, for example, write “not deducting 30%” on Form 4562. Free state filing turbotax Deemed election. Free state filing turbotax   If you have not followed either of the procedures described above to elect not to claim the allowance, you may still be treated as making the election. Free state filing turbotax You will be treated as making the election if you meet both of the following conditions. Free state filing turbotax You filed your return for the year you placed the property in service and claimed depreciation, but not the special allowance, for any class of property. Free state filing turbotax You do not file an amended return or a Form 3115 within the time prescribed for claiming the special allowance. Free state filing turbotax See Claiming the allowance, earlier. Free state filing turbotax Passenger Automobiles The limit on your depreciation deduction (including any section 179 deduction) for any passenger automobile that is qualified property (defined earlier) placed in service after September 10, 2001, and for which you claim the special depreciation allowance is increased. Free state filing turbotax Generally, the limit is increased from $3,060 to $7,660. Free state filing turbotax However, if the automobile is a qualified electric car, the limit is increased from $9,280 to $23,080 ($22,980 if placed in service in 2002). Free state filing turbotax Table 1 shows the maximum deduction amounts for 2001. Free state filing turbotax Table 1. Free state filing turbotax Maximum Deduction for 2001 Qualified Vehicle Placed in Service Before Sept. Free state filing turbotax 11 Placed in Service After Sept. Free state filing turbotax 10 Passenger automobile $3,060 $7,660 Electric car 9,280 23,080 1 1$22,980 if you place an electric car in service in 2002. Free state filing turbotax Election not to claim the allowance. Free state filing turbotax   The increased maximum depreciation deduction does not apply if you elected not to claim the special depreciation allowance as explained earlier under Election Not To Claim the Allowance and Rules for Returns Filed Before June 1, 2002. Free state filing turbotax New York Liberty Zone Benefits Several benefits are available for property you place in service in the New York Liberty Zone (Liberty Zone). Free state filing turbotax They include a special depreciation allowance for the year you place the property in service, an increased section 179 deduction, and the classification of certain leasehold improvement property as 5-year property. Free state filing turbotax Area defined. Free state filing turbotax   The New York Liberty Zone is the area located on or south of Canal Street, East Broadway (east of its intersection with Canal Street), or Grand Street (east of its intersection with East Broadway) in the Borough of Manhattan in the City of New York, New York. Free state filing turbotax Special Liberty Zone Depreciation Allowance You can take a special depreciation allowance for qualified Liberty Zone property you place in service after September 10, 2001. Free state filing turbotax The allowance is an additional deduction of 30% of the property's depreciable basis. Free state filing turbotax To figure the depreciable basis, you must first multiply the property's cost or other basis by the percentage of business/investment use and then reduce that amount by any section 179 deduction and certain other deductions and credits for the property. Free state filing turbotax See What Is the Basis for Depreciation? on page 23 in Publication 946 for more information on figuring depreciable basis. Free state filing turbotax The allowance is deductible for both regular tax and alternative minimum tax (AMT) purposes. Free state filing turbotax There is no AMT adjustment required for any depreciation figured on the remaining basis of the property. Free state filing turbotax In the year you claim the allowance (generally the year you place the property in service), you must reduce the depreciable basis of the property by the allowance before figuring your regular depreciation deduction. Free state filing turbotax You cannot claim the special Liberty Zone depreciation allowance for property eligible for the special depreciation allowance explained earlier in Qualified Property under Special Depreciation Allowance. Free state filing turbotax Qualified property is eligible for only one special depreciation allowance. Free state filing turbotax Example 1. Free state filing turbotax On November 1, 2001, you bought and placed in service in your business, which is in the Liberty Zone, qualified Liberty Zone property that cost $200,000. Free state filing turbotax You did not elect to claim a section 179 deduction. Free state filing turbotax You can deduct 30% of the cost ($60,000) as a special Liberty Zone depreciation allowance for 2001. Free state filing turbotax You use the remaining $140,000 of cost to figure your regular depreciation deduction for 2001 and later years. Free state filing turbotax Example 2. Free state filing turbotax The facts are the same as in Example 1, except that you choose to deduct $59,000 of the property's cost as a section 179 deduction. Free state filing turbotax (See Increased Section 179 Deduction, later, for information concerning how this section 179 deduction amount is figured). Free state filing turbotax You use the remaining $141,000 of cost to figure your special Liberty Zone depreciation allowance of $42,300 ($141,000 × 30%). Free state filing turbotax You use the remaining $98,700 of cost to figure your regular depreciation deduction for 2001 and later years. Free state filing turbotax Qualified Liberty Zone Property For a 2001 calendar or fiscal year and a 2000 fiscal year that ends after September 10, 2001, property qualifies for the special Liberty Zone depreciation allowance if it meets the following requirements. Free state filing turbotax It is one of the following types of property. Free state filing turbotax Used property depreciated under MACRS with a recovery period of 20 years or less. Free state filing turbotax See Can You Use MACRS To Depreciate Your Property and Which Recovery Period Applies? on pages 7 and 23, respectively, in Publication 946. Free state filing turbotax Used water utility property. Free state filing turbotax See 25-year property on page 22 in Publication 946. Free state filing turbotax Used computer software that is not a section 197 intangible as described in Computer software on page 5 in Publication 946. Free state filing turbotax (The cost of some computer software is treated as part of the cost of hardware and is depreciated under MACRS. Free state filing turbotax ) Certain nonresidential real property and residential rental property (defined later). Free state filing turbotax It meets the following tests (explained later under Tests to be met). Free state filing turbotax Acquisition date test. Free state filing turbotax Placed in service date test. Free state filing turbotax Substantial use test. Free state filing turbotax Original use test. Free state filing turbotax It is not excepted property (explained later under Excepted property). Free state filing turbotax Nonresidential real property and residential rental property. Free state filing turbotax   This property is qualifying property only to the extent it rehabilitates real property damaged, or replaces real property destroyed or condemned, as a result of the terrorist attack of September 11, 2001. Free state filing turbotax Property is treated as replacing destroyed or condemned property if, as part of an integrated plan, such property replaces real property included in a continuous area that includes real property destroyed or condemned. Free state filing turbotax   For these purposes, real property is considered destroyed (or condemned) only if an entire building or structure was destroyed (or condemned) as a result of the terrorist attack. Free state filing turbotax Otherwise, the property is considered damaged real property. Free state filing turbotax For example, if certain structural components of a building (such as walls, floors, or plumbing fixtures) are damaged or destroyed as a result of the terrorist attack, but the building is not destroyed (or condemned), then only costs related to replacing the damaged or destroyed structural components qualify for the special Liberty Zone depreciation allowance. Free state filing turbotax Tests to be met. Free state filing turbotax   To qualify for the special Liberty Zone depreciation allowance, your property must meet all of the following tests. Free state filing turbotax Acquisition date test. Free state filing turbotax   You must have acquired the property by purchase after September 10, 2001, and there must not have been a binding written contract for the acquisition in effect before September 11, 2001. Free state filing turbotax   For information on the acquisition of property by purchase, see Property Acquired by Purchase on page 15 of Publication 946. Free state filing turbotax   Property you manufacture, construct, or produce for your own use meets this test if you began the manufacture, construction, or production of the property after September 10, 2001. Free state filing turbotax Placed in service date test. Free state filing turbotax   Generally, the property must be placed in service for use in your trade or business or for the production of income before January 1, 2007 (January 1, 2010, in the case of qualifying nonresidential real property and residential rental property). Free state filing turbotax   If you sold property you placed in service after September 10, 2001, and you leased it back within 3 months after the property was originally placed in service, the property is treated as placed in service no earlier than the date it is used under the leaseback. Free state filing turbotax Substantial use test. Free state filing turbotax   Substantially all use of the property must be in the Liberty Zone and in the active conduct of your trade or business in the Liberty Zone. Free state filing turbotax Original use test. Free state filing turbotax   The original use of the property in the Liberty Zone must have begun with you after September 10, 2001. Free state filing turbotax   Used property can be qualified Liberty Zone property if it has not previously been used within the Liberty Zone. Free state filing turbotax Also, additional capital expenditures you incurred after September 10, 2001, to recondition or rebuild your property meet the original use test if the original use of the property in the Liberty Zone began with you. Free state filing turbotax Excepted property. Free state filing turbotax   The following property does not qualify for the special Liberty Zone depreciation allowance. Free state filing turbotax Property eligible for the special depreciation allowance explained earlier in Qualified Property under Special Depreciation Allowance. Free state filing turbotax Property required to be depreciated using ADS. Free state filing turbotax This includes listed property used 50% or less in a qualified business use. Free state filing turbotax Qualified New York Liberty Zone leasehold improvement property (defined earlier in Excepted Property under Special Depreciation Allowance). Free state filing turbotax Example. Free state filing turbotax In December 2001, you bought and placed in service in your business in the Liberty Zone the following property. Free state filing turbotax New office furniture with a MACRS recovery period of 7 years. Free state filing turbotax A used computer with a MACRS recovery period of 5 years. Free state filing turbotax The computer had not previously been used within the Liberty Zone. Free state filing turbotax Because the office furniture is new property, it qualifies for the special depreciation allowance, but not the special Liberty Zone depreciation allowance. Free state filing turbotax Because the computer is used property that had not previously been used in the Liberty Zone, it qualifies for the special Liberty Zone depreciation allowance, but not the special depreciation allowance. Free state filing turbotax Election Not To Claim the Liberty Zone Allowance You can elect not to claim the special Liberty Zone depreciation allowance for qualified property. Free state filing turbotax If you make this election for any property, it applies to all property in the same property class placed in service during the year. Free state filing turbotax To make this election, attach a statement to your return indicating you elect not to claim the allowance and the class of property for which you are making the election. Free state filing turbotax When to make the election. Free state filing turbotax   Generally, you must make the election on a timely filed tax return (including extensions) for the year in which you place the property in service. Free state filing turbotax   However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the original return (not including extensions). Free state filing turbotax Attach the election statement to the amended return. Free state filing turbotax At the top of the election statement, write “Filed pursuant to section 301. Free state filing turbotax 9100–2. Free state filing turbotax ” Revoking an election. Free state filing turbotax   Once you elect not to deduct the special Liberty Zone depreciation allowance for a class of property, you cannot revoke the election without IRS consent. Free state filing turbotax A request to revoke the election is subject to a user fee. Free state filing turbotax Returns filed before June 1, 2002. Free state filing turbotax   The rules that apply to the special depreciation allowance discussed earlier in Rules for Returns Filed Before June 1, 2002 under Special Depreciation Allowance also apply to the special Liberty Zone depreciation allowance. Free state filing turbotax Increased Section 179 Deduction Under section 179 of the Internal Revenue Code, you can choose to recover all or part of the cost of certain qualifying property, up to a limit, by deducting it in the year you place the property in service. Free state filing turbotax For tax years beginning in 2000, that limit was $20,000. Free state filing turbotax For tax years beginning in 2001 and 2002, that limit is generally $24,000. Free state filing turbotax If the cost of qualifying section 179 property placed in service in a year is over $200,000, you must reduce the dollar limit (but not below zero) by the amount of the cost over $200,000. Free state filing turbotax Increased Dollar Limit The dollar limit on the section 179 deduction is increased for certain property placed in service in the Liberty Zone. Free state filing turbotax The increase is the smaller of the following amounts. Free state filing turbotax $35,000. Free state filing turbotax The cost of section 179 property that is qualified Liberty Zone property placed in service during the year. Free state filing turbotax If you use the revised 2001 Form 4562 (dated March 2002) for a tax year beginning in 2000, you must reduce the section 179 dollar limit to $20,000 before adding the additional amount for qualified property. Free state filing turbotax Qualified property. Free state filing turbotax   To qualify for the increased section 179 deduction, your property must be section 179 property that is either: Qualified Liberty Zone property, or Property that would be qualified Liberty Zone property except that it is eligible for the special depreciation allowance. Free state filing turbotax Qualified Liberty Zone property is explained earlier in Qualified Liberty Zone Property under Special Liberty Zone Depreciation Allowance. Free state filing turbotax Property eligible for the special depreciation allowance is explained earlier in Qualified Property under Special Depreciation Allowance. Free state filing turbotax For information on the requirements that must be met for property to qualify for the section 179 deduction, see What Property Qualifies? on page 14 of Publication 946. Free state filing turbotax Example 1. Free state filing turbotax In 2002, you place in service in your business, which is in the Liberty Zone, qualified property (defined earlier) costing $25,000. Free state filing turbotax Because this cost is less than $35,000, the dollar limit on the section 179 deduction is increased by $25,000 to $49,000 ($24,000 + $25,000). Free state filing turbotax Example 2. Free state filing turbotax In 2002, you place in service in your business, which is in the Liberty Zone, qualified property (defined earlier) costing $75,000. Free state filing turbotax Because $35,000 is less than the cost of the property you place in service, the dollar limit on the section 179 deduction you can claim is increased by $35,000 to $59,000 ($24,000 + $35,000). Free state filing turbotax Reduced Dollar Limit Generally, you must reduce the dollar limit for a year by the cost of qualifying section 179 property placed in service in the year that is more than $200,000. Free state filing turbotax However, if the cost of your Liberty Zone property exceeds $200,000, you take into account only 50% (instead of 100%) of the cost of qualified property placed in service in a year. Free state filing turbotax Example. Free state filing turbotax In 2002, you place in service in your business, which is in the Liberty Zone, qualified property costing $460,000. Free state filing turbotax Your increased dollar limit is $59,000 ($35,000 + $24,000). Free state filing turbotax Because 50% of the cost of the property you place in service ($230,000) is $30,000 more than $200,000, you must reduce your $59,000 dollar limit to $29,000 ($59,000 - $30,000). Free state filing turbotax Recapture Rules Rules similar to those explained on page 20 of Publication 946 under When Must You Recapture the Deduction? apply with respect to any qualified property you stop using in the Liberty Zone. Free state filing turbotax Returns Filed Before June 1, 2002 If you filed a return before June 1, 2002, and did not deduct the increased section 179 amount for qualified property placed in service after September 10, 2001, you can deduct the increased amount by filing an amended return by the due date (not including extensions) of the return for the year after the year the property was placed in service. Free state filing turbotax This rule applies to returns for the following years. Free state filing turbotax 2000 fiscal years that end after September 10, 2001. Free state filing turbotax 2001 calendar and fiscal years. Free state filing turbotax On the amended return, write “Filed Pursuant to Rev. Free state filing turbotax Proc. Free state filing turbotax 2002–33. Free state filing turbotax ” Liberty Zone Leasehold Improvement Property Qualified Liberty Zone leasehold improvement property (described earlier in Qualified Property under Special Depreciation Allowance) is 5-year property. Free state filing turbotax This means that it is depreciated over a recovery period of 5 years. Free state filing turbotax For information about recovery periods, see Which Recovery Period Applies? on page 23 of Publication 946. Free state filing turbotax The straight-line method must be used with respect to qualified Liberty Zone leasehold improvement property. Free state filing turbotax Under ADS, the recovery period for qualified Liberty Zone leasehold improvement property is 9 years. Free state filing turbotax Returns Filed Before June 1, 2002 If you filed either of the following returns before June 1, 2002, and did not depreciate qualified Liberty Zone leasehold improvement property placed in service during the tax year as 5-year property using the straight line method, you should file an amended return before you file your return for the year after the year the property was placed in service. Free state filing turbotax Your 2000 fiscal year return (for a 2000 fiscal year that ends after September 10, 2001). Free state filing turbotax Your 2001 calendar or fiscal year return. Free state filing turbotax On the amended return, write “Filed Pursuant to Rev. Free state filing turbotax Proc. Free state filing turbotax 2002–33. Free state filing turbotax ” Table 2. Free state filing turbotax Rules for Returns Filed Before June 1, 2002 Note:This chart highlights the rules for returns affected by the Job Creation and Worker Assistance Act of 2002 that were filed before June 1, 2002, without accounting for any of the new benefits under the law. Free state filing turbotax See the text for definitions and examples. Free state filing turbotax Do not rely on this chart alone. Free state filing turbotax IF you want to. Free state filing turbotax . Free state filing turbotax . Free state filing turbotax THEN you. Free state filing turbotax . Free state filing turbotax . Free state filing turbotax BY. Free state filing turbotax . Free state filing turbotax . Free state filing turbotax claim the special depreciation allowance or special Liberty Zone depreciation allowance • must file an amended return • the due date (not including extensions) of your return for the year after the year the property was placed in service, or • must file Form 3115, Application for Change in Accounting Method, with your return for the year after the year the property was placed in service • the due date (including extensions) of your return for the year after the year the property was placed in service, and • must file a copy of your completed Form 3115 with the IRS National Office • the date you file the original Form 3115 with your return for the year after the year the property was placed in service. Free state filing turbotax elect not to claim the special depreciation allowance or the special Liberty Zone depreciation allowance 1 • must have filed your return timely for the year the property was placed in service, and   • must file an amended return stating you are not claiming the allowance • the date that is 6 months after the due date of the original return (not including extensions). Free state filing turbotax deduct the increased section 179 amount • must file an amended return • the due date (not including extensions) of your return for the year after the year the property was placed in service. Free state filing turbotax use a 5-year recovery period for depreciating qualified Liberty Zone leasehold improvement property • should file an amended return • the date you file your return for the year after the year the property was placed in service. Free state filing turbotax 1See also Deemed election under Rules for Returns Filed Before June 1, 2002, earlier. 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