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H&r Block Free Return

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H&r block free return Publication 509 - Main Content Table of Contents General Tax CalendarFirst Quarter Second Quarter Third Quarter Fourth Quarter Fiscal-Year Taxpayers Employer's Tax CalendarFirst Quarter Second Quarter Third Quarter Fourth Quarter Excise Tax CalendarFirst Quarter Second Quarter Third Quarter Fourth Quarter How To Get Tax Help General Tax Calendar This tax calendar has the due dates for 2014 that most taxpayers will need. H&r block free return Employers and persons who pay excise taxes also should use the Employer's Tax Calendar and the Excise Tax Calendar . H&r block free return Fiscal-year taxpayers. H&r block free return   If you file your income tax return for a fiscal year rather than the calendar year, you must change some of the dates in this calendar. H&r block free return These changes are described under Fiscal-Year Taxpayers at the end of this calendar. H&r block free return First Quarter The first quarter of a calendar year is made up of January, February, and March. H&r block free return Second Quarter The second quarter of a calendar year is made up of April, May, and June. H&r block free return Third Quarter The third quarter of a calendar year is made up of July, August, and September. H&r block free return Fourth Quarter The fourth quarter of a calendar year is made up of October, November, and December. H&r block free return Fiscal-Year Taxpayers If you use a fiscal year (rather than the calendar year) as your tax year, you should change some of the dates in this calendar. H&r block free return Use the following general guidelines to make these changes. H&r block free return The 3 months that make up each quarter of a fiscal year may be different from those of each calendar quarter, depending on when the fiscal year begins. H&r block free return Also see Saturday, Sunday, or legal holiday, earlier. H&r block free return Individuals Form 1040. H&r block free return    This form is due on the 15th day of the 4th month after the end of your tax year. H&r block free return Form 4868 is used to request an extension of time to file Form 1040. H&r block free return Estimated tax payments (Form 1040-ES). H&r block free return   Payments are due on the 15th day of the 4th, 6th, and 9th months of your tax year and on the 15th day of the 1st month after your tax year ends. H&r block free return Partnerships Form 1065. H&r block free return   This form is due on the 15th day of the 4th month after the end of the partnership's tax year. H&r block free return Provide each partner with a copy of Schedule K-1 (Form 1065) or a substitute Schedule K-1. H&r block free return Form 1065-B (electing large partnerships). H&r block free return   This form is due on the 15th day of the 4th month after the end of the partnership's tax year. H&r block free return Provide each partner with a copy of Schedule K-1 (Form 1065-B) or a substitute Schedule K-1 by the first March 15 following the close of the partnership's tax year. H&r block free return Corporations and S Corporations Form 1120 and Form 1120S (or Form 7004). H&r block free return   These forms are due on the 15th day of the 3rd month after the end of the corporation's tax year. H&r block free return S corporations must provide each shareholder with a copy of Schedule K-1 (Form 1120S) or a substitute Schedule K-1. H&r block free return Form 7004 is used to request an extension of time to file Form 1120 or Form 1120S. H&r block free return Estimated tax payments. H&r block free return   Payments are due on the 15th day of the 4th, 6th, 9th, and 12th months of the corporation's tax year. H&r block free return Form 2553. H&r block free return   This form is used to choose S corporation treatment. H&r block free return It is due no more than two months and 15 days after the beginning of the tax year the election is to take effect or at any time during the preceding tax year. H&r block free return Employer's Tax Calendar This tax calendar covers various due dates of interest to employers. H&r block free return Principally, it covers the following federal taxes. H&r block free return Income tax you withhold from your employees' wages or from nonpayroll amounts you pay out. H&r block free return Social security and Medicare taxes (FICA taxes) you withhold from your employees' wages and the social security and Medicare taxes you must pay as an employer. H&r block free return Federal unemployment (FUTA) tax you must pay as an employer. H&r block free return The calendar lists due dates for filing returns and for making deposits of these three taxes throughout the year. H&r block free return Use this calendar with Publication 15 (Circular E), which gives the deposit rules. H&r block free return Forms you may need. H&r block free return   The following is a list and description of the primary employment tax forms you may need. H&r block free return Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. H&r block free return This form is due the last day of the first calendar month after the calendar year ends. H&r block free return Use it to report the FUTA tax on wages you paid. H&r block free return Form 941, Employer's QUARTERLY Federal Tax Return. H&r block free return This form is due the last day of the first calendar month after the calendar quarter ends. H&r block free return Use it to report social security and Medicare taxes and withheld income taxes on wages if your employees are not farm workers or household employees. H&r block free return Form 943, Employer's Annual Federal Tax Return for Agricultural Employees. H&r block free return This form is due the last day of the first calendar month after the calendar year ends. H&r block free return Use it to report social security and Medicare taxes and withheld income taxes on wages if your employees are farm workers. H&r block free return Form 944, Employer's ANNUAL Federal Tax Return. H&r block free return This form is due the last day of the first calendar month after the calendar year ends. H&r block free return Certain small employers use it instead of Form 941 to report social security and Medicare taxes and withheld income tax. H&r block free return Form 945, Annual Return of Withheld Federal Income Tax. H&r block free return This form is due the last day of the first calendar month after the calendar year ends. H&r block free return Use it to report income tax withheld on all nonpayroll items. H&r block free return Nonpayroll items include the following. H&r block free return Backup withholding. H&r block free return Withholding on pensions, annuities, IRAs, and gambling winnings. H&r block free return Payments of Indian gaming profits to tribal members. H&r block free return Fiscal-year taxpayers. H&r block free return   The dates in this calendar apply whether you use a fiscal year or the calendar year as your tax year. H&r block free return The only exception is the date for filing Forms 5500, Annual Return/Report of Employee Benefit Plan, and 5500-EZ, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan. H&r block free return These employee benefit plan forms are due by the last day of the seventh month after the plan year ends. H&r block free return See July 31 , later. H&r block free return Extended due dates. H&r block free return   If you timely deposit in full the tax you are required to report on Form 940, 941, 943, 944, or 945, you have an additional 10 calendar days to file that form. H&r block free return If you are subject to the semiweekly deposit rule, use Table 2 near the end of this publication for your deposit due dates. H&r block free return However, if you accumulate $100,000 or more of taxes on any day during a deposit period, you must deposit the tax by the next business day instead of the date shown in Table 2. H&r block free return First Quarter The first quarter of a calendar year is made up of January, February, and March. H&r block free return Second Quarter The second quarter of a calendar year is made up of April, May, and June. H&r block free return Third Quarter The third quarter of a calendar year is made up of July, August, and September. H&r block free return Fourth Quarter The fourth quarter of a calendar year is made up of October, November, and December. H&r block free return Excise Tax Calendar This tax calendar gives the due dates for filing returns and making deposits of excise taxes. H&r block free return Use this calendar with Publication 510. H&r block free return Also see the instructions for Forms 11-C, 720, 730, and 2290 for more information. H&r block free return References to Form 2290 also apply to Form 2290(SP). H&r block free return Forms you may need. H&r block free return   The following is a list and description of the excise tax forms you may need. H&r block free return Form 11-C, Occupational Tax and Registration Return for Wagering. H&r block free return Use this form to register any wagering activity and to pay an occupational tax on wagering. H&r block free return File Form 11-C if you are in the business of accepting wagers, including conducting a wagering pool or lottery, or are an agent of someone who accepts wagers. H&r block free return You must file the form before you begin accepting wagers. H&r block free return After that, file the form by July 1 of each year. H&r block free return Also, see Form 730, later. H&r block free return Form 720, Quarterly Federal Excise Tax Return. H&r block free return File this form by the last day of the month following the calendar quarter. H&r block free return Use this form to report a wide variety of excise taxes, including: Communications and air transportation taxes, Fuel taxes, Retail tax, Ship passenger tax, and Manufacturers taxes. H&r block free return Form 730, Monthly Tax Return for Wagers. H&r block free return Use this form to pay an excise tax on wagers you accept. H&r block free return File this form for each month by the last day of the following month. H&r block free return Also, see Form 11-C, earlier. H&r block free return Form 2290, Heavy Highway Vehicle Use Tax Return. H&r block free return Use this form to pay the federal use tax on heavy highway vehicles registered in your name. H&r block free return File this form by the last day of the month following the month of the vehicle's first taxable use in the tax period. H&r block free return The tax period begins on July 1 and ends the following June 30. H&r block free return You must pay the full year's tax on all vehicles you have in use during the month of July. H&r block free return You must also pay a partial-year tax on taxable vehicles that you put into use in a month after July. H&r block free return For more information, see the Instructions for Form 2290. H&r block free return Fiscal-year taxpayers. H&r block free return   The dates in this calendar apply whether you use a fiscal year or the calendar year as your tax year. H&r block free return Adjustments for Saturday, Sunday, or legal holidays. H&r block free return   Generally, if a due date falls on a Saturday, Sunday, or legal holiday, the due date is delayed until the next day that is not a Saturday, Sunday, or legal holiday. H&r block free return For excise taxes, there are two exceptions to this rule. H&r block free return For deposits of regular method taxes, if the due date is a Saturday, Sunday, or legal holiday, the due date is the immediately preceding day that is not a Saturday, Sunday, or legal holiday. H&r block free return Under the special September deposit rules, if the due date falls on a Saturday, the deposit is due on the preceding Friday. H&r block free return If the due date falls on a Sunday, the deposit is due on the following Monday. H&r block free return For more information, see the Instructions for Form 720. H&r block free return The Excise Tax Calendar has been adjusted for all of these provisions. H&r block free return Regular method taxes. H&r block free return   These are taxes, other than alternative method taxes used for communication and air transportation taxes, reported on Form 720 for which deposits are required. H&r block free return First Quarter The first quarter of a calendar year is made up of January, February, and March. H&r block free return Second Quarter The second quarter of a calendar year is made up of April, May, and June. H&r block free return Third Quarter The third quarter of a calendar year is made up of July, August, and September. H&r block free return Fourth Quarter The fourth quarter of a calendar year is made up of October, November, and December. H&r block free return How To Get Tax Help Go online, use a smart phone, call or walk in to an office near you. H&r block free return Whether it's help with a tax issue, preparing your tax return or picking up a free publication or form, get the help you need the way you want it. H&r block free return Free help with your tax return. H&r block free return   Free help in preparing your return is available nationwide from IRS-certified volunteers. H&r block free return The Volunteer Income Tax Assistance (VITA) program is designed to help low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers. H&r block free return The Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. H&r block free return Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. H&r block free return Some VITA and TCE sites provide taxpayers the opportunity to prepare their return with the assistance of an IRS-certified volunteer. H&r block free return To find the nearest VITA or TCE site, visit IRS. H&r block free return gov or call 1-800-906-9887. H&r block free return   As part of the TCE program, AARP offers the Tax-Aide counseling program. H&r block free return To find the nearest AARP Tax-Aide site, visit AARP's website at www. H&r block free return aarp. H&r block free return org/money/taxaide or call 1-888-227-7669. H&r block free return   For more information on these programs, go to IRS. H&r block free return gov and enter “VITA” in the search box. H&r block free return Internet. H&r block free return IRS. H&r block free return gov and IRS2Go are ready when you are — every day, every night, 24 hours a day, 7 days a week. H&r block free return Apply for an Employer Identification Number (EIN). H&r block free return Go to IRS. H&r block free return gov and enter Apply for an EIN in the search box. H&r block free return Request an Electronic Filing PIN by going to IRS. H&r block free return gov and entering Electronic Filing PIN in the search box. H&r block free return Check the status of your 2013 refund with Where's My Refund? Go to IRS. H&r block free return gov or the IRS2Go app, and click on Where's My Refund? You'll get a personalized refund date as soon as the IRS processes your tax return and approves your refund. H&r block free return If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. H&r block free return Checking the status of your amended return. H&r block free return Go to IRS. H&r block free return gov and enter Where's My Amended Return in the search box. H&r block free return Download forms, instructions, and publications, including some accessible versions. H&r block free return Order free transcripts of your tax returns or tax account using the Order a Transcript tool on IRS. H&r block free return gov or IRS2Go. H&r block free return Tax return and tax account transcripts are generally available for the current year and past three years. H&r block free return Figure your income tax withholding with the IRS Withholding Calculator on IRS. H&r block free return gov. H&r block free return Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. H&r block free return Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. H&r block free return gov. H&r block free return Locate the nearest Taxpayer Assistance Center using the Office Locator tool on IRS. H&r block free return gov or IRS2Go. H&r block free return Stop by most business days for face-to-face tax help, no appointment necessary — just walk in. H&r block free return An employee can explain IRS letters, request adjustments to your tax account or help you set up a payment plan. H&r block free return Before you visit, check the Office Locator for the address, phone number, hours of operation and the services provided. H&r block free return If you have an ongoing tax account problem or a special need, such as a disability, you can request an appointment. H&r block free return Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. H&r block free return Locate the nearest volunteer help site with the VITA Locator Tool on IRS. H&r block free return gov. H&r block free return Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. H&r block free return The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. H&r block free return Most VITA and TCE sites offer free electronic filing and some provide IRS-certified volunteers who can help prepare your tax return. H&r block free return AARP offers the Tax-Aide counseling program as part of the TCE program. H&r block free return Visit AARP's website to find the nearest Tax-Aide location. H&r block free return Research your tax questions. H&r block free return Search publications and instructions by topic or keyword. H&r block free return Read the Internal Revenue Code, regulations, or other official guidance. H&r block free return Read Internal Revenue Bulletins. H&r block free return Sign up to receive local and national tax news by email. H&r block free return Phone. H&r block free return You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. H&r block free return Download the free IRS2Go mobile app from the iTunes app store or from Google Play. H&r block free return Use it to watch the IRS YouTube channel, get IRS news as soon as it's released to the public, order transcripts of your tax returns or tax account, check your refund status, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. H&r block free return Call to locate the nearest volunteer help site, 1-800-906-9887. H&r block free return Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. H&r block free return The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. H&r block free return Most VITA and TCE sites offer free electronic filing. H&r block free return Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. H&r block free return Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. H&r block free return Call to check the status of your 2013 refund, 1-800-829-1954 or 1-800-829-4477. H&r block free return The automated Where's My Refund? information is available 24 hours a day, 7 days a week. H&r block free return If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. H&r block free return Before you call, have your 2013 tax return handy so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. H&r block free return Where's My Refund? can give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. H&r block free return Where's My Refund? includes information for the most recent return filed in the current year and does not include information about amended returns. H&r block free return Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. H&r block free return Call to order forms, instructions and publications, 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions and publications, and prior-year forms and instructions (limited to 5 years). H&r block free return You should receive your order within 10 business days. H&r block free return Call to order transcripts of your tax returns or tax account, 1-800-908-9946. H&r block free return Follow the prompts to provide your Social Security Number or Individual Taxpayer Identification Number, date of birth, street address and ZIP code. H&r block free return Call for TeleTax topics, 1-800-829-4477, to listen to pre-recorded messages covering various tax topics. H&r block free return Call to ask tax questions, 1-800-829-1040. H&r block free return Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. H&r block free return The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. H&r block free return These individuals can also contact the IRS through relay services such as the Federal Relay Service available at www. H&r block free return gsa. H&r block free return gov/fedrelay. H&r block free return Walk-in. H&r block free return You can find a selection of forms, publications and services — in-person, face-to-face. H&r block free return Products. H&r block free return You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. H&r block free return Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. H&r block free return Services. H&r block free return You can walk in to your local TAC most business days for personal, face-to-face tax help. H&r block free return An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. H&r block free return If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local TAC where you can talk with an IRS representative face-to-face. H&r block free return No appointment is necessary—just walk in. H&r block free return Before visiting, check www. H&r block free return irs. H&r block free return gov/localcontacts for hours of operation and services provided. H&r block free return Mail. H&r block free return You can send your order for forms, instructions, and publications to the address below. H&r block free return You should receive a response within 10 business days after your request is received. H&r block free return  Internal Revenue Service 1201 N. H&r block free return Mitsubishi Motorway Bloomington, IL 61705-6613 The Taxpayer Advocate Service Is Here to Help You. H&r block free return   The Taxpayer Advocate Service (TAS) is your voice at the IRS. H&r block free return Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. H&r block free return What can TAS do for you?   We can offer you free help with IRS problems that you can't resolve on your own. H&r block free return We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. H&r block free return You face (or your business is facing) an immediate threat of adverse action. H&r block free return You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. H&r block free return   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. H&r block free return Here's why we can help: TAS is an independent organization within the IRS. H&r block free return Our advocates know how to work with the IRS. H&r block free return Our services are free and tailored to meet your needs. H&r block free return We have offices in every state, the District of Columbia, and Puerto Rico. H&r block free return How can you reach us?   If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. H&r block free return irs. H&r block free return gov/advocate, or call us toll-free at 1-877-777-4778. H&r block free return How else does TAS help taxpayers?   TAS also works to resolve large-scale, systemic problems that affect many taxpayers. H&r block free return If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. H&r block free return irs. H&r block free return gov/sams. H&r block free return Low Income Taxpayer Clinics. H&r block free return   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. H&r block free return Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. H&r block free return Visit www. H&r block free return TaxpayerAdvocate. H&r block free return irs. H&r block free return gov or see IRS Publication 4134, Low Income Taxpayer Clinic List. H&r block free return gnewbus01 Prev  Up  Next   Home   More Online Publications
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Tax Relief for Victims of Tropical Storm Irene in New Hampshire

E-file to Remain Open through Oct. 31 for Victims of Tropical Storm Irene

NH-2011-31, Sept. 8, 2011

BOSTON — Victims of Tropical Storm Irene that began on Aug. 27, 2011 in parts of New Hampshire may qualify for tax relief from the Internal Revenue Service.

The President has declared the following counties a federal disaster area: Carroll and Grafton. Individuals who reside or have a business in these counties may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Aug. 27, and on or before Oct. 31, have been postponed to Oct. 31, 2011. This includes corporations and other businesses that previously obtained an extension until Sept. 15 to file their 2010 returns, and individuals and businesses that received a similar extension until Oct. 17. It also includes the estimated tax payment for the third quarter, normally due Sept. 15.

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after Aug. 27, and on or before Sept. 12, as long as the deposits are made by Sept. 12, 2011.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request this tax relief.

Covered Disaster Area

The counties listed above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and are entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until Oct. 31 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Aug. 27 and on or before Oct. 31.

The IRS also gives affected taxpayers until Oct. 31 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), that are due to be performed on or after Aug. 27 and on or before Oct. 31.

This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after Aug. 27 and on or before Sept. 12 provided the taxpayer makes these deposits by Sept. 12.

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.

Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “New Hampshire/Tropical Storm Irene” at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS website, irs.gov, or order them by calling 1-800-TAX-FORM (1-800-829-3676). The IRS toll-free number for general tax questions is 1-800-829-1040.

Related Information

Page Last Reviewed or Updated: 20-Mar-2014

The H&r Block Free Return

H&r block free return 14. H&r block free return   Sale of Property Table of Contents Reminder Introduction Useful Items - You may want to see: Sales and TradesWhat Is a Sale or Trade? How To Figure Gain or Loss Nontaxable Trades Transfers Between Spouses Related Party Transactions Capital Gains and LossesCapital or Ordinary Gain or Loss Capital Assets and Noncapital Assets Holding Period Nonbusiness Bad Debts Wash Sales Rollover of Gain From Publicly Traded Securities Reminder Foreign income. H&r block free return  If you are a U. H&r block free return S. H&r block free return citizen who sells property located outside the United States, you must report all gains and losses from the sale of that property on your tax return unless it is exempt by U. H&r block free return S. H&r block free return law. H&r block free return This is true whether you reside inside or outside the United States and whether or not you receive a Form 1099 from the payer. H&r block free return Introduction This chapter discusses the tax consequences of selling or trading investment property. H&r block free return It explains the following. H&r block free return What a sale or trade is. H&r block free return Figuring gain or loss. H&r block free return Nontaxable trades. H&r block free return Related party transactions. H&r block free return Capital gains or losses. H&r block free return Capital assets and noncapital assets. H&r block free return Holding period. H&r block free return Rollover of gain from publicly traded securities. H&r block free return Other property transactions. H&r block free return   Certain transfers of property are not discussed here. H&r block free return They are discussed in other IRS publications. H&r block free return These include the following. H&r block free return Sales of a main home, covered in chapter 15. H&r block free return Installment sales, covered in Publication 537, Installment Sales. H&r block free return Transactions involving business property, covered in Publication 544, Sales and Other Dispositions of Assets. H&r block free return Dispositions of an interest in a passive activity, covered in Publication 925, Passive Activity and At-Risk Rules. H&r block free return    Publication 550, Investment Income and Expenses (Including Capital Gains and Losses), provides a more detailed discussion about sales and trades of investment property. H&r block free return Publication 550 includes information about the rules covering nonbusiness bad debts, straddles, section 1256 contracts, puts and calls, commodity futures, short sales, and wash sales. H&r block free return It also discusses investment-related expenses. H&r block free return Useful Items - You may want to see: Publication 550 Investment Income and Expenses Form (and Instructions) Schedule D (Form 1040) Capital Gains and Losses 8949 Sales and Other Dispositions of Capital Assets 8824 Like-Kind Exchanges Sales and Trades If you sold property such as stocks, bonds, or certain commodities through a broker during the year, you should receive, for each sale, a Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, or substitute statement, from the broker. H&r block free return Generally, you should receive the statement by February 15 of the next year. H&r block free return It will show the gross proceeds from the sale. H&r block free return If you sold a covered security in 2013, your 1099-B (or substitute statement) will show your basis. H&r block free return Generally, a covered security is a security you acquired after 2010, with certain exceptions. H&r block free return See the Instructions for Form 8949. H&r block free return The IRS will also get a copy of Form 1099-B from the broker. H&r block free return Use Form 1099-B (or substitute statement received from your broker) to complete Form 8949. H&r block free return What Is a Sale or Trade? This section explains what is a sale or trade. H&r block free return It also explains certain transactions and events that are treated as sales or trades. H&r block free return A sale is generally a transfer of property for money or a mortgage, note, or other promise to pay money. H&r block free return A trade is a transfer of property for other property or services and may be taxed in the same way as a sale. H&r block free return Sale and purchase. H&r block free return   Ordinarily, a transaction is not a trade when you voluntarily sell property for cash and immediately buy similar property to replace it. H&r block free return The sale and purchase are two separate transactions. H&r block free return But see Like-kind exchanges under Nontaxable Trades, later. H&r block free return Redemption of stock. H&r block free return   A redemption of stock is treated as a sale or trade and is subject to the capital gain or loss provisions unless the redemption is a dividend or other distribution on stock. H&r block free return Dividend versus sale or trade. H&r block free return   Whether a redemption is treated as a sale, trade, dividend, or other distribution depends on the circumstances in each case. H&r block free return Both direct and indirect ownership of stock will be considered. H&r block free return The redemption is treated as a sale or trade of stock if: The redemption is not essentially equivalent to a dividend (see chapter 8), There is a substantially disproportionate redemption of stock, There is a complete redemption of all the stock of the corporation owned by the shareholder, or The redemption is a distribution in partial liquidation of a corporation. H&r block free return Redemption or retirement of bonds. H&r block free return   A redemption or retirement of bonds or notes at their maturity is generally treated as a sale or trade. H&r block free return   In addition, a significant modification of a bond is treated as a trade of the original bond for a new bond. H&r block free return For details, see Regulations section 1. H&r block free return 1001-3. H&r block free return Surrender of stock. H&r block free return   A surrender of stock by a dominant shareholder who retains ownership of more than half of the corporation's voting shares is treated as a contribution to capital rather than as an immediate loss deductible from taxable income. H&r block free return The surrendering shareholder must reallocate his or her basis in the surrendered shares to the shares he or she retains. H&r block free return Worthless securities. H&r block free return    Stocks, stock rights, and bonds (other than those held for sale by a securities dealer) that became completely worthless during the tax year are treated as though they were sold on the last day of the tax year. H&r block free return This affects whether your capital loss is long term or short term. H&r block free return See Holding Period , later. H&r block free return   Worthless securities also include securities that you abandon after March 12, 2008. H&r block free return To abandon a security, you must permanently surrender and relinquish all rights in the security and receive no consideration in exchange for it. H&r block free return All the facts and circumstances determine whether the transaction is properly characterized as an abandonment or other type of transaction, such as an actual sale or exchange, contribution to capital, dividend, or gift. H&r block free return    If you are a cash basis taxpayer and make payments on a negotiable promissory note that you issued for stock that became worthless, you can deduct these payments as losses in the years you actually make the payments. H&r block free return Do not deduct them in the year the stock became worthless. H&r block free return How to report loss. H&r block free return    Report worthless securities in Part I or Part II, whichever applies, of Form 8949. H&r block free return In column (a), enter “Worthless. H&r block free return ”    Report your worthless securities transactions on Form 8949 with the correct box checked for these transactions. H&r block free return See Form 8949 and the Instructions for Form 8949. H&r block free return For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. H&r block free return See also Schedule D (Form 1040), Form 8949, and their separate instructions. H&r block free return Filing a claim for refund. H&r block free return   If you do not claim a loss for a worthless security on your original return for the year it becomes worthless, you can file a claim for a credit or refund due to the loss. H&r block free return You must use Form 1040X, Amended U. H&r block free return S. H&r block free return Individual Income Tax Return, to amend your return for the year the security became worthless. H&r block free return You must file it within 7 years from the date your original return for that year had to be filed, or 2 years from the date you paid the tax, whichever is later. H&r block free return For more information about filing a claim, see Amended Returns and Claims for Refund in chapter 1. H&r block free return How To Figure Gain or Loss You figure gain or loss on a sale or trade of property by comparing the amount you realize with the adjusted basis of the property. H&r block free return Gain. H&r block free return   If the amount you realize from a sale or trade is more than the adjusted basis of the property you transfer, the difference is a gain. H&r block free return Loss. H&r block free return   If the adjusted basis of the property you transfer is more than the amount you realize, the difference is a loss. H&r block free return Adjusted basis. H&r block free return   The adjusted basis of property is your original cost or other original basis properly adjusted (increased or decreased) for certain items. H&r block free return See chapter 13 for more information about determining the adjusted basis of property. H&r block free return Amount realized. H&r block free return   The amount you realize from a sale or trade of property is everything you receive for the property minus your expenses of sale (such as redemption fees, sales commissions, sales charges, or exit fees). H&r block free return Amount realized includes the money you receive plus the fair market value of any property or services you receive. H&r block free return If you received a note or other debt instrument for the property, see How To Figure Gain or Loss in chapter 4 of Publication 550 to figure the amount realized. H&r block free return If you finance the buyer's purchase of your property and the debt instrument does not provide for adequate stated interest, the unstated interest that you must report as ordinary income will reduce the amount realized from the sale. H&r block free return For more information, see Publication 537. H&r block free return Fair market value. H&r block free return   Fair market value is the price at which the property would change hands between a buyer and a seller, neither being forced to buy or sell and both having reasonable knowledge of all the relevant facts. H&r block free return Example. H&r block free return You trade A Company stock with an adjusted basis of $7,000 for B Company stock with a fair market value of $10,000, which is your amount realized. H&r block free return Your gain is $3,000 ($10,000 − $7,000). H&r block free return Debt paid off. H&r block free return    A debt against the property, or against you, that is paid off as a part of the transaction, or that is assumed by the buyer, must be included in the amount realized. H&r block free return This is true even if neither you nor the buyer is personally liable for the debt. H&r block free return For example, if you sell or trade property that is subject to a nonrecourse loan, the amount you realize generally includes the full amount of the note assumed by the buyer even if the amount of the note is more than the fair market value of the property. H&r block free return Example. H&r block free return You sell stock that you had pledged as security for a bank loan of $8,000. H&r block free return Your basis in the stock is $6,000. H&r block free return The buyer pays off your bank loan and pays you $20,000 in cash. H&r block free return The amount realized is $28,000 ($20,000 + $8,000). H&r block free return Your gain is $22,000 ($28,000 − $6,000). H&r block free return Payment of cash. H&r block free return   If you trade property and cash for other property, the amount you realize is the fair market value of the property you receive. H&r block free return Determine your gain or loss by subtracting the cash you pay plus the adjusted basis of the property you trade in from the amount you realize. H&r block free return If the result is a positive number, it is a gain. H&r block free return If the result is a negative number, it is a loss. H&r block free return No gain or loss. H&r block free return   You may have to use a basis for figuring gain that is different from the basis used for figuring loss. H&r block free return In this case, you may have neither a gain nor a loss. H&r block free return See Basis Other Than Cost in chapter 13. H&r block free return Nontaxable Trades This section discusses trades that generally do not result in a taxable gain or deductible loss. H&r block free return For more information on nontaxable trades, see chapter 1 of Publication 544. H&r block free return Like-kind exchanges. H&r block free return   If you trade business or investment property for other business or investment property of a like kind, you do not pay tax on any gain or deduct any loss until you sell or dispose of the property you receive. H&r block free return To be nontaxable, a trade must meet all six of the following conditions. H&r block free return The property must be business or investment property. H&r block free return You must hold both the property you trade and the property you receive for productive use in your trade or business or for investment. H&r block free return Neither property may be property used for personal purposes, such as your home or family car. H&r block free return The property must not be held primarily for sale. H&r block free return The property you trade and the property you receive must not be property you sell to customers, such as merchandise. H&r block free return The property must not be stocks, bonds, notes, choses in action, certificates of trust or beneficial interest, or other securities or evidences of indebtedness or interest, including partnership interests. H&r block free return However, see Special rules for mutual ditch, reservoir, or irrigation company stock, in chapter 4 of Publication 550 for an exception. H&r block free return Also, you can have a nontaxable trade of corporate stocks under a different rule, as discussed later. H&r block free return There must be a trade of like property. H&r block free return The trade of real estate for real estate, or personal property for similar personal property, is a trade of like property. H&r block free return The trade of an apartment house for a store building, or a panel truck for a pickup truck, is a trade of like property. H&r block free return The trade of a piece of machinery for a store building is not a trade of like property. H&r block free return Real property located in the United States and real property located outside the United States are not like property. H&r block free return Also, personal property used predominantly within the United States and personal property used predominantly outside the United States are not like property. H&r block free return The property to be received must be identified in writing within 45 days after the date you transfer the property given up in the trade. H&r block free return The property to be received must be received by the earlier of: The 180th day after the date on which you transfer the property given up in the trade, or The due date, including extensions, for your tax return for the year in which the transfer of the property given up occurs. H&r block free return    If you trade property with a related party in a like-kind exchange, a special rule may apply. H&r block free return See Related Party Transactions , later in this chapter. H&r block free return Also, see chapter 1 of Publication 544 for more information on exchanges of business property and special rules for exchanges using qualified intermediaries or involving multiple properties. H&r block free return Partly nontaxable exchange. H&r block free return   If you receive money or unlike property in addition to like property, and the above six conditions are met, you have a partly nontaxable trade. H&r block free return You are taxed on any gain you realize, but only up to the amount of the money and the fair market value of the unlike property you receive. H&r block free return You cannot deduct a loss. H&r block free return Like property and unlike property transferred. H&r block free return   If you give up unlike property in addition to the like property, you must recognize gain or loss on the unlike property you give up. H&r block free return The gain or loss is the difference between the adjusted basis of the unlike property and its fair market value. H&r block free return Like property and money transferred. H&r block free return   If all of the above conditions (1) – (6) are met, you have a nontaxable trade even if you pay money in addition to the like property. H&r block free return Basis of property received. H&r block free return   To figure the basis of the property received, see Nontaxable Exchanges in chapter 13. H&r block free return How to report. H&r block free return   You must report the trade of like property on Form 8824. H&r block free return If you figure a recognized gain or loss on Form 8824, report it on Schedule D (Form 1040), or on Form 4797, Sales of Business Property, whichever applies. H&r block free return See the instructions for Line 22 in the Instructions for Form 8824. H&r block free return   For information on using Form 4797, see chapter 4 of Publication 544. H&r block free return Corporate stocks. H&r block free return   The following trades of corporate stocks generally do not result in a taxable gain or a deductible loss. H&r block free return Corporate reorganizations. H&r block free return   In some instances, a company will give you common stock for preferred stock, preferred stock for common stock, or stock in one corporation for stock in another corporation. H&r block free return If this is a result of a merger, recapitalization, transfer to a controlled corporation, bankruptcy, corporate division, corporate acquisition, or other corporate reorganization, you do not recognize gain or loss. H&r block free return Stock for stock of the same corporation. H&r block free return   You can exchange common stock for common stock or preferred stock for preferred stock in the same corporation without having a recognized gain or loss. H&r block free return This is true for a trade between two stockholders as well as a trade between a stockholder and the corporation. H&r block free return Convertible stocks and bonds. H&r block free return   You generally will not have a recognized gain or loss if you convert bonds into stock or preferred stock into common stock of the same corporation according to a conversion privilege in the terms of the bond or the preferred stock certificate. H&r block free return Property for stock of a controlled corporation. H&r block free return   If you transfer property to a corporation solely in exchange for stock in that corporation, and immediately after the trade you are in control of the corporation, you ordinarily will not recognize a gain or loss. H&r block free return This rule applies both to individuals and to groups who transfer property to a corporation. H&r block free return It does not apply if the corporation is an investment company. H&r block free return   For this purpose, to be in control of a corporation, you or your group of transferors must own, immediately after the exchange, at least 80% of the total combined voting power of all classes of stock entitled to vote and at least 80% of the outstanding shares of each class of nonvoting stock of the corporation. H&r block free return   If this provision applies to you, you may have to attach to your return a complete statement of all facts pertinent to the exchange. H&r block free return For details, see Regulations section 1. H&r block free return 351-3. H&r block free return Additional information. H&r block free return   For more information on trades of stock, see Nontaxable Trades in chapter 4 of Publication 550. H&r block free return Insurance policies and annuities. H&r block free return   You will not have a recognized gain or loss if the insured or annuitant is the same under both contracts and you trade: A life insurance contract for another life insurance contract or for an endowment or annuity contract or for a qualified long-term care insurance contract, An endowment contract for another endowment contract that provides for regular payments beginning at a date no later than the beginning date under the old contract or for an annuity contract or for a qualified long-term insurance contract, An annuity contract for annuity contract or for a qualified long-term care insurance contract, or A qualified long-term care insurance contract for a qualified long-term care insurance contract. H&r block free return   You also may not have to recognize gain or loss on an exchange of a portion of an annuity contract for another annuity contract. H&r block free return For transfers completed before October 24, 2011, see Revenue Ruling 2003-76 in Internal Revenue Bulletin 2003-33 and Revenue Procedure 2008-24 in Internal Revenue Bulletin 2008-13. H&r block free return Revenue Ruling 2003-76 is available at www. H&r block free return irs. H&r block free return gov/irb/2003-33_IRB/ar11. H&r block free return html. H&r block free return Revenue Procedure 2008-24 is available at www. H&r block free return irs. H&r block free return gov/irb/2008-13_IRB/ar13. H&r block free return html. H&r block free return For transfers completed on or after October 24, 2011, see Revenue Ruling 2003-76, above, and Revenue Procedure 2011-38, in Internal Revenue Bulletin 2011-30. H&r block free return Revenue Procedure 2011-38 is available at www. H&r block free return irs. H&r block free return gov/irb/2011-30_IRB/ar09. H&r block free return html. H&r block free return   For tax years beginning after December 31, 2010, amounts received as an annuity for a period of 10 years or more, or for the lives of one or more individuals, under any portion of an annuity, endowment, or life insurance contract, are treated as a separate contract and are considered partial annuities. H&r block free return A portion of an annuity, endowment, or life insurance contract may be annuitized, provided that the annuitization period is for 10 years or more or for the lives of one or more individuals. H&r block free return The investment in the contract is allocated between the part of the contract from which amounts are received as an annuity and the part of the contract from which amounts are not received as an annuity. H&r block free return   Exchanges of contracts not included in this list, such as an annuity contract for an endowment contract, or an annuity or endowment contract for a life insurance contract, are taxable. H&r block free return Demutualization of life insurance companies. H&r block free return   If you received stock in exchange for your equity interest as a policyholder or an annuitant, you generally will not have a recognized gain or loss. H&r block free return See Demutualization of Life Insurance Companies in Publication 550. H&r block free return U. H&r block free return S. H&r block free return Treasury notes or bonds. H&r block free return   You can trade certain issues of U. H&r block free return S. H&r block free return Treasury obligations for other issues designated by the Secretary of the Treasury, with no gain or loss recognized on the trade. H&r block free return See Savings bonds traded in chapter 1 of Publication 550 for more information. H&r block free return Transfers Between Spouses Generally, no gain or loss is recognized on a transfer of property from an individual to (or in trust for the benefit of) a spouse, or if incident to a divorce, a former spouse. H&r block free return This nonrecognition rule does not apply in the following situations. H&r block free return The recipient spouse or former spouse is a nonresident alien. H&r block free return Property is transferred in trust and liability exceeds basis. H&r block free return Gain must be recognized to the extent the amount of the liabilities assumed by the trust, plus any liabilities on the property, exceed the adjusted basis of the property. H&r block free return For other situations, see Transfers Between Spouses in chapter 4 of Publication 550. H&r block free return Any transfer of property to a spouse or former spouse on which gain or loss is not recognized is treated by the recipient as a gift and is not considered a sale or exchange. H&r block free return The recipient's basis in the property will be the same as the adjusted basis of the giver immediately before the transfer. H&r block free return This carryover basis rule applies whether the adjusted basis of the transferred property is less than, equal to, or greater than either its fair market value at the time of transfer or any consideration paid by the recipient. H&r block free return This rule applies for purposes of determining loss as well as gain. H&r block free return Any gain recognized on a transfer in trust increases the basis. H&r block free return A transfer of property is incident to a divorce if the transfer occurs within 1 year after the date on which the marriage ends, or if the transfer is related to the ending of the marriage. H&r block free return Related Party Transactions Special rules apply to the sale or trade of property between related parties. H&r block free return Gain on sale or trade of depreciable property. H&r block free return   Your gain from the sale or trade of property to a related party may be ordinary income, rather than capital gain, if the property can be depreciated by the party receiving it. H&r block free return See chapter 3 of Publication 544 for more information. H&r block free return Like-kind exchanges. H&r block free return   Generally, if you trade business or investment property for other business or investment property of a like kind, no gain or loss is recognized. H&r block free return See Like-kind exchanges , earlier, under Nontaxable Trades. H&r block free return   This rule also applies to trades of property between related parties, defined next under Losses on sales or trades of property. H&r block free return However, if either you or the related party disposes of the like property within 2 years after the trade, you both must report any gain or loss not recognized on the original trade on your return filed for the year in which the later disposition occurs. H&r block free return See Related Party Transactions in chapter 4 of Publication 550 for exceptions. H&r block free return Losses on sales or trades of property. H&r block free return   You cannot deduct a loss on the sale or trade of property, other than a distribution in complete liquidation of a corporation, if the transaction is directly or indirectly between you and the following related parties. H&r block free return Members of your family. H&r block free return This includes only your brothers and sisters, half-brothers and half-sisters, spouse, ancestors (parents, grandparents, etc. H&r block free return ), and lineal descendants (children, grandchildren, etc. H&r block free return ). H&r block free return A partnership in which you directly or indirectly own more than 50% of the capital interest or the profits interest. H&r block free return A corporation in which you directly or indirectly own more than 50% in value of the outstanding stock. H&r block free return (See Constructive ownership of stock , later. H&r block free return ) A tax-exempt charitable or educational organization directly or indirectly controlled, in any manner or by any method, by you or by a member of your family, whether or not this control is legally enforceable. H&r block free return   In addition, a loss on the sale or trade of property is not deductible if the transaction is directly or indirectly between the following related parties. H&r block free return A grantor and fiduciary, or the fiduciary and beneficiary, of any trust. H&r block free return Fiduciaries of two different trusts, or the fiduciary and beneficiary of two different trusts, if the same person is the grantor of both trusts. H&r block free return A trust fiduciary and a corporation of which more than 50% in value of the outstanding stock is directly or indirectly owned by or for the trust, or by or for the grantor of the trust. H&r block free return A corporation and a partnership if the same persons own more than 50% in value of the outstanding stock of the corporation and more than 50% of the capital interest, or the profits interest, in the partnership. H&r block free return Two S corporations if the same persons own more than 50% in value of the outstanding stock of each corporation. H&r block free return Two corporations, one of which is an S corporation, if the same persons own more than 50% in value of the outstanding stock of each corporation. H&r block free return An executor and a beneficiary of an estate (except in the case of a sale or trade to satisfy a pecuniary bequest). H&r block free return Two corporations that are members of the same controlled group. H&r block free return (Under certain conditions, however, these losses are not disallowed but must be deferred. H&r block free return ) Two partnerships if the same persons own, directly or indirectly, more than 50% of the capital interests or the profit interests in both partnerships. H&r block free return Multiple property sales or trades. H&r block free return   If you sell or trade to a related party a number of blocks of stock or pieces of property in a lump sum, you must figure the gain or loss separately for each block of stock or piece of property. H&r block free return The gain on each item may be taxable. H&r block free return However, you cannot deduct the loss on any item. H&r block free return Also, you cannot reduce gains from the sales of any of these items by losses on the sales of any of the other items. H&r block free return Indirect transactions. H&r block free return   You cannot deduct your loss on the sale of stock through your broker if, under a prearranged plan, a related party buys the same stock you had owned. H&r block free return This does not apply to a trade between related parties through an exchange that is purely coincidental and is not prearranged. H&r block free return Constructive ownership of stock. H&r block free return   In determining whether a person directly or indirectly owns any of the outstanding stock of a corporation, the following rules apply. H&r block free return Rule 1. H&r block free return   Stock directly or indirectly owned by or for a corporation, partnership, estate, or trust is considered owned proportionately by or for its shareholders, partners, or beneficiaries. H&r block free return Rule 2. H&r block free return   An individual is considered to own the stock directly or indirectly owned by or for his or her family. H&r block free return Family includes only brothers and sisters, half-brothers and half-sisters, spouse, ancestors, and lineal descendants. H&r block free return Rule 3. H&r block free return   An individual owning, other than by applying rule 2, any stock in a corporation is considered to own the stock directly or indirectly owned by or for his or her partner. H&r block free return Rule 4. H&r block free return   When applying rule 1, 2, or 3, stock constructively owned by a person under rule 1 is treated as actually owned by that person. H&r block free return But stock constructively owned by an individual under rule 2 or rule 3 is not treated as owned by that individual for again applying either rule 2 or rule 3 to make another person the constructive owner of the stock. H&r block free return Property received from a related party. H&r block free return    If you sell or trade at a gain property you acquired from a related party, you recognize the gain only to the extent it is more than the loss previously disallowed to the related party. H&r block free return This rule applies only if you are the original transferee and you acquired the property by purchase or exchange. H&r block free return This rule does not apply if the related party's loss was disallowed because of the wash sale rules described in chapter 4 of Publication 550 under Wash Sales. H&r block free return   If you sell or trade at a loss property you acquired from a related party, you cannot recognize the loss that was not allowed to the related party. H&r block free return Example 1. H&r block free return Your brother sells you stock for $7,600. H&r block free return His cost basis is $10,000. H&r block free return Your brother cannot deduct the loss of $2,400. H&r block free return Later, you sell the same stock to an unrelated party for $10,500, realizing a gain of $2,900. H&r block free return Your reportable gain is $500 (the $2,900 gain minus the $2,400 loss not allowed to your brother). H&r block free return Example 2. H&r block free return If, in Example 1, you sold the stock for $6,900 instead of $10,500, your recognized loss is only $700 (your $7,600 basis minus $6,900). H&r block free return You cannot deduct the loss that was not allowed to your brother. H&r block free return Capital Gains and Losses This section discusses the tax treatment of gains and losses from different types of investment transactions. H&r block free return Character of gain or loss. H&r block free return   You need to classify your gains and losses as either ordinary or capital gains or losses. H&r block free return You then need to classify your capital gains and losses as either short term or long term. H&r block free return If you have long-term gains and losses, you must identify your 28% rate gains and losses. H&r block free return If you have a net capital gain, you must also identify any unrecaptured section 1250 gain. H&r block free return   The correct classification and identification helps you figure the limit on capital losses and the correct tax on capital gains. H&r block free return Reporting capital gains and losses is explained in chapter 16. H&r block free return Capital or Ordinary Gain or Loss If you have a taxable gain or a deductible loss from a transaction, it may be either a capital gain or loss or an ordinary gain or loss, depending on the circumstances. H&r block free return Generally, a sale or trade of a capital asset (defined next) results in a capital gain or loss. H&r block free return A sale or trade of a noncapital asset generally results in ordinary gain or loss. H&r block free return Depending on the circumstances, a gain or loss on a sale or trade of property used in a trade or business may be treated as either capital or ordinary, as explained in Publication 544. H&r block free return In some situations, part of your gain or loss may be a capital gain or loss and part may be an ordinary gain or loss. H&r block free return Capital Assets and Noncapital Assets For the most part, everything you own and use for personal purposes, pleasure, or investment is a capital asset. H&r block free return Some examples are: Stocks or bonds held in your personal account, A house owned and used by you and your family, Household furnishings, A car used for pleasure or commuting, Coin or stamp collections, Gems and jewelry, and Gold, silver, or any other metal. H&r block free return Any property you own is a capital asset, except the following noncapital assets. H&r block free return Property held mainly for sale to customers or property that will physically become a part of the merchandise for sale to customers. H&r block free return For an exception, see Capital Asset Treatment for Self-Created Musical Works , later. H&r block free return Depreciable property used in your trade or business, even if fully depreciated. H&r block free return Real property used in your trade or business. H&r block free return A copyright, a literary, musical, or artistic composition, a letter or memorandum, or similar property that is: Created by your personal efforts, Prepared or produced for you (in the case of a letter, memorandum, or similar property), or Acquired under circumstances (for example, by gift) entitling you to the basis of the person who created the property or for whom it was prepared or produced. H&r block free return For an exception to this rule, see Capital Asset Treatment for Self-Created Musical Works , later. H&r block free return Accounts or notes receivable acquired in the ordinary course of a trade or business for services rendered or from the sale of property described in (1). H&r block free return U. H&r block free return S. H&r block free return Government publications that you received from the government free or for less than the normal sales price, or that you acquired under circumstances entitling you to the basis of someone who received the publications free or for less than the normal sales price. H&r block free return Certain commodities derivative financial instruments held by commodities derivatives dealers. H&r block free return Hedging transactions, but only if the transaction is clearly identified as a hedging transaction before the close of the day on which it was acquired, originated, or entered into. H&r block free return Supplies of a type you regularly use or consume in the ordinary course of your trade or business. H&r block free return Investment Property Investment property is a capital asset. H&r block free return Any gain or loss from its sale or trade is generally a capital gain or loss. H&r block free return Gold, silver, stamps, coins, gems, etc. H&r block free return   These are capital assets except when they are held for sale by a dealer. H&r block free return Any gain or loss you have from their sale or trade generally is a capital gain or loss. H&r block free return Stocks, stock rights, and bonds. H&r block free return   All of these (including stock received as a dividend) are capital assets except when held for sale by a securities dealer. H&r block free return However, if you own small business stock, see Losses on Section 1244 (Small Business) Stock , later, and Losses on Small Business Investment Company Stock, in chapter 4 of Publication 550. H&r block free return Personal Use Property Property held for personal use only, rather than for investment, is a capital asset, and you must report a gain from its sale as a capital gain. H&r block free return However, you cannot deduct a loss from selling personal use property. H&r block free return Capital Asset Treatment for Self-Created Musical Works You can elect to treat musical compositions and copyrights in musical works as capital assets when you sell or exchange them if: Your personal efforts created the property, or You acquired the property under circumstances (for example, by gift) entitling you to the basis of the person who created the property or for whom it was prepared or produced. H&r block free return You must make a separate election for each musical composition (or copyright in a musical work) sold or exchanged during the tax year. H&r block free return You must make the election on or before the due date (including extensions) of the income tax return for the tax year of the sale or exchange. H&r block free return You must make the election on Form 8949 by treating the sale or exchange as the sale or exchange of a capital asset, according to Form 8949, Schedule D (Form 1040), and their separate instructions. H&r block free return For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. H&r block free return See also Schedule D (Form 1040), Form 8949, and their separate instructions. H&r block free return You can revoke the election if you have IRS approval. H&r block free return To get IRS approval, you must submit a request for a letter ruling under the appropriate IRS revenue procedure. H&r block free return See, for example, Rev. H&r block free return Proc. H&r block free return 2013-1, corrected by Announcement 2013–9, and amplified and modified by Rev. H&r block free return Proc. H&r block free return 2013–32, available at www. H&r block free return irs. H&r block free return gov/irb/2013-01_IRB/ar06. H&r block free return html. H&r block free return Alternatively, you are granted an automatic 6-month extension from the due date of your income tax return (excluding extensions) to revoke the election, provided you timely file your income tax return, and within this 6-month extension period, you file Form 1040X that treats the sale or exchange as the sale or exchange of property that is not a capital asset. H&r block free return Discounted Debt Instruments Treat your gain or loss on the sale, redemption, or retirement of a bond or other debt instrument originally issued at a discount or bought at a discount as capital gain or loss, except as explained in the following discussions. H&r block free return Short-term government obligations. H&r block free return   Treat gains on short-term federal, state, or local government obligations (other than tax-exempt obligations) as ordinary income up to your ratable share of the acquisition discount. H&r block free return This treatment applies to obligations with a fixed maturity date not more than 1 year from the date of issue. H&r block free return Acquisition discount is the stated redemption price at maturity minus your basis in the obligation. H&r block free return   However, do not treat these gains as income to the extent you previously included the discount in income. H&r block free return See Discount on Short-Term Obligations in chapter 1 of Publication 550. H&r block free return Short-term nongovernment obligations. H&r block free return   Treat gains on short-term nongovernment obligations as ordinary income up to your ratable share of original issue discount (OID). H&r block free return This treatment applies to obligations with a fixed maturity date of not more than 1 year from the date of issue. H&r block free return   However, to the extent you previously included the discount in income, you do not have to include it in income again. H&r block free return See Discount on Short-Term Obligations in chapter 1 of Publication 550. H&r block free return Tax-exempt state and local government bonds. H&r block free return   If these bonds were originally issued at a discount before September 4, 1982, or you acquired them before March 2, 1984, treat your part of OID as tax-exempt interest. H&r block free return To figure your gain or loss on the sale or trade of these bonds, reduce the amount realized by your part of OID. H&r block free return   If the bonds were issued after September 3, 1982, and acquired after March 1, 1984, increase the adjusted basis by your part of OID to figure gain or loss. H&r block free return For more information on the basis of these bonds, see Discounted Debt Instruments in chapter 4 of Publication 550. H&r block free return   Any gain from market discount is usually taxable on disposition or redemption of tax-exempt bonds. H&r block free return If you bought the bonds before May 1, 1993, the gain from market discount is capital gain. H&r block free return If you bought the bonds after April 30, 1993, the gain is ordinary income. H&r block free return   You figure the market discount by subtracting the price you paid for the bond from the sum of the original issue price of the bond and the amount of accumulated OID from the date of issue that represented interest to any earlier holders. H&r block free return For more information, see Market Discount Bonds in chapter 1 of Publication 550. H&r block free return    A loss on the sale or other disposition of a tax-exempt state or local government bond is deductible as a capital loss. H&r block free return Redeemed before maturity. H&r block free return   If a state or local bond issued before June 9, 1980, is redeemed before it matures, the OID is not taxable to you. H&r block free return   If a state or local bond issued after June 8, 1980, is redeemed before it matures, the part of OID earned while you hold the bond is not taxable to you. H&r block free return However, you must report the unearned part of OID as a capital gain. H&r block free return Example. H&r block free return On July 2, 2002, the date of issue, you bought a 20-year, 6% municipal bond for $800. H&r block free return The face amount of the bond was $1,000. H&r block free return The $200 discount was OID. H&r block free return At the time the bond was issued, the issuer had no intention of redeeming it before it matured. H&r block free return The bond was callable at its face amount beginning 10 years after the issue date. H&r block free return The issuer redeemed the bond at the end of 11 years (July 2, 2013) for its face amount of $1,000 plus accrued annual interest of $60. H&r block free return The OID earned during the time you held the bond, $73, is not taxable. H&r block free return The $60 accrued annual interest also is not taxable. H&r block free return However, you must report the unearned part of OID ($127) as a capital gain. H&r block free return Long-term debt instruments issued after 1954 and before May 28, 1969 (or before July 2, 1982, if a government instrument). H&r block free return   If you sell, trade, or redeem for a gain one of these debt instruments, the part of your gain that is not more than your ratable share of the OID at the time of the sale or redemption is ordinary income. H&r block free return The rest of the gain is capital gain. H&r block free return If, however, there was an intention to call the debt instrument before maturity, all of your gain that is not more than the entire OID is treated as ordinary income at the time of the sale. H&r block free return This treatment of taxable gain also applies to corporate instruments issued after May 27, 1969, under a written commitment that was binding on May 27, 1969, and at all times thereafter. H&r block free return Long-term debt instruments issued after May 27, 1969 (or after July 1, 1982, if a government instrument). H&r block free return   If you hold one of these debt instruments, you must include a part of OID in your gross income each year you own the instrument. H&r block free return Your basis in that debt instrument is increased by the amount of OID that you have included in your gross income. H&r block free return See Original Issue Discount (OID) in chapter 7 for information about OID that you must report on your tax return. H&r block free return   If you sell or trade the debt instrument before maturity, your gain is a capital gain. H&r block free return However, if at the time the instrument was originally issued there was an intention to call it before its maturity, your gain generally is ordinary income to the extent of the entire OID reduced by any amounts of OID previously includible in your income. H&r block free return In this case, the rest of the gain is capital gain. H&r block free return Market discount bonds. H&r block free return   If the debt instrument has market discount and you chose to include the discount in income as it accrued, increase your basis in the debt instrument by the accrued discount to figure capital gain or loss on its disposition. H&r block free return If you did not choose to include the discount in income as it accrued, you must report gain as ordinary interest income up to the instrument's accrued market discount. H&r block free return The rest of the gain is capital gain. H&r block free return See Market Discount Bonds in chapter 1 of Publication 550. H&r block free return   A different rule applies to market discount bonds issued before July 19, 1984, and purchased by you before May 1, 1993. H&r block free return See Market discount bonds under Discounted Debt Instruments in chapter 4 of Publication 550. H&r block free return Retirement of debt instrument. H&r block free return   Any amount you receive on the retirement of a debt instrument is treated in the same way as if you had sold or traded that instrument. H&r block free return Notes of individuals. H&r block free return   If you hold an obligation of an individual issued with OID after March 1, 1984, you generally must include the OID in your income currently, and your gain or loss on its sale or retirement is generally capital gain or loss. H&r block free return An exception to this treatment applies if the obligation is a loan between individuals and all the following requirements are met. H&r block free return The lender is not in the business of lending money. H&r block free return The amount of the loan, plus the amount of any outstanding prior loans, is $10,000 or less. H&r block free return Avoiding federal tax is not one of the principal purposes of the loan. H&r block free return   If the exception applies, or the obligation was issued before March 2, 1984, you do not include the OID in your income currently. H&r block free return When you sell or redeem the obligation, the part of your gain that is not more than your accrued share of OID at that time is ordinary income. H&r block free return The rest of the gain, if any, is capital gain. H&r block free return Any loss on the sale or redemption is capital loss. H&r block free return Deposit in Insolvent or Bankrupt Financial Institution If you lose money you have on deposit in a bank, credit union, or other financial institution that becomes insolvent or bankrupt, you may be able to deduct your loss in one of three ways. H&r block free return Ordinary loss. H&r block free return Casualty loss. H&r block free return Nonbusiness bad debt (short-term capital loss). H&r block free return  For more information, see Deposit in Insolvent or Bankrupt Financial Institution, in chapter 4 of Publication 550. H&r block free return Sale of Annuity The part of any gain on the sale of an annuity contract before its maturity date that is based on interest accumulated on the contract is ordinary income. H&r block free return Losses on Section 1244 (Small Business) Stock You can deduct as an ordinary loss, rather than as a capital loss, your loss on the sale, trade, or worthlessness of section 1244 stock. H&r block free return Report the loss on Form 4797, line 10. H&r block free return Any gain on section 1244 stock is a capital gain if the stock is a capital asset in your hands. H&r block free return Report the gain on Form 8949. H&r block free return See Losses on Section 1244 (Small Business) Stock in chapter 4 of Publication 550. H&r block free return For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. H&r block free return See also Schedule D (Form 1040), Form 8949, and their separate instructions. H&r block free return Holding Period If you sold or traded investment property, you must determine your holding period for the property. H&r block free return Your holding period determines whether any capital gain or loss was a short-term or long-term capital gain or loss. H&r block free return Long-term or short-term. H&r block free return   If you hold investment property more than 1 year, any capital gain or loss is a long-term capital gain or loss. H&r block free return If you hold the property 1 year or less, any capital gain or loss is a short-term capital gain or loss. H&r block free return   To determine how long you held the investment property, begin counting on the date after the day you acquired the property. H&r block free return The day you disposed of the property is part of your holding period. H&r block free return Example. H&r block free return If you bought investment property on February 6, 2012, and sold it on February 6, 2013, your holding period is not more than 1 year and you have a short-term capital gain or loss. H&r block free return If you sold it on February 7, 2013, your holding period is more than 1 year and you will have a long-term capital gain or loss. H&r block free return Securities traded on established market. H&r block free return   For securities traded on an established securities market, your holding period begins the day after the trade date you bought the securities, and ends on the trade date you sold them. H&r block free return    Do not confuse the trade date with the settlement date, which is the date by which the stock must be delivered and payment must be made. H&r block free return Example. H&r block free return You are a cash method, calendar year taxpayer. H&r block free return You sold stock at a gain on December 30, 2013. H&r block free return According to the rules of the stock exchange, the sale was closed by delivery of the stock 4 trading days after the sale, on January 6, 2014. H&r block free return You received payment of the sales price on that same day. H&r block free return Report your gain on your 2013 return, even though you received the payment in 2014. H&r block free return The gain is long term or short term depending on whether you held the stock more than 1 year. H&r block free return Your holding period ended on December 30. H&r block free return If you had sold the stock at a loss, you would also report it on your 2013 return. H&r block free return U. H&r block free return S. H&r block free return Treasury notes and bonds. H&r block free return   The holding period of U. H&r block free return S. H&r block free return Treasury notes and bonds sold at auction on the basis of yield starts the day after the Secretary of the Treasury, through news releases, gives notification of acceptance to successful bidders. H&r block free return The holding period of U. H&r block free return S. H&r block free return Treasury notes and bonds sold through an offering on a subscription basis at a specified yield starts the day after the subscription is submitted. H&r block free return Automatic investment service. H&r block free return   In determining your holding period for shares bought by the bank or other agent, full shares are considered bought first and any fractional shares are considered bought last. H&r block free return Your holding period starts on the day after the bank's purchase date. H&r block free return If a share was bought over more than one purchase date, your holding period for that share is a split holding period. H&r block free return A part of the share is considered to have been bought on each date that stock was bought by the bank with the proceeds of available funds. H&r block free return Nontaxable trades. H&r block free return   If you acquire investment property in a trade for other investment property and your basis for the new property is determined, in whole or in part, by your basis in the old property, your holding period for the new property begins on the day following the date you acquired the old property. H&r block free return Property received as a gift. H&r block free return   If you receive a gift of property and your basis is determined by the donor's adjusted basis, your holding period is considered to have started on the same day the donor's holding period started. H&r block free return   If your basis is determined by the fair market value of the property, your holding period starts on the day after the date of the gift. H&r block free return Inherited property. H&r block free return   Generally, if you inherited investment property, your capital gain or loss on any later disposition of that property is long-term capital gain or loss. H&r block free return This is true regardless of how long you actually held the property. H&r block free return However, if you inherited property from someone who died in 2010, see the information below. H&r block free return Inherited property from someone who died in 2010. H&r block free return   If you inherit investment property from a decedent who died in 2010, and the executor of the decedent's estate made the election to file Form 8939, refer to the information provided by the executor or see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, to determine your holding period. H&r block free return Real property bought. H&r block free return   To figure how long you have held real property bought under an unconditional contract, begin counting on the day after you received title to it or on the day after you took possession of it and assumed the burdens and privileges of ownership, whichever happened first. H&r block free return However, taking delivery or possession of real property under an option agreement is not enough to start the holding period. H&r block free return The holding period cannot start until there is an actual contract of sale. H&r block free return The holding period of the seller cannot end before that time. H&r block free return Real property repossessed. H&r block free return   If you sell real property but keep a security interest in it, and then later repossess the property under the terms of the sales contract, your holding period for a later sale includes the period you held the property before the original sale and the period after the repossession. H&r block free return Your holding period does not include the time between the original sale and the repossession. H&r block free return That is, it does not include the period during which the first buyer held the property. H&r block free return Stock dividends. H&r block free return   The holding period for stock you received as a taxable stock dividend begins on the date of distribution. H&r block free return   The holding period for new stock you received as a nontaxable stock dividend begins on the same day as the holding period of the old stock. H&r block free return This rule also applies to stock acquired in a “spin-off,” which is a distribution of stock or securities in a controlled corporation. H&r block free return Nontaxable stock rights. H&r block free return   Your holding period for nontaxable stock rights begins on the same day as the holding period of the underlying stock. H&r block free return The holding period for stock acquired through the exercise of stock rights begins on the date the right was exercised. H&r block free return Nonbusiness Bad Debts If someone owes you money that you cannot collect, you have a bad debt. H&r block free return You may be able to deduct the amount owed to you when you figure your tax for the year the debt becomes worthless. H&r block free return Generally, nonbusiness bad debts are bad debts that did not come from operating your trade or business, and are deductible as short-term capital losses. H&r block free return To be deductible, nonbusiness bad debts must be totally worthless. H&r block free return You cannot deduct a partly worthless nonbusiness debt. H&r block free return Genuine debt required. H&r block free return   A debt must be genuine for you to deduct a loss. H&r block free return A debt is genuine if it arises from a debtor-creditor relationship based on a valid and enforceable obligation to repay a fixed or determinable sum of money. H&r block free return Basis in bad debt required. H&r block free return    To deduct a bad debt, you must have a basis in it—that is, you must have already included the amount in your income or loaned out your cash. H&r block free return For example, you cannot claim a bad debt deduction for court-ordered child support not paid to you by your former spouse. H&r block free return If you are a cash method taxpayer (as most individuals are), you generally cannot take a bad debt deduction for unpaid salaries, wages, rents, fees, interest, dividends, and similar items. H&r block free return When deductible. H&r block free return   You can take a bad debt deduction only in the year the debt becomes worthless. H&r block free return You do not have to wait until a debt is due to determine whether it is worthless. H&r block free return A debt becomes worthless when there is no longer any chance that the amount owed will be paid. H&r block free return   It is not necessary to go to court if you can show that a judgment from the court would be uncollectible. H&r block free return You must only show that you have taken reasonable steps to collect the debt. H&r block free return Bankruptcy of your debtor is generally good evidence of the worthlessness of at least a part of an unsecured and unpreferred debt. H&r block free return How to report bad debts. H&r block free return    Deduct nonbusiness bad debts as short-term capital losses on Form 8949. H&r block free return    Make sure you report your bad debt(s) (and any other short-term transactions for which you did not receive a Form 1099-B) on Form 8949, Part I, with box C checked. H&r block free return    For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. H&r block free return See also Schedule D (Form 1040), Form 8949, and their separate instructions. H&r block free return   For each bad debt, attach a statement to your return that contains: A description of the debt, including the amount, and the date it became due, The name of the debtor, and any business or family relationship between you and the debtor, The efforts you made to collect the debt, and Why you decided the debt was worthless. H&r block free return For example, you could show that the borrower has declared bankruptcy, or that legal action to collect would probably not result in payment of any part of the debt. H&r block free return Filing a claim for refund. H&r block free return    If you do not deduct a bad debt on your original return for the year it becomes worthless, you can file a claim for a credit or refund due to the bad debt. H&r block free return To do this, use Form 1040X to amend your return for the year the debt became worthless. H&r block free return You must file it within 7 years from the date your original return for that year had to be filed, or 2 years from the date you paid the tax, whichever is later. H&r block free return For more information about filing a claim, see Amended Returns and Claims for Refund in chapter 1. H&r block free return Additional information. H&r block free return   For more information, see Nonbusiness Bad Debts in Publication 550. H&r block free return For information on business bad debts, see chapter 10 of Publication 535, Business Expenses. H&r block free return Wash Sales You cannot deduct losses from sales or trades of stock or securities in a wash sale. H&r block free return A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you: Buy substantially identical stock or securities, Acquire substantially identical stock or securities in a fully taxable trade, Acquire a contract or option to buy substantially identical stock or securities, or Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA. H&r block free return If your loss was disallowed because of the wash sale rules, add the disallowed loss to the cost of the new stock or securities (except in (4) above). H&r block free return The result is your basis in the new stock or securities. H&r block free return This adjustment postpones the loss deduction until the disposition of the new stock or securities. H&r block free return Your holding period for the new stock or securities includes the holding period of the stock or securities sold. H&r block free return For more information, see Wash Sales, in chapter 4 of Publication 550. H&r block free return Rollover of Gain From Publicly Traded Securities You may qualify for a tax-free rollover of certain gains from the sale of publicly traded securities. H&r block free return This means that if you buy certain replacement property and make the choice described in this section, you postpone part or all of your gain. H&r block free return You postpone the gain by adjusting the basis of the replacement property as described in Basis of replacement property , later. H&r block free return This postpones your gain until the year you dispose of the replacement property. H&r block free return You qualify to make this choice if you meet all the following tests. H&r block free return You sell publicly traded securities at a gain. H&r block free return Publicly traded securities are securities traded on an established securities market. H&r block free return Your gain from the sale is a capital gain. H&r block free return During the 60-day period beginning on the date of the sale, you buy replacement property. H&r block free return This replacement property must be either common stock of, or a partnership interest in a specialized small business investment company (SSBIC). H&r block free return This is any partnership or corporation licensed by the Small Business Administration under section 301(d) of the Small Business Investment Act of 1958, as in effect on May 13, 1993. H&r block free return Amount of gain recognized. H&r block free return   If you make the choice described in this section, you must recognize gain only up to the following amount. H&r block free return The amount realized on the sale, minus The cost of any common stock or partnership interest in an SSBIC that you bought during the 60-day period beginning on the date of sale (and did not previously take into account on an earlier sale of publicly traded securities). H&r block free return  If this amount is less than the amount of your gain, you can postpone the rest of your gain, subject to the limit described next. H&r block free return If this amount is equal to or more than the amount of your gain, you must recognize the full amount of your gain. H&r block free return Limit on gain postponed. H&r block free return   The amount of gain you can postpone each year is limited to the smaller of: $50,000 ($25,000 if you are married and file a separate return), or $500,000 ($250,000 if you are married and file a separate return), minus the amount of gain you postponed for all earlier years. H&r block free return Basis of replacement property. H&r block free return   You must subtract the amount of postponed gain from the basis of your replacement property. H&r block free return How to report and postpone gain. H&r block free return    See How to report and postpone gain under Rollover of Gain From Publicly Traded Securities in chapter 4 of Publication 550 for details. H&r block free return Prev  Up  Next   Home   More Online Publications