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H&r Block Taxes Online

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H&r block taxes online Index A Acontecimientos futuros, Acontecimientos futuros Administración del Seguro Social (SSA) Ayuda para radicar documentos ante la SSA , Ayuda para radicar documentos ante la SSA. H&r block taxes online Ajustes a los Formularios 941-PR, 944(SP) o 943-PR Ajustes del período en curso, Ajustes del período en curso. H&r block taxes online Ajustes de períodos anteriores a los Formularios 941-PR, 944(SP) o 943-PR, Ajustes de períodos anteriores Cambio en el proceso para hacer ajustes libres de intereses, Antecedentes. H&r block taxes online Excepciones a las correcciones de las contribuciones sobre la nómina libres de intereses , Excepciones a las correcciones de las contribuciones sobre la nómina libres de intereses. H&r block taxes online Planillas para ajustes en períodos anteriores, Planillas para ajustes en períodos anteriores. H&r block taxes online Proceso para hacer ajustes a las contribuciones sobre la nómina, Proceso para hacer ajustes a las contribuciones sobre la nómina. H&r block taxes online Recaudando las contribuciones retenidas de menos de los empleados, Recaudando las contribuciones retenidas de menos de los empleados. H&r block taxes online Reintegro de cantidades incorrectamente retenidas de los empleados, Reintegro de cantidades incorrectamente retenidas de los empleados. H&r block taxes online Ayuda contributiva, Cómo obtener ayuda relacionada con las contribuciones Ayuda provista por el IRS , Ayuda provista por el IRS. H&r block taxes online Ayuda relacionada con las contribuciones, Ayuda relacionada con las contribuciones. H&r block taxes online B Beneficios marginales, Retención y declaración de la contribución sobre beneficios marginales proporcionados a los empleados Cuándo se tratan los beneficios marginales como pagados al empleado, Cuándo se tratan los beneficios marginales como pagados al empleado. H&r block taxes online Depósito de la contribución sobre los beneficios marginales, Depósito de la contribución sobre los beneficios marginales. H&r block taxes online Regla especial en el caso de beneficios marginales proporcionados en noviembre y diciembre, Regla especial en el caso de beneficios marginales proporcionados en noviembre y diciembre. H&r block taxes online Retención de las contribuciones al Seguro Social y al seguro Medicare sobre los beneficios marginales, Retención de las contribuciones al Seguro Social y al seguro Medicare sobre los beneficios marginales. H&r block taxes online Valorización de vehículos proporcionados a los empleados, Valorización de vehículos proporcionados a los empleados. H&r block taxes online C Cálculo de las contribuciones al Seguro Social, al seguro Medicare y al FUTA , 9. H&r block taxes online Cálculo de las contribuciones al Seguro Social, al seguro Medicare y al FUTA Compensación por enfermedad, Pagos de compensación por enfermedad. H&r block taxes online Contribución Adicional al Medicare , Retención de la Contribución Adicional al Medicare. H&r block taxes online Contribuciones al Seguro Social y al Medicare , Contribuciones al Seguro Social y al Medicare. H&r block taxes online Contribuciones pagadas por el patrono, Contribución pagada por el patrono correspondiente al empleado. H&r block taxes online Deducción de la contribución, Deducción de la contribución. H&r block taxes online Patronos domésticos y agrícolas, Patronos domésticos y agrícolas. H&r block taxes online Calendario, Calendario Formulario 499R-2/W-2PR, Calendario Formulario 940-PR, Calendario Formulario 943-PR, Calendario Formulario 944(SP), Calendario Formulario 944-PR, Calendario Para el 28 de febrero, Calendario Para el 30 de abril, Calendario Para el 31 de enero, Calendario Para el 31 de julio, Calendario Para el 31 de marzo, Calendario Para el 31 de octubre, Calendario Clasificación errónea de empleados, Clasificación errónea de empleados. H&r block taxes online COBRA Crédito de asistencia para las primas COBRA , Recordatorios, Crédito de asistencia para las primas de COBRA. H&r block taxes online Comentarios y sugerencias, Recordatorios Compañías subsidarias calificadas conforme al subcapítulo S QSubs, Entidades no consideradas como separadas de sus dueños y compañías subsidarias calificadas conforme al subcapítulo S (QSubs). H&r block taxes online Compensación por enfermedad, Compensación por enfermedad Patronos Compensación por enfermedad procedentes de una compañía de seguros o de algún otro tercero pagador, Patronos. H&r block taxes online Terceros pagadores, Terceros pagadores. H&r block taxes online Contratación de nuevos empleados, Recordatorios Contratistas independientes, Contratistas independientes. H&r block taxes online Contribución Adicional al Medicare Retención de la Contribución Adicional al Medicare , Recordatorios Contribución Adicional al Medicare, ajustes a la retención, Ajustes a la retención de la Contribución Adicional al Medicare. H&r block taxes online Contribución al Seguro Social y al seguro Medicare por trabajo agrícola, 7. H&r block taxes online Contribución al Seguro Social y al seguro Medicare por trabajo agrícola El requisito de los $150 o $2,500, El requisito de los $150 o $2,500. H&r block taxes online Excepciones al requisito de los $150 o $2,500, Excepciones. H&r block taxes online Contribución al Seguro Social y al seguro Medicare por trabajo doméstico, 8. H&r block taxes online Contribución al Seguro Social y al seguro Medicare por trabajo doméstico Contribución FUTA , Contribución federal para el desempleo (contribución FUTA). H&r block taxes online Contribución sobre los ingresos de Puerto Rico, Contribuciones sobre los ingresos de Puerto Rico. H&r block taxes online Contribuciones al Seguro Social y al Medicare para 2014, Contribuciones al Seguro Social y al Medicare para 2014. H&r block taxes online Crédito contributivo por oportunidad de trabajo, Recordatorios D Defensor del Contribuyente, Servicio del Defensor del Contribuyente. H&r block taxes online Depósito de las contribuciones al Seguro Social y al seguro  Medicare, requisitos de Ajustes a las contribuciones del período retroactivo , Ajustes a las contribuciones del período retroactivo. H&r block taxes online Aplicación de los itinerarios mensuales y bisemanales, Aplicación de los itinerarios mensuales y bisemanales. H&r block taxes online Cuándo se tienen que hacer los depósitos, Cuándo se tienen que hacer los depósitos. H&r block taxes online Depósitos en días laborables solamente, Depósitos en días laborables solamente. H&r block taxes online Depósitos, cuándo se hacen, 11. H&r block taxes online Depósito de las contribuciones al Seguro Social y al seguro  Medicare Días feriados oficiales, Días feriados oficiales. H&r block taxes online Ejemplo de itinerario bisemanal, Ejemplo de itinerario bisemanal. H&r block taxes online Ejemplo de itinerario mensual, Ejemplo de itinerario mensual. H&r block taxes online Ejemplo de las reglas de depósito de itinerario mensual y bisemanal para patronos de empleados agrícolas, Ejemplo de las reglas de depósito de itinerario mensual y bisemanal para patronos de empleados agrícolas. H&r block taxes online Ejemplo de las reglas de depósito de itinerario mensual y bisemanal para patronos de empleados no agrícolas, Ejemplo de las reglas de depósito de itinerario mensual y bisemanal para patronos de empleados no agrícolas. H&r block taxes online Fecha compensatoria para una cantidad depositada de menos, Fecha compensatoria para una cantidad depositada de menos: Formularios 941-X (PR), 944-X (PR), 944-X (SP), 943-X (PR), Ajustes a las contribuciones del período retroactivo. H&r block taxes online Patronos de empleados agrícolas nuevos, Patronos de empleados agrícolas nuevos. H&r block taxes online Patronos nuevos, Patronos nuevos. H&r block taxes online Patronos que tienen empleados tanto agrícolas como no agrícolas, Patronos que tienen empleados tanto agrícolas como no agrícolas. H&r block taxes online Período de depósito, Período de depósito. H&r block taxes online Período de depósito de itinerario bisemanal que abarca 2 trimestres, Período de depósito de itinerario bisemanal que abarca 2 trimestres. H&r block taxes online Período retroactivo para patronos de empleados agrícolas, Período retroactivo para patronos de empleados agrícolas. H&r block taxes online Período retroactivo para patronos de empleados no agrícolas, Período retroactivo para patronos de empleados no agrícolas. H&r block taxes online Regla de depositar $100,000 el próximo día, Regla de depositar $100,000 el próximo día. H&r block taxes online Regla de depósito de itinerario mensual, Regla de depósito de itinerario mensual. H&r block taxes online Regla de la exactitud de los depósitos, Regla de la exactitud de los depósitos. H&r block taxes online Reglas para los depositantes de itinerario bisemanal, Reglas para los depositantes de itinerario bisemanal. H&r block taxes online Requisito de los $2,500, Requisito de los $2,500. H&r block taxes online Depósito electrónico Contribución federal, Recordatorios Depósitos de la contribución al Seguro Social y al seguro  Medicare, cómo se hacen, Cómo hacer los depósitos Cuando usted recibe su EIN , Cuando usted recibe su EIN. H&r block taxes online Depósitos hechos a tiempo, Depósitos hechos a tiempo. H&r block taxes online Opción de pago el mismo día, Opción de pago el mismo día. H&r block taxes online Reclamación de créditos por pagos en exceso, Reclamación de créditos por pagos en exceso. H&r block taxes online Registro de depósitos, Registro de depósitos. H&r block taxes online Requisito de depósito electrónico, Requisito de depósito electrónico. H&r block taxes online Dirección Cambio de dirección, Recordatorios Discrepancias entre los Formularios 941-PR or 944-PR y los Formularios 499R-2/W-2PR, Recordatorios E Elegibilidad para empleo, Elegibilidad para empleo. H&r block taxes online Empleado Definición, 2. H&r block taxes online ¿Quiénes son empleados? Estatutarios, Empleados estatutarios. H&r block taxes online Según el derecho común, Definición de empleado según el derecho común. H&r block taxes online Empleado doméstico Requisito de $1,900, Requisito de $1,900. H&r block taxes online Empleados Clasificación errónea de empleados, Clasificación errónea de empleados. H&r block taxes online Empleados arrendados, Empleados arrendados. H&r block taxes online Entidades no consideradas como separadas de sus dueños, Entidades no consideradas como separadas de sus dueños y compañías subsidarias calificadas conforme al subcapítulo S (QSubs). H&r block taxes online Exención, disposiciones de, Disposiciones de exención. H&r block taxes online Especialista en servicios técnicos, Especialista en servicios técnicos. H&r block taxes online F Formulario 499R-2/W-2PR, 13. H&r block taxes online Los Formularios 499R-2/W-2PR y W-3PR SS-5-SP, Recordatorios, Tarjeta de Seguro Social del empleado. H&r block taxes online SS-8PR, Ayuda provista por el IRS. H&r block taxes online W-3PR, 13. H&r block taxes online Los Formularios 499R-2/W-2PR y W-3PR Formulario 944-PR descontinuado, Recordatorios Fotografías de niños desaparecidos, Recordatorios FUTA Ley Federal de Contribución para el Desempleo (FUTA). H&r block taxes online , Ley Federal de Contribución para el Desempleo (FUTA). H&r block taxes online Reducción en el crédito contra la contribución FUTA , Estados o territorios con reducción en el crédito. H&r block taxes online G Gastos de viaje y de representación, Gastos de viaje y de representación. H&r block taxes online I Individuos que no son empleados estatutarios, Individuos que no son empleados estatutarios. H&r block taxes online Agentes de bienes inmuebles autorizados, Agentes de bienes inmuebles autorizados. H&r block taxes online Personas a quienes se les paga por acompañar y posiblemente cuidar a otras, Personas a quienes se les paga por acompañar y posiblemente cuidar a otras. H&r block taxes online Vendedores directos, Vendedores directos. H&r block taxes online Introducción, Introduction L Líder de cuadrilla agrícola, Líder de cuadrilla agrícola. H&r block taxes online Los Formularios 499R-2/W-2PR y W-3PR, 13. H&r block taxes online Los Formularios 499R-2/W-2PR y W-3PR Problemas con la radicación electrónica, Problemas con la radicación electrónica. H&r block taxes online Radicación de Formularios 499R-2/W-2PR ante el Departamento de Hacienda, Radicación de Formularios 499R-2/W-2PR ante el Departamento de Hacienda. H&r block taxes online Solicitud de exención de radicación de declaraciones informativas por medios electrónicos, Solicitud de exención de radicación de declaraciones informativas por medios electrónicos. H&r block taxes online M Mantenimiento de récords, Recordatorios Matrimonio Matrimonio entre personas del mismo sexo. H&r block taxes online , Qué hay de nuevo Medicare Retención de la Contribución Adicional al Medicare , Retención de la Contribución Adicional al Medicare. H&r block taxes online Medios electrónicos, pago y radicación por, Recordatorios Multas relacionadas con los depósitos de la contribución al Seguro Social y al seguro  Medicare , Multas relacionadas con los depósitos. H&r block taxes online Agentes de reportación, Agentes de reportación. H&r block taxes online Multa por recuperación del fondo fiduciario, Multa por recuperación del fondo fiduciario. H&r block taxes online Multa promediada por no depositar, Multa promediada por no depositar. H&r block taxes online Orden en que se aplican los depósitos, Orden en que se aplican los depósitos. H&r block taxes online Regla especial para los que radicaron el Formulario 944(SP) anteriormente, Regla especial para los que radicaron el Formulario 944(SP) anteriormente. H&r block taxes online N Negocio perteneciente y administrado por cónyuges, Negocio que pertenece y es administrado por los cónyuges Excepción: Negocio en participación calificado, Excepción: Negocio en participación calificado. H&r block taxes online Nómina Externalización de las obligaciones de la nómina, Recordatorios Outsourcing payroll duties , Recordatorios Número de identificación de contribuyente individual (ITIN), Número de identificación personal del contribuyente (ITIN) del IRS para extranjeros. H&r block taxes online Número de identificación patronal (EIN), 3. H&r block taxes online Número de identificación patronal (EIN) Número de identificación patronal en linea (EIN), solicitud de un, Recordatorios Número de Seguro Social Dónde se obtienen los formularios , Dónde se obtienen los formularios para solicitar un Número de Seguro Social. H&r block taxes online Número de Seguro Social (SSN) , 4. H&r block taxes online Número de Seguro Social (SSN), Tarjeta de Seguro Social del empleado. H&r block taxes online Escriba correctamente el nombre y número de Seguro Social del empleado, Escriba correctamente el nombre y número de Seguro Social del empleado. H&r block taxes online Tarjeta de Seguro Social del empleado, Tarjeta de Seguro Social del empleado. H&r block taxes online Verificación de los números de Seguro Social, Verificación de los números de Seguro Social. H&r block taxes online P Pago por medios electrónicos, Recordatorios Pagos con tarjeta de crédito o débito, Recordatorios Pagos que no se consideran salarios Empleado doméstico, Pagos que no se consideran salarios. H&r block taxes online Transportación (beneficios de transporte), Transportación (beneficios de transporte). H&r block taxes online Pagos rechazados, Recordatorios Pagos y depósitos de la contribución FUTA , 10. H&r block taxes online Pagos y depósitos de la contribución federal para el desempleo (la contribución FUTA) Depósitos, Depósitos. H&r block taxes online Empleados domésticos, Empleados domésticos. H&r block taxes online Formulario 940-PR, Formulario 940-PR. H&r block taxes online Tasa de la contribución, Tasa de la contribución FUTA. H&r block taxes online Trabajadores agrícolas, Trabajadores agrícolas. H&r block taxes online Parte responsable Cambio de parte responsable, Qué hay de nuevo Patrono, definición, 1. H&r block taxes online ¿Quién es patrono? Planillas para patronos Formulario 944(SP), Formulario 944(SP). H&r block taxes online Multas por no radicar y por no pagar, Multas o penalidades. H&r block taxes online Patrono sucesor, Patrono sucesor. H&r block taxes online Patrono sucesor, crédito especial, Crédito especial para un patrono sucesor. H&r block taxes online Patronos de empleados domésticos que declaran las contribuciones al Seguro Social y al Medicare , Patronos de empleados domésticos que declaran las contribuciones al Seguro Social y al Medicare. H&r block taxes online Patronos de trabajadores agrícolas, Patronos de trabajadores agrícolas. H&r block taxes online Patronos que no son patronos agrícolas, Patronos que no son patronos agrícolas. H&r block taxes online Planilla anual y pago de la contribución federal para el desempleo (contribución  FUTA), Planilla anual y pago de la contribución federal para el desempleo (contribución FUTA). H&r block taxes online Programa de acuerdo voluntario para la clasificación de trabajadores (VCSP), Programa para el acuerdo de clasificación voluntaria de trabajadores (VCSP, por sus siglas en inglés). H&r block taxes online Propinas, 6. H&r block taxes online Propinas Formulario 4070-PR, 6. H&r block taxes online Propinas Formulario 4070A-PR, 6. H&r block taxes online Propinas Informe de propinas, Informe de propinas. H&r block taxes online Recaudación de las contribuciones sobre las propinas, Recaudación de las contribuciones sobre las propinas. H&r block taxes online Regla de disposición, Regla de disposición. H&r block taxes online Q Qué hay de nuevo Contribuciones al Medicare para 2014, Qué hay de nuevo Contribuciones al Seguro Social para 2014, Qué hay de nuevo R Radicación por medios electrónicos, Recordatorios Radicar el Formulario 944(SP) en vez del Formulario 941-PR, Recordatorios Recordatorios, Recordatorios Récords, Recordatorios Reglas especiales para varias clases de servicios y de pagos, 15. H&r block taxes online Reglas especiales para varias clases de servicios y de pagos Retención de la contribución federal sobre ingresos, 14. H&r block taxes online Retención de la contribución federal sobre ingresos S Salarios sujetos a la contribución Compensaciones sujetos a la contribución, 5. H&r block taxes online Salarios y otra compensación Servicio del Defensor del Contribuyente, Servicio del Defensor del Contribuyente. H&r block taxes online Servicios de entrega privados, Recordatorios T Tarjetas de crédito o débito, pagos con, Recordatorios TAS , Servicio del Defensor del Contribuyente. H&r block taxes online Trabajo doméstico, Trabajo doméstico. H&r block taxes online V Veteranos calificados, contratación, Recordatorios Visa H-2A, Trabajadores agrícolas. H&r block taxes online Remuneración pagada a trabajadores agrícolas con visa H-2A, Recordatorios Prev  Up     Home   More Online Publications
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The H&r Block Taxes Online

H&r block taxes online 14. H&r block taxes online   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 taxes online  If you are a U. H&r block taxes online S. H&r block taxes online 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 taxes online S. H&r block taxes online law. H&r block taxes online 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 taxes online Introduction This chapter discusses the tax consequences of selling or trading investment property. H&r block taxes online It explains the following. H&r block taxes online What a sale or trade is. H&r block taxes online Figuring gain or loss. H&r block taxes online Nontaxable trades. H&r block taxes online Related party transactions. H&r block taxes online Capital gains or losses. H&r block taxes online Capital assets and noncapital assets. H&r block taxes online Holding period. H&r block taxes online Rollover of gain from publicly traded securities. H&r block taxes online Other property transactions. H&r block taxes online   Certain transfers of property are not discussed here. H&r block taxes online They are discussed in other IRS publications. H&r block taxes online These include the following. H&r block taxes online Sales of a main home, covered in chapter 15. H&r block taxes online Installment sales, covered in Publication 537, Installment Sales. H&r block taxes online Transactions involving business property, covered in Publication 544, Sales and Other Dispositions of Assets. H&r block taxes online Dispositions of an interest in a passive activity, covered in Publication 925, Passive Activity and At-Risk Rules. H&r block taxes online    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 taxes online 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 taxes online It also discusses investment-related expenses. H&r block taxes online 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 taxes online Generally, you should receive the statement by February 15 of the next year. H&r block taxes online It will show the gross proceeds from the sale. H&r block taxes online If you sold a covered security in 2013, your 1099-B (or substitute statement) will show your basis. H&r block taxes online Generally, a covered security is a security you acquired after 2010, with certain exceptions. H&r block taxes online See the Instructions for Form 8949. H&r block taxes online The IRS will also get a copy of Form 1099-B from the broker. H&r block taxes online Use Form 1099-B (or substitute statement received from your broker) to complete Form 8949. H&r block taxes online What Is a Sale or Trade? This section explains what is a sale or trade. H&r block taxes online It also explains certain transactions and events that are treated as sales or trades. H&r block taxes online A sale is generally a transfer of property for money or a mortgage, note, or other promise to pay money. H&r block taxes online 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 taxes online Sale and purchase. H&r block taxes online   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 taxes online The sale and purchase are two separate transactions. H&r block taxes online But see Like-kind exchanges under Nontaxable Trades, later. H&r block taxes online Redemption of stock. H&r block taxes online   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 taxes online Dividend versus sale or trade. H&r block taxes online   Whether a redemption is treated as a sale, trade, dividend, or other distribution depends on the circumstances in each case. H&r block taxes online Both direct and indirect ownership of stock will be considered. H&r block taxes online 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 taxes online Redemption or retirement of bonds. H&r block taxes online   A redemption or retirement of bonds or notes at their maturity is generally treated as a sale or trade. H&r block taxes online   In addition, a significant modification of a bond is treated as a trade of the original bond for a new bond. H&r block taxes online For details, see Regulations section 1. H&r block taxes online 1001-3. H&r block taxes online Surrender of stock. H&r block taxes online   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 taxes online The surrendering shareholder must reallocate his or her basis in the surrendered shares to the shares he or she retains. H&r block taxes online Worthless securities. H&r block taxes online    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 taxes online This affects whether your capital loss is long term or short term. H&r block taxes online See Holding Period , later. H&r block taxes online   Worthless securities also include securities that you abandon after March 12, 2008. H&r block taxes online 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 taxes online 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 taxes online    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 taxes online Do not deduct them in the year the stock became worthless. H&r block taxes online How to report loss. H&r block taxes online    Report worthless securities in Part I or Part II, whichever applies, of Form 8949. H&r block taxes online In column (a), enter “Worthless. H&r block taxes online ”    Report your worthless securities transactions on Form 8949 with the correct box checked for these transactions. H&r block taxes online See Form 8949 and the Instructions for Form 8949. H&r block taxes online For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. H&r block taxes online See also Schedule D (Form 1040), Form 8949, and their separate instructions. H&r block taxes online Filing a claim for refund. H&r block taxes online   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 taxes online You must use Form 1040X, Amended U. H&r block taxes online S. H&r block taxes online Individual Income Tax Return, to amend your return for the year the security became worthless. H&r block taxes online 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 taxes online For more information about filing a claim, see Amended Returns and Claims for Refund in chapter 1. H&r block taxes online 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 taxes online Gain. H&r block taxes online   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 taxes online Loss. H&r block taxes online   If the adjusted basis of the property you transfer is more than the amount you realize, the difference is a loss. H&r block taxes online Adjusted basis. H&r block taxes online   The adjusted basis of property is your original cost or other original basis properly adjusted (increased or decreased) for certain items. H&r block taxes online See chapter 13 for more information about determining the adjusted basis of property. H&r block taxes online Amount realized. H&r block taxes online   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 taxes online Amount realized includes the money you receive plus the fair market value of any property or services you receive. H&r block taxes online 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 taxes online 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 taxes online For more information, see Publication 537. H&r block taxes online Fair market value. H&r block taxes online   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 taxes online Example. H&r block taxes online 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 taxes online Your gain is $3,000 ($10,000 − $7,000). H&r block taxes online Debt paid off. H&r block taxes online    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 taxes online This is true even if neither you nor the buyer is personally liable for the debt. H&r block taxes online 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 taxes online Example. H&r block taxes online You sell stock that you had pledged as security for a bank loan of $8,000. H&r block taxes online Your basis in the stock is $6,000. H&r block taxes online The buyer pays off your bank loan and pays you $20,000 in cash. H&r block taxes online The amount realized is $28,000 ($20,000 + $8,000). H&r block taxes online Your gain is $22,000 ($28,000 − $6,000). H&r block taxes online Payment of cash. H&r block taxes online   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 taxes online 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 taxes online If the result is a positive number, it is a gain. H&r block taxes online If the result is a negative number, it is a loss. H&r block taxes online No gain or loss. H&r block taxes online   You may have to use a basis for figuring gain that is different from the basis used for figuring loss. H&r block taxes online In this case, you may have neither a gain nor a loss. H&r block taxes online See Basis Other Than Cost in chapter 13. H&r block taxes online Nontaxable Trades This section discusses trades that generally do not result in a taxable gain or deductible loss. H&r block taxes online For more information on nontaxable trades, see chapter 1 of Publication 544. H&r block taxes online Like-kind exchanges. H&r block taxes online   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 taxes online To be nontaxable, a trade must meet all six of the following conditions. H&r block taxes online The property must be business or investment property. H&r block taxes online 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 taxes online Neither property may be property used for personal purposes, such as your home or family car. H&r block taxes online The property must not be held primarily for sale. H&r block taxes online The property you trade and the property you receive must not be property you sell to customers, such as merchandise. H&r block taxes online 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 taxes online However, see Special rules for mutual ditch, reservoir, or irrigation company stock, in chapter 4 of Publication 550 for an exception. H&r block taxes online Also, you can have a nontaxable trade of corporate stocks under a different rule, as discussed later. H&r block taxes online There must be a trade of like property. H&r block taxes online The trade of real estate for real estate, or personal property for similar personal property, is a trade of like property. H&r block taxes online 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 taxes online The trade of a piece of machinery for a store building is not a trade of like property. H&r block taxes online Real property located in the United States and real property located outside the United States are not like property. H&r block taxes online 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 taxes online 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 taxes online 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 taxes online    If you trade property with a related party in a like-kind exchange, a special rule may apply. H&r block taxes online See Related Party Transactions , later in this chapter. H&r block taxes online 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 taxes online Partly nontaxable exchange. H&r block taxes online   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 taxes online 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 taxes online You cannot deduct a loss. H&r block taxes online Like property and unlike property transferred. H&r block taxes online   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 taxes online The gain or loss is the difference between the adjusted basis of the unlike property and its fair market value. H&r block taxes online Like property and money transferred. H&r block taxes online   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 taxes online Basis of property received. H&r block taxes online   To figure the basis of the property received, see Nontaxable Exchanges in chapter 13. H&r block taxes online How to report. H&r block taxes online   You must report the trade of like property on Form 8824. H&r block taxes online 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 taxes online See the instructions for Line 22 in the Instructions for Form 8824. H&r block taxes online   For information on using Form 4797, see chapter 4 of Publication 544. H&r block taxes online Corporate stocks. H&r block taxes online   The following trades of corporate stocks generally do not result in a taxable gain or a deductible loss. H&r block taxes online Corporate reorganizations. H&r block taxes online   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 taxes online 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 taxes online Stock for stock of the same corporation. H&r block taxes online   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 taxes online This is true for a trade between two stockholders as well as a trade between a stockholder and the corporation. H&r block taxes online Convertible stocks and bonds. H&r block taxes online   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 taxes online Property for stock of a controlled corporation. H&r block taxes online   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 taxes online This rule applies both to individuals and to groups who transfer property to a corporation. H&r block taxes online It does not apply if the corporation is an investment company. H&r block taxes online   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 taxes online   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 taxes online For details, see Regulations section 1. H&r block taxes online 351-3. H&r block taxes online Additional information. H&r block taxes online   For more information on trades of stock, see Nontaxable Trades in chapter 4 of Publication 550. H&r block taxes online Insurance policies and annuities. H&r block taxes online   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 taxes online   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 taxes online 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 taxes online Revenue Ruling 2003-76 is available at www. H&r block taxes online irs. H&r block taxes online gov/irb/2003-33_IRB/ar11. H&r block taxes online html. H&r block taxes online Revenue Procedure 2008-24 is available at www. H&r block taxes online irs. H&r block taxes online gov/irb/2008-13_IRB/ar13. H&r block taxes online html. H&r block taxes online 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 taxes online Revenue Procedure 2011-38 is available at www. H&r block taxes online irs. H&r block taxes online gov/irb/2011-30_IRB/ar09. H&r block taxes online html. H&r block taxes online   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 taxes online 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 taxes online 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 taxes online   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 taxes online Demutualization of life insurance companies. H&r block taxes online   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 taxes online See Demutualization of Life Insurance Companies in Publication 550. H&r block taxes online U. H&r block taxes online S. H&r block taxes online Treasury notes or bonds. H&r block taxes online   You can trade certain issues of U. H&r block taxes online S. H&r block taxes online Treasury obligations for other issues designated by the Secretary of the Treasury, with no gain or loss recognized on the trade. H&r block taxes online See Savings bonds traded in chapter 1 of Publication 550 for more information. H&r block taxes online 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 taxes online This nonrecognition rule does not apply in the following situations. H&r block taxes online The recipient spouse or former spouse is a nonresident alien. H&r block taxes online Property is transferred in trust and liability exceeds basis. H&r block taxes online 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 taxes online For other situations, see Transfers Between Spouses in chapter 4 of Publication 550. H&r block taxes online 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 taxes online 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 taxes online 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 taxes online This rule applies for purposes of determining loss as well as gain. H&r block taxes online Any gain recognized on a transfer in trust increases the basis. H&r block taxes online 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 taxes online Related Party Transactions Special rules apply to the sale or trade of property between related parties. H&r block taxes online Gain on sale or trade of depreciable property. H&r block taxes online   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 taxes online See chapter 3 of Publication 544 for more information. H&r block taxes online Like-kind exchanges. H&r block taxes online   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 taxes online See Like-kind exchanges , earlier, under Nontaxable Trades. H&r block taxes online   This rule also applies to trades of property between related parties, defined next under Losses on sales or trades of property. H&r block taxes online 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 taxes online See Related Party Transactions in chapter 4 of Publication 550 for exceptions. H&r block taxes online Losses on sales or trades of property. H&r block taxes online   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 taxes online Members of your family. H&r block taxes online This includes only your brothers and sisters, half-brothers and half-sisters, spouse, ancestors (parents, grandparents, etc. H&r block taxes online ), and lineal descendants (children, grandchildren, etc. H&r block taxes online ). H&r block taxes online A partnership in which you directly or indirectly own more than 50% of the capital interest or the profits interest. H&r block taxes online A corporation in which you directly or indirectly own more than 50% in value of the outstanding stock. H&r block taxes online (See Constructive ownership of stock , later. H&r block taxes online ) 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 taxes online   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 taxes online A grantor and fiduciary, or the fiduciary and beneficiary, of any trust. H&r block taxes online 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 taxes online 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 taxes online 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 taxes online Two S corporations if the same persons own more than 50% in value of the outstanding stock of each corporation. H&r block taxes online 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 taxes online 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 taxes online Two corporations that are members of the same controlled group. H&r block taxes online (Under certain conditions, however, these losses are not disallowed but must be deferred. H&r block taxes online ) 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 taxes online Multiple property sales or trades. H&r block taxes online   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 taxes online The gain on each item may be taxable. H&r block taxes online However, you cannot deduct the loss on any item. H&r block taxes online 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 taxes online Indirect transactions. H&r block taxes online   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 taxes online This does not apply to a trade between related parties through an exchange that is purely coincidental and is not prearranged. H&r block taxes online Constructive ownership of stock. H&r block taxes online   In determining whether a person directly or indirectly owns any of the outstanding stock of a corporation, the following rules apply. H&r block taxes online Rule 1. H&r block taxes online   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 taxes online Rule 2. H&r block taxes online   An individual is considered to own the stock directly or indirectly owned by or for his or her family. H&r block taxes online Family includes only brothers and sisters, half-brothers and half-sisters, spouse, ancestors, and lineal descendants. H&r block taxes online Rule 3. H&r block taxes online   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 taxes online Rule 4. H&r block taxes online   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 taxes online 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 taxes online Property received from a related party. H&r block taxes online    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 taxes online This rule applies only if you are the original transferee and you acquired the property by purchase or exchange. H&r block taxes online 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 taxes online   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 taxes online Example 1. H&r block taxes online Your brother sells you stock for $7,600. H&r block taxes online His cost basis is $10,000. H&r block taxes online Your brother cannot deduct the loss of $2,400. H&r block taxes online Later, you sell the same stock to an unrelated party for $10,500, realizing a gain of $2,900. H&r block taxes online Your reportable gain is $500 (the $2,900 gain minus the $2,400 loss not allowed to your brother). H&r block taxes online Example 2. H&r block taxes online 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 taxes online You cannot deduct the loss that was not allowed to your brother. H&r block taxes online Capital Gains and Losses This section discusses the tax treatment of gains and losses from different types of investment transactions. H&r block taxes online Character of gain or loss. H&r block taxes online   You need to classify your gains and losses as either ordinary or capital gains or losses. H&r block taxes online You then need to classify your capital gains and losses as either short term or long term. H&r block taxes online If you have long-term gains and losses, you must identify your 28% rate gains and losses. H&r block taxes online If you have a net capital gain, you must also identify any unrecaptured section 1250 gain. H&r block taxes online   The correct classification and identification helps you figure the limit on capital losses and the correct tax on capital gains. H&r block taxes online Reporting capital gains and losses is explained in chapter 16. H&r block taxes online 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 taxes online Generally, a sale or trade of a capital asset (defined next) results in a capital gain or loss. H&r block taxes online A sale or trade of a noncapital asset generally results in ordinary gain or loss. H&r block taxes online 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 taxes online 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 taxes online 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 taxes online 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 taxes online Any property you own is a capital asset, except the following noncapital assets. H&r block taxes online 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 taxes online For an exception, see Capital Asset Treatment for Self-Created Musical Works , later. H&r block taxes online Depreciable property used in your trade or business, even if fully depreciated. H&r block taxes online Real property used in your trade or business. H&r block taxes online 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 taxes online For an exception to this rule, see Capital Asset Treatment for Self-Created Musical Works , later. H&r block taxes online 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 taxes online U. H&r block taxes online S. H&r block taxes online 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 taxes online Certain commodities derivative financial instruments held by commodities derivatives dealers. H&r block taxes online 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 taxes online Supplies of a type you regularly use or consume in the ordinary course of your trade or business. H&r block taxes online Investment Property Investment property is a capital asset. H&r block taxes online Any gain or loss from its sale or trade is generally a capital gain or loss. H&r block taxes online Gold, silver, stamps, coins, gems, etc. H&r block taxes online   These are capital assets except when they are held for sale by a dealer. H&r block taxes online Any gain or loss you have from their sale or trade generally is a capital gain or loss. H&r block taxes online Stocks, stock rights, and bonds. H&r block taxes online   All of these (including stock received as a dividend) are capital assets except when held for sale by a securities dealer. H&r block taxes online 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 taxes online 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 taxes online However, you cannot deduct a loss from selling personal use property. H&r block taxes online 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 taxes online 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 taxes online 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 taxes online 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 taxes online For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. H&r block taxes online See also Schedule D (Form 1040), Form 8949, and their separate instructions. H&r block taxes online You can revoke the election if you have IRS approval. H&r block taxes online To get IRS approval, you must submit a request for a letter ruling under the appropriate IRS revenue procedure. H&r block taxes online See, for example, Rev. H&r block taxes online Proc. H&r block taxes online 2013-1, corrected by Announcement 2013–9, and amplified and modified by Rev. H&r block taxes online Proc. H&r block taxes online 2013–32, available at www. H&r block taxes online irs. H&r block taxes online gov/irb/2013-01_IRB/ar06. H&r block taxes online html. H&r block taxes online 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 taxes online 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 taxes online Short-term government obligations. H&r block taxes online   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 taxes online This treatment applies to obligations with a fixed maturity date not more than 1 year from the date of issue. H&r block taxes online Acquisition discount is the stated redemption price at maturity minus your basis in the obligation. H&r block taxes online   However, do not treat these gains as income to the extent you previously included the discount in income. H&r block taxes online See Discount on Short-Term Obligations in chapter 1 of Publication 550. H&r block taxes online Short-term nongovernment obligations. H&r block taxes online   Treat gains on short-term nongovernment obligations as ordinary income up to your ratable share of original issue discount (OID). H&r block taxes online This treatment applies to obligations with a fixed maturity date of not more than 1 year from the date of issue. H&r block taxes online   However, to the extent you previously included the discount in income, you do not have to include it in income again. H&r block taxes online See Discount on Short-Term Obligations in chapter 1 of Publication 550. H&r block taxes online Tax-exempt state and local government bonds. H&r block taxes online   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 taxes online 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 taxes online   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 taxes online For more information on the basis of these bonds, see Discounted Debt Instruments in chapter 4 of Publication 550. H&r block taxes online   Any gain from market discount is usually taxable on disposition or redemption of tax-exempt bonds. H&r block taxes online If you bought the bonds before May 1, 1993, the gain from market discount is capital gain. H&r block taxes online If you bought the bonds after April 30, 1993, the gain is ordinary income. H&r block taxes online   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 taxes online For more information, see Market Discount Bonds in chapter 1 of Publication 550. H&r block taxes online    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 taxes online Redeemed before maturity. H&r block taxes online   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 taxes online   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 taxes online However, you must report the unearned part of OID as a capital gain. H&r block taxes online Example. H&r block taxes online On July 2, 2002, the date of issue, you bought a 20-year, 6% municipal bond for $800. H&r block taxes online The face amount of the bond was $1,000. H&r block taxes online The $200 discount was OID. H&r block taxes online At the time the bond was issued, the issuer had no intention of redeeming it before it matured. H&r block taxes online The bond was callable at its face amount beginning 10 years after the issue date. H&r block taxes online 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 taxes online The OID earned during the time you held the bond, $73, is not taxable. H&r block taxes online The $60 accrued annual interest also is not taxable. H&r block taxes online However, you must report the unearned part of OID ($127) as a capital gain. H&r block taxes online Long-term debt instruments issued after 1954 and before May 28, 1969 (or before July 2, 1982, if a government instrument). H&r block taxes online   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 taxes online The rest of the gain is capital gain. H&r block taxes online 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 taxes online 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 taxes online Long-term debt instruments issued after May 27, 1969 (or after July 1, 1982, if a government instrument). H&r block taxes online   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 taxes online Your basis in that debt instrument is increased by the amount of OID that you have included in your gross income. H&r block taxes online See Original Issue Discount (OID) in chapter 7 for information about OID that you must report on your tax return. H&r block taxes online   If you sell or trade the debt instrument before maturity, your gain is a capital gain. H&r block taxes online 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 taxes online In this case, the rest of the gain is capital gain. H&r block taxes online Market discount bonds. H&r block taxes online   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 taxes online 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 taxes online The rest of the gain is capital gain. H&r block taxes online See Market Discount Bonds in chapter 1 of Publication 550. H&r block taxes online   A different rule applies to market discount bonds issued before July 19, 1984, and purchased by you before May 1, 1993. H&r block taxes online See Market discount bonds under Discounted Debt Instruments in chapter 4 of Publication 550. H&r block taxes online Retirement of debt instrument. H&r block taxes online   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 taxes online Notes of individuals. H&r block taxes online   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 taxes online An exception to this treatment applies if the obligation is a loan between individuals and all the following requirements are met. H&r block taxes online The lender is not in the business of lending money. H&r block taxes online The amount of the loan, plus the amount of any outstanding prior loans, is $10,000 or less. H&r block taxes online Avoiding federal tax is not one of the principal purposes of the loan. H&r block taxes online   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 taxes online 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 taxes online The rest of the gain, if any, is capital gain. H&r block taxes online Any loss on the sale or redemption is capital loss. H&r block taxes online 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 taxes online Ordinary loss. H&r block taxes online Casualty loss. H&r block taxes online Nonbusiness bad debt (short-term capital loss). H&r block taxes online  For more information, see Deposit in Insolvent or Bankrupt Financial Institution, in chapter 4 of Publication 550. H&r block taxes online 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 taxes online 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 taxes online Report the loss on Form 4797, line 10. H&r block taxes online Any gain on section 1244 stock is a capital gain if the stock is a capital asset in your hands. H&r block taxes online Report the gain on Form 8949. H&r block taxes online See Losses on Section 1244 (Small Business) Stock in chapter 4 of Publication 550. H&r block taxes online For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. H&r block taxes online See also Schedule D (Form 1040), Form 8949, and their separate instructions. H&r block taxes online Holding Period If you sold or traded investment property, you must determine your holding period for the property. H&r block taxes online Your holding period determines whether any capital gain or loss was a short-term or long-term capital gain or loss. H&r block taxes online Long-term or short-term. H&r block taxes online   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 taxes online 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 taxes online   To determine how long you held the investment property, begin counting on the date after the day you acquired the property. H&r block taxes online The day you disposed of the property is part of your holding period. H&r block taxes online Example. H&r block taxes online 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 taxes online 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 taxes online Securities traded on established market. H&r block taxes online   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 taxes online    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 taxes online Example. H&r block taxes online You are a cash method, calendar year taxpayer. H&r block taxes online You sold stock at a gain on December 30, 2013. H&r block taxes online 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 taxes online You received payment of the sales price on that same day. H&r block taxes online Report your gain on your 2013 return, even though you received the payment in 2014. H&r block taxes online The gain is long term or short term depending on whether you held the stock more than 1 year. H&r block taxes online Your holding period ended on December 30. H&r block taxes online If you had sold the stock at a loss, you would also report it on your 2013 return. H&r block taxes online U. H&r block taxes online S. H&r block taxes online Treasury notes and bonds. H&r block taxes online   The holding period of U. H&r block taxes online S. H&r block taxes online 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 taxes online The holding period of U. H&r block taxes online S. H&r block taxes online 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 taxes online Automatic investment service. H&r block taxes online   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 taxes online Your holding period starts on the day after the bank's purchase date. H&r block taxes online 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 taxes online 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 taxes online Nontaxable trades. H&r block taxes online   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 taxes online Property received as a gift. H&r block taxes online   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 taxes online   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 taxes online Inherited property. H&r block taxes online   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 taxes online This is true regardless of how long you actually held the property. H&r block taxes online However, if you inherited property from someone who died in 2010, see the information below. H&r block taxes online Inherited property from someone who died in 2010. H&r block taxes online   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 taxes online Real property bought. H&r block taxes online   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 taxes online However, taking delivery or possession of real property under an option agreement is not enough to start the holding period. H&r block taxes online The holding period cannot start until there is an actual contract of sale. H&r block taxes online The holding period of the seller cannot end before that time. H&r block taxes online Real property repossessed. H&r block taxes online   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 taxes online Your holding period does not include the time between the original sale and the repossession. H&r block taxes online That is, it does not include the period during which the first buyer held the property. H&r block taxes online Stock dividends. H&r block taxes online   The holding period for stock you received as a taxable stock dividend begins on the date of distribution. H&r block taxes online   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 taxes online 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 taxes online Nontaxable stock rights. H&r block taxes online   Your holding period for nontaxable stock rights begins on the same day as the holding period of the underlying stock. H&r block taxes online The holding period for stock acquired through the exercise of stock rights begins on the date the right was exercised. H&r block taxes online Nonbusiness Bad Debts If someone owes you money that you cannot collect, you have a bad debt. H&r block taxes online 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 taxes online 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 taxes online To be deductible, nonbusiness bad debts must be totally worthless. H&r block taxes online You cannot deduct a partly worthless nonbusiness debt. H&r block taxes online Genuine debt required. H&r block taxes online   A debt must be genuine for you to deduct a loss. H&r block taxes online 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 taxes online Basis in bad debt required. H&r block taxes online    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 taxes online 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 taxes online 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 taxes online When deductible. H&r block taxes online   You can take a bad debt deduction only in the year the debt becomes worthless. H&r block taxes online You do not have to wait until a debt is due to determine whether it is worthless. H&r block taxes online A debt becomes worthless when there is no longer any chance that the amount owed will be paid. H&r block taxes online   It is not necessary to go to court if you can show that a judgment from the court would be uncollectible. H&r block taxes online You must only show that you have taken reasonable steps to collect the debt. H&r block taxes online 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 taxes online How to report bad debts. H&r block taxes online    Deduct nonbusiness bad debts as short-term capital losses on Form 8949. H&r block taxes online    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 taxes online    For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 16. H&r block taxes online See also Schedule D (Form 1040), Form 8949, and their separate instructions. H&r block taxes online   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 taxes online 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 taxes online Filing a claim for refund. H&r block taxes online    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 taxes online To do this, use Form 1040X to amend your return for the year the debt became worthless. H&r block taxes online 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 taxes online For more information about filing a claim, see Amended Returns and Claims for Refund in chapter 1. H&r block taxes online Additional information. H&r block taxes online   For more information, see Nonbusiness Bad Debts in Publication 550. H&r block taxes online For information on business bad debts, see chapter 10 of Publication 535, Business Expenses. H&r block taxes online Wash Sales You cannot deduct losses from sales or trades of stock or securities in a wash sale. H&r block taxes online 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 taxes online 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 taxes online The result is your basis in the new stock or securities. H&r block taxes online This adjustment postpones the loss deduction until the disposition of the new stock or securities. H&r block taxes online Your holding period for the new stock or securities includes the holding period of the stock or securities sold. H&r block taxes online For more information, see Wash Sales, in chapter 4 of Publication 550. H&r block taxes online 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 taxes online 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 taxes online You postpone the gain by adjusting the basis of the replacement property as described in Basis of replacement property , later. H&r block taxes online This postpones your gain until the year you dispose of the replacement property. H&r block taxes online You qualify to make this choice if you meet all the following tests. H&r block taxes online You sell publicly traded securities at a gain. H&r block taxes online Publicly traded securities are securities traded on an established securities market. H&r block taxes online Your gain from the sale is a capital gain. H&r block taxes online During the 60-day period beginning on the date of the sale, you buy replacement property. H&r block taxes online This replacement property must be either common stock of, or a partnership interest in a specialized small business investment company (SSBIC). H&r block taxes online 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 taxes online Amount of gain recognized. H&r block taxes online   If you make the choice described in this section, you must recognize gain only up to the following amount. H&r block taxes online 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 taxes online  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 taxes online 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 taxes online Limit on gain postponed. H&r block taxes online   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 taxes online Basis of replacement property. H&r block taxes online   You must subtract the amount of postponed gain from the basis of your replacement property. H&r block taxes online How to report and postpone gain. H&r block taxes online    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 taxes online Prev  Up  Next   Home   More Online Publications