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H&r Block

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H&r Block

H&r block Publication 584SP - Main Content Table of Contents Cómo Utilizar Este Registro PérdidasCosto u otra base. H&r block Valor justo de mercado. H&r block Excepción en el caso de propiedad inmueble de uso personal. H&r block Más información. H&r block Para pedir formularios y publicaciones. H&r block Preguntas sobre los impuestos. H&r block Cómo Obtener Ayuda con los ImpuestosTalleres para Contribuyentes de Ingresos Bajos (LITC por sus siglas en inglés). H&r block Cómo Utilizar Este Registro Puede utilizar este registro siguiendo estos cinco pasos. H&r block Lea la Publicación 547(SP) para saber más sobre las leyes tributarias relacionadas con hechos fortuitos, desastres y robos. H&r block Familiarícese con las definiciones de costo u otra base y valor justo de mercado, las cuales se explican más adelante. H&r block Llene los Anexos 1 al 20. H&r block Lea las instrucciones del Formulario 4684, en inglés. H&r block Llene el Formulario 4684, en inglés, utilizando la información que usted escribió en los Anexos 1 al 20. H&r block Utilice la tabla que se encuentra a continuación para saber cómo hacer uso de los Anexos 1 al 19 a fin de llenar el Formulario 4684, en inglés. H&r block Utilice lo que se halla en la. H&r block . H&r block . H&r block Y anótelo en el Formulario 4684. H&r block . H&r block . H&r block Columna 1 Línea 1 Columna 2 Línea 2 Columna 3 Línea 3 Columna 4 Línea 4 Columna 5 Línea 5 Columna 6 Línea 6 Columna 7 Línea 7 Columna 8 Línea 8 Columna 9 Línea 9 Pérdidas Generalmente, tiene el derecho de deducir en su declaración de impuesto federal las pérdidas sufridas en su domicilio, sus enseres domésticos y vehículos motorizados. H&r block Sin embargo, no puede deducir una pérdida por hecho fortuito o robo que esté cubierta por seguro a menos que haya presentado oportunamente una reclamación de reembolso al seguro. H&r block Todo reembolso que usted reciba reducirá la cantidad de la pérdida. H&r block Si no presentó una reclamación de reembolso al seguro, puede deducir únicamente la porción de la pérdida que no haya sido protegida por dicho seguro. H&r block Cantidad de la pérdida. H&r block   Calcule la cantidad de su pérdida de la siguiente forma: Determine su costo u otra base en la propiedad antes del hecho fortuito o robo. H&r block Determine la disminución en el valor justo de mercado de la propiedad como resultado del hecho fortuito o robo. H&r block (La disminución del valor justo de mercado es la diferencia entre el valor de la propiedad inmediatamente antes e inmediatamente después del hecho fortuito o robo). H&r block De la cantidad menor de los puntos anteriores (1) y (2), reste todo reembolso del seguro o de otra fuente que usted haya recibido o espere recibir. H&r block   Aplique los límites a la deducción, explicados más adelante, para determinar la cantidad de su pérdida deducible. H&r block Costo u otra base. H&r block   El costo u otra base significa generalmente el costo original más toda mejora realizada a la propiedad. H&r block Si no adquirió la propiedad por medio de una compra, su base se determina según se explica en la Publicación 551, Basis of Assets (Base de los Bienes), en inglés. H&r block Si usted heredó propiedad de alguien que falleció en 2010 y el albacea del caudal hereditario eligió presentar el Formulario 8939, favor de referirse a la información proporcionada por el albacea, o vea la Publicación 4895, Tax Treatment of Property Acquired from a Decedent Dying in 2010 (Trato tributario de la propiedad adquirida de un difunto que falleció en 2010), en inglés. H&r block Valor justo de mercado. H&r block   El valor justo de mercado (FMV, por sus siglas en inglés) es el precio por el cual podría vender su propiedad a una persona dispuesta a comprarla, cuando ninguno de los dos tiene que vender o comprar y ambos están informados de todos los hechos pertinentes. H&r block Al llenar los Anexos 1 al 20, se necesita saber el valor justo de mercado de la propiedad inmediatamente antes e inmediatamente después del desastre, hecho fortuito o robo. H&r block Cálculos separados. H&r block   Generalmente, si un solo hecho fortuito o robo involucra más de un artículo de propiedad, usted tiene que calcular la pérdida de cada artículo por separado. H&r block Luego, sume las pérdidas para determinar la pérdida total de ese hecho fortuito o robo. H&r block Excepción en el caso de propiedad inmueble de uso personal. H&r block   Para calcular una pérdida de bienes inmuebles (bienes raíces) de uso personal, la propiedad entera (incluidas todas las mejoras como edificios, árboles y arbustos) se considera una unidad. H&r block Calcule la pérdida utilizando la menor de las siguientes cantidades: La disminución en el valor justo de mercado de toda la propiedad. H&r block La base ajustada de toda la propiedad. H&r block Límites de la deducción. H&r block   Después de calcular la cantidad de su pérdida según la explicación anterior, tiene que calcular qué cantidad de la pérdida puede deducir. H&r block Esto se hace en la sección A del Formulario 4684, en inglés. H&r block Si la pérdida fue de bienes de uso personal o de su familia, existen dos límites sobre la cantidad que puede deducir como pérdida por hecho fortuito o robo: Tiene que reducir cada pérdida por hecho fortuito o robo por $100 (la regla de $100). H&r block Tiene que reducir además el total de todas sus pérdidas por 10% de su ingreso bruto ajustado (la regla del 10%). H&r block Más información. H&r block   Vea la Publicación 547(SP) para más información sobre los límites de esta deducción. H&r block Cuándo su pérdida es deducible. H&r block   Normalmente, puede deducir una pérdida por hecho fortuito, o aquélla sufrida en una zona de desastre, sólo en el año tributario en el que aconteció el hecho fortuito o desastre. H&r block Normalmente puede deducir una pérdida por robo de propiedad sólo en el año en el que descubrió dicho robo. H&r block No obstante, tiene la opción de deducir las pérdidas sufridas en una zona de desastre en la declaración del año inmediatamente antes del año del desastre si el Presidente de los Estados Unidos ha declarado dicha área como zona de desastre federal. H&r block Para más información, vea el tema Pérdidas en Zonas de Desastre en la Publicación 547(SP). H&r block Comentarios y sugerencias. H&r block   Agradecemos sus comentarios acerca de esta publicación, así como sus sugerencias para ediciones futuras. H&r block   Nos puede escribir a la dirección siguiente:  Internal Revenue Service Individual Forms and Publications Branch SE:W:CAR:MP:T:I 1111 Constitution Ave. H&r block NW, IR-6526 Washington, DC 20224   Contestamos muchas cartas por teléfono. H&r block Por lo tanto, sería útil que incluyera en la correspondencia su número de teléfono, con el código de área, para llamar durante el día. H&r block   Nos puede enviar correspondencia electrónica (email) a la dirección electrónica taxforms@irs. H&r block gov. H&r block Escriba “Publications Comment” (Comentario sobre una Publicación) en la línea para asunto. H&r block Usted también nos puede enviar comentarios desde la página web en www. H&r block irs. H&r block gov/formspubs, en inglés, seleccionando “Comment on Tax Forms and Publications” (Enviar comentarios sobre los formularios y publicaciones de impuestos), bajo la sección “Information About” (Información sobre). H&r block Aunque no podemos contestar individualmente cada comentario, agradecemos sus comentarios y sugerencias y los tendremos en cuenta para ediciones futuras de nuestros productos tributarios. H&r block Para pedir formularios y publicaciones. H&r block   Visite www. H&r block irs. H&r block gov/formspubs para descargar formularios y publicaciones, llame al 1-800-829-3676 para pedir formulario y publicaciones o escriba a la dirección a continuación para recibir una respuesta dentro de los 10 días después de recibir su solicitud. H&r block  Internal Revenue Service 1201 N. H&r block Mitsubishi Motorway Bloomington, IL 61705-6613 Preguntas sobre los impuestos. H&r block   Si tiene una pregunta sobre los impuestos, verifique la información disponible en IRS. H&r block gov/espanol o llame al 1-800-829-1040. H&r block No podemos contestar preguntas sobre impuestos enviadas a ninguna de las dos direcciones anteriores. H&r block Cómo Obtener Ayuda con los Impuestos Puede obtener ayuda con asuntos relacionados con sus impuestos que no hayan sido aún resueltos, pedir gratuitamente publicaciones y formularios, hacer preguntas acerca de los impuestos, así como obtener más información del IRS de varias maneras. H&r block Al seleccionar el método que le resulte mejor, usted tendrá acceso rápido y fácil a ayuda relacionada con los impuestos Ayuda gratuita con la preparación de la declaración de impuestos. H&r block   Existe ayuda gratuita para la preparación de la declaración de impuestos en todo el país con voluntarios certificados por el IRS. H&r block El programa Volunteer Income Tax Assistance (Programa de Ayuda Voluntaria a los Contribuyentes o VITA, por sus siglas en inglés) está diseñado para ayudar a los contribuyentes de recursos bajos a medianos y el programa Tax Counseling for the Elderly (Programa de Asesoramiento para las Personas de Edad Avanzada o TCE, por sus siglas en inglés) está diseñado para ayudar a los contribuyentes de 60 años de edad o más con su declaración de impuestos. H&r block En la mayoría de estos locales usted puede presentar la declaración electrónicamente gratis y los voluntarios le informarán sobre los créditos y deducciones a los que quizás tenga derecho. H&r block Para ubicar un local de ayuda VITA o TCE cerca de usted, visite IRS. H&r block gov o llame al 1-800-906-9887 o 1-800-829-1040. H&r block   Como parte del programa TCE, la Asociación Estadounidense de Personas Jubiladas (AARP, por sus siglas en inglés) ofrece el programa de asesoramiento AARP Tax-Aide (Programa de Ayuda Tributaria de la Asociación Estadounidense de Personas Jubiladas). H&r block Para ubicar el sitio del programa AARP Tax-Aide más cercano, llame al 1-888-227-7669 o visite el sitio web de la AARP, www. H&r block aarp. H&r block org/money/taxaide. H&r block   Para más información sobre estos programas, visite IRS. H&r block gov e ingrese la palabra clave “VITA” en la esquina superior derecha. H&r block Internet. H&r block Puede tener acceso al sitio web del IRS, www. H&r block irs. H&r block gov/espanol las 24 horas del día, 7 días a la semana para: Revisar el estado de su reembolso para el año 2011. H&r block Visite www. H&r block irs. H&r block gov/espanol y pulse sobre el enlace “¿Dónde Está mi Reembolso?” . H&r block Asegúrese de esperar por lo menos 72 horas después de que el IRS acuse recibo de su declaración presentada por vía electrónica o 3 a 4 semanas después de enviar una declaración en papel. H&r block Si presentó el Formulario 8379 junto con su declaración, espere 14 semanas (11 semanas si la presentó electrónicamente). H&r block Tenga a mano su declaración de impuestos del año 2011 para poder facilitar su número de Seguro Social, su estado civil para efectos de la declaración y la cantidad exacta en dólares enteros de su reembolso. H&r block Presentar la declaración por medio del sistema electrónico e-file. H&r block Aprenda sobre programas comerciales para la preparación de la declaración y los servicios e-file gratuitos para los contribuyentes que cumplan los requisitos. H&r block Descargar formularios, incluidos audioformularios, instrucciones y publicaciones. H&r block Pedir productos del IRS a través de Internet. H&r block Buscar información en Internet para aclarar sus preguntas acerca de impuestos. H&r block Buscar publicaciones en Internet por tema o palabra clave. H&r block Utilizar el Código o regulaciones de Impuestos Internos en Internet u otra información oficial. H&r block Ver los Internal Revenue Bulletins (Boletines del IRS o IRB, por sus siglas en inglés) publicados en los últimos años. H&r block Calcular los descuentos de la retención usando nuestra calculadora diseñada para este propósito en el sitio web www. H&r block irs. H&r block gov/espanol. H&r block Saber si se tiene que presentar el Formulario 6251 utilizando el Alternative Minimum Tax (AMT) Assistant (Hoja de Cómputo Electrónica para Calcular el Impuesto Mínimo Alternativo), en inglés, disponible por Internet en www. H&r block irs. H&r block gov/individuals. H&r block Suscribirse para recibir noticias sobre impuestos locales y nacionales por medio de correo electrónico. H&r block Obtener información acerca de cómo abrir y administrar un pequeño negocio. H&r block Teléfono. H&r block Muchos servicios están disponibles por teléfono. H&r block Cómo pedir formularios, instrucciones y publicaciones. H&r block Llame al 1-800-829-3676 (servicio disponible en español) para pedir formularios, instrucciones y publicaciones de este año, así como de años anteriores. H&r block Deberá recibir lo que ha pedido dentro de 10 días. H&r block Cómo hacer preguntas relacionadas con los impuestos. H&r block Llame al IRS para hacer preguntas al 1-800-829-1040. H&r block Cómo resolver problemas. H&r block Puede recibir ayuda en persona para resolver problemas tributarios en días laborables en los IRS Taxpayer Assistance Centers (Centros de Ayuda del IRS para Contribuyentes). H&r block Un funcionario le puede explicar las cartas que le ha enviado el IRS, ayudarle a hacer solicitudes para ajustes a su cuenta o ayudarle a establecer un plan de pagos. H&r block Llame al Centro de Ayuda del IRS para Contribuyentes local para pedir una cita. H&r block Para obtener el número telefónico, visite el sitio web www. H&r block irs. H&r block gov/localcontacts, en inglés, o consulte la guía telefónica bajo United States Government, Internal Revenue Service (Gobierno de los Estados Unidos, Servicio de Impuestos Internos). H&r block Equipo TTY/TDD. H&r block Si tiene acceso a equipo TTY/TDD, llame al 1-800-829-4059 para hacer preguntas relacionadas con los impuestos o para pedir formularios y publicaciones. H&r block Temas TeleTax. H&r block Llame al 1-800-829-4477 y presione el 2 para escuchar mensajes grabados en español sobre varios temas relacionados con los impuestos. H&r block Información sobre los reembolsos. H&r block Usted puede averiguar el estado de su reembolso con la nueva aplicación para teléfonos celulares del IRS. H&r block Descargue la aplicación IRS2Go gratis cuando visite la página Web de la tienda de aplicaciones de iTunes o la del Android Marketplace. H&r block La aplicación IRS2Go es una manera nueva para nosotros proveerle información. H&r block Para averiguar el estado de su reembolso por teléfono, llame al 1-800-829-4477 y presione el 2 para escuchar información automatizada en español, 24 horas al día, 7 días a la semana. H&r block Asegúrese de esperar por lo menos 72 horas después de que el IRS acuse recibo de su declaración presentada por vía electrónica o 3 a 4 semanas después de enviar una declaración en papel. H&r block Si presentó el Formulario 8379 junto con su declaración, espere 14 semanas (11 semanas si la presentó electrónicamente). H&r block Tenga a mano su declaración de impuestos del año 2011 para poder facilitar su número de Seguro Social, su estado civil para efectos de la declaración y la cantidad exacta en dólares enteros de su reembolso. H&r block Si comprueba el estado de su reembolso y no se le da una fecha de envío, espere a la siguiente semana para volver a comprobarlo. H&r block Otra información relacionada con los reembolsos. H&r block Para averiguar el estado del reembolso o de una declaración enmendada correspondiente a un año anterior, llame al 1-800-829-1040. H&r block Cómo evaluar la calidad de nuestros servicios telefónicos. H&r block Para asegurar que las respuestas que reciba de los funcionarios del IRS sean correctas, corteses y profesionales, evaluamos la calidad de nuestros servicios telefónicos de diversas maneras. H&r block Una manera es que un segundo funcionario del IRS escuche o grabe las llamadas telefónicas en el momento en que éstas se llevan a cabo. H&r block Otra manera es pedirles a algunas de las personas que llaman que contesten una breve encuesta al final de la llamada. H&r block Visitas en persona. H&r block Muchos productos y servicios están disponibles en varios lugares públicos. H&r block Productos. H&r block Puede visitar diversas oficinas de correos, bibliotecas y oficinas del IRS para obtener formularios, instrucciones y publicaciones. H&r block Algunas oficinas del IRS, bibliotecas, supermercados, centros para hacer copias, oficinas de gobiernos municipales y de condados, cooperativas de crédito y tiendas de artículos de oficina tienen una colección de productos que se pueden imprimir de un CD o fotocopiar del documento original impreso. H&r block Además, algunas oficinas del IRS así como algunas bibliotecas tienen el Código Tributario del IRS, reglamentaciones, Boletines del IRS y Boletines Cumulativos disponibles para la búsqueda de información. H&r block Servicios. H&r block Usted puede visitar su Taxpayer Assistance Center (Centro de Ayuda para el Contribuyente) local del IRS cada día laborable para recibir ayuda en persona con respecto a todo problema relacionado con los impuestos. H&r block Un funcionario puede explicarle las cartas que le envía el IRS, le puede ayudar a hacer solicitudes para ajustar su cuenta o ayudarle a establecer un plan de pagos. H&r block Si necesita resolver un problema relacionado con los impuestos, tiene preguntas sobre cómo las leyes tributarias son aplicables a su declaración de impuestos personal o se siente más a gusto hablando con alguien en persona, visite su Centro de Ayuda para el Contribuyente a nivel local donde podrá mostrar sus archivos y documentación y hablar con un funcionario del IRS en persona. H&r block No se necesita cita, simplemente venga a hacer su consulta. H&r block Pero si prefiere, puede llamar a su centro local y dejar un mensaje solicitando una cita para resolver un asunto relacionado con su cuenta tributaria. H&r block Un funcionario le llamará dentro de 2 días laborables para hacer una cita en persona con usted. H&r block Si le queda por resolver algún problema complicado relacionado con los impuestos o si tiene alguna necesidad especial, como una discapacidad, puede solicitar una cita. H&r block Los demás asuntos se tramitan sin necesidad de hacer una cita. H&r block Para obtener el número telefónico de la oficina local, visite el sitio web www. H&r block irs. H&r block gov/localcontacts o consulte la guía telefónica bajo United States Government, Internal Revenue Service (Gobierno de los Estados Unidos, Servicio de Impuestos Internos). H&r block Correspondencia. H&r block Puede solicitar formularios, instrucciones y publicaciones enviando una solicitud a la dirección indicada a continuación y le contestaremos dentro de un período de 10 días después de haber recibido su solicitud. H&r block  Internal Revenue Service 1201 N. H&r block Mitsubishi Motorway Bloomington, IL 61705–6613 Servicio del Defensor del Contribuyente. H&r block   El Servicio del Defensor del Contribuyente (TAS por sus siglas en inglés), es su voz ante el IRS. H&r block Nuestro deber es asegurar que a cada contribuyente se le trate de forma justa, y que usted conozca y entienda sus derechos. H&r block Le ofrecemos ayuda gratuita para ayudarle a navegar el proceso, frecuentemente confuso, de resolver problemas tributarios que no ha podido resolver usted mismo. H&r block Tenga presente que lo peor que se puede hacer es no hacer nada. H&r block   El Servicio del Defensor del Contribuyente le puede ayudar si usted no puede resolver su problema con el IRS y además: Si su problema le causa problemas financieros a usted, su familia o su negocio. H&r block Si usted (o su negocio) está enfrentando la amenaza de acción adversa inmediata. H&r block Si usted ha intentado, vez tras vez, comunicarse con el IRS pero nadie le ha respondido, o si el IRS no le ha respondido antes de la fecha prometida. H&r block   Si usted reúne los requisitos para recibir nuestra ayuda, haremos todo lo posible para resolverle su problema. H&r block A usted se le asignará un defensor, quien estará a su lado en cada paso del camino. H&r block Tenemos oficinas en cada estado, el Distrito de Columbia, y Puerto Rico. H&r block Aunque TAS es una sección independiente dentro del IRS, nuestros defensores saben trabajar junto con el IRS para resolver sus provlemas. H&r block ¡Y nuestros servicios son siempre gratuitos!   Como contribuyente, usted tiene derechos que el IRS tiene que respetar cuando trata con usted. H&r block Nuestro kit de herramientas tributarias, disponible en www. H&r block taxpayeradvocate. H&r block irs. H&r block gov/Home/Spanish le puede ayudar a entender estos derechos. H&r block   Si usted cree que el TAS posiblemente le puede ayudar, llame al defensor local, cuyo número de teléfono se halla en el directorio del teléfono, y también en nuestra página Web, en www. H&r block irs. H&r block gov/advocate. H&r block Usted también podría llamarnos gratis al 1-877-777-4778. H&r block   El TAS se ocupa de resolver problemas de gran escala o problemas sistémicos que afectan a muchos contribuyentes. H&r block Si usted conoce alguno de estos asuntos, favor de informarnos del mismo utilizando el Systemic Advocacy Management System (Sistema de administración de la defensa sistémica), en inglés, en el sitio www. H&r block irs. H&r block gov/advocate. H&r block Talleres para Contribuyentes de Ingresos Bajos (LITC por sus siglas en inglés). H&r block   Los Talleres para Contribuyentes de Ingresos Bajos (LITC) son independientes del IRS. H&r block Algunos Talleres sirven a las personas cuyos ingresos estén por debajo de cierto nivel, y quienes necesitan resolver un problema tributaria. H&r block Estos talleres proporcionan gratis, o por una cuota pequeña, representación profesional ante el IRS, en la corte durante auditorias, apelaciones, disputas de cobro de impuestos, y en otros asuntos. H&r block Para esas personas que hablan inglés como segundo idioma, algunos Talleres pueden proveer información en muchos idiomas diferentes sobre los derechos y responsabilidades del contribuyente. H&r block Para más información y para hallar un Taller cerca de usted, vea la página Web de los LITC en www. H&r block irs. H&r block gov/espanol/article/0,,id=219303,00. H&r block html o en la Publicación 4134SP, Lista de Talleres para Contribuyentes de Bajos Ingresos. H&r block Esta publicación también le está disponible en la oficina local del IRS o llamando al 1-800-829-3676. H&r block Servicios Tributarios Gratuitos. H&r block   La Publicación 910, IRS Guide to Free Tax Services, (Guía de servicios gratuitos del IRS, en inglés), es su guía para los servicios y recursos proporcionados por el IRS. H&r block Con ella puede aprender más sobre la información tributaria que el IRS le proporciona gratis, inclusive publicaciones, servicios, y programas de educación y ayuda. H&r block La publicación le brinda también una índice de más de 100 temas tributarios TeleTax (información tributaria grabada) que usted puede escuchar por teléfono. H&r block La mayoría de la información y los servicios enumerados en esta publicación se le proporcionan sin costo a usted. H&r block Si hay una cuota asociada con algún recurso o servicio, esta se indica en la publicación. H&r block   Versiones accesibles de los productos publicadas por el IRS se la hacen disponibles a personas discapacitadas en varios formatos, si ellos las piden. H&r block Discos DVD para productos tributarios. H&r block Usted puede solicitar la Publicación 1796, IRS Tax Products DVD (DVD de productos tributarios del IRS), en inglés, y obtener: Formularios, instrucciones y publicaciones de impuestos del año en curso. H&r block Formularios, instrucciones y publicaciones de impuestos de años anteriores. H&r block Mapa Tributario: una herramienta de búsqueda electrónica y de ayuda. H&r block Preguntas sobre leyes tributarias hechas con frecuencia. H&r block Tax Topics (Temas Tributarios) del sistema telefónico de respuestas del IRS. H&r block Código de Impuestos Internos —Título 26 del Código de los Estados Unidos. H&r block Opciones para completar, imprimir y guardar la mayoría de los formularios de impuestos. H&r block Internal Revenue Bulletins (Boletines del IRS). H&r block Apoyo técnico telefónico gratuito y por correo electrónico. H&r block El CD que se expide dos veces al año. H&r block  — La primera entrega se envía a principios de enero del año 2012. H&r block  — La última entrega se envía a principios de marzo del año 2012. H&r block Compre el DVD del National Technical Information Service (NTIS, por sus siglas en inglés) en la página web www. H&r block irs. H&r block gov/cdorders por $30 (sin costo de tramitación) o llame gratuitamente al 1-877-233-6767 para comprar el DVD por $30 (más un cargo de tramitación de $6). H&r block Prev  Up  Next   Home   More Online Publications
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The H&r Block

H&r block Publication 551 - Main Content Table of Contents Cost BasisStocks and Bonds Real Property Business Assets Allocating the Basis Adjusted BasisIncreases to Basis Decreases to Basis Adjustments to Basis Example Basis Other Than CostProperty Received for Services Taxable Exchanges Nontaxable Exchanges Property Transferred From a Spouse Property Received as a Gift Inherited Property Property Changed to Business or Rental Use How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). H&r block Cost Basis The basis of property you buy is usually its cost. H&r block The cost is the amount you pay in cash, debt obligations, other property, or services. H&r block Your cost also includes amounts you pay for the following items. H&r block Sales tax, Freight, Installation and testing, Excise taxes, Legal and accounting fees (when they must be capitalized), Revenue stamps, Recording fees, and Real estate taxes (if assumed for the seller). H&r block  You may also have to capitalize (add to basis) certain other costs related to buying or producing property. H&r block Loans with low or no interest. H&r block   If you buy property on a time-payment plan that charges little or no interest, the basis of your property is your stated purchase price, minus the amount considered to be unstated interest. H&r block You generally have unstated interest if your interest rate is less than the applicable federal rate. H&r block For more information, see Unstated Interest and Original Issue Discount in Publication 537. H&r block Purchase of a business. H&r block   When you purchase a trade or business, you generally purchase all assets used in the business operations, such as land, buildings, and machinery. H&r block Allocate the price among the various assets, including any section 197 intangibles. H&r block See Allocating the Basis, later. H&r block Stocks and Bonds The basis of stocks or bonds you buy is generally the purchase price plus any costs of purchase, such as commissions and recording or transfer fees. H&r block If you get stocks or bonds other than by purchase, your basis is usually determined by the fair market value (FMV) or the previous owner's adjusted basis of the stock. H&r block You must adjust the basis of stocks for certain events that occur after purchase. H&r block See Stocks and Bonds in chapter 4 of Publication 550 for more information on the basis of stock. H&r block Identifying stock or bonds sold. H&r block   If you can adequately identify the shares of stock or the bonds you sold, their basis is the cost or other basis of the particular shares of stock or bonds. H&r block If you buy and sell securities at various times in varying quantities and you cannot adequately identify the shares you sell, the basis of the securities you sell is the basis of the securities you acquired first. H&r block For more information about identifying securities you sell, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. H&r block Mutual fund shares. H&r block   If you sell mutual fund shares acquired at different times and prices, you can choose to use an average basis. H&r block For more information, see Publication 550. H&r block Real Property Real property, also called real estate, is land and generally anything built on or attached to it. H&r block If you buy real property, certain fees and other expenses become part of your cost basis in the property. H&r block Real estate taxes. H&r block   If you pay real estate taxes the seller owed on real property you bought, and the seller did not reimburse you, treat those taxes as part of your basis. H&r block You cannot deduct them as taxes. H&r block   If you reimburse the seller for taxes the seller paid for you, you can usually deduct that amount as an expense in the year of purchase. H&r block Do not include that amount in the basis of the property. H&r block If you did not reimburse the seller, you must reduce your basis by the amount of those taxes. H&r block Settlement costs. H&r block   Your basis includes the settlement fees and closing costs for buying property. H&r block You cannot include in your basis the fees and costs for getting a loan on property. H&r block A fee for buying property is a cost that must be paid even if you bought the property for cash. H&r block   The following items are some of the settlement fees or closing costs you can include in the basis of your property. H&r block Abstract fees (abstract of title fees); Charges for installing utility services; Legal fees (including title search and preparation of the sales contract and deed); Recording fees; Surveys; Transfer taxes; Owner's title insurance; and Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions. H&r block   Settlement costs do not include amounts placed in escrow for the future payment of items such as taxes and insurance. H&r block   The following items are some settlement fees and closing costs you cannot include in the basis of the property. H&r block Casualty insurance premiums. H&r block Rent for occupancy of the property before closing. H&r block Charges for utilities or other services related to occupancy of the property before closing. H&r block Charges connected with getting a loan. H&r block The following are examples of these charges. H&r block Points (discount points, loan origination fees). H&r block Mortgage insurance premiums. H&r block Loan assumption fees. H&r block Cost of a credit report. H&r block Fees for an appraisal required by a lender. H&r block Fees for refinancing a mortgage. H&r block If these costs relate to business property, items (1) through (3) are deductible as business expenses. H&r block Items (4) and (5) must be capitalized as costs of getting a loan and can be deducted over the period of the loan. H&r block Points. H&r block   If you pay points to obtain a loan (including a mortgage, second mortgage, line of credit, or a home equity loan), do not add the points to the basis of the related property. H&r block Generally, you deduct the points over the term of the loan. H&r block For more information on how to deduct points, see Points in chapter 4 of Publication 535. H&r block Points on home mortgage. H&r block   Special rules may apply to points you and the seller pay when you obtain a mortgage to purchase your main home. H&r block If certain requirements are met, you can deduct the points in full for the year in which they are paid. H&r block Reduce the basis of your home by any seller-paid points. H&r block For more information, see Points in Publication 936, Home Mortgage Interest Deduction. H&r block Assumption of mortgage. H&r block   If you buy property and assume (or buy subject to) an existing mortgage on the property, your basis includes the amount you pay for the property plus the amount to be paid on the mortgage. H&r block Example. H&r block If you buy a building for $20,000 cash and assume a mortgage of $80,000 on it, your basis is $100,000. H&r block Constructing assets. H&r block   If you build property or have assets built for you, your expenses for this construction are part of your basis. H&r block Some of these expenses include the following costs. H&r block Land, Labor and materials, Architect's fees, Building permit charges, Payments to contractors, Payments for rental equipment, and Inspection fees. H&r block In addition, if you own a business and use your employees, material, and equipment to build an asset, do not deduct the following expenses. H&r block You must include them in the asset's basis. H&r block Employee wages paid for the construction work, reduced by any employment credits allowed; Depreciation on equipment you own while it is used in the construction; Operating and maintenance costs for equipment used in the construction; and The cost of business supplies and materials used in the construction. H&r block    Do not include the value of your own labor, or any other labor you did not pay for, in the basis of any property you construct. H&r block Business Assets If you purchase property to use in your business, your basis is usually its actual cost to you. H&r block If you construct, create, or otherwise produce property, you must capitalize the costs as your basis. H&r block In certain circumstances, you may be subject to the uniform capitalization rules, next. H&r block Uniform Capitalization Rules The uniform capitalization rules specify the costs you add to basis in certain circumstances. H&r block Activities subject to the rules. H&r block   You must use the uniform capitalization rules if you do any of the following in your trade or business or activity carried on for profit. H&r block Produce real or tangible personal property for use in the business or activity, Produce real or tangible personal property for sale to customers, or Acquire property for resale. H&r block However, this rule does not apply to personal property if your average annual gross receipts for the 3 previous tax years are $10 million or less. H&r block   You produce property if you construct, build, install, manufacture, develop, improve, create, raise, or grow the property. H&r block Treat property produced for you under a contract as produced by you up to the amount you pay or costs you otherwise incur for the property. H&r block Tangible personal property includes films, sound recordings, video tapes, books, or similar property. H&r block    Under the uniform capitalization rules, you must capitalize all direct costs and an allocable part of most indirect costs you incur due to your production or resale activities. H&r block To capitalize means to include certain expenses in the basis of property you produce or in your inventory costs rather than deduct them as a current expense. H&r block You recover these costs through deductions for depreciation, amortization, or cost of goods sold when you use, sell, or otherwise dispose of the property. H&r block   Any cost you cannot use to figure your taxable income for any tax year is not subject to the uniform capitalization rules. H&r block Example. H&r block If you incur a business meal expense for which your deduction would be limited to 50% of the cost of the meal, that amount is subject to the uniform capitalization rules. H&r block The nondeductible part of the cost is not subject to the uniform capitalization rules. H&r block More information. H&r block   For more information about these rules, see the regulations under section 263A of the Internal Revenue Code and Publication 538, Accounting Periods and Methods. H&r block Exceptions. H&r block   The following are not subject to the uniform capitalization rules. H&r block Property you produce that you do not use in your trade, business, or activity conducted for profit; Qualified creative expenses you pay or incur as a free-lance (self-employed) writer, photographer, or artist that are otherwise deductible on your tax return; Property you produce under a long-term contract, except for certain home construction contracts; Research and experimental expenses deductible under section 174 of the Internal Revenue Code; and Costs for personal property acquired for resale if your (or your predecessor's) average annual gross receipts for the 3 previous tax years do not exceed $10 million. H&r block For other exceptions to the uniform capitalization rules, see section 1. H&r block 263A-1(b) of the regulations. H&r block   For information on the special rules that apply to costs incurred in the business of farming, see chapter 6 of Publication 225, Farmer's Tax Guide. H&r block Intangible Assets Intangible assets include goodwill, patents, copyrights, trademarks, trade names, and franchises. H&r block The basis of an intangible asset is usually the cost to buy or create it. H&r block If you acquire multiple assets, for example a going business for a lump sum, see Allocating the Basis below to figure the basis of the individual assets. H&r block The basis of certain intangibles can be amortized. H&r block See chapter 8 of Publication 535 for information on the amortization of these costs. H&r block Patents. H&r block   The basis of a patent you get for an invention is the cost of development, such as research and experimental expenditures, drawings, working models, and attorneys' and governmental fees. H&r block If you deduct the research and experimental expenditures as current business expenses, you cannot include them in the basis of the patent. H&r block The value of the inventor's time spent on an invention is not part of the basis. H&r block Copyrights. H&r block   If you are an author, the basis of a copyright will usually be the cost of getting the copyright plus copyright fees, attorneys' fees, clerical assistance, and the cost of plates that remain in your possession. H&r block Do not include the value of your time as the author, or any other person's time you did not pay for. H&r block Franchises, trademarks, and trade names. H&r block   If you buy a franchise, trademark, or trade name, the basis is its cost, unless you can deduct your payments as a business expense. H&r block Allocating the Basis If you buy multiple assets for a lump sum, allocate the amount you pay among the assets you receive. H&r block You must make this allocation to figure your basis for depreciation and gain or loss on a later disposition of any of these assets. H&r block See Trade or Business Acquired below. H&r block Group of Assets Acquired If you buy multiple assets for a lump sum, you and the seller may agree to a specific allocation of the purchase price among the assets in the sales contract. H&r block If this allocation is based on the value of each asset and you and the seller have adverse tax interests, the allocation generally will be accepted. H&r block However, see Trade or Business Acquired, next. H&r block Trade or Business Acquired If you acquire a trade or business, allocate the consideration paid to the various assets acquired. H&r block Generally, reduce the consideration paid by any cash and general deposit accounts (including checking and savings accounts) received. H&r block Allocate the remaining consideration to the other business assets received in proportion to (but not more than) their fair market value in the following order. H&r block Certificates of deposit, U. H&r block S. H&r block Government securities, foreign currency, and actively traded personal property, including stock and securities. H&r block Accounts receivable, other debt instruments, and assets you mark to market at least annually for federal income tax purposes. H&r block Property of a kind that would properly be included in inventory if on hand at the end of the tax year or property held primarily for sale to customers in the ordinary course of business. H&r block All other assets except section 197 intangibles, goodwill, and going concern value. H&r block Section 197 intangibles except goodwill and going concern value. H&r block Goodwill and going concern value (whether or not they qualify as section 197 intangibles). H&r block Agreement. H&r block   The buyer and seller may enter into a written agreement as to the allocation of any consideration or the fair market value (FMV) of any of the assets. H&r block This agreement is binding on both parties unless the IRS determines the amounts are not appropriate. H&r block Reporting requirement. H&r block   Both the buyer and seller involved in the sale of business assets must report to the IRS the allocation of the sales price among section 197 intangibles and the other business assets. H&r block Use Form 8594 to provide this information. H&r block The buyer and seller should each attach Form 8594 to their federal income tax return for the year in which the sale occurred. H&r block More information. H&r block   See Sale of a Business in chapter 2 of Publication 544 for more information. H&r block Land and Buildings If you buy buildings and the land on which they stand for a lump sum, allocate the basis of the property among the land and the buildings so you can figure the depreciation allowable on the buildings. H&r block Figure the basis of each asset by multiplying the lump sum by a fraction. H&r block The numerator is the FMV of that asset and the denominator is the FMV of the whole property at the time of purchase. H&r block If you are not certain of the FMV of the land and buildings, you can allocate the basis based on their assessed values for real estate tax purposes. H&r block Demolition of building. H&r block   Add demolition costs and other losses incurred for the demolition of any building to the basis of the land on which the demolished building was located. H&r block Do not claim the costs as a current deduction. H&r block Modification of building. H&r block   A modification of a building will not be treated as a demolition if the following conditions are satisfied. H&r block 75 percent or more of the existing external walls of the building are retained in place as internal or external walls, and 75 percent or more of the existing internal structural framework of the building is retained in place. H&r block   If the building is a certified historic structure, the modification must also be part of a certified rehabilitation. H&r block   If these conditions are met, add the costs of the modifications to the basis of the building. H&r block Subdivided lots. H&r block   If you buy a tract of land and subdivide it, you must determine the basis of each lot. H&r block This is necessary because you must figure the gain or loss on the sale of each individual lot. H&r block As a result, you do not recover your entire cost in the tract until you have sold all of the lots. H&r block   To determine the basis of an individual lot, multiply the total cost of the tract by a fraction. H&r block The numerator is the FMV of the lot and the denominator is the FMV of the entire tract. H&r block Future improvement costs. H&r block   If you are a developer and sell subdivided lots before the development work is completed, you can (with IRS consent) include in the basis of the properties sold an allocation of the estimated future cost for common improvements. H&r block See Revenue Procedure 92–29 for more information, including an explanation of the procedures for getting consent from the IRS. H&r block Use of erroneous cost basis. H&r block   If you made a mistake in figuring the cost basis of subdivided lots sold in previous years, you cannot correct the mistake for years for which the statute of limitations (generally 3 tax years) has expired. H&r block Figure the basis of any remaining lots by allocating the correct original cost basis of the entire tract among the original lots. H&r block Example. H&r block You bought a tract of land to which you assigned a cost of $15,000. H&r block You subdivided the land into 15 building lots of equal size and equitably divided your basis so that each lot had a basis of $1,000. H&r block You treated the sale of each lot as a separate transaction and figured gain or loss separately on each sale. H&r block Several years later you determine that your original basis in the tract was $22,500 and not $15,000. H&r block You sold eight lots using $8,000 of basis in years for which the statute of limitations has expired. H&r block You now can take $1,500 of basis into account for figuring gain or loss only on the sale of each of the remaining seven lots ($22,500 basis divided among all 15 lots). H&r block You cannot refigure the basis of the eight lots sold in tax years barred by the statute of limitations. H&r block Adjusted Basis Before figuring gain or loss on a sale, exchange, or other disposition of property or figuring allowable depreciation, depletion, or amortization, you must usually make certain adjustments to the basis of the property. H&r block The result of these adjustments to the basis is the adjusted basis. H&r block Increases to Basis Increase the basis of any property by all items properly added to a capital account. H&r block These include the cost of any improvements having a useful life of more than 1 year. H&r block Rehabilitation expenses also increase basis. H&r block However, you must subtract any rehabilitation credit allowed for these expenses before you add them to your basis. H&r block If you have to recapture any of the credit, increase your basis by the recaptured amount. H&r block If you make additions or improvements to business property, keep separate accounts for them. H&r block Also, you must depreciate the basis of each according to the depreciation rules that would apply to the underlying property if you had placed it in service at the same time you placed the addition or improvement in service. H&r block For more information, see Publication 946. H&r block The following items increase the basis of property. H&r block The cost of extending utility service lines to the property; Impact fees; Legal fees, such as the cost of defending and perfecting title; Legal fees for obtaining a decrease in an assessment levied against property to pay for local improvements; Zoning costs; and The capitalized value of a redeemable ground rent. H&r block Assessments for Local Improvements Increase the basis of property by assessments for items such as paving roads and building ditches that increase the value of the property assessed. H&r block Do not deduct them as taxes. H&r block However, you can deduct as taxes charges for maintenance, repairs, or interest charges related to the improvements. H&r block Example. H&r block Your city changes the street in front of your store into an enclosed pedestrian mall and assesses you and other affected landowners for the cost of the conversion. H&r block Add the assessment to your property's basis. H&r block In this example, the assessment is a depreciable asset. H&r block Deducting vs. H&r block Capitalizing Costs Do not add to your basis costs you can deduct as current expenses. H&r block For example, amounts paid for incidental repairs or maintenance that are deductible as business expenses cannot be added to basis. H&r block However, you can choose either to deduct or to capitalize certain other costs. H&r block If you capitalize these costs, include them in your basis. H&r block If you deduct them, do not include them in your basis. H&r block See Uniform Capitalization Rules earlier. H&r block The costs you can choose to deduct or to capitalize include the following. H&r block Carrying charges, such as interest and taxes, that you pay to own property, except carrying charges that must be capitalized under the uniform capitalization rules; Research and experimentation costs; Intangible drilling and development costs for oil, gas, and geothermal wells; Exploration costs for new mineral deposits; Mining development costs for a new mineral deposit; Costs of establishing, maintaining, or increasing the circulation of a newspaper or other periodical; and Costs of removing architectural and transportation barriers to people with disabilities and the elderly. H&r block If you claim the disabled access credit, you must reduce the amount you deduct or capitalize by the amount of the credit. H&r block For more information about deducting or capitalizing costs, see chapter 7 in Publication 535. H&r block Table 1. H&r block Examples of Increases and Decreases to Basis Increases to Basis Decreases to Basis Capital improvements:   Putting an addition on your home   Replacing an entire roof  Paving your driveway  Installing central air conditioning Rewiring your home Exclusion from income of subsidies for energy conservation measures  Casualty or theft loss deductions and insurance reimbursements  Vehicle credits Assessments for local improvements: Water connections Sidewalks Roads Section 179 deduction  Casualty losses: Restoring damaged property Depreciation  Nontaxable corporate distributions Legal fees:  Cost of defending and perfecting a title   Zoning costs   Decreases to Basis The following are some items that reduce the basis of property. H&r block Section 179 deduction; Nontaxable corporate distributions; Deductions previously allowed (or allowable) for amortization, depreciation, and depletion; Exclusion of subsidies for energy conservation measures; Vehicle credits; Residential energy credits; Postponed gain from sale of home; Investment credit (part or all) taken; Casualty and theft losses and insurance reimbursement; Certain canceled debt excluded from income; Rebates from a manufacturer or seller; Easements; Gas-guzzler tax; Adoption tax benefits; and Credit for employer-provided child care. H&r block Some of these items are discussed next. H&r block Casualties and Thefts If you have a casualty or theft loss, decrease the basis in your property by any insurance or other reimbursement and by any deductible loss not covered by insurance. H&r block You must increase your basis in the property by the amount you spend on repairs that substantially prolong the life of the property, increase its value, or adapt it to a different use. H&r block To make this determination, compare the repaired property to the property before the casualty. H&r block For more information on casualty and theft losses, see Publication 547, Casualties, Disasters, and Thefts. H&r block Easements The amount you receive for granting an easement is generally considered to be a sale of an interest in real property. H&r block It reduces the basis of the affected part of the property. H&r block If the amount received is more than the basis of the part of the property affected by the easement, reduce your basis in that part to zero and treat the excess as a recognized gain. H&r block Vehicle Credits Unless you elect not to claim the qualified plug-in electric vehicle credit, the alternative motor vehicle credit, or the qualified plug-in electric drive motor vehicle credit, you may have to reduce the basis of each qualified vehicle by certain amounts reported. H&r block For more information, see Form 8834, Qualified Plug-in Electric and Electric Vehicle Credit; Form 8910, Alternative Motor Vehicle Credit; Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit;and the related instructions. H&r block Gas-Guzzler Tax Decrease the basis in your car by the gas-guzzler (fuel economy) tax if you begin using the car within 1 year of the date of its first sale for ultimate use. H&r block This rule also applies to someone who later buys the car and begins using it not more than 1 year after the original sale for ultimate use. H&r block If the car is imported, the one-year period begins on the date of entry or withdrawal of the car from the warehouse if that date is later than the date of the first sale for ultimate use. H&r block Section 179 Deduction If you take the section 179 deduction for all or part of the cost of qualifying business property, decrease the basis of the property by the deduction. H&r block For more information about the section 179 deduction, see Publication 946. H&r block Exclusion of Subsidies for Energy Conservation Measures You can exclude from gross income any subsidy you received from a public utility company for the purchase or installation of any energy conservation measure for a dwelling unit. H&r block Reduce the basis of the property for which you received the subsidy by the excluded amount. H&r block For more information on this subsidy, see Publication 525. H&r block Depreciation Decrease the basis of property by the depreciation you deducted, or could have deducted, on your tax returns under the method of depreciation you chose. H&r block If you took less depreciation than you could have under the method chosen, decrease the basis by the amount you could have taken under that method. H&r block If you did not take a depreciation deduction, reduce the basis by the full amount of the depreciation you could have taken. H&r block Unless a timely election is made not to deduct the special depreciation allowance for property placed in service after September 10, 2001, decrease the property's basis by the special depreciation allowance you deducted or could have deducted. H&r block If you deducted more depreciation than you should have, decrease your basis by the amount equal to the depreciation you should have deducted plus the part of the excess depreciation you deducted that actually reduced your tax liability for the year. H&r block In decreasing your basis for depreciation, take into account the amount deducted on your tax returns as depreciation and any depreciation capitalized under the uniform capitalization rules. H&r block For information on figuring depreciation, see Publication 946. H&r block If you are claiming depreciation on a business vehicle, see Publication 463. H&r block If the car is not used more than 50% for business during the tax year, you may have to recapture excess depreciation. H&r block Include the excess depreciation in your gross income and add it to your basis in the property. H&r block For information on the computation of excess depreciation, see chapter 4 in Publication 463. H&r block Canceled Debt Excluded From Income If a debt you owe is canceled or forgiven, other than as a gift or bequest, you generally must include the canceled amount in your gross income for tax purposes. H&r block A debt includes any indebtedness for which you are liable or which attaches to property you hold. H&r block You can exclude canceled debt from income in the following situations. H&r block Debt canceled in a bankruptcy case or when you are insolvent, Qualified farm debt, and Qualified real property business debt (provided you are not a C corporation). H&r block If you exclude from income canceled debt under situation (1) or (2), you may have to reduce the basis of your depreciable and nondepreciable property. H&r block However, in situation (3), you must reduce the basis of your depreciable property by the excluded amount. H&r block For more information about canceled debt in a bankruptcy case or during insolvency, see Publication 908, Bankruptcy Tax Guide. H&r block For more information about canceled debt that is qualified farm debt, see chapter 3 in Publication 225. H&r block For more information about qualified real property business debt, see chapter 5 in Publication 334, Tax Guide for Small Business. H&r block Postponed Gain From Sale of Home If you postponed gain from the sale of your main home before May 7, 1997, you must reduce the basis of your new home by the postponed gain. H&r block For more information on the rules for the sale of a home, see Publication 523. H&r block Adoption Tax Benefits If you claim an adoption credit for the cost of improvements you added to the basis of your home, decrease the basis of your home by the credit allowed. H&r block This also applies to amounts you received under an employer's adoption assistance program and excluded from income. H&r block For more information Form 8839, Qualified Adoption Expenses. H&r block Employer-Provided Child Care If you are an employer, you can claim the employer-provided child care credit on amounts you paid or incurred to acquire, construct, rehabilitate, or expand property used as part of your qualified child care facility. H&r block You must reduce your basis in that property by the credit claimed. H&r block For more information, see Form 8882, Credit for Employer-Provided Child Care Facilities and Services. H&r block Adjustments to Basis Example In January 2005, you paid $80,000 for real property to be used as a factory. H&r block You also paid commissions of $2,000 and title search and legal fees of $600. H&r block You allocated the total cost of $82,600 between the land and the building—$10,325 for the land and $72,275 for the building. H&r block Immediately you spent $20,000 in remodeling the building before you placed it in service. H&r block You were allowed depreciation of $14,526 for the years 2005 through 2009. H&r block In 2008 you had a $5,000 casualty loss from a that was not covered by insurance on the building. H&r block You claimed a deduction for this loss. H&r block You spent $5,500 to repair the damages and extend the useful life of the building. H&r block The adjusted basis of the building on January 1, 2010, is figured as follows: Original cost of building including fees and commissions $72,275 Adjustments to basis:     Add:         Improvements 20,000   Repair of damages 5,500       $97,775 Subtract:       Depreciation $14,526     Deducted casualty loss 5,000 19,526 Adjusted basis on January 1, 2010 $78,249 The basis of the land, $10,325, remains unchanged. H&r block It is not affected by any of the above adjustments. H&r block Basis Other Than Cost There are many times when you cannot use cost as basis. H&r block In these cases, the fair market value or the adjusted basis of property may be used. H&r block Adjusted basis is discussed earlier. H&r block Fair market value (FMV). H&r block   FMV is the price at which property would change hands between a buyer and a seller, neither having to buy or sell, and both having reasonable knowledge of all necessary facts. H&r block Sales of similar property on or about the same date may be helpful in figuring the property's FMV. H&r block Property Received for Services If you receive property for services, include the property's FMV in income. H&r block The amount you include in income becomes your basis. H&r block If the services were performed for a price agreed on beforehand, it will be accepted as the FMV of the property if there is no evidence to the contrary. H&r block Bargain Purchases A bargain purchase is a purchase of an item for less than its FMV. H&r block If, as compensation for services, you purchase goods or other property at less than FMV, include the difference between the purchase price and the property's FMV in your income. H&r block Your basis in the property is its FMV (your purchase price plus the amount you include in income). H&r block If the difference between your purchase price and the FMV represents a qualified employee discount, do not include the difference in income. H&r block However, your basis in the property is still its FMV. H&r block See Employee Discounts in Publication 15-B. H&r block Restricted Property If you receive property for your services and the property is subject to certain restrictions, your basis in the property is its FMV when it becomes substantially vested unless you make the election discussed later. H&r block Property becomes substantially vested when your rights in the property or the rights of any person to whom you transfer the property are not subject to a substantial risk of forfeiture. H&r block There is substantial risk of forfeiture when the rights to full enjoyment of the property depend on the future performance of substantial services by any person. H&r block When the property becomes substantially vested, include the FMV, less any amount you paid for the property, in income. H&r block Example. H&r block Your employer gives you stock for services performed under the condition that you will have to return the stock unless you complete 5 years of service. H&r block The stock is under a substantial risk of forfeiture and is not substantially vested when you receive it. H&r block You do not report any income until you have completed the 5 years of service that satisfy the condition. H&r block Fair market value. H&r block   Figure the FMV of property you received without considering any restriction except one that by its terms will never end. H&r block Example. H&r block You received stock from your employer for services you performed. H&r block If you want to sell the stock while you are still employed, you must sell the stock to your employer at book value. H&r block At your retirement or death, you or your estate must offer to sell the stock to your employer at its book value. H&r block This is a restriction that by its terms will never end and you must consider it when you figure the FMV. H&r block Election. H&r block   You can choose to include in your gross income the FMV of the property at the time of transfer, less any amount you paid for it. H&r block If you make this choice, the substantially vested rules do not apply. H&r block Your basis is the amount you paid plus the amount you included in income. H&r block   See the discussion of Restricted Property in Publication 525 for more information. H&r block Taxable Exchanges A taxable exchange is one in which the gain is taxable or the loss is deductible. H&r block A taxable gain or deductible loss is also known as a recognized gain or loss. H&r block If you receive property in exchange for other property in a taxable exchange, the basis of property you receive is usually its FMV at the time of the exchange. H&r block A taxable exchange occurs when you receive cash or property not similar or related in use to the property exchanged. H&r block Example. H&r block You trade a tract of farm land with an adjusted basis of $3,000 for a tractor that has an FMV of $6,000. H&r block You must report a taxable gain of $3,000 for the land. H&r block The tractor has a basis of $6,000. H&r block Involuntary Conversions If you receive property as a result of an involuntary conversion, such as a casualty, theft, or condemnation, you can figure the basis of the replacement property you receive using the basis of the converted property. H&r block Similar or related property. H&r block   If you receive replacement property similar or related in service or use to the converted property, the replacement property's basis is the old property's basis on the date of the conversion. H&r block However, make the following adjustments. H&r block Decrease the basis by the following. H&r block Any loss you recognize on the conversion, and Any money you receive that you do not spend on similar property. H&r block Increase the basis by the following. H&r block Any gain you recognize on the conversion, and Any cost of acquiring the replacement property. H&r block Money or property not similar or related. H&r block   If you receive money or property not similar or related in service or use to the converted property, and you buy replacement property similar or related in service or use to the converted property, the basis of the new property is its cost decreased by the gain not recognized on the conversion. H&r block Example. H&r block The state condemned your property. H&r block The property had an adjusted basis of $26,000 and the state paid you $31,000 for it. H&r block You realized a gain of $5,000 ($31,000 − $26,000). H&r block You bought replacement property similar in use to the converted property for $29,000. H&r block You recognize a gain of $2,000 ($31,000 − $29,000), the unspent part of the payment from the state. H&r block Your gain not recognized is $3,000, the difference between the $5,000 realized gain and the $2,000 recognized gain. H&r block The basis of the new property is figured as follows: Cost of replacement property $29,000 Minus: Gain not recognized 3,000 Basis of the replacement property $26,000 Allocating the basis. H&r block   If you buy more than one piece of replacement property, allocate your basis among the properties based on their respective costs. H&r block Example. H&r block The state in the previous example condemned your unimproved real property and the replacement property you bought was improved real property with both land and buildings. H&r block Allocate the replacement property's $26,000 basis between land and buildings based on their respective costs. H&r block More information. H&r block   For more information about condemnations, see Involuntary Conversions in Publication 544. H&r block For more information about casualty and theft losses, see Publication 547. H&r block Nontaxable Exchanges A nontaxable exchange is an exchange in which you are not taxed on any gain and you cannot deduct any loss. H&r block If you receive property in a nontaxable exchange, its basis is usually the same as the basis of the property you transferred. H&r block A nontaxable gain or loss is also known as an unrecognized gain or loss. H&r block Like-Kind Exchanges The exchange of property for the same kind of property is the most common type of nontaxable exchange. H&r block To qualify as a like-kind exchange, you must hold for business or investment purposes both the property you transfer and the property you receive. H&r block There must also be an exchange of like-kind property. H&r block For more information, see Like-Kind Exchanges in Publication 544. H&r block The basis of the property you receive is the same as the basis of the property you gave up. H&r block Example. H&r block You exchange real estate (adjusted basis $50,000, FMV $80,000) held for investment for other real estate (FMV $80,000) held for investment. H&r block Your basis in the new property is the same as the basis of the old ($50,000). H&r block Exchange expenses. H&r block   Exchange expenses are generally the closing costs you pay. H&r block They include such items as brokerage commissions, attorney fees, deed preparation fees, etc. H&r block Add them to the basis of the like-kind property received. H&r block Property plus cash. H&r block   If you trade property in a like-kind exchange and also pay money, the basis of the property received is the basis of the property you gave up increased by the money you paid. H&r block Example. H&r block You trade in a truck (adjusted basis $3,000) for another truck (FMV $7,500) and pay $4,000. H&r block Your basis in the new truck is $7,000 (the $3,000 basis of the old truck plus the $4,000 paid). H&r block Special rules for related persons. H&r block   If a like-kind exchange takes place directly or indirectly between related persons and either party disposes of the property within 2 years after the exchange, the exchange no longer qualifies for like-kind exchange treatment. H&r block Each person must report any gain or loss not recognized on the original exchange. H&r block Each person reports it on the tax return filed for the year in which the later disposition occurs. H&r block If this rule applies, the basis of the property received in the original exchange will be its fair market value. H&r block   These rules generally do not apply to the following kinds of property dispositions. H&r block Dispositions due to the death of either related person, Involuntary conversions, and Dispositions in which neither the original exchange nor the subsequent disposition had as a main purpose the avoidance of federal income tax. H&r block Related persons. H&r block   Generally, related persons are ancestors, lineal descendants, brothers and sisters (whole or half), and a spouse. H&r block   For other related persons (for example, two corporations, an individual and a corporation, a grantor and fiduciary, etc. H&r block ), see Nondeductible Loss in chapter 2 of Publication 544. H&r block Exchange of business property. H&r block   Exchanging the assets of one business for the assets of another business is a multiple property exchange. H&r block For information on figuring basis, see Multiple Property Exchanges in chapter 1 of Publication 544. H&r block Partially Nontaxable Exchange A partially nontaxable exchange is an exchange in which you receive unlike property or money in addition to like property. H&r block The basis of the property you receive is the same as the basis of the property you gave up, with the following adjustments. H&r block Decrease the basis by the following amounts. H&r block Any money you receive, and Any loss you recognize on the exchange. H&r block Increase the basis by the following amounts. H&r block Any additional costs you incur, and Any gain you recognize on the exchange. H&r block If the other party to the exchange assumes your liabilities, treat the debt assumption as money you received in the exchange. H&r block Example. H&r block You traded a truck (adjusted basis $6,000) for a new truck (FMV $5,200) and $1,000 cash. H&r block You realized a gain of $200 ($6,200 − $6,000). H&r block This is the FMV of the truck received plus the cash minus the adjusted basis of the truck you traded ($5,200 + $1,000 – $6,000). H&r block You include all the gain in income (recognized gain) because the gain is less than the cash received. H&r block Your basis in the new truck is: Adjusted basis of old truck $6,000 Minus: Cash received (adjustment 1(a)) 1,000   $5,000 Plus: Gain recognized (adjustment 2(b)) 200 Basis of new truck $5,200 Allocation of basis. H&r block   Allocate the basis first to the unlike property, other than money, up to its FMV on the date of the exchange. H&r block The rest is the basis of the like property. H&r block Example. H&r block You had an adjusted basis of $15,000 in real estate you held for investment. H&r block You exchanged it for other real estate to be held for investment with an FMV of $12,500, a truck with an FMV of $3,000, and $1,000 cash. H&r block The truck is unlike property. H&r block You realized a gain of $1,500 ($16,500 − $15,000). H&r block This is the FMV of the real estate received plus the FMV of the truck received plus the cash minus the adjusted basis of the real estate you traded ($12,500 + $3,000 + $1,000 – $15,000). H&r block You include in income (recognize) all $1,500 of the gain because it is less than the FMV of the unlike property plus the cash received. H&r block Your basis in the properties you received is figured as follows. H&r block Adjusted basis of real estate transferred $15,000 Minus: Cash received (adjustment 1(a)) 1,000   $14,000 Plus: Gain recognized (adjustment 2(b)) 1,500 Total basis of properties received $15,500 Allocate the total basis of $15,500 first to the unlike property — the truck ($3,000). H&r block This is the truck's FMV. H&r block The rest ($12,500) is the basis of the real estate. H&r block Sale and Purchase If you sell property and buy similar property in two mutually dependent transactions, you may have to treat the sale and purchase as a single nontaxable exchange. H&r block Example. H&r block You are a salesperson and you use one of your cars 100% for business. H&r block You have used this car in your sales activities for 2 years and have depreciated it. H&r block Your adjusted basis in the car is $22,600 and its FMV is $23,100. H&r block You are interested in a new car, which sells for $28,000. H&r block If you trade your old car and pay $4,900 for the new one, your basis for depreciation for the new car would be $27,500 ($4,900 plus the $22,600 basis of your old car). H&r block However, you want a higher basis for depreciating the new car, so you agree to pay the dealer $28,000 for the new car if he will pay you $23,100 for your old car. H&r block Because the two transactions are dependent on each other, you are treated as having exchanged your old car for the new one and paid $4,900 ($28,000 − $23,100). H&r block Your basis for depreciating the new car is $27,500, the same as if you traded the old car. H&r block Partial Business Use of Property If you have property used partly for business and partly for personal use, and you exchange it in a nontaxable exchange for property to be used wholly or partly in your business, the basis of the property you receive is figured as if you had exchanged two properties. H&r block The first is an exchange of like-kind property. H&r block The second is personal-use property on which gain is recognized and loss is not recognized. H&r block First, figure your adjusted basis in the property as if you transferred two separate properties. H&r block Figure the adjusted basis of each part of the property by taking into account any adjustments to basis. H&r block Deduct the depreciation you took or could have taken from the adjusted basis of the business part. H&r block Then figure the amount realized for your property and allocate it to the business and nonbusiness parts of the property. H&r block The business part of the property is permitted to be exchanged tax free. H&r block However, you must recognize any gain from the exchange of the nonbusiness part. H&r block You are deemed to have received, in exchange for the nonbusiness part, an amount equal to its FMV on the date of the exchange. H&r block The basis of the property you acquired is the total basis of the property transferred (adjusted to the date of the exchange), increased by any gain recognized on the nonbusiness part. H&r block If the nonbusiness part of the property transferred is your main home, you may qualify to exclude from income all or part of the gain on that part. H&r block For more information, see Publication 523. H&r block Trade of car used partly in business. H&r block   If you trade in a car you used partly in your business for another car you will use in your business, your basis for depreciation of the new car is not the same as your basis for figuring a gain or loss on its sale. H&r block   For information on figuring your basis for depreciation, see Publication 463. H&r block Property Transferred From a Spouse The basis of property transferred to you or transferred in trust for your benefit by your spouse (or former spouse if the transfer is incident to divorce), is the same as your spouse's adjusted basis. H&r block However, adjust your basis for any gain recognized by your spouse or former spouse on property transferred in trust. H&r block This rule applies only to a transfer of property in trust in which the liabilities assumed, plus the liabilities to which the property is subject, are more than the adjusted basis of the property transferred. H&r block If the property transferred to you is a series E, series EE, or series I United States savings bond, the transferor must include in income the interest accrued to the date of transfer. H&r block Your basis in the bond immediately after the transfer is equal to the transferor's basis increased by the interest income includible in the transferor's income. H&r block For more information on these bonds, see Publication 550. H&r block At the time of the transfer, the transferor must give you the records necessary to determine the adjusted basis and holding period of the property as of the date of transfer. H&r block For more information, see Publication 504, Divorced or Separated Individuals. H&r block Property Received as a Gift To figure the basis of property you receive as a gift, you must know its adjusted basis (defined earlier) to the donor just before it was given to you, its FMV at the time it was given to you, and any gift tax paid on it. H&r block FMV Less Than Donor's Adjusted Basis If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property. H&r block Your basis for figuring gain is the same as the donor's adjusted basis plus or minus any required adjustment to basis while you held the property. H&r block Your basis for figuring loss is its FMV when you received the gift plus or minus any required adjustment to basis while you held the property (see Adjusted Basis earlier). H&r block If you use the donor's adjusted basis for figuring a gain and get a loss, and then use the FMV for figuring a loss and have a gain, you have neither gain nor loss on the sale or disposition of the property. H&r block Example. H&r block You received an acre of land as a gift. H&r block At the time of the gift, the land had an FMV of $8,000. H&r block The donor's adjusted basis was $10,000. H&r block After you received the land, no events occurred to increase or decrease your basis. H&r block If you sell the land for $12,000, you will have a $2,000 gain because you must use the donor's adjusted basis ($10,000) at the time of the gift as your basis to figure gain. H&r block If you sell the land for $7,000, you will have a $1,000 loss because you must use the FMV ($8,000) at the time of the gift as your basis to figure a loss. H&r block If the sales price is between $8,000 and $10,000, you have neither gain nor loss. H&r block For instance, if the sales price was $9,000 and you tried to figure a gain using the donor's adjusted basis ($10,000), you would get a $1,000 loss. H&r block If you then tried to figure a loss using the FMV ($8,000), you would get a $1,000 gain. H&r block Business property. H&r block   If you hold the gift as business property, your basis for figuring any depreciation, depletion, or amortization deduction is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you hold the property. H&r block FMV Equal to or More Than Donor's Adjusted Basis If the FMV of the property is equal to or greater than the donor's adjusted basis, your basis is the donor's adjusted basis at the time you received the gift. H&r block Increase your basis by all or part of any gift tax paid, depending on the date of the gift. H&r block Also, for figuring gain or loss from a sale or other disposition of the property, or for figuring depreciation, depletion, or amortization deductions on business property, you must increase or decrease your basis by any required adjustments to basis while you held the property. H&r block See Adjusted Basis earlier. H&r block Gift received before 1977. H&r block   If you received a gift before 1977, increase your basis in the gift (the donor's adjusted basis) by any gift tax paid on it. H&r block However, do not increase your basis above the FMV of the gift at the time it was given to you. H&r block Example 1. H&r block You were given a house in 1976 with an FMV of $21,000. H&r block The donor's adjusted basis was $20,000. H&r block The donor paid a gift tax of $500. H&r block Your basis is $20,500, the donor's adjusted basis plus the gift tax paid. H&r block Example 2. H&r block If, in Example 1, the gift tax paid had been $1,500, your basis would be $21,000. H&r block This is the donor's adjusted basis plus the gift tax paid, limited to the FMV of the house at the time you received the gift. H&r block Gift received after 1976. H&r block   If you received a gift after 1976, increase your basis in the gift (the donor's adjusted basis) by the part of the gift tax paid on it that is due to the net increase in value of the gift. H&r block Figure the increase by multiplying the gift tax paid by a fraction. H&r block The numerator of the fraction is the net increase in value of the gift and the denominator is the amount of the gift. H&r block   The net increase in value of the gift is the FMV of the gift less the donor's adjusted basis. H&r block The amount of the gift is its value for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. H&r block For information on the gift tax, see Publication 950, Introduction to Estate and Gift Taxes. H&r block Example. H&r block In 2010, you received a gift of property from your mother that had an FMV of $50,000. H&r block Her adjusted basis was $20,000. H&r block The amount of the gift for gift tax purposes was $37,000 ($50,000 minus the $13,000 annual exclusion). H&r block She paid a gift tax of $9,000. H&r block Your basis, $27,290, is figured as follows: Fair market value $50,000 Minus: Adjusted basis 20,000 Net increase in value $30,000 Gift tax paid $9,000 Multiplied by ($30,000 ÷ $37,000) . H&r block 81 Gift tax due to net increase in value $7,290 Adjusted basis of property to your mother 20,000 Your basis in the property $27,290 Inherited Property Special rules apply to property acquired from a decedent who died in 2010. H&r block See Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, for details. H&r block If you inherited property from a decedent who died before 2010, your basis in property you inherit from a decedent is generally one of the following. H&r block The FMV of the property at the date of the individual's death. H&r block The FMV on the alternate valuation date if the personal representative for the estate chooses to use alternate valuation. H&r block For information on the alternate valuation date, see the Instructions for Form 706. H&r block The value under the special-use valuation method for real property used in farming or a closely held business if chosen for estate tax purposes. H&r block This method is discussed later. H&r block The decedent's adjusted basis in land to the extent of the value excluded from the decedent's taxable estate as a qualified conservation easement. H&r block For information on a qualified conservation easement, see the Instructions for Form 706. H&r block If a federal estate tax return does not have to be filed, your basis in the inherited property is its appraised value at the date of death for state inheritance or transmission taxes. H&r block For more information, see the Instructions for Form 706. H&r block Appreciated property. H&r block   The above rule does not apply to appreciated property you receive from a decedent if you or your spouse originally gave the property to the decedent within 1 year before the decedent's death. H&r block Your basis in this property is the same as the decedent's adjusted basis in the property immediately before his or her death, rather than its FMV. H&r block Appreciated property is any property whose FMV on the day it was given to the decedent is more than its adjusted basis. H&r block Community Property In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), husband and wife are each usually considered to own half the community property. H&r block When either spouse dies, the total value of the community property, even the part belonging to the surviving spouse, generally becomes the basis of the entire property. H&r block For this rule to apply, at least half the value of the community property interest must be includable in the decedent's gross estate, whether or not the estate must file a return. H&r block For example, you and your spouse owned community property that had a basis of $80,000. H&r block When your spouse died, half the FMV of the community interest was includible in your spouse's estate. H&r block The FMV of the community interest was $100,000. H&r block The basis of your half of the property after the death of your spouse is $50,000 (half of the $100,000 FMV). H&r block The basis of the other half to your spouse's heirs is also $50,000. H&r block For more information on community property, see Publication 555, Community Property. H&r block Property Held by Surviving Tenant The following example explains the rule for the basis of property held by a surviving tenant in joint tenancy or tenancy by the entirety. H&r block Example. H&r block John and Jim owned, as joint tenants with right of survivorship, business property they purchased for $30,000. H&r block John furnished two-thirds of the purchase price and Jim furnished one-third. H&r block Depreciation deductions allowed before John's death were $12,000. H&r block Under local law, each had a half interest in the income from the property. H&r block At the date of John's death, the property had an FMV of $60,000, two-thirds of which is includable in John's estate. H&r block Jim figures his basis in the property at the date of John's death as follows: Interest Jim bought with his own funds—1/3 of $30,000 cost $10,000   Interest Jim received on John's death—2/3 of $60,000 FMV 40,000 $50,000 Minus: ½ of $12,000 depreciation before John's death 6,000 Jim's basis at the date of John's death $44,000 If Jim had not contributed any part of the purchase price, his basis at the date of John's death would be $54,000. H&r block This is figured by subtracting from the $60,000 FMV, the $6,000 depreciation allocated to Jim's half interest before the date of death. H&r block If under local law Jim had no interest in the income from the property and he contributed no part of the purchase price, his basis at John's death would be $60,000, the FMV of the property. H&r block Qualified Joint Interest Include one-half of the value of a qualified joint interest in the decedent's gross estate. H&r block It does not matter how much each spouse contributed to the purchase price. H&r block Also, it does not matter which spouse dies first. H&r block A qualified joint interest is any interest in property held by husband and wife as either of the following. H&r block Tenants by the entirety, or Joint tenants with right of survivorship if husband and wife are the only joint tenants. H&r block Basis. H&r block   As the surviving spouse, your basis in property you owned with your spouse as a qualified joint interest is the cost of your half of the property with certain adjustments. H&r block Decrease the cost by any deductions allowed to you for depreciation and depletion. H&r block Increase the reduced cost by your basis in the half you inherited. H&r block Farm or Closely Held Business Under certain conditions, when a person dies the executor or personal representative of that person's estate can choose to value the qualified real property on other than its FMV. H&r block If so, the executor or personal representative values the qualified real property based on its use as a farm or its use in a closely held business. H&r block If the executor or personal representative chooses this method of valuation for estate tax purposes, that value is the basis of the property for the heirs. H&r block Qualified heirs should be able to get the necessary value from the executor or personal representative of the estate. H&r block Special-use valuation. H&r block   If you are a qualified heir who received special-use valuation property, your basis in the property is the estate's or trust's basis in that property immediately before the distribution. H&r block Increase your basis by any gain recognized by the estate or trust because of post-death appreciation. H&r block Post-death appreciation is the property's FMV on the date of distribution minus the property's FMV either on the date of the individual's death or the alternate valuation date. H&r block Figure all FMVs without regard to the special-use valuation. H&r block   You can elect to increase your basis in special-use valuation property if it becomes subject to the additional estate tax. H&r block This tax is assessed if, within 10 years after the death of the decedent, you transfer the property to a person who is not a member of your family or the property stops being used as a farm or in a closely held business. H&r block   To increase your basis in the property, you must make an irrevocable election and pay interest on the additional estate tax figured from the date 9 months after the decedent's death until the date of the payment of the additional estate tax. H&r block If you meet these requirements, increase your basis in the property to its FMV on the date of the decedent's death or the alternate valuation date. H&r block The increase in your basis is considered to have occurred immediately before the event that results in the additional estate tax. H&r block   You make the election by filing with Form 706-A a statement that does all of the following. H&r block Contains your name, address, and taxpayer identification number and those of the estate; Identifies the election as an election under section 1016(c) of the Internal Revenue Code; Specifies the property for which the election is made; and Provides any additional information required by the Instructions for Form 706-A. H&r block   For more information, see the Instructions for Form 706 and the Instructions for Form 706-A. H&r block Property Changed to Business or Rental Use If you hold property for personal use and then change it to business use or use it to produce rent, you must figure its basis for depreciation. H&r block An example of changing property held for personal use to business use would be renting out your former main home. H&r block Basis for depreciation. H&r block   The basis for depreciation is the lesser of the following amounts. H&r block The FMV of the property on the date of the change, or Your adjusted basis on the date of the change. H&r block Example. H&r block Several years ago you paid $160,000 to have your home built on a lot that cost $25,000. H&r block You paid $20,000 for permanent improvements to the house and claimed a $2,000 casualty loss deduction for damage to the house before changing the property to rental use last year. H&r block Because land is not depreciable, you include only the cost of the house when figuring the basis for depreciation. H&r block Your adjusted basis in the house when you changed its use was $178,000 ($160,000 + $20,000 − $2,000). H&r block On the same date, your property had an FMV of $180,000, of which $15,000 was for the land and $165,000 was for the house. H&r block The basis for figuring depreciation on the house is its FMV on the date of change ($165,000) because it is less than your adjusted basis ($178,000). H&r block Sale of property. H&r block   If you later sell or dispose of property changed to business or rental use, the basis of the property you use will depend on whether you are figuring gain or loss. H&r block Gain. H&r block   The basis for figuring a gain is your adjusted basis when you sell the property. H&r block Example. H&r block Assume the same facts as in the previous example except that you sell the property at a gain after being allowed depreciation deductions of $37,500. H&r block Your adjusted basis for figuring gain is $165,500 ($178,000 + $25,000 (land) − $37,500). H&r block Loss. H&r block   Figure the basis for a loss starting with the smaller of your adjusted basis or the FMV of the property at the time of the change to business or rental use. H&r block Then adjust this amount for the period after the change in the property's use, as discussed earlier under Adjusted Basis, to arrive at a basis for loss. H&r block Example. H&r block Assume the same facts as in the previous example, except that you sell the property at a loss after being allowed depreciation deductions of $37,500. H&r block In this case, you would start with the FMV on the date of the change to rental use ($180,000) because it is less than the adjusted basis of $203,000 ($178,000 + $25,000) on that date. H&r block Reduce that amount ($180,000) by the depreciation deductions to arrive at a basis for loss of $142,500 ($180,000 − $37,500). H&r block How To Get Tax Help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get more information from the IRS in several ways. H&r block By selecting the method that is best for you, you will have quick and easy access to tax help. H&r block Contacting your Taxpayer Advocate. H&r block   The Taxpayer Advocate Service (TAS) is an independent organization within the IRS. H&r block We help taxpayers who are experiencing economic harm, such as not being able to provide necessities like housing, transportation, or food; taxpayers who are seeking help in resolving tax problems with the IRS; and those who believe that an IRS system or procedure is not working as it should. H&r block Here are seven things every taxpayer should know about TAS. H&r block TAS is your voice at the IRS. H&r block Our service is free, confidential, and tailored to meet your needs. H&r block You may be eligible for our help if you have tried to resolve your tax problem through normal IRS channels and have gotten nowhere, or you believe an IRS procedure just isn't working as it should. H&r block We help taxpayers whose problems are causing financial difficulty or significant cost, including the cost of professional representation. H&r block This includes businesses as well as individuals. H&r block Our employees know the IRS and how to navigate it. H&r block If you qualify for our help, we'll assign your case to an advocate who will listen to your problem, help you understand what needs to be done to resolve it, and stay with you every step of the way until your problem is resolved. H&r block We have at least one local taxpayer advocate in every state, the District of Columbia, and Puerto Rico. H&r block You can call your local advocate, whose number is in your phone book, in Publication 1546, Taxpayer Advocate Service—Your Voice at the IRS, and on our website at www. H&r block irs. H&r block gov/advocate. H&r block You can also call our toll-free line at 1-877-777-4778 or TTY/TDD 1-800-829-4059. H&r block You can learn about your rights and responsibilities as a taxpayer by visiting our online tax toolkit at www. H&r block taxtoolkit. H&r block irs. H&r block gov. H&r block You can get updates on hot tax topics by visiting our YouTube channel at www. H&r block youtube. H&r block com/tasnta and our Facebook page at www. H&r block facebook. H&r block com/YourVoiceAtIRS, or by following our tweets at www. H&r block twitter. H&r block com/YourVoiceAtIRS. H&r block Low Income Taxpayer Clinics (LITCs). H&r block   The Low Income Taxpayer Clinic program serves individuals who have a problem with the IRS and whose income is below a certain level. H&r block LITCs are independent from the IRS. H&r block Most LITCs can provide representation before the IRS or in court on audits, tax collection disputes, and other issues for free or a small fee. H&r block If an individual's native language is not English, some clinics can provide multilingual information about taxpayer rights and responsibilities. H&r block For more information, see Publication 4134, Low Income Taxpayer Clinic List. H&r block This publication is available at IRS. H&r block gov, by calling 1-800-TAX-FORM (1-800-829-3676), or at your local IRS office. H&r block Free tax services. H&r block   Publication 910, IRS Guide to Free Tax Services, is your guide to IRS services and resources. H&r block Learn about free tax information from the IRS, including publications, services, and education and assistance programs. H&r block The publication also has an index of over 100 TeleTax topics (recorded tax information) you can listen to on the telephone. H&r block The majority of the information and services listed in this publication are available to you free of charge. H&r block If there is a fee associated with a resource or service, it is listed in the publication. H&r block   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with d