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H&r Tax Software

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H&r Tax Software

H&r tax software Part Three -   Ganancias y Pérdidas Los cuatro capítulos de esta sección abordan las ganancias y pérdidas provenientes de inversiones. H&r tax software Explican también cómo calcular la base de una propiedad. H&r tax software Una ganancia proveniente de la venta o del canje de acciones, bonos u otra propiedad de inversión puede estar sujeta a impuestos o al menos parcialmente exenta de impuestos. H&r tax software Una pérdida puede ser o no ser deducible. H&r tax software Además, estos capítulos tratan sobre las ganancias provenientes de la venta de propiedad de uso personal, incluidas las reglas especiales que corresponden al vender su vivienda. H&r tax software Las pérdidas por hecho fortuito y robo no relacionadas con los negocios se presentan en el capítulo 25 de la Parte Cinco. H&r tax software Table of Contents 13. H&r tax software   Base de BienesIntroduction Useful Items - You may want to see: Base de CostoBienes Raíces Base AjustadaAumentos a la Base Disminuciones a la Base Base Distinta al CostoBienes Recibidos por Servicios Intercambios Sujetos a Impuestos Conversiones Involuntarias Intercambios no Sujetos a Impuestos Bienes Traspasados de un Cónyuge Bienes Recibidos como Donación Bienes Heredados Bienes de Uso Personal Cambiados a Uso Comercial o de Alquiler Acciones y Bonos 14. H&r tax software   Venta de BienesRecordatorio Introduction Useful Items - You may want to see: Ventas y CanjesQué es una Venta o Canje Cómo Calcular Pérdidas o Ganancias Canjes no Sujetos a Impuestos Traspasos entre Cónyuges Transacciones entre Partes Vinculadas Pérdidas y Ganancias de CapitalPérdidas o Ganancias Ordinarias o de Capital Bienes de Capital y Bienes que no Son de Capital Período de Tenencia Deudas Incobrables no Empresariales Ventas Ficticias Reinversiones de Ganancia de Valores Cotizados en Bolsa 15. H&r tax software   Venta de su ViviendaRecordatorio Introduction Useful Items - You may want to see: Vivienda Principal Cómo Calcular las Pérdidas o Ganancias Precio de Venta Cantidad Recibida Base Ajustada Cantidad de Pérdidas o Ganancias Enajenaciones que no Sean Ventas Cómo Determinar la Base Cómo Excluir las GananciasExclusión Máxima Requisitos de Propietario y de Uso Exclusión Máxima Reducida Uso Comercial o Alquiler de Vivienda Cómo Declarar la VentaHipoteca financiada por el vendedor. H&r tax software Información adicional. H&r tax software Situaciones EspecialesExcepción para ventas a personas emparentadas o vinculadas. H&r tax software Recuperación (Devolución) de un Subsidio Hipotecario Federal 16. H&r tax software   Cómo Declarar Ganancias y PérdidasQué Hay de Nuevo Introduction Useful Items - You may want to see: Cómo Declarar Ganancias y Pérdidas de CapitalExcepción 1. H&r tax software Excepción 2. H&r tax software Presente el Formulario 1099-B o el Formulario 1099-S al IRS. H&r tax software Pérdidas de Capital Tasas Impositivas sobre Ganancias de Capital Prev  Up  Next   Home   More Online Publications
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The H&r Tax Software

H&r tax software 7. H&r tax software   Costs You Can Deduct or Capitalize Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: Carrying Charges Research and Experimental CostsProduct. H&r tax software Costs not included. H&r tax software Intangible Drilling Costs Exploration CostsPartnerships and S corporations. H&r tax software Development Costs Circulation Costs Business Start-Up and Organizational Costs Reforestation Costs Retired Asset Removal Costs Barrier Removal CostsOther barrier removals. H&r tax software Film and Television Production Costs What's New Film and television productions costs. H&r tax software  The election to expense film and television production costs does not apply to productions that begin after December 31, 2013. H&r tax software See Film and Television Production Costs , later. H&r tax software Introduction This chapter discusses costs you can elect to deduct or capitalize. H&r tax software You generally deduct a cost as a current business expense by subtracting it from your income in either the year you incur it or the year you pay it. H&r tax software If you capitalize a cost, you may be able to recover it over a period of years through periodic deductions for amortization, depletion, or depreciation. H&r tax software When you capitalize a cost, you add it to the basis of property to which it relates. H&r tax software A partnership, corporation, estate, or trust makes the election to deduct or capitalize the costs discussed in this chapter except for exploration costs for mineral deposits. H&r tax software Each individual partner, shareholder, or beneficiary elects whether to deduct or capitalize exploration costs. H&r tax software You may be subject to the alternative minimum tax (AMT) if you deduct research and experimental, intangible drilling, exploration, development, circulation, or business organizational costs. H&r tax software For more information on the alternative minimum tax, see the instructions for the following forms. H&r tax software Form 6251, Alternative Minimum Tax—Individuals. H&r tax software Form 4626, Alternative Minimum Tax—Corporations. H&r tax software Topics - This chapter discusses: Carrying charges Research and experimental costs Intangible drilling costs Exploration costs Development costs Circulation costs Qualified disaster expenses Business start-up and organizational costs Reforestation costs Retired asset removal costs Barrier removal costs Film and television production costs Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets Form (and Instructions) 3468 Investment Credit 8826 Disabled Access Credit See chapter 12 for information about getting publications and forms. H&r tax software Carrying Charges Carrying charges include the taxes and interest you pay to carry or develop real property or to carry, transport, or install personal property. H&r tax software Certain carrying charges must be capitalized under the uniform capitalization rules. H&r tax software (For information on capitalization of interest, see chapter 4 . H&r tax software ) You can elect to capitalize carrying charges not subject to the uniform capitalization rules, but only if they are otherwise deductible. H&r tax software You can elect to capitalize carrying charges separately for each project you have and for each type of carrying charge. H&r tax software For unimproved and unproductive real property, your election is good for only 1 year. H&r tax software You must decide whether to capitalize carrying charges each year the property remains unimproved and unproductive. H&r tax software For other real property, your election to capitalize carrying charges remains in effect until construction or development is completed. H&r tax software For personal property, your election is effective until the date you install or first use it, whichever is later. H&r tax software How to make the election. H&r tax software   To make the election to capitalize a carrying charge, attach a statement to your original tax return for the year the election is to be effective indicating which charges you are electing to capitalize. H&r tax software However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). H&r tax software Attach the statement to the amended return and write “Filed pursuant to section 301. H&r tax software 9100-2” on the statement. H&r tax software File the amended return at the same address you filed the original return. H&r tax software Research and Experimental Costs The costs of research and experimentation are generally capital expenses. H&r tax software However, you can elect to deduct these costs as a current business expense. H&r tax software Your election to deduct these costs is binding for the year it is made and for all later years unless you get IRS approval to make a change. H&r tax software If you meet certain requirements, you may elect to defer and amortize research and experimental costs. H&r tax software For information on electing to defer and amortize these costs, see Research and Experimental Costs in chapter 8. H&r tax software Research and experimental costs defined. H&r tax software   Research and experimental costs are reasonable costs you incur in your trade or business for activities intended to provide information that would eliminate uncertainty about the development or improvement of a product. H&r tax software Uncertainty exists if the information available to you does not establish how to develop or improve a product or the appropriate design of a product. H&r tax software Whether costs qualify as research and experimental costs depends on the nature of the activity to which the costs relate rather than on the nature of the product or improvement being developed or the level of technological advancement. H&r tax software      The costs of obtaining a patent, including attorneys' fees paid or incurred in making and perfecting a patent application, are research and experimental costs. H&r tax software However, costs paid or incurred to obtain another's patent are not research and experimental costs. H&r tax software Product. H&r tax software   The term “product” includes any of the following items. H&r tax software Formula. H&r tax software Invention. H&r tax software Patent. H&r tax software Pilot model. H&r tax software Process. H&r tax software Technique. H&r tax software Property similar to the items listed above. H&r tax software It also includes products used by you in your trade or business or held for sale, lease, or license. H&r tax software Costs not included. H&r tax software   Research and experimental costs do not include expenses for any of the following activities. H&r tax software Advertising or promotions. H&r tax software Consumer surveys. H&r tax software Efficiency surveys. H&r tax software Management studies. H&r tax software Quality control testing. H&r tax software Research in connection with literary, historical, or similar projects. H&r tax software The acquisition of another's patent, model, production, or process. H&r tax software When and how to elect. H&r tax software   You make the election to deduct research and experimental costs by deducting them on your tax return for the year in which you first pay or incur research and experimental costs. H&r tax software If you do not make the election to deduct research and experimental costs in the first year in which you pay or incur the costs, you can deduct the costs in a later year only with approval from the IRS. H&r tax software Deducting or Amortizing Research and Experimentation Costs IF you . H&r tax software . H&r tax software . H&r tax software THEN . H&r tax software . H&r tax software . H&r tax software Elect to deduct research and experimental costs as a current business expense Deduct all research and experimental costs in the first year you pay or incur the costs and all later years. H&r tax software Do not deduct research and experimental costs as a current business expense If you meet the requirements, amortize them over at least 60 months, starting with the month you first receive an economic benefit from the research. H&r tax software See Research and Experimental Costs in chapter 8. H&r tax software Research credit. H&r tax software   If you pay or incur qualified research expenses, you may be able to take the research credit. H&r tax software For more information see Form 6765, Credit for Increasing Research Activities and its instructions. H&r tax software Intangible Drilling Costs The costs of developing oil, gas, or geothermal wells are ordinarily capital expenditures. H&r tax software You can usually recover them through depreciation or depletion. H&r tax software However, you can elect to deduct intangible drilling costs (IDCs) as a current business expense. H&r tax software These are certain drilling and development costs for wells in the United States in which you hold an operating or working interest. H&r tax software You can deduct only costs for drilling or preparing a well for the production of oil, gas, or geothermal steam or hot water. H&r tax software You can elect to deduct only the costs of items with no salvage value. H&r tax software These include wages, fuel, repairs, hauling, and supplies related to drilling wells and preparing them for production. H&r tax software Your cost for any drilling or development work done by contractors under any form of contract is also an IDC. H&r tax software However, see Amounts paid to contractor that must be capitalized , later. H&r tax software You can also elect to deduct the cost of drilling exploratory bore holes to determine the location and delineation of offshore hydrocarbon deposits if the shaft is capable of conducting hydrocarbons to the surface on completion. H&r tax software It does not matter whether there is any intent to produce hydrocarbons. H&r tax software If you do not elect to deduct your IDCs as a current business expense, you can elect to deduct them over the 60-month period beginning with the month they were paid or incurred. H&r tax software Amounts paid to contractor that must be capitalized. H&r tax software   Amounts paid to a contractor must be capitalized if they are either: Amounts properly allocable to the cost of depreciable property, or Amounts paid only out of production or proceeds from production if these amounts are depletable income to the recipient. H&r tax software How to make the election. H&r tax software   You elect to deduct IDCs as a current business expense by taking the deduction on your income tax return for the first tax year you have eligible costs. H&r tax software No formal statement is required. H&r tax software If you file Schedule C (Form 1040), enter these costs under “Other expenses. H&r tax software ”   For oil and gas wells, your election is binding for the year it is made and for all later years. H&r tax software For geothermal wells, your election can be revoked by the filing of an amended return on which you do not take the deduction. H&r tax software You can file the amended return for the year up to the normal time of expiration for filing a claim for credit or refund, generally, within 3 years after the date you filed the original return or within 2 years after the date you paid the tax, whichever is later. H&r tax software Energy credit for costs of geothermal wells. H&r tax software   If you capitalize the drilling and development costs of geothermal wells that you place in service during the tax year, you may be able to claim a business energy credit. H&r tax software See the Instructions for Form 3468 for more information. H&r tax software Nonproductive well. H&r tax software   If you capitalize your IDCs, you have another option if the well is nonproductive. H&r tax software You can deduct the IDCs of the nonproductive well as an ordinary loss. H&r tax software You must indicate and clearly state your election on your tax return for the year the well is completed. H&r tax software Once made, the election for oil and gas wells is binding for all later years. H&r tax software You can revoke your election for a geothermal well by filing an amended return that does not claim the loss. H&r tax software Costs incurred outside the United States. H&r tax software   You cannot deduct as a current business expense all the IDCs paid or incurred for an oil, gas, or geothermal well located outside the United States. H&r tax software However, you can elect to include the costs in the adjusted basis of the well to figure depletion or depreciation. H&r tax software If you do not make this election, you can deduct the costs over the 10-year period beginning with the tax year in which you paid or incurred them. H&r tax software These rules do not apply to a nonproductive well. H&r tax software Exploration Costs The costs of determining the existence, location, extent, or quality of any mineral deposit are ordinarily capital expenditures if the costs lead to the development of a mine. H&r tax software You recover these costs through depletion as the mineral is removed from the ground. H&r tax software However, you can elect to deduct domestic exploration costs paid or incurred before the beginning of the development stage of the mine (except those for oil and gas wells). H&r tax software How to make the election. H&r tax software   You elect to deduct exploration costs by taking the deduction on your income tax return, or on an amended income tax return, for the first tax year for which you wish to deduct the costs paid or incurred during the tax year. H&r tax software Your return must adequately describe and identify each property or mine, and clearly state how much is being deducted for each one. H&r tax software The election applies to the tax year you make this election and all later tax years. H&r tax software Partnerships and S corporations. H&r tax software   Each partner, not the partnership, elects whether to capitalize or to deduct that partner's share of exploration costs. H&r tax software Each shareholder, not the S corporation, elects whether to capitalize or to deduct that shareholder's share of exploration costs. H&r tax software Reduced corporate deductions for exploration costs. H&r tax software   A corporation (other than an S corporation) can deduct only 70% of its domestic exploration costs. H&r tax software It must capitalize the remaining 30% of costs and amortize them over the 60-month period starting with the month the exploration costs are paid or incurred. H&r tax software A corporation may also elect to capitalize and amortize mining exploration costs over a 10-year period. H&r tax software For more information on this method of amortization, see Internal Revenue Code section 59(e). H&r tax software   The 30% the corporation capitalizes cannot be added to its basis in the property to figure cost depletion. H&r tax software However, the amount amortized is treated as additional depreciation and is subject to recapture as ordinary income on a disposition of the property. H&r tax software See Section 1250 Property under Depreciation Recapture in chapter 3 of Publication 544. H&r tax software   These rules also apply to the deduction of development costs by corporations. H&r tax software See Development Costs , later. H&r tax software Recapture of exploration expenses. H&r tax software   When your mine reaches the producing stage, you must recapture any exploration costs you elected to deduct. H&r tax software Use either of the following methods. H&r tax software Method 1—Include the deducted costs in gross income for the tax year the mine reaches the producing stage. H&r tax software Your election must be clearly indicated on the return. H&r tax software Increase your adjusted basis in the mine by the amount included in income. H&r tax software Generally, you must elect this recapture method by the due date (including extensions) of your return. H&r tax software However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). H&r tax software Make the election on your amended return and write “Filed pursuant to section 301. H&r tax software 9100-2” on the form where you are including the income. H&r tax software File the amended return at the same address you filed the original return. H&r tax software Method 2—Do not claim any depletion deduction for the tax year the mine reaches the producing stage and any later tax years until the depletion you would have deducted equals the exploration costs you deducted. H&r tax software   You also must recapture deducted exploration costs if you receive a bonus or royalty from mine property before it reaches the producing stage. H&r tax software Do not claim any depletion deduction for the tax year you receive the bonus or royalty and any later tax years until the depletion you would have deducted equals the exploration costs you deducted. H&r tax software   Generally, if you dispose of the mine before you have fully recaptured the exploration costs you deducted, recapture the balance by treating all or part of your gain as ordinary income. H&r tax software Under these circumstances, you generally treat as ordinary income all of your gain if it is less than your adjusted exploration costs with respect to the mine. H&r tax software If your gain is more than your adjusted exploration costs, treat as ordinary income only a part of your gain, up to the amount of your adjusted exploration costs. H&r tax software Foreign exploration costs. H&r tax software   If you pay or incur exploration costs for a mine or other natural deposit located outside the United States, you cannot deduct all the costs in the current year. H&r tax software You can elect to include the costs (other than for an oil, gas, or geothermal well) in the adjusted basis of the mineral property to figure cost depletion. H&r tax software (Cost depletion is discussed in chapter 9 . H&r tax software ) If you do not make this election, you must deduct the costs over the 10-year period beginning with the tax year in which you pay or incur them. H&r tax software These rules also apply to foreign development costs. H&r tax software Development Costs You can deduct costs paid or incurred during the tax year for developing a mine or any other natural deposit (other than an oil or gas well) located in the United States. H&r tax software These costs must be paid or incurred after the discovery of ores or minerals in commercially marketable quantities. H&r tax software Development costs also include depreciation on improvements used in the development of ores or minerals and costs incurred for you by a contractor. H&r tax software Development costs do not include the costs for the acquisition or improvement of depreciable property. H&r tax software Instead of deducting development costs in the year paid or incurred, you can elect to treat the cost as deferred expenses and deduct them ratably as the units of produced ores or minerals benefited by the expenses are sold. H&r tax software This election applies each tax year to expenses paid or incurred in that year. H&r tax software Once made, the election is binding for the year and cannot be revoked for any reason. H&r tax software How to make the election. H&r tax software   The election to deduct development costs ratably as the ores or minerals are sold must be made for each mine or other natural deposit by a clear indication on your return or by a statement filed with the IRS office where you file your return. H&r tax software Generally, you must make the election by the due date of the return (including extensions). H&r tax software However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). H&r tax software Clearly indicate the election on your amended return and write “Filed pursuant to section 301. H&r tax software 9100-2. H&r tax software ” File the amended return at the same address you filed the original return. H&r tax software Foreign development costs. H&r tax software   The rules discussed earlier for foreign exploration costs apply to foreign development costs. H&r tax software Reduced corporate deductions for development costs. H&r tax software   The rules discussed earlier for reduced corporate deductions for exploration costs also apply to corporate deductions for development costs. H&r tax software Circulation Costs A publisher can deduct as a current business expense the costs of establishing, maintaining, or increasing the circulation of a newspaper, magazine, or other periodical. H&r tax software For example, a publisher can deduct the cost of hiring extra employees for a limited time to get new subscriptions through telephone calls. H&r tax software Circulation costs are deductible even if they normally would be capitalized. H&r tax software This rule does not apply to the following costs that must be capitalized. H&r tax software The purchase of land or depreciable property. H&r tax software The acquisition of circulation through the purchase of any part of the business of another publisher of a newspaper, magazine, or other periodical, including the purchase of another publisher's list of subscribers. H&r tax software Other treatment of circulation costs. H&r tax software   If you do not want to deduct circulation costs as a current business expense, you can elect one of the following ways to recover these costs. H&r tax software Capitalize all circulation costs that are properly chargeable to a capital account (see chapter 1 ). H&r tax software Amortize circulation costs over the 3-year period beginning with the tax year they were paid or incurred. H&r tax software How to make the election. H&r tax software   You elect to capitalize circulation costs by attaching a statement to your return for the first tax year the election applies. H&r tax software Your election is binding for the year it is made and for all later years, unless you get IRS approval to revoke it. H&r tax software Business Start-Up and Organizational Costs Business start-up and organizational costs are generally capital expenditures. H&r tax software However, you can elect to deduct up to $5,000 of business start-up and $5,000 of organizational costs paid or incurred after October 22, 2004. H&r tax software The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. H&r tax software Any remaining costs must be amortized. H&r tax software For information about amortizing start-up and organizational costs, see chapter 8 . H&r tax software Start-up costs include any amounts paid or incurred in connection with creating an active trade or business or investigating the creation or acquisition of an active trade or business. H&r tax software Organizational costs include the costs of creating a corporation. H&r tax software For more information on start-up and organizational costs, see chapter 8 . H&r tax software How to make the election. H&r tax software   You elect to deduct the start-up or organizational costs by claiming the deduction on your income tax return (filed by the due date including extensions) for the tax year in which the active trade or business begins. H&r tax software However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). H&r tax software Clearly indicate the election on your amended return and write “Filed pursuant to section 301. H&r tax software 9100-2. H&r tax software ” File the amended return at the same address you filed the original return. H&r tax software The election applies when computing taxable income for the current tax year and all subsequent years. H&r tax software Reforestation Costs Reforestation costs are generally capital expenditures. H&r tax software However, you can elect to deduct up to $10,000 ($5,000 if married filing separately; $0 for a trust) of qualifying reforestation costs paid or incurred after October 22, 2004, for each qualified timber property. H&r tax software The remaining costs can be amortized over an 84-month period. H&r tax software For information about amortizing reforestation costs, see chapter 8 . H&r tax software Qualifying reforestation costs are the direct costs of planting or seeding for forestation or reforestation. H&r tax software Qualified timber property is property that contains trees in significant commercial quantities. H&r tax software See chapter 8 for more information on qualifying reforestation costs and qualified timber property. H&r tax software If you elect to deduct qualified reforestation costs, create and maintain separate timber accounts for each qualified timber property and include all reforestation costs and the dates each was applied. H&r tax software Do not include this qualified timber property in any account (for example, depletion block) for which depletion is allowed. H&r tax software How to make the election. H&r tax software   You elect to deduct qualifying reforestation costs by claiming the deduction on your timely filed income tax return (including extensions) for the tax year the expenses were paid or incurred. H&r tax software If Form T (Timber), Forest Activities Schedule, is required, complete Part IV of Form T. H&r tax software If Form T is not required, attach a statement containing the following information for each qualified timber property for which an election is being made. H&r tax software The unique stand identification numbers. H&r tax software The total number of acres reforested during the tax year. H&r tax software The nature of the reforestation treatments. H&r tax software The total amounts of qualified reforestation expenditures eligible to be amortized or deducted. H&r tax software   If you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). H&r tax software Clearly indicate the election on your amended return and write “Filed pursuant to section 301. H&r tax software 9100-2. H&r tax software ” File the amended return at the same address you filed the original return. H&r tax software The election applies when computing taxable income for the current tax year and all subsequent years. H&r tax software   For additional information on reforestation costs, see chapter 8 . H&r tax software Recapture. H&r tax software   This deduction may have to be recaptured as ordinary income under section 1245 when you sell or otherwise dispose of the property that would have received an addition to basis if you had not elected to deduct the expenditure. H&r tax software For more information on recapturing the deduction, see Depreciation Recapture in Publication 544. H&r tax software Retired Asset Removal Costs If you retire and remove a depreciable asset in connection with the installation or production of a replacement asset, you can deduct the costs of removing the retired asset. H&r tax software However, if you replace a component (part) of a depreciable asset, capitalize the removal costs if the replacement is an improvement and deduct the costs if the replacement is a repair. H&r tax software Barrier Removal Costs The cost of an improvement to a business asset is normally a capital expense. H&r tax software However, you can elect to deduct the costs of making a facility or public transportation vehicle more accessible to and usable by those who are disabled or elderly. H&r tax software You must own or lease the facility or vehicle for use in connection with your trade or business. H&r tax software A facility is all or any part of buildings, structures, equipment, roads, walks, parking lots, or similar real or personal property. H&r tax software A public transportation vehicle is a vehicle, such as a bus or railroad car, that provides transportation service to the public (including service for your customers, even if you are not in the business of providing transportation services). H&r tax software You cannot deduct any costs that you paid or incurred to completely renovate or build a facility or public transportation vehicle or to replace depreciable property in the normal course of business. H&r tax software Deduction limit. H&r tax software   The most you can deduct as a cost of removing barriers to the disabled and the elderly for any tax year is $15,000. H&r tax software However, you can add any costs over this limit to the basis of the property and depreciate these excess costs. H&r tax software Partners and partnerships. H&r tax software   The $15,000 limit applies to a partnership and also to each partner in the partnership. H&r tax software A partner can allocate the $15,000 limit in any manner among the partner's individually incurred costs and the partner's distributive share of partnership costs. H&r tax software If the partner cannot deduct the entire share of partnership costs, the partnership can add any costs not deducted to the basis of the improved property. H&r tax software   A partnership must be able to show that any amount added to basis was not deducted by the partner and that it was over a partner's $15,000 limit (as determined by the partner). H&r tax software If the partnership cannot show this, it is presumed that the partner was able to deduct the distributive share of the partnership's costs in full. H&r tax software Example. H&r tax software Emilio Azul's distributive share of ABC partnership's deductible expenses for the removal of architectural barriers was $14,000. H&r tax software Emilio had $12,000 of similar expenses in his sole proprietorship. H&r tax software He elected to deduct $7,000 of them. H&r tax software Emilio allocated the remaining $8,000 of the $15,000 limit to his share of ABC's expenses. H&r tax software Emilio can add the excess $5,000 of his own expenses to the basis of the property used in his business. H&r tax software Also, if ABC can show that Emilio could not deduct $6,000 ($14,000 – $8,000) of his share of the partnership's expenses because of how Emilio applied the limit, ABC can add $6,000 to the basis of its property. H&r tax software Qualification standards. H&r tax software   You can deduct your costs as a current expense only if the barrier removal meets the guidelines and requirements issued by the Architectural and Transportation Barriers Compliance Board under the Americans with Disabilities Act (ADA) of 1990. H&r tax software You can view the Americans with Disabilities Act at www. H&r tax software ada. H&r tax software gov/pubs/ada. H&r tax software htm. H&r tax software   The following is a list of some architectural barrier removal costs that can be deducted. H&r tax software Ground and floor surfaces. H&r tax software Walks. H&r tax software Parking lots. H&r tax software Ramps. H&r tax software Entrances. H&r tax software Doors and doorways. H&r tax software Stairs. H&r tax software Floors. H&r tax software Toilet rooms. H&r tax software Water fountains. H&r tax software Public telephones. H&r tax software Elevators. H&r tax software Controls. H&r tax software Signage. H&r tax software Alarms. H&r tax software Protruding objects. H&r tax software Symbols of accessibility. H&r tax software You can find the ADA guidelines and requirements for architectural barrier removal at www. H&r tax software usdoj. H&r tax software gov/crt/ada/reg3a. H&r tax software html. H&r tax software   The costs for removal of transportation barriers from rail facilities, buses, and rapid and light rail vehicles are deductible. H&r tax software You can find the guidelines and requirements for transportation barrier removal at www. H&r tax software fta. H&r tax software dot. H&r tax software gov. H&r tax software   Also, you can access the ADA website at www. H&r tax software ada. H&r tax software gov for additional information. H&r tax software Other barrier removals. H&r tax software   To be deductible, expenses of removing any barrier not covered by the above standards must meet all three of the following tests. H&r tax software The removed barrier must be a substantial barrier to access or use of a facility or public transportation vehicle by persons who have a disability or are elderly. H&r tax software The removed barrier must have been a barrier for at least one major group of persons who have a disability or are elderly (such as people who are blind, deaf, or wheelchair users). H&r tax software The barrier must be removed without creating any new barrier that significantly impairs access to or use of the facility or vehicle by a major group of persons who have a disability or are elderly. H&r tax software How to make the election. H&r tax software   If you elect to deduct your costs for removing barriers to the disabled or the elderly, claim the deduction on your income tax return (partnership return for partnerships) for the tax year the expenses were paid or incurred. H&r tax software Identify the deduction as a separate item. H&r tax software The election applies to all the qualifying costs you have during the year, up to the $15,000 limit. H&r tax software If you make this election, you must maintain adequate records to support your deduction. H&r tax software   For your election to be valid, you generally must file your return by its due date, including extensions. H&r tax software However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). H&r tax software Clearly indicate the election on your amended return and write “Filed pursuant to section 301. H&r tax software 9100-2. H&r tax software ” File the amended return at the same address you filed the original return. H&r tax software Your election is irrevocable after the due date, including extensions, of your return. H&r tax software Disabled access credit. H&r tax software   If you make your business accessible to persons with disabilities and your business is an eligible small business, you may be able to claim the disabled access credit. H&r tax software If you choose to claim the credit, you must reduce the amount you deduct or capitalize by the amount of the credit. H&r tax software   For more information, see Form 8826, Disabled Access Credit. H&r tax software Film and Television Production Costs Film and television production costs are generally capital expenses. H&r tax software However, you can elect to deduct costs paid or incurred for certain productions commencing before January 1, 2014. H&r tax software For more information, see section 181 of the Internal Revenue Code and the related Treasury Regulations. H&r tax software Prev  Up  Next   Home   More Online Publications