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How To Amend A 2012 Tax Return

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How To Amend A 2012 Tax Return

How to amend a 2012 tax return 3. How to amend a 2012 tax return   Investment Expenses Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Limits on DeductionsPassive activity. How to amend a 2012 tax return Other income (nonpassive income). How to amend a 2012 tax return Expenses. How to amend a 2012 tax return Additional information. How to amend a 2012 tax return Interest ExpensesInvestment Interest Limit on Deduction Bond Premium AmortizationSpecial rules to determine amounts payable on a bond. How to amend a 2012 tax return Basis. How to amend a 2012 tax return How To Figure Amortization Choosing To Amortize How To Report Amortization Expenses of Producing IncomeFees to buy or sell. How to amend a 2012 tax return Including mutual fund or REMIC expenses in income. How to amend a 2012 tax return Nondeductible ExpensesUsed as collateral. How to amend a 2012 tax return Short-sale expenses. How to amend a 2012 tax return Expenses for both tax-exempt and taxable income. How to amend a 2012 tax return State income taxes. How to amend a 2012 tax return Nondeductible amount. How to amend a 2012 tax return Basis adjustment. How to amend a 2012 tax return How To Report Investment Expenses When To Report Investment Expenses Topics - This chapter discusses: Limits on Deductions , Interest Expenses , Bond Premium Amortization , Expenses of Producing Income , Nondeductible Expenses , How To Report Investment Expenses , and When To Report Investment Expenses . How to amend a 2012 tax return Useful Items - You may want to see: Publication 535 Business Expenses 925 Passive Activity and At-Risk Rules 929 Tax Rules for Children and Dependents Form (and Instructions) Schedule A (Form 1040) Itemized Deductions 4952 Investment Interest Expense Deduction See chapter 5, How To Get Tax Help , for information about getting these publications and forms. How to amend a 2012 tax return Limits on Deductions Your deductions for investment expenses may be limited by: The at-risk rules, The passive activity loss limits, The limit on investment interest, or The 2% limit on certain miscellaneous itemized deductions. How to amend a 2012 tax return The at-risk rules and passive activity rules are explained briefly in this section. How to amend a 2012 tax return The limit on investment interest is explained later in this chapter under Interest Expenses . How to amend a 2012 tax return The 2% limit is explained later in this chapter under Expenses of Producing Income . How to amend a 2012 tax return At-risk rules. How to amend a 2012 tax return   Special at-risk rules apply to most income-producing activities. How to amend a 2012 tax return These rules limit the amount of loss you can deduct to the amount you risk losing in the activity. How to amend a 2012 tax return Generally, this is the cash and the adjusted basis of property you contribute to the activity. How to amend a 2012 tax return It also includes money you borrow for use in the activity if you are personally liable for repayment or if you use property not used in the activity as security for the loan. How to amend a 2012 tax return For more information, see Publication 925. How to amend a 2012 tax return Passive activity losses and credits. How to amend a 2012 tax return   The amount of losses and tax credits you can claim from passive activities is limited. How to amend a 2012 tax return Generally, you are allowed to deduct passive activity losses only up to the amount of your passive activity income. How to amend a 2012 tax return Also, you can use credits from passive activities only against tax on the income from passive activities. How to amend a 2012 tax return There are exceptions for certain activities, such as rental real estate activities. How to amend a 2012 tax return Passive activity. How to amend a 2012 tax return   A passive activity generally is any activity involving the conduct of any trade or business in which you do not materially participate and any rental activity. How to amend a 2012 tax return However, if you are involved in renting real estate, the activity is not a passive activity if both of the following are true. How to amend a 2012 tax return More than one-half of the personal services you perform during the year in all trades or businesses are performed in real property trades or businesses in which you materially participate. How to amend a 2012 tax return You perform more than 750 hours of services during the year in real property trades or businesses in which you materially participate. How to amend a 2012 tax return  The term “trade or business” generally means any activity that involves the conduct of a trade or business, is conducted in anticipation of starting a trade or business, or involves certain research or experimental expenditures. How to amend a 2012 tax return However, it does not include rental activities or certain activities treated as incidental to holding property for investment. How to amend a 2012 tax return   You are considered to materially participate in an activity if you are involved on a regular, continuous, and substantial basis in the operations of the activity. How to amend a 2012 tax return Other income (nonpassive income). How to amend a 2012 tax return    Generally, you can use losses from passive activities only to offset income from passive activities. How to amend a 2012 tax return You cannot use passive activity losses to offset your other income, such as your wages or your portfolio income. How to amend a 2012 tax return Portfolio income includes gross income from interest, dividends, annuities, or royalties that is not derived in the ordinary course of a trade or business. How to amend a 2012 tax return It also includes gains or losses (not derived in the ordinary course of a trade or business) from the sale or trade of property (other than an interest in a passive activity) producing portfolio income or held for investment. How to amend a 2012 tax return This includes capital gain distributions from mutual funds (and other regulated investment companies) and real estate investment trusts. How to amend a 2012 tax return   You cannot use passive activity losses to offset Alaska Permanent Fund dividends. How to amend a 2012 tax return Expenses. How to amend a 2012 tax return   Do not include in the computation of your passive activity income or loss: Expenses (other than interest) that are clearly and directly allocable to your portfolio income, or Interest expense properly allocable to portfolio income. How to amend a 2012 tax return However, this interest and other expenses may be subject to other limits. How to amend a 2012 tax return These limits are explained in the rest of this chapter. How to amend a 2012 tax return Additional information. How to amend a 2012 tax return   For more information about determining and reporting income and losses from passive activities, see Publication 925. How to amend a 2012 tax return Interest Expenses This section discusses interest expenses you may be able to deduct as an investor. How to amend a 2012 tax return For information on business interest, see chapter 4 of Publication 535. How to amend a 2012 tax return You cannot deduct personal interest expenses other than qualified home mortgage interest, as explained in Publication 936, Home Mortgage Interest Deduction, and interest on certain student loans, as explained in Publication 970. How to amend a 2012 tax return Investment Interest If you borrow money to buy property you hold for investment, the interest you pay is investment interest. How to amend a 2012 tax return You can deduct investment interest subject to the limit discussed later. How to amend a 2012 tax return However, you cannot deduct interest you incurred to produce tax-exempt income. How to amend a 2012 tax return See Tax-exempt income under Nondeductible Expenses, later. How to amend a 2012 tax return You also cannot deduct interest expenses on straddles discussed under Interest expense and carrying charges on straddles , later. How to amend a 2012 tax return Investment interest does not include any qualified home mortgage interest or any interest taken into account in computing income or loss from a passive activity. How to amend a 2012 tax return Investment property. How to amend a 2012 tax return   Property held for investment includes property that produces interest, dividends, annuities, or royalties not derived in the ordinary course of a trade or business. How to amend a 2012 tax return It also includes property that produces gain or loss (not derived in the ordinary course of a trade or business) from the sale or trade of property producing these types of income or held for investment (other than an interest in a passive activity). How to amend a 2012 tax return Investment property also includes an interest in a trade or business activity in which you did not materially participate (other than a passive activity). How to amend a 2012 tax return Partners, shareholders, and beneficiaries. How to amend a 2012 tax return   To determine your investment interest, combine your share of investment interest from a partnership, S corporation, estate, or trust with your other investment interest. How to amend a 2012 tax return Allocation of Interest Expense If you borrow money for business or personal purposes as well as for investment, you must allocate the debt among those purposes. How to amend a 2012 tax return Only the interest expense on the part of the debt used for investment purposes is treated as investment interest. How to amend a 2012 tax return The allocation is not affected by the use of property that secures the debt. How to amend a 2012 tax return Example 1. How to amend a 2012 tax return You borrow $10,000 and use $8,000 to buy stock. How to amend a 2012 tax return You use the other $2,000 to buy items for your home. How to amend a 2012 tax return Since 80% of the debt is used for, and allocated to, investment purposes, 80% of the interest on that debt is investment interest. How to amend a 2012 tax return The other 20% is nondeductible personal interest. How to amend a 2012 tax return Debt proceeds received in cash. How to amend a 2012 tax return   If you receive debt proceeds in cash, the proceeds are generally not treated as investment property. How to amend a 2012 tax return Debt proceeds deposited in account. How to amend a 2012 tax return   If you deposit debt proceeds in an account, that deposit is treated as investment property, regardless of whether the account bears interest. How to amend a 2012 tax return But, if you withdraw the funds and use them for another purpose, you must reallocate the debt to determine the amount considered to be for investment purposes. How to amend a 2012 tax return Example 2. How to amend a 2012 tax return Assume in Example 1 that you borrowed the money on March 1 and immediately bought the stock for $8,000. How to amend a 2012 tax return You did not buy the household items until June 1. How to amend a 2012 tax return You had deposited the $2,000 in the bank. How to amend a 2012 tax return You had no other transactions on the bank account until June. How to amend a 2012 tax return You did not sell the stock, and you made no principal payments on the debt. How to amend a 2012 tax return You paid interest from another account. How to amend a 2012 tax return The $8,000 is treated as being used for an investment purpose. How to amend a 2012 tax return The $2,000 is treated as being used for an investment purpose for the 3-month period. How to amend a 2012 tax return Your total interest expense for 3 months on this debt is investment interest. How to amend a 2012 tax return In June, when you spend the $2,000 for household items, you must begin to allocate 80% of the debt and the interest expense to investment purposes and 20% to personal purposes. How to amend a 2012 tax return Amounts paid within 30 days. How to amend a 2012 tax return   If you receive loan proceeds in cash or if the loan proceeds are deposited in an account, you can treat any payment (up to the amount of the proceeds) made from any account you own, or from cash, as made from those proceeds. How to amend a 2012 tax return This applies to any payment made within 30 days before or after the proceeds are received in cash or deposited in your account. How to amend a 2012 tax return   If you received the loan proceeds in cash, you can treat the payment as made on the date you received the cash instead of the date you actually made the payment. How to amend a 2012 tax return Payments on debt may require new allocation. How to amend a 2012 tax return   As you repay a debt used for more than one purpose, you must reallocate the balance. How to amend a 2012 tax return You must first reduce the amount allocated to personal purposes by the repayment. How to amend a 2012 tax return You then reallocate the rest of the debt to find what part is for investment purposes. How to amend a 2012 tax return Example 3. How to amend a 2012 tax return If, in Example 2 , you repay $500 on November 1, the entire repayment is applied against the amount allocated to personal purposes. How to amend a 2012 tax return The debt balance is now allocated as $8,000 for investment purposes and $1,500 for personal purposes. How to amend a 2012 tax return Until the next reallocation is necessary, 84% ($8,000 ÷ $9,500) of the debt and the interest expense is allocated to investment. How to amend a 2012 tax return Pass-through entities. How to amend a 2012 tax return   If you use borrowed funds to buy an interest in a partnership or S corporation, then the interest on those funds must be allocated based on the assets of the entity. How to amend a 2012 tax return If you contribute to the capital of the entity, you can make the allocation using any reasonable method. How to amend a 2012 tax return Additional allocation rules. How to amend a 2012 tax return   For more information about allocating interest expense, see chapter 4 of Publication 535. How to amend a 2012 tax return When To Deduct Investment Interest If you use the cash method of accounting, you must pay the interest before you can deduct it. How to amend a 2012 tax return If you use an accrual method of accounting, you can deduct interest over the period it accrues, regardless of when you pay it. How to amend a 2012 tax return For an exception, see Unpaid expenses owed to related party under When To Report Investment Expenses, later in this chapter. How to amend a 2012 tax return Example. How to amend a 2012 tax return You borrowed $1,000 on August 26, 2013, payable in 90 days at 12% interest. How to amend a 2012 tax return On November 26, 2013, you paid this with a new note for $1,030, due on February 26, 2014. How to amend a 2012 tax return If you use the cash method of accounting, you cannot deduct any part of the $30 interest on your return for 2013 because you did not actually pay it. How to amend a 2012 tax return If you use an accrual method, you may be able to deduct a portion of the interest on the loans through December 31, 2013, on your return for 2013. How to amend a 2012 tax return Interest paid in advance. How to amend a 2012 tax return   Generally, if you pay interest in advance for a period that goes beyond the end of the tax year, you must spread the interest over the tax years to which it belongs under the OID rules discussed in chapter 1. How to amend a 2012 tax return You can deduct in each year only the interest for that year. How to amend a 2012 tax return Interest on margin accounts. How to amend a 2012 tax return   If you are a cash method taxpayer, you can deduct interest on margin accounts to buy taxable securities as investment interest in the year you paid it. How to amend a 2012 tax return You are considered to have paid interest on these accounts only when you actually pay the broker or when payment becomes available to the broker through your account. How to amend a 2012 tax return Payment may become available to the broker through your account when the broker collects dividends or interest for your account, or sells securities held for you or received from you. How to amend a 2012 tax return   You cannot deduct any interest on money borrowed for personal reasons. How to amend a 2012 tax return Limit on interest deduction for market discount bonds. How to amend a 2012 tax return   The amount you can deduct for interest expense you paid or accrued during the year to buy or carry a market discount bond may be limited. How to amend a 2012 tax return This limit does not apply if you accrue the market discount and include it in your income currently. How to amend a 2012 tax return   Under this limit, the interest is deductible only to the extent it is more than: The total interest and OID includible in gross income for the bond for the year, plus The market discount for the number of days you held the bond during the year. How to amend a 2012 tax return Figure the amount in (2) above using the rules for figuring accrued market discount in chapter 1 under Market Discount Bonds . How to amend a 2012 tax return Interest not deducted due to limit. How to amend a 2012 tax return   In the year you dispose of the bond, you can deduct any interest expense you were not allowed to deduct in earlier years because of the limit. How to amend a 2012 tax return Choosing to deduct disallowed interest expense before the year of disposition. How to amend a 2012 tax return   You can choose to deduct disallowed interest expense in any year before the year you dispose of the bond, up to your net interest income from the bond during the year. How to amend a 2012 tax return The rest of the disallowed interest expense remains deductible in the year you dispose of the bond. How to amend a 2012 tax return Net interest income. How to amend a 2012 tax return   This is the interest income (including OID) from the bond that you include in income for the year, minus the interest expense paid or accrued during the year to purchase or carry the bond. How to amend a 2012 tax return Limit on interest deduction for short-term obligations. How to amend a 2012 tax return   If the current income inclusion rules discussed in chapter 1 under Discount on Short-Term Obligations do not apply to you, the amount you can deduct for interest expense you paid or accrued during the year to buy or carry a short-term obligation is limited. How to amend a 2012 tax return   The interest is deductible only to the extent it is more than: The amount of acquisition discount or OID on the obligation for the tax year, plus The amount of any interest payable on the obligation for the year that is not included in income because of your accounting method (other than interest taken into account in determining the amount of acquisition discount or OID). How to amend a 2012 tax return The method of determining acquisition discount and OID for short-term obligations is discussed in chapter 1 under Discount on Short-Term Obligations . How to amend a 2012 tax return Interest not deducted due to limit. How to amend a 2012 tax return   In the year you dispose of the obligation, or, if you choose, in another year in which you have net interest income from the obligation, you can deduct any interest expense you were not allowed to deduct for an earlier year because of the limit. How to amend a 2012 tax return Follow the same rules provided in the earlier discussion under Limit on interest deduction for market discount bonds , earlier. How to amend a 2012 tax return Limit on Deduction Generally, your deduction for investment interest expense is limited to your net investment income. How to amend a 2012 tax return You can carry over the amount of investment interest you could not deduct because of this limit to the next tax year. How to amend a 2012 tax return The interest carried over is treated as investment interest paid or accrued in that next year. How to amend a 2012 tax return You can carry over disallowed investment interest to the next tax year even if it is more than your taxable income in the year the interest was paid or accrued. How to amend a 2012 tax return Net Investment Income Determine the amount of your net investment income by subtracting your investment expenses (other than interest expense) from your investment income. How to amend a 2012 tax return Investment income. How to amend a 2012 tax return   This generally includes your gross income from property held for investment (such as interest, dividends, annuities, and royalties). How to amend a 2012 tax return Investment income does not include Alaska Permanent Fund dividends. How to amend a 2012 tax return It also does not include qualified dividends or net capital gain unless you choose to include them. How to amend a 2012 tax return Choosing to include qualified dividends. How to amend a 2012 tax return   Investment income generally does not include qualified dividends, discussed in chapter 1. How to amend a 2012 tax return However, you can choose to include all or part of your qualified dividends in investment income. How to amend a 2012 tax return   You make this choice by completing Form 4952, line 4g, according to its instructions. How to amend a 2012 tax return   If you choose to include any of your qualified dividends in investment income, you must reduce your qualified dividends that are eligible for the lower capital gains tax rates by the same amount. How to amend a 2012 tax return Choosing to include net capital gain. How to amend a 2012 tax return    Investment income generally does not include net capital gain from disposing of investment property (including capital gain distributions from mutual funds). How to amend a 2012 tax return However, you can choose to include all or part of your net capital gain in investment income. How to amend a 2012 tax return   You make this choice by completing Form 4952, line 4g, according to its instructions. How to amend a 2012 tax return   If you choose to include any of your net capital gain in investment income, you must reduce your net capital gain that is eligible for the lower capital gains tax rates by the same amount. How to amend a 2012 tax return   For more information about the capital gains rates, see Capital Gain Tax Rates in chapter 4. How to amend a 2012 tax return    Before making either choice, consider the overall effect on your tax liability. How to amend a 2012 tax return Compare your tax if you make one or both of these choices with your tax if you do not. How to amend a 2012 tax return Investment income of child reported on parent's return. How to amend a 2012 tax return   Investment income includes the part of your child's interest and dividend income you choose to report on your return. How to amend a 2012 tax return If the child does not have qualified dividends, Alaska Permanent Fund dividends, or capital gain distributions, this is the amount on line 6 of Form 8814. How to amend a 2012 tax return Include it on line 4a of Form 4952. How to amend a 2012 tax return Example. How to amend a 2012 tax return Your 8-year-old son has interest income of $2,200, which you choose to report on your own return. How to amend a 2012 tax return You enter $2,200 on Form 8814, lines 1a and 4, and $200 on lines 6 and 12 and complete Part II. How to amend a 2012 tax return Also enter $200 on Form 1040, line 21. How to amend a 2012 tax return Your investment income includes this $200. How to amend a 2012 tax return Child's qualified dividends. How to amend a 2012 tax return   If part of the amount you report is your child's qualified dividends, that part (which is reported on Form 1040, line 9b) generally does not count as investment income. How to amend a 2012 tax return However, you can choose to include all or part of it in investment income, as explained under Choosing to include qualified dividends , earlier. How to amend a 2012 tax return   Your investment income also includes the amount on Form 8814, line 12 (or, if applicable, the reduced amount figured next under Child's Alaska Permanent Fund dividends). How to amend a 2012 tax return Child's Alaska Permanent Fund dividends. How to amend a 2012 tax return   If part of the amount you report is your child's Alaska Permanent Fund dividends, that part does not count as investment income. How to amend a 2012 tax return To figure the amount of your child's income that you can consider your investment income, start with the amount on Form 8814, line 6. How to amend a 2012 tax return Multiply that amount by a percentage that is equal to the Alaska Permanent Fund dividends divided by the total amount on Form 8814, line 4. How to amend a 2012 tax return Subtract the result from the amount on Form 8814, line 12. How to amend a 2012 tax return Example. How to amend a 2012 tax return Your 10-year-old child has taxable interest income of $4,000 and Alaska Permanent Fund dividends of $2,000. How to amend a 2012 tax return You choose to report this on your return. How to amend a 2012 tax return You enter $4,000 on Form 8814, line 1a, $2,000 on line 2a, and $6,000 on line 4. How to amend a 2012 tax return You then enter $4,000 on Form 8814, lines 6 and 12, and Form 1040, line 21. How to amend a 2012 tax return You figure the amount of your child's income that you can consider your investment income as follows: $4,000 − ($4,000 × ($2,000 ÷ $6,000)) = $2,667 You include the result, $2,667, on Form 4952, line 4a. How to amend a 2012 tax return Child's capital gain distributions. How to amend a 2012 tax return   If part of the amount you report is your child's capital gain distributions, that part (which is reported on Schedule D (Form 1040), line 13, or Form 1040, line 13) generally does not count as investment income. How to amend a 2012 tax return However, you can choose to include all or part of it in investment income, as explained in Choosing to include net capital gain , earlier. How to amend a 2012 tax return   Your investment income also includes the amount on Form 8814, line 12 (or, if applicable, the reduced amount figured under Child's Alaska Permanent Fund dividends , earlier). How to amend a 2012 tax return Investment expenses. How to amend a 2012 tax return   Investment expenses are your allowed deductions (other than interest expense) directly connected with the production of investment income. How to amend a 2012 tax return Investment expenses that are included as a miscellaneous itemized deduction on Schedule A (Form 1040) are allowable deductions after applying the 2% limit that applies to miscellaneous itemized deductions. How to amend a 2012 tax return Use the smaller of: The investment expenses included on Schedule A (Form 1040), line 23, or The amount on Schedule A (Form 1040), line 27. How to amend a 2012 tax return See Expenses of Producing Income , later, for a discussion of the 2% limit. How to amend a 2012 tax return Losses from passive activities. How to amend a 2012 tax return   Income or expenses that you used in computing income or loss from a passive activity are not included in determining your investment income or investment expenses (including investment interest expense). How to amend a 2012 tax return See Publication 925 for information about passive activities. How to amend a 2012 tax return Example. How to amend a 2012 tax return Ted is a partner in a partnership that operates a business. How to amend a 2012 tax return However, he does not materially participate in the partnership's business. How to amend a 2012 tax return Ted's interest in the partnership is considered a passive activity. How to amend a 2012 tax return Ted's investment income from interest and dividends (other than qualified dividends) is $10,000. How to amend a 2012 tax return His investment expenses (other than interest) are $3,200 after taking into account the 2% limit on miscellaneous itemized deductions. How to amend a 2012 tax return His investment interest expense is $8,000. How to amend a 2012 tax return Ted also has income from the partnership of $2,000. How to amend a 2012 tax return Ted figures his net investment income and the limit on his investment interest expense deduction in the following way: Total investment income $10,000 Minus: Investment expenses (other than interest) 3,200 Net investment income $6,800 Deductible investment interest expense for the year $6,800 The $2,000 of income from the passive activity is not used in determining Ted's net investment income. How to amend a 2012 tax return His investment interest deduction for the year is limited to $6,800, the amount of his net investment income. How to amend a 2012 tax return Form 4952 Use Form 4952 to figure your deduction for investment interest. How to amend a 2012 tax return See Form 4952 for more information. How to amend a 2012 tax return Exception to use of Form 4952. How to amend a 2012 tax return   You do not have to complete Form 4952 or attach it to your return if you meet all of the following tests. How to amend a 2012 tax return Your investment interest expense is not more than your investment income from interest and ordinary dividends minus any qualified dividends. How to amend a 2012 tax return You do not have any other deductible investment expenses. How to amend a 2012 tax return You have no carryover of investment interest expense from 2012. How to amend a 2012 tax return   If you meet all of these tests, you can deduct all of your investment interest. How to amend a 2012 tax return    Bond Premium Amortization If you pay a premium to buy a bond, the premium is part of your basis in the bond. How to amend a 2012 tax return If the bond yields taxable interest, you can choose to amortize the premium. How to amend a 2012 tax return This generally means that each year, over the life of the bond, you use a part of the premium to reduce the amount of interest includible in your income. How to amend a 2012 tax return If you make this choice, you must reduce your basis in the bond by the amortization for the year. How to amend a 2012 tax return If the bond yields tax-exempt interest, you must amortize the premium. How to amend a 2012 tax return This amortized amount is not deductible in determining taxable income. How to amend a 2012 tax return However, each year you must reduce your basis in the bond (and tax-exempt interest otherwise reportable on Form 1040, line 8b) by the amortization for the year. How to amend a 2012 tax return Bond premium. How to amend a 2012 tax return   Bond premium is the amount by which your basis in the bond right after you get it is more than the total of all amounts payable on the bond after you get it (other than payments of qualified stated interest). How to amend a 2012 tax return For example, a bond with a maturity value of $1,000 generally would have a $50 premium if you buy it for $1,050. How to amend a 2012 tax return Special rules to determine amounts payable on a bond. How to amend a 2012 tax return   For special rules that apply to determine the amounts payable on a variable rate bond, an inflation-indexed debt instrument, a bond that provides for certain alternative payment schedules (for example, a bond callable prior to the stated maturity date of the bond), or a bond that provides for remote or incidental contingencies, see Regulations section 1. How to amend a 2012 tax return 171-3. How to amend a 2012 tax return Basis. How to amend a 2012 tax return   In general, your basis for figuring bond premium amortization is the same as your basis for figuring any loss on the sale of the bond. How to amend a 2012 tax return However, you may need to use a different basis for: Convertible bonds, Bonds you got in a trade, and Bonds whose basis has to be determined using the basis of the person who transferred the bond to you. How to amend a 2012 tax return See Regulations section 1. How to amend a 2012 tax return 171-1(e). How to amend a 2012 tax return Dealers. How to amend a 2012 tax return   A dealer in taxable bonds (or anyone who holds them mainly for sale to customers in the ordinary course of a trade or business or who would properly include bonds in inventory at the close of the tax year) cannot claim a deduction for amortizable bond premium. How to amend a 2012 tax return   See section 75 of the Internal Revenue Code for the treatment of bond premium by a dealer in tax-exempt bonds. How to amend a 2012 tax return How To Figure Amortization For bonds issued after September 27, 1985, you must amortize bond premium using a constant yield method on the basis of the bond's yield to maturity, determined by using the bond's basis and compounding at the close of each accrual period. How to amend a 2012 tax return Constant yield method. How to amend a 2012 tax return   Figure the bond premium amortization for each accrual period as follows. How to amend a 2012 tax return Step 1: Determine your yield. How to amend a 2012 tax return   Your yield is the discount rate that, when used in figuring the present value of all remaining payments to be made on the bond (including payments of qualified stated interest), produces an amount equal to your basis in the bond. How to amend a 2012 tax return Figure the yield as of the date you got the bond. How to amend a 2012 tax return It must be constant over the term of the bond and must be figured to at least two decimal places when expressed as a percentage. How to amend a 2012 tax return   If you do not know the yield, consult your broker or tax advisor. How to amend a 2012 tax return Databases available to them are likely to show the yield at the date of purchase. How to amend a 2012 tax return Step 2: Determine the accrual periods. How to amend a 2012 tax return   You can choose the accrual periods to use. How to amend a 2012 tax return They may be of any length and may vary in length over the term of the bond, but each accrual period can be no longer than 1 year and each scheduled payment of principal or interest must occur either on the first or the final day of an accrual period. How to amend a 2012 tax return The computation is simplest if accrual periods are the same as the intervals between interest payment dates. How to amend a 2012 tax return Step 3: Determine the bond premium for the accrual period. How to amend a 2012 tax return   To do this, multiply your adjusted acquisition price at the beginning of the accrual period by your yield. How to amend a 2012 tax return Then subtract the result from the qualified stated interest for the period. How to amend a 2012 tax return   Your adjusted acquisition price at the beginning of the first accrual period is the same as your basis. How to amend a 2012 tax return After that, it is your basis decreased by the amount of bond premium amortized for earlier periods and the amount of any payment previously made on the bond other than a payment of qualified stated interest. How to amend a 2012 tax return Example. How to amend a 2012 tax return On February 1, 2012, you bought a taxable bond for $110,000. How to amend a 2012 tax return The bond has a stated principal amount of $100,000, payable at maturity on February 1, 2019, making your premium $10,000 ($110,000 − $100,000). How to amend a 2012 tax return The bond pays qualified stated interest of $10,000 on February 1 of each year. How to amend a 2012 tax return Your yield is 8. How to amend a 2012 tax return 07439% compounded annually. How to amend a 2012 tax return You choose to use annual accrual periods ending on February 1 of each year. How to amend a 2012 tax return To find your bond premium amortization for the accrual period ending on February 1, 2013, you multiply the adjusted acquisition price at the beginning of the period ($110,000) by your yield. How to amend a 2012 tax return When you subtract the result ($8,881. How to amend a 2012 tax return 83) from the qualified stated interest for the period ($10,000), you find that your bond premium amortization for the period is $1,118. How to amend a 2012 tax return 17. How to amend a 2012 tax return Special rules to figure amortization. How to amend a 2012 tax return   For special rules to figure the bond premium amortization on a variable rate bond, an inflation-indexed debt instrument, a bond that provides for certain alternative payment schedules (for example, a bond callable prior to the stated maturity date of the bond), or a bond that provides for remote or incidental contingencies, see Regulations section 1. How to amend a 2012 tax return 171-3. How to amend a 2012 tax return Bonds Issued Before September 28, 1985 For these bonds, you can amortize bond premium using any reasonable method. How to amend a 2012 tax return Reasonable methods include: The straight-line method, and The Revenue Ruling 82-10 method. How to amend a 2012 tax return Straight-line method. How to amend a 2012 tax return   Under this method, the amount of your bond premium amortization is the same each month. How to amend a 2012 tax return Divide the number of months you held the bond during the year by the number of months from the beginning of the tax year (or, if later, the date of acquisition) to the date of maturity or earlier call date. How to amend a 2012 tax return Then multiply the result by the bond premium (reduced by any bond premium amortization claimed in earlier years). How to amend a 2012 tax return This gives you your bond premium amortization for the year. How to amend a 2012 tax return Revenue Ruling 82-10 method. How to amend a 2012 tax return   Under this method, the amount of your bond premium amortization increases each month over the life of the bond. How to amend a 2012 tax return This method is explained in Revenue Ruling 82-10, 1982-1 C. How to amend a 2012 tax return B. How to amend a 2012 tax return 46. How to amend a 2012 tax return Choosing To Amortize You choose to amortize the premium on taxable bonds by reporting the amortization for the year on your income tax return for the first tax year you want the choice to apply. How to amend a 2012 tax return You should attach a statement to your return that you are making this choice under section 171. How to amend a 2012 tax return See How To Report Amortization, next. How to amend a 2012 tax return This choice is binding for the year you make it and for later tax years. How to amend a 2012 tax return It applies to all taxable bonds you own in the year you make the choice and also to those you acquire in later years. How to amend a 2012 tax return You can change your decision to amortize bond premium only with the written approval of the IRS. How to amend a 2012 tax return To request approval, use Form 3115. How to amend a 2012 tax return For more information on requesting approval, see section 5 of the Appendix to Revenue Procedure 2011-14 in Internal Revenue Bulletin 2011-4. How to amend a 2012 tax return You can find Revenue Procedure 2011-14 at www. How to amend a 2012 tax return irs. How to amend a 2012 tax return gov/irb/2011-04_IRB/ar08. How to amend a 2012 tax return html. How to amend a 2012 tax return How To Report Amortization Subtract the bond premium amortization from your interest income from these bonds. How to amend a 2012 tax return Report the bond's interest on Schedule B (Form 1040A or 1040), line 1. How to amend a 2012 tax return Under your last entry on line 1, put a subtotal of all interest listed on line 1. How to amend a 2012 tax return Below this subtotal, print “ABP Adjustment,” and the total interest you received. How to amend a 2012 tax return Subtract this amount from the subtotal, and enter the result on line 2. How to amend a 2012 tax return Bond premium amortization more than interest. How to amend a 2012 tax return   If the amount of your bond premium amortization for an accrual period is more than the qualified stated interest for the period, you can deduct the difference as a miscellaneous itemized deduction on Schedule A (Form 1040), line 28. How to amend a 2012 tax return    But your deduction is limited to the amount by which your total interest inclusions on the bond in prior accrual periods is more than your total bond premium deductions on the bond in prior periods. How to amend a 2012 tax return Any amount you cannot deduct because of this limit can be carried forward to the next accrual period. How to amend a 2012 tax return Pre-1998 election to amortize bond premium. How to amend a 2012 tax return   Generally, if you first elected to amortize bond premium before 1998, the above treatment of the premium does not apply to bonds you acquired before 1988. How to amend a 2012 tax return Bonds acquired before October 23, 1986. How to amend a 2012 tax return   The amortization of the premium on these bonds is a miscellaneous itemized deduction not subject to the 2%-of-adjusted-gross-income limit. How to amend a 2012 tax return Bonds acquired after October 22, 1986, but before 1988. How to amend a 2012 tax return    The amortization of the premium on these bonds is investment interest expense subject to the investment interest limit, unless you choose to treat it as an offset to interest income on the bond. How to amend a 2012 tax return Expenses of Producing Income You deduct investment expenses (other than interest expenses) as miscellaneous itemized deductions on Schedule A (Form 1040). How to amend a 2012 tax return To be deductible, these expenses must be ordinary and necessary expenses paid or incurred: To produce or collect income, or To manage property held for producing income. How to amend a 2012 tax return The expenses must be directly related to the income or income-producing property, and the income must be taxable to you. How to amend a 2012 tax return The deduction for most income-producing expenses is subject to a 2% limit that also applies to certain other miscellaneous itemized deductions. How to amend a 2012 tax return The amount deductible is limited to the total of these miscellaneous deductions that is more than 2% of your adjusted gross income. How to amend a 2012 tax return For information on how to report expenses of producing income, see How To Report Investment Expenses , later. How to amend a 2012 tax return Attorney or accounting fees. How to amend a 2012 tax return   You can deduct attorney or accounting fees that are necessary to produce or collect taxable income. How to amend a 2012 tax return However, in some cases, attorney or accounting fees are part of the basis of property. How to amend a 2012 tax return See Basis of Investment Property in chapter 4. How to amend a 2012 tax return Automatic investment service and dividend reinvestment plans. How to amend a 2012 tax return   A bank may offer its checking account customers an automatic investment service so that, for a charge, each customer can choose to invest a part of the checking account each month in common stock. How to amend a 2012 tax return Or a bank that is a dividend disbursing agent for a number of publicly-owned corporations may set up an automatic dividend reinvestment service. How to amend a 2012 tax return Through that service, cash dividends are reinvested in more shares of stock after the bank deducts a service charge. How to amend a 2012 tax return   A corporation in which you own stock also may have a dividend reinvestment plan. How to amend a 2012 tax return This plan lets you choose to use your dividends to buy more shares of stock in the corporation instead of receiving the dividends in cash. How to amend a 2012 tax return   You can deduct the monthly service charge you pay to a bank to participate in an automatic investment service. How to amend a 2012 tax return If you participate in a dividend reinvestment plan, you can deduct any service charge subtracted from your cash dividends before the dividends are used to buy more shares of stock. How to amend a 2012 tax return Deduct the charges in the year you pay them. How to amend a 2012 tax return Clerical help and office rent. How to amend a 2012 tax return   You can deduct office expenses, such as rent and clerical help, you incurred in connection with your investments and collecting the taxable income on your investments. How to amend a 2012 tax return Cost of replacing missing securities. How to amend a 2012 tax return   To replace your taxable securities that are mislaid, lost, stolen, or destroyed, you may have to post an indemnity bond. How to amend a 2012 tax return You can deduct the premium you pay to buy the indemnity bond and the related incidental expenses. How to amend a 2012 tax return   You may, however, get a refund of part of the bond premium if the missing securities are recovered within a specified time. How to amend a 2012 tax return Under certain types of insurance policies, you can recover some of the expenses. How to amend a 2012 tax return   If you receive the refund in the tax year you pay the amounts, you can deduct only the difference between the expenses paid and the amount refunded. How to amend a 2012 tax return If the refund is made in a later tax year, you must include the refund in income in the year you received it, but only to the extent that the expenses decreased your tax in the year you deducted them. How to amend a 2012 tax return Fees to collect income. How to amend a 2012 tax return   You can deduct fees you pay to a broker, bank, trustee, or similar agent to collect investment income, such as your taxable bond or mortgage interest, or your dividends on shares of stock. How to amend a 2012 tax return Fees to buy or sell. How to amend a 2012 tax return   You cannot deduct a fee you pay to a broker to acquire investment property, such as stocks or bonds. How to amend a 2012 tax return You must add the fee to the cost of the property. How to amend a 2012 tax return See Basis of Investment Property in chapter 4. How to amend a 2012 tax return    You cannot deduct any broker's fees, commissions, or option premiums you pay (or that were netted out) in connection with the sale of investment property. How to amend a 2012 tax return They can be used only to figure gain or loss from the sale. How to amend a 2012 tax return See Reporting Capital Gains and Losses , in chapter 4, for more information about the treatment of these sale expenses. How to amend a 2012 tax return Investment counsel and advice. How to amend a 2012 tax return   You can deduct fees you pay for counsel and advice about investments that produce taxable income. How to amend a 2012 tax return This includes amounts you pay for investment advisory services. How to amend a 2012 tax return Safe deposit box rent. How to amend a 2012 tax return   You can deduct rent you pay for a safe deposit box if you use the box to store taxable income-producing stocks, bonds, or other investment-related papers and documents. How to amend a 2012 tax return If you also use the box to store tax-exempt securities or personal items, you can deduct only part of the rent. How to amend a 2012 tax return See Tax-exempt income under Nondeductible Expenses, later, to figure what part you can deduct. How to amend a 2012 tax return State and local transfer taxes. How to amend a 2012 tax return   You cannot deduct the state and local transfer taxes you pay when you buy or sell securities. How to amend a 2012 tax return If you pay these transfer taxes when you buy securities, you must treat them as part of the cost of the property. How to amend a 2012 tax return If you pay these transfer taxes when you sell securities, you must treat them as a reduction in the amount realized. How to amend a 2012 tax return Trustee's commissions for revocable trust. How to amend a 2012 tax return   If you set up a revocable trust and have its income distributed to you, you can deduct the commission you pay the trustee for managing the trust to the extent it is to produce or collect taxable income or to manage property. How to amend a 2012 tax return However, you cannot deduct any part of the commission used for producing or collecting tax-exempt income or for managing property that produces tax-exempt income. How to amend a 2012 tax return   If you are a cash-basis taxpayer and pay the commissions for several years in advance, you must deduct a part of the commission each year. How to amend a 2012 tax return You cannot deduct the entire amount in the year you pay it. How to amend a 2012 tax return Investment expenses from pass-through entities. How to amend a 2012 tax return   If you hold an interest in a partnership, S corporation, real estate mortgage investment conduit (REMIC), or a nonpublicly offered mutual fund, you can deduct your share of that entity's investment expenses. How to amend a 2012 tax return A partnership or S corporation will show your share of these expenses on your Schedule K-1 (Form 1065) or Schedule K-1 (Form 1120S). How to amend a 2012 tax return A nonpublicly offered mutual fund will indicate your share of these expenses in box 5 of Form 1099-DIV (or substitute statement). How to amend a 2012 tax return Publicly-offered mutual funds are discussed later. How to amend a 2012 tax return   If you hold an interest in a REMIC, any expenses relating to your residual interest investment will be shown on Schedule Q (Form 1066), line 3b. How to amend a 2012 tax return Any expenses relating to your regular interest investment will appear in box 5 of Form 1099-INT (or substitute statement) or box 9 of Form 1099-OID (or substitute statement). How to amend a 2012 tax return   Report your share of these investment expenses on Schedule A (Form 1040), subject to the 2% limit, in the same manner as your other investment expenses. How to amend a 2012 tax return Including mutual fund or REMIC expenses in income. How to amend a 2012 tax return   Your share of the investment expenses of a REMIC or a nonpublicly offered mutual fund, as described above, are considered to be indirect deductions through that pass-through entity. How to amend a 2012 tax return You must include in your gross income an amount equal to the expenses allocated to you, whether or not you are able to claim a deduction for those expenses. How to amend a 2012 tax return If you are a shareholder in a nonpublicly offered mutual fund, you must include on your return the full amount of ordinary dividends or other distributions of stock, as shown in box 1a of Form 1099-DIV (or substitute statement). How to amend a 2012 tax return If you are a residual interest holder in a REMIC, you must report as ordinary income on Schedule E (Form 1040) the total amounts shown on Schedule Q (Form 1066), lines 1b and 3b. How to amend a 2012 tax return If you are a REMIC regular interest holder, you must include the amount of any expense allocation you received on Form 1040, line 8a. How to amend a 2012 tax return Publicly-offered mutual funds. How to amend a 2012 tax return   Most mutual funds are publicly offered. How to amend a 2012 tax return These mutual funds, generally, are traded on an established securities exchange. How to amend a 2012 tax return These funds do not pass investment expenses through to you. How to amend a 2012 tax return Instead, the dividend income they report to you in box 1a of Form 1099-DIV (or substitute statement) is already reduced by your share of investment expenses. How to amend a 2012 tax return As a result, you cannot deduct the expenses on your return. How to amend a 2012 tax return   Include the amount from box 1a of Form 1099-DIV (or substitute statement) in your income. How to amend a 2012 tax return    A publicly offered mutual fund is one that: Is continuously offered pursuant to a public offering, Is regularly traded on an established securities market, and Is held by or for no fewer than 500 persons at any time during the year. How to amend a 2012 tax return Contact your mutual fund if you are not sure whether it is publicly offered. How to amend a 2012 tax return Nondeductible Expenses Some expenses that you incur as an investor are not deductible. How to amend a 2012 tax return Stockholders' meetings. How to amend a 2012 tax return   You cannot deduct transportation and other expenses you pay to attend stockholders' meetings of companies in which you have no interest other than owning stock. How to amend a 2012 tax return This is true even if your purpose in attending is to get information that would be useful in making further investments. How to amend a 2012 tax return Investment-related seminar. How to amend a 2012 tax return   You cannot deduct expenses for attending a convention, seminar, or similar meeting for investment purposes. How to amend a 2012 tax return Single-premium life insurance, endowment, and annuity contracts. How to amend a 2012 tax return   You cannot deduct interest on money you borrow to buy or carry a single-premium life insurance, endowment, or annuity contract. How to amend a 2012 tax return Used as collateral. How to amend a 2012 tax return   If you use a single premium annuity contract as collateral to obtain or continue a mortgage loan, you cannot deduct any interest on the loan that is collateralized by the annuity contract. How to amend a 2012 tax return Figure the amount of interest expense disallowed by multiplying the current interest rate on the mortgage loan by the lesser of the amount of the annuity contract used as collateral or the amount of the loan. How to amend a 2012 tax return Borrowing on insurance. How to amend a 2012 tax return   Generally, you cannot deduct interest on money you borrow to buy or carry a life insurance, endowment, or annuity contract if you plan to systematically borrow part or all of the increases in the cash value of the contract. How to amend a 2012 tax return This rule applies to the interest on the total amount borrowed to buy or carry the contract, not just the interest on the borrowed increases in the cash value. How to amend a 2012 tax return Tax-exempt income. How to amend a 2012 tax return   You cannot deduct expenses you incur to produce tax-exempt income. How to amend a 2012 tax return Nor can you deduct interest on money you borrow to buy tax-exempt securities or shares in a mutual fund or other regulated investment company that distributes only exempt-interest dividends. How to amend a 2012 tax return Short-sale expenses. How to amend a 2012 tax return   The rule disallowing a deduction for interest expenses on tax-exempt securities applies to amounts you pay in connection with personal property used in a short sale or amounts paid by others for the use of any collateral in connection with the short sale. How to amend a 2012 tax return However, it does not apply to the expenses you incur if you deposit cash as collateral for the property used in the short sale and the cash does not earn a material return during the period of the sale. How to amend a 2012 tax return Short sales are discussed in Short Sales in chapter 4. How to amend a 2012 tax return Expenses for both tax-exempt and taxable income. How to amend a 2012 tax return   You may have expenses that are for both tax-exempt and taxable income. How to amend a 2012 tax return If you cannot specifically identify what part of the expenses is for each type of income, you can divide the expenses, using reasonable proportions based on facts and circumstances. How to amend a 2012 tax return You must attach a statement to your return showing how you divided the expenses and stating that each deduction claimed is not based on tax-exempt income. How to amend a 2012 tax return   One accepted method for dividing expenses is to do it in the same proportion that each type of income is to the total income. How to amend a 2012 tax return If the expenses relate in part to capital gains and losses, include the gains, but not the losses, in figuring this proportion. How to amend a 2012 tax return To find the part of the expenses that is for the tax-exempt income, divide your tax-exempt income by the total income and multiply your expenses by the result. How to amend a 2012 tax return Example. How to amend a 2012 tax return You received $6,000 interest; $4,800 was tax-exempt and $1,200 was taxable. How to amend a 2012 tax return In earning this income, you had $500 of expenses. How to amend a 2012 tax return You cannot specifically identify the amount of each expense item that is for each income item, so you must divide your expenses. How to amend a 2012 tax return 80% ($4,800 tax-exempt interest divided by $6,000 total interest) of your expenses is for the tax-exempt income. How to amend a 2012 tax return You cannot deduct $400 (80% of $500) of the expenses. How to amend a 2012 tax return You can deduct $100 (the rest of the expenses) because they are for the taxable interest. How to amend a 2012 tax return State income taxes. How to amend a 2012 tax return   If you itemize your deductions, you can deduct, as taxes, state income taxes on interest income that is exempt from federal income tax. How to amend a 2012 tax return But you cannot deduct, as either taxes or investment expenses, state income taxes on other exempt income. How to amend a 2012 tax return Interest expense and carrying charges on straddles. How to amend a 2012 tax return   You cannot deduct interest and carrying charges allocable to personal property that is part of a straddle. How to amend a 2012 tax return The nondeductible interest and carrying charges are added to the basis of the straddle property. How to amend a 2012 tax return However, this treatment does not apply if: All the offsetting positions making up the straddle either consist of one or more qualified covered call options and the optioned stock, or consist of section 1256 contracts (and the straddle is not part of a larger straddle); or The straddle is a hedging transaction. How to amend a 2012 tax return  For information about straddles, including definitions of the terms used in this discussion, see Straddles in chapter 4. How to amend a 2012 tax return   Interest includes any amount you pay or incur in connection with personal property used in a short sale. How to amend a 2012 tax return However, you must first apply the rules discussed in Payments in lieu of dividends under Short Sales in chapter 4. How to amend a 2012 tax return   To determine the interest on market discount bonds and short-term obligations that are part of a straddle, you must first apply the rules discussed under Limit on interest deduction for market discount bonds and Limit on interest deduction for short-term obligations (both under Interest Expenses, earlier). How to amend a 2012 tax return Nondeductible amount. How to amend a 2012 tax return   Figure the nondeductible interest and carrying charges on straddle property as follows. How to amend a 2012 tax return Add: Interest on indebtedness incurred or continued to buy or carry the personal property, and All other amounts (including charges to insure, store, or transport the personal property) paid or incurred to carry the personal property. How to amend a 2012 tax return Subtract from the amount in (1): Interest (including OID) includible in gross income for the year on the personal property, Any income from the personal property treated as ordinary income on the disposition of short-term government obligations or as ordinary income under the market discount and short-term bond provisions — see Discount on Debt Instruments in chapter 1, The dividends includible in gross income for the year from the personal property, and Any payment on a loan of the personal property for use in a short sale that is includible in gross income. How to amend a 2012 tax return Basis adjustment. How to amend a 2012 tax return   Add the nondeductible amount to the basis of your straddle property. How to amend a 2012 tax return How To Report Investment Expenses To deduct your investment expenses, you must itemize deductions on Schedule A (Form 1040). How to amend a 2012 tax return Enter your deductible investment interest expense on Schedule A (Form1040), line 14. How to amend a 2012 tax return Include any deductible short sale expenses. How to amend a 2012 tax return (See Short Sales in chapter 4 for information on these expenses. How to amend a 2012 tax return ) Also attach a completed Form 4952 if you used that form to figure your investment interest expense. How to amend a 2012 tax return Enter the total amount of your other investment expenses (other than interest expenses) on Schedule A (Form 1040), line 23. How to amend a 2012 tax return List the type and amount of each expense on the dotted lines next to line 23. How to amend a 2012 tax return (If necessary, you can show the required information on an attached statement. How to amend a 2012 tax return ) For information on how to report amortizable bond premium, see Bond Premium Amortization , earlier in this chapter. How to amend a 2012 tax return When To Report Investment Expenses If you use the cash method to report income and expenses, you generally deduct your expenses, except for certain prepaid interest, in the year you pay them. How to amend a 2012 tax return If you use an accrual method, you generally deduct your expenses when you incur a liability for them, rather than when you pay them. How to amend a 2012 tax return Also see When To Deduct Investment Interest , earlier in this chapter. How to amend a 2012 tax return Unpaid expenses owed to related party. How to amend a 2012 tax return   If you use an accrual method, you cannot deduct interest and other expenses owed to a related cash-basis person until payment is made and the amount is includible in the gross income of that person. How to amend a 2012 tax return The relationship, for purposes of this rule, is determined as of the end of the tax year for which the interest or expense would otherwise be deductible. How to amend a 2012 tax return If a deduction is denied under this rule, this rule will continue to apply even if your relationship with the person ceases to exist before the amount is includible in the gross income of that person. How to amend a 2012 tax return   This rule generally applies to those relationships listed in chapter 4 under Related Party Transactions . How to amend a 2012 tax return It also applies to accruals by partnerships to partners, partners to partnerships, shareholders to S corporations, and S corporations to shareholders. How to amend a 2012 tax return   The postponement of deductions for unpaid expenses and interest under the related party rule does not apply to OID, regardless of when payment is made. How to amend a 2012 tax return This rule also does not apply to loans with below-market interest rates or to certain payments for the use of property and services when the lender or recipient has to include payments periodically in income, even if a payment has not been made. How to amend a 2012 tax return Prev  Up  Next   Home   More Online Publications
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The How To Amend A 2012 Tax Return

How to amend a 2012 tax return Publication 938 - Main Content Table of Contents Who May Request Information How To Request Information Who May Request Information The persons listed below, or their agent or representative, should follow the procedures in this publication to request tax information from the representative of the REMIC or the issuer of the CDO. How to amend a 2012 tax return Any broker who holds a REMIC regular interest or CDO for itself or as a nominee for an actual holder. How to amend a 2012 tax return A middleman who holds a REMIC regular interest or CDO as a nominee for an actual holder and who is required to file an information return with respect to the regular interest or CDO. How to amend a 2012 tax return The following persons, if they hold their REMIC regular interest or CDO directly and not through a nominee. How to amend a 2012 tax return A corporation. How to amend a 2012 tax return A fiscal year taxpayer. How to amend a 2012 tax return A dealer in securities or commodities required to register as such under the laws of the United States or a state. How to amend a 2012 tax return A real estate investment trust (as defined in section 856). How to amend a 2012 tax return An entity registered at all times during the tax year under the Investment Company Act of 1940. How to amend a 2012 tax return A common trust fund (as defined in section 584(a)). How to amend a 2012 tax return A financial institution such as a mutual savings bank, savings and loan association, building and loan association, cooperative bank, homestead association, credit union, industrial loan association or bank, or other similar organization. How to amend a 2012 tax return Any trust that is exempt from tax under section 664(c) (a charitable remainder annuity trust or a charitable remainder unitrust). How to amend a 2012 tax return A REMIC. How to amend a 2012 tax return Note. How to amend a 2012 tax return A person listed in (3) above who holds an interest through a nominee (instead of directly from the REMIC or the issuer of the CDO) should request the information from the nominee instead of from the REMIC or the issuer of the CDO. How to amend a 2012 tax return The request should be made of the nominee in the same manner as specified below for requesting information from the representative. How to amend a 2012 tax return How To Request Information Use the directory to find the representative of the REMIC or issuer of the CDO. How to amend a 2012 tax return You can request information from the representative or issuer by telephone or mail. How to amend a 2012 tax return If only an address is listed in the directory, you must request the information in writing. How to amend a 2012 tax return Your request must specify the calendar quarters and the classes of REMIC regular interests or CDOs for which you need the information. How to amend a 2012 tax return The representative or issuer must provide the information to you by the later of: The 30th day after the close of the calendar quarter for which you request the information, or The 14th day after the receipt of your request. How to amend a 2012 tax return The representative or issuer can provide the information to you by telephone, by written statement sent by first class mail, by printing the information in a publication that is generally read by and available to persons who may request the information (for example, a webpage), or by any other method agreed to by both parties. How to amend a 2012 tax return If the information is published, the representative or issuer must notify you by telephone or in writing of the publication in which the information will appear, the date of its appearance, and, if possible, the page number. How to amend a 2012 tax return Prev  Up  Next   Home   More Online Publications