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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 Publication 3920 - Main Contents Table of Contents Tax ForgivenessYears Eligible for Tax Forgiveness Amount of Tax Forgiven Refund of Taxes Paid How To Claim Tax Forgiveness Payments to SurvivorsSeptember 11th Victim Compensation Fund of 2001 Qualified Disaster Relief Payments Disability Payments Death Benefits Canceled Debt Payments to Survivors of Public Safety Officers Postponed Tax DeadlinesCovered area. How to amend a 2012 tax return Disaster Area Losses Estate Tax Reduction Structured Settlement Factoring Transactions Illustrated Worksheets B and C Additional Worksheets How To Get Tax Help Tax Forgiveness The IRS will forgive the federal income tax liabilities of decedents who died as a result of the Oklahoma City attack, September 11 attacks, and anthrax attacks. How to amend a 2012 tax return Income tax is forgiven for these decedents whether they were killed in an attack or in rescue or recovery operations. How to amend a 2012 tax return Any forgiven tax liability owed to the IRS will not have to be paid. How to amend a 2012 tax return Any forgiven tax liability that has already been paid will be refunded. How to amend a 2012 tax return (See Refund of Taxes Paid, later. How to amend a 2012 tax return ) To determine the amount of tax to be forgiven, read Years Eligible for Tax Forgiveness first. How to amend a 2012 tax return Then read Amount of Tax Forgiven. How to amend a 2012 tax return Decedents whose total forgiven tax liability for all eligible years is less than $10,000 are entitled to $10,000 minimum relief. How to amend a 2012 tax return Even decedents who were not required to file tax returns for the eligible tax years are entitled to $10,000 minimum relief. How to amend a 2012 tax return See Minimum Amount of Relief later under Amount of Tax Forgiven. How to amend a 2012 tax return Years Eligible for Tax Forgiveness The following paragraphs explain which years are eligible for tax forgiveness. How to amend a 2012 tax return Oklahoma City attack. How to amend a 2012 tax return   For those who died from this attack, income tax is forgiven for 1994 and all later years up to and including the year of death. How to amend a 2012 tax return Example 1. How to amend a 2012 tax return A man was killed in the bombing of the federal building in Oklahoma City on April 19, 1995. How to amend a 2012 tax return His income tax is forgiven for 1994 and 1995. How to amend a 2012 tax return Example 2. How to amend a 2012 tax return A woman was wounded while walking outside the federal building in Oklahoma City on April 19, 1995. How to amend a 2012 tax return She subsequently died of her wounds in 1996. How to amend a 2012 tax return Her income tax is forgiven for 1994, 1995, and 1996. How to amend a 2012 tax return September 11 attacks and anthrax attacks. How to amend a 2012 tax return   For those who die from these attacks, income tax is forgiven for 2000 and all later years up to and including the year of death. How to amend a 2012 tax return Example 1. How to amend a 2012 tax return A Pentagon employee died in the September 11 attack. How to amend a 2012 tax return Her income tax is forgiven for 2000 and 2001. How to amend a 2012 tax return Example 2. How to amend a 2012 tax return A visitor to the World Trade Center died in 2002 of wounds he sustained in the September 11 attack. How to amend a 2012 tax return His income tax liability is forgiven for 2000, 2001, and 2002. How to amend a 2012 tax return Amount of Tax Forgiven The IRS will forgive the decedent's income tax liability for all years eligible for tax forgiveness. How to amend a 2012 tax return On a joint return, only the decedent's part of the joint income tax liability is eligible for forgiveness. How to amend a 2012 tax return To figure the tax to be forgiven, use the following worksheets. How to amend a 2012 tax return Use Worksheet A for any eligible year the decedent filed a return as single, married filing separately, head of household, or qualifying widow(er). How to amend a 2012 tax return Use Worksheet B for any eligible year the decedent filed a joint return. How to amend a 2012 tax return See the illustrated Worksheet B near the end of this publication. How to amend a 2012 tax return Do not complete Worksheet A or B if the decedent was not required to file tax returns for the eligible tax years. How to amend a 2012 tax return Instead, complete Worksheet C and file a return for the decedent's last tax year. How to amend a 2012 tax return See Minimum Amount of Relief, later. How to amend a 2012 tax return If you need assistance, call the IRS at 1–866–562–5227 Monday through Friday during the following times. How to amend a 2012 tax return In English–7 a. How to amend a 2012 tax return m. How to amend a 2012 tax return to 10 p. How to amend a 2012 tax return m. How to amend a 2012 tax return local time. How to amend a 2012 tax return In Spanish–8 a. How to amend a 2012 tax return m. How to amend a 2012 tax return to 9:30 p. How to amend a 2012 tax return m. How to amend a 2012 tax return local time. How to amend a 2012 tax return Both spouses died. How to amend a 2012 tax return   If both spouses died as a result of a terrorist attack and they filed a joint return for an eligible tax year, fill out Worksheet B for each spouse for that year. How to amend a 2012 tax return Do this to determine if each spouse qualifies for the minimum relief of $10,000 (discussed later under Minimum Amount of Relief). How to amend a 2012 tax return If you are certain that neither spouse's total forgiven tax liability for all eligible years is less than $10,000, skip Worksheet B. How to amend a 2012 tax return However, attach a computation of the forgiven tax liability to the final income tax return or amended tax return for each eligible year. How to amend a 2012 tax return The forgiven tax liability is the total tax shown on the joint return minus the taxes listed in the instructions for line 4 of Worksheet B. How to amend a 2012 tax return Residents of community property states. How to amend a 2012 tax return   If the decedent was domiciled in a community property state and the spouse reported half the community income on a separate return, the surviving spouse can get a refund of taxes paid on his or her share of the decedent's income for the eligible years. How to amend a 2012 tax return Also, all of the decedent's income taxes paid for the eligible years will be refunded to either the executor or administrator of the estate, or to the surviving spouse if there is no legal representative. How to amend a 2012 tax return Worksheet B. How to amend a 2012 tax return Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. How to amend a 2012 tax return 1       2 Enter the decedent's taxable income. How to amend a 2012 tax return Figure taxable income as if a separate return had been filed. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 2       3 Enter the decedent's total tax. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 4       5 Subtract line 4 from line 3. How to amend a 2012 tax return 5       6 Enter the surviving spouse's taxable income. How to amend a 2012 tax return Figure taxable income as if a separate return had been filed. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 6       7 Enter the surviving spouse's total tax. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. How to amend a 2012 tax return 8       9 Subtract line 8 from line 7. How to amend a 2012 tax return 9       10 Add lines 5 and 9. How to amend a 2012 tax return 10       11 Enter the total tax from the joint return. How to amend a 2012 tax return See Table 1 on page 5 for the line number for years before 2002. How to amend a 2012 tax return 11       12 Add lines 4 and 8. How to amend a 2012 tax return 12       13 Subtract line 12 from line 11. How to amend a 2012 tax return 13       14 Divide line 5 by line 10. How to amend a 2012 tax return Enter the result as a decimal. How to amend a 2012 tax return 14       15 Tax to be forgiven. How to amend a 2012 tax return Multiply line 13 by line 14 and enter the result. How to amend a 2012 tax return 15       Note. How to amend a 2012 tax return If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. How to amend a 2012 tax return Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. How to amend a 2012 tax return If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. How to amend a 2012 tax return The IRS will determine the amount to be refunded. How to amend a 2012 tax return Worksheet B. How to amend a 2012 tax return Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. How to amend a 2012 tax return 1       2 Enter the decedent's taxable income. How to amend a 2012 tax return Figure taxable income as if a separate return had been filed. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 2       3 Enter the decedent's total tax. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 4       5 Subtract line 4 from line 3. How to amend a 2012 tax return 5       6 Enter the surviving spouse's taxable income. How to amend a 2012 tax return Figure taxable income as if a separate return had been filed. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 6       7 Enter the surviving spouse's total tax. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. How to amend a 2012 tax return 8       9 Subtract line 8 from line 7. How to amend a 2012 tax return 9       10 Add lines 5 and 9. How to amend a 2012 tax return 10       11 Enter the total tax from the joint return. How to amend a 2012 tax return See Table 1 on page 5 for the line number for years before 2002. How to amend a 2012 tax return 11       12 Add lines 4 and 8. How to amend a 2012 tax return 12       13 Subtract line 12 from line 11. How to amend a 2012 tax return 13       14 Divide line 5 by line 10. How to amend a 2012 tax return Enter the result as a decimal. How to amend a 2012 tax return 14       15 Tax to be forgiven. How to amend a 2012 tax return Multiply line 13 by line 14 and enter the result. How to amend a 2012 tax return 15       Note. How to amend a 2012 tax return If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. How to amend a 2012 tax return Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. How to amend a 2012 tax return If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. How to amend a 2012 tax return The IRS will determine the amount to be refunded. How to amend a 2012 tax return Instructions for Worksheet B Table 1. How to amend a 2012 tax return Total Tax Line on Decedent's Return Note: Use this table to find the total tax line on the decedent's income tax return. How to amend a 2012 tax return * Form 1994 1995 1996 2000 2001 1040 Line 53 Line 54 Line 51 Line 57 Line 58 1040A Line 27 Line 28 Line 28 Line 35 File Form 1040 1040EZ Line 9 Line 10 Line 10 Line 10 TeleFile Tax Record ** Line E Line J Line K 1040NR Line 51 Line 52 Line 49 Line 54 Line 54 1040NR–EZ N/A Line 17 Line 17 Line 18 File Form 1040NR * Line numbers for the 2002 forms were not available when this publication went to print. How to amend a 2012 tax return ** File Form 4506 to get a transcript of the decedent's account. How to amend a 2012 tax return Table 1. How to amend a 2012 tax return Total Tax Line on Decedent's Return Note: Use this table to find the total tax line on the decedent's income tax return. How to amend a 2012 tax return * Form 1994 1995 1996 2000 2001 1040 Line 53 Line 54 Line 51 Line 57 Line 58 1040A Line 27 Line 28 Line 28 Line 35 File Form 1040 1040EZ Line 9 Line 10 Line 10 Line 10 TeleFile Tax Record ** Line E Line J Line K 1040NR Line 51 Line 52 Line 49 Line 54 Line 54 1040NR–EZ N/A Line 17 Line 17 Line 18 File Form 1040NR * Line numbers for the 2002 forms were not available when this publication went to print. How to amend a 2012 tax return ** File Form 4506 to get a transcript of the decedent's account. How to amend a 2012 tax return Lines 2 and 6. How to amend a 2012 tax return   Allocate income and deductions in the same manner they would have been allocated if the spouses had filed separate returns. How to amend a 2012 tax return   Allocate wages and salaries to the spouse who performed the services and received the Form W-2. How to amend a 2012 tax return Business and investment income (including capital gains) are generally allocated to the spouse who owned the business or investment that produced the income. How to amend a 2012 tax return Income from a jointly owned business or investment should be allocated equally between the spouses unless there is evidence that shows a different allocation is appropriate. How to amend a 2012 tax return   Allocate business deductions to the owner of the business. How to amend a 2012 tax return Allocate personal deductions (such as itemized deductions for mortgage interest and taxes) equally between the spouses unless there is evidence that shows a different allocation is appropriate. How to amend a 2012 tax return Lines 3 and 7. How to amend a 2012 tax return   Figure the total tax as if a separate return had been filed. How to amend a 2012 tax return The total tax is the tax that would have been entered on the tax return line shown in Table 1 if a separate return had been filed. How to amend a 2012 tax return When figuring the tax using the Tax Table or Tax Rate Schedule, use the “Married filing separately” column in the Tax Table or Tax Rate Schedule Y-2. How to amend a 2012 tax return   When figuring the total tax, allocate credits and other taxes, if any, in the same manner as they would have been allocated if the spouses had filed separate returns. How to amend a 2012 tax return If a credit would not have been allowed on a separate return, allocate the credit shown on the joint return between the spouses. How to amend a 2012 tax return Examples of credits generally not allowed on a separate return are the child and dependent care credit, credit for the elderly, adoption credit, education credits, and earned income credit. How to amend a 2012 tax return Line 4. How to amend a 2012 tax return   Enter the total, if any, of the following taxes. How to amend a 2012 tax return Self-employment tax. How to amend a 2012 tax return Social security and Medicare tax on tip income not reported to employer. How to amend a 2012 tax return Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). How to amend a 2012 tax return Tax on excess accumulation in qualified retirement plans. How to amend a 2012 tax return Household employment taxes. How to amend a 2012 tax return Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. How to amend a 2012 tax return Tax on golden parachute payments. How to amend a 2012 tax return Minimum Amount of Relief The minimum amount of relief is $10,000. How to amend a 2012 tax return If the decedent's total forgiven tax liability for all eligible years is less than $10,000, the difference between $10,000 and the total forgiven tax liability for those years will be treated as a tax payment for the decedent's last tax year. How to amend a 2012 tax return The IRS will refund the difference as explained under Refund of Taxes Paid. How to amend a 2012 tax return Use Worksheet C to figure the additional tax payment. How to amend a 2012 tax return But first complete Worksheet A or B, unless the decedent was not required to file tax returns for the eligible tax years. How to amend a 2012 tax return Example 1. How to amend a 2012 tax return An individual who died in the September 11 attacks had an income tax liability of $-0- for 2000 and $6,400 for 2001. How to amend a 2012 tax return The $6,400 is eligible for forgiveness. How to amend a 2012 tax return The IRS will forgive $6,400 and treat the difference between $10,000 and $6,400 ($3,600) as a tax payment for 2001. How to amend a 2012 tax return Example 2. How to amend a 2012 tax return A child who died in the September 11 attacks had no (-0-) income tax liability for 2000 or 2001. How to amend a 2012 tax return The IRS will treat $10,000 as a tax payment for 2001. How to amend a 2012 tax return Income received after date of death. How to amend a 2012 tax return   Generally, income of the decedent received after the date of death must be reported on Form 1041 if the estate has gross income for the tax year of $600 or more. How to amend a 2012 tax return Examples are the final paycheck or dividends on stock owned by the decedent. How to amend a 2012 tax return However, this income is exempt from income tax and is not included on Form 1041 if it is received: After the date of the decedent's death, and Before the end of the decedent's tax year (determined without regard to death). How to amend a 2012 tax return Nonqualifying income. How to amend a 2012 tax return   The following income is not exempt from tax. How to amend a 2012 tax return The tax on it is not eligible for forgiveness. How to amend a 2012 tax return Deferred compensation that would have been payable if the death had occurred because of an event other than these attacks. How to amend a 2012 tax return Amounts that would not have been payable but for an action taken after September 11, 2001. How to amend a 2012 tax return The following are examples of nonqualifying income. How to amend a 2012 tax return Amounts payable from a qualified retirement plan or IRA to the beneficiary or estate of the decedent. How to amend a 2012 tax return Amounts payable only as death or survivor's benefits from pre-existing arrangements that would have been paid if the death had occurred for another reason. How to amend a 2012 tax return Income received as a result of adjustments made by the decedent's employer to a plan or arrangement to accelerate the vesting of restricted property or the payment of nonqualified deferred compensation after the date of the attack. How to amend a 2012 tax return Interest on savings bonds cashed by the beneficiary of the decedent. How to amend a 2012 tax return If you are responsible for the estate of a decedent, see Publication 559. How to amend a 2012 tax return Publication 559 discusses how to complete and file federal income tax returns and explains your responsibility to pay any taxes due. How to amend a 2012 tax return Instructions for lines 2–9 of Worksheet C. How to amend a 2012 tax return   The tax that would have been payable on the exempt income (discussed earlier) must be considered when determining whether a decedent is entitled to the $10,000 minimum relief. How to amend a 2012 tax return To figure the tax that would have been payable, you can use lines 2 through 9 of Worksheet C. How to amend a 2012 tax return Or, if special requirements are met, you can use the alternative computation instead. How to amend a 2012 tax return See Alternative computation, later. How to amend a 2012 tax return   You have to use lines 2–9 (or the alternative computation) to figure the tax that would have been payable even if Form 1041 was not required to be filed. How to amend a 2012 tax return Use Form 1041 to figure what the taxable income would be without including the exempt income. How to amend a 2012 tax return Then enter that taxable income (even if a negative number) on line 2 of Worksheet C (or line 1 of Worksheet D, Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C)). How to amend a 2012 tax return Alternative computation. How to amend a 2012 tax return   Instead of using lines 2–8 of Worksheet C to figure the tax on exempt income (line 9 of Worksheet C), you may be able to use Worksheet D. How to amend a 2012 tax return You can use Worksheet D to figure the tax on the exempt income payable by the estate and its beneficiaries only if both of the following requirements are met. How to amend a 2012 tax return The estate claimed an income distribution deduction on line 18 (Form 1041). How to amend a 2012 tax return Each beneficiary submits the information necessary to refigure the income tax payable on the exempt income received from the decedent's estate. How to amend a 2012 tax return If requirement (2) is met but requirement (1) is not, you can still use Worksheet D if: Form 1041 was not required because exempt income was received, and The estate would have claimed an income distribution deduction if the exempt income were taxable. How to amend a 2012 tax return If you use this alternative computation, skip lines 2–8 of Worksheet C and enter the amount from line 8 of Worksheet D on line 9 of Worksheet C. How to amend a 2012 tax return Complete the rest of Worksheet C to determine the additional payment allowed. How to amend a 2012 tax return Worksheet C. How to amend a 2012 tax return Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. How to amend a 2012 tax return Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. How to amend a 2012 tax return 1 Minimum relief amount. How to amend a 2012 tax return Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. How to amend a 2012 tax return 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . How to amend a 2012 tax return 3       4 Add lines 2 and 3. How to amend a 2012 tax return 4       5 Enter exempt income received after death minus expenses allocable to exempt income. How to amend a 2012 tax return (See Income received after date of death on page 5. How to amend a 2012 tax return ) 5       6 Add lines 4 and 5. How to amend a 2012 tax return 6       7 Figure the tax on line 6 using Schedule G (Form 1041). How to amend a 2012 tax return 7       8 Figure the tax on line 4 using Schedule G (Form 1041). How to amend a 2012 tax return 8       9 Tax on exempt income. How to amend a 2012 tax return Subtract line 8 from line 7. How to amend a 2012 tax return 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. How to amend a 2012 tax return If the decedent was not required to file tax returns for the eligible tax years, enter -0-. How to amend a 2012 tax return 10       11 Add lines 9 and 10. How to amend a 2012 tax return 11   12 Additional payment allowed. How to amend a 2012 tax return If line 11 is $10,000 or more, enter -0- and stop here. How to amend a 2012 tax return No additional amount is allowed as a tax payment. How to amend a 2012 tax return Otherwise, subtract line 11 from line 1 and enter the result. How to amend a 2012 tax return 12   Note. How to amend a 2012 tax return The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). How to amend a 2012 tax return Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. How to amend a 2012 tax return If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. How to amend a 2012 tax return Write "Sec. How to amend a 2012 tax return 692(d)(2) Payment" and the amount to the right of the entry space. How to amend a 2012 tax return Also indicate whether a Form 1041 is being filed for the decedent's estate. How to amend a 2012 tax return If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). How to amend a 2012 tax return Write “Sec. How to amend a 2012 tax return 692(d)(2) Payment” on the dotted line to the left of the entry space. How to amend a 2012 tax return Worksheet C. How to amend a 2012 tax return Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. How to amend a 2012 tax return Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. How to amend a 2012 tax return 1 Minimum relief amount. How to amend a 2012 tax return Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. How to amend a 2012 tax return 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . How to amend a 2012 tax return 3       4 Add lines 2 and 3. How to amend a 2012 tax return 4       5 Enter exempt income received after death minus expenses allocable to exempt income. How to amend a 2012 tax return (See Income received after date of death on page 5. How to amend a 2012 tax return ) 5       6 Add lines 4 and 5. How to amend a 2012 tax return 6       7 Figure the tax on line 6 using Schedule G (Form 1041). How to amend a 2012 tax return 7       8 Figure the tax on line 4 using Schedule G (Form 1041). How to amend a 2012 tax return 8       9 Tax on exempt income. How to amend a 2012 tax return Subtract line 8 from line 7. How to amend a 2012 tax return 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. How to amend a 2012 tax return If the decedent was not required to file tax returns for the eligible tax years, enter -0-. How to amend a 2012 tax return 10       11 Add lines 9 and 10. How to amend a 2012 tax return 11   12 Additional payment allowed. How to amend a 2012 tax return If line 11 is $10,000 or more, enter -0- and stop here. How to amend a 2012 tax return No additional amount is allowed as a tax payment. How to amend a 2012 tax return Otherwise, subtract line 11 from line 1 and enter the result. How to amend a 2012 tax return 12   Note. How to amend a 2012 tax return The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). How to amend a 2012 tax return Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. How to amend a 2012 tax return If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. How to amend a 2012 tax return Write "Sec. How to amend a 2012 tax return 692(d)(2) Payment" and the amount to the right of the entry space. How to amend a 2012 tax return Also indicate whether a Form 1041 is being filed for the decedent's estate. How to amend a 2012 tax return If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). How to amend a 2012 tax return Write “Sec. How to amend a 2012 tax return 692(d)(2) Payment” on the dotted line to the left of the entry space. How to amend a 2012 tax return Worksheet D. How to amend a 2012 tax return Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C) 1 Enter the taxable income from line 22 (Form 1041) 1   2 Enter exempt income received after death minus expenses allocable to exempt income. How to amend a 2012 tax return (See Income received after date of death on page 5. How to amend a 2012 tax return ) 2   3 Add lines 1 and 2 3   4 Figure the tax on line 3 using Schedule G (Form 1041). How to amend a 2012 tax return 4   5 Figure the tax on line 1 using Schedule G (Form 1041). How to amend a 2012 tax return 5   6 Estate's tax on exempt income. How to amend a 2012 tax return Subtract line 5 from line 4 6   7 Beneficiaries' tax on exempt income. How to amend a 2012 tax return Figure the total tax that would have been payable by all beneficiaries. How to amend a 2012 tax return Do this by including in each beneficiary's gross income the exempt income received from the decedent's estate and refiguring the income tax. How to amend a 2012 tax return Add the amounts by which each beneficiary's income tax is increased. How to amend a 2012 tax return 7   8 Add lines 6 and 7. How to amend a 2012 tax return Enter this amount on line 9 of Worksheet C. How to amend a 2012 tax return 8   Worksheet D. How to amend a 2012 tax return Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C) 1 Enter the taxable income from line 22 (Form 1041) 1   2 Enter exempt income received after death minus expenses allocable to exempt income. How to amend a 2012 tax return (See Income received after date of death on page 5. How to amend a 2012 tax return ) 2   3 Add lines 1 and 2 3   4 Figure the tax on line 3 using Schedule G (Form 1041). How to amend a 2012 tax return 4   5 Figure the tax on line 1 using Schedule G (Form 1041). How to amend a 2012 tax return 5   6 Estate's tax on exempt income. How to amend a 2012 tax return Subtract line 5 from line 4 6   7 Beneficiaries' tax on exempt income. How to amend a 2012 tax return Figure the total tax that would have been payable by all beneficiaries. How to amend a 2012 tax return Do this by including in each beneficiary's gross income the exempt income received from the decedent's estate and refiguring the income tax. How to amend a 2012 tax return Add the amounts by which each beneficiary's income tax is increased. How to amend a 2012 tax return 7   8 Add lines 6 and 7. How to amend a 2012 tax return Enter this amount on line 9 of Worksheet C. How to amend a 2012 tax return 8   Refund of Taxes Paid The IRS will refund the following forgiven income tax liabilities. How to amend a 2012 tax return Income tax liabilities that have been paid. How to amend a 2012 tax return Income tax liabilities treated as paid because the total tax liability for all years eligible for tax forgiveness is less than $10,000. How to amend a 2012 tax return See Minimum Amount of Relief, earlier. How to amend a 2012 tax return Example 1. How to amend a 2012 tax return A man who died in the September 11 attacks had an income tax liability of $7,500 for 2000 and $6,500 for 2001. How to amend a 2012 tax return The total, $14,000, is eligible for tax forgiveness. How to amend a 2012 tax return However, he paid only $13,000 of that amount. How to amend a 2012 tax return The IRS will refund the $13,000 paid. How to amend a 2012 tax return Example 2. How to amend a 2012 tax return A child who died in the September 11 attacks had no income tax liability for 2000 or 2001. How to amend a 2012 tax return The child qualifies for the minimum relief of $10,000. How to amend a 2012 tax return The $10,000 is treated as a tax payment for 2001 and will be refunded. How to amend a 2012 tax return Period for filing a claim for credit or refund. How to amend a 2012 tax return   To obtain a tax refund on a previously filed income tax return, file an amended return (Form 1040X or an amended Form 1041) within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever is later. How to amend a 2012 tax return For example, you have until April 15, 2004, to file an amended return on a 2000 Form 1040, 1040A, or 1040EZ that was filed by April 16, 2001, and for which the tax was paid when due. How to amend a 2012 tax return To obtain a refund on a return that has not been filed, file the return within 3 years of the original due date of the return. How to amend a 2012 tax return Extension of time for victims of Oklahoma City attack. How to amend a 2012 tax return   The period described above has been extended for victims of the Oklahoma City attack. How to amend a 2012 tax return Survivors and personal representatives of these victims have until January 22, 2003, to file an original or amended return. How to amend a 2012 tax return How To Claim Tax Forgiveness Use the following procedures to claim income tax forgiveness. How to amend a 2012 tax return Which Form To Use The form you use depends on whether an income tax return for the eligible year was already filed for the decedent. How to amend a 2012 tax return Return required but not yet filed. How to amend a 2012 tax return   File Form 1040 if the decedent was a U. How to amend a 2012 tax return S. How to amend a 2012 tax return citizen or resident. How to amend a 2012 tax return File Form 1040NR if the decedent was a nonresident alien. How to amend a 2012 tax return A nonresident alien is someone who is not a U. How to amend a 2012 tax return S. How to amend a 2012 tax return citizen or resident. How to amend a 2012 tax return Return required and already filed. How to amend a 2012 tax return   File a separate Form 1040X for each year you are claiming tax relief. How to amend a 2012 tax return Return not required and not filed. How to amend a 2012 tax return   File Form 1040 only for the year of death if the decedent was a U. How to amend a 2012 tax return S. How to amend a 2012 tax return citizen or resident. How to amend a 2012 tax return File Form 1040NR if the decedent was a nonresident alien. How to amend a 2012 tax return Return not required but already filed. How to amend a 2012 tax return   File Form 1040X only for the year of death. How to amend a 2012 tax return How to complete the returns. How to amend a 2012 tax return   Fill out Form 1040 or 1040NR according to its instructions but do not reduce the decedent's tax liability by any taxes that will be forgiven. How to amend a 2012 tax return Attach to each return a computation of the income tax to be forgiven or a copy of Worksheet A or B. How to amend a 2012 tax return If filing Form 1040 or Form 1040NR, also attach any Forms W–2. How to amend a 2012 tax return If the total forgiven tax liability for all eligible years is less than $10,000, attach to the decedent's final return a computation of the additional tax payment allowed or a copy of Worksheet C. How to amend a 2012 tax return Also, please write one of the following across the top of page 1 of each return. How to amend a 2012 tax return KITA—Oklahoma City KITA—9/11 KITA—Anthrax “KITA” means “killed in terrorist attack. How to amend a 2012 tax return ” Need a copy of a previously filed return?   You will find it easier to prepare Form 1040X if you have a copy of the decedent's previously filed tax return. How to amend a 2012 tax return If you need a copy, use Form 4506. How to amend a 2012 tax return The IRS will provide a free copy of the tax return if you write “DISASTER” in the top margin of Form 4506. How to amend a 2012 tax return Attach Letters Testamentary or other evidence to establish that you are authorized to act for the decedent's estate. How to amend a 2012 tax return Send Form 4506 to the address shown in the form instructions. How to amend a 2012 tax return Taxpayer identification number. How to amend a 2012 tax return   A taxpayer identification number must be furnished on the decedent's returns. How to amend a 2012 tax return This is usually the decedent's social security number (SSN). How to amend a 2012 tax return However, a nonresident alien who is not eligible to get an SSN should have an individual taxpayer identification number (ITIN). How to amend a 2012 tax return If the decedent was a nonresident alien, had neither an SSN nor an ITIN, and was not required to file a U. How to amend a 2012 tax return S. How to amend a 2012 tax return income tax return for any tax year, do not apply for an ITIN. How to amend a 2012 tax return You may claim a refund by filing Form 1040NR without an SSN or ITIN. How to amend a 2012 tax return Necessary Documents Please attach the following documents to the return or amended return. How to amend a 2012 tax return Proof of death. How to amend a 2012 tax return   Attach a copy of the death certificate. How to amend a 2012 tax return If the Department of Defense issued DD Form 1300, Report of Casualty, you can attach that form instead of the death certificate. How to amend a 2012 tax return Form 1310. How to amend a 2012 tax return   You must send Form 1310 with all returns and claims for refund, unless either of the following applies. How to amend a 2012 tax return You are a surviving spouse filing an original or amended joint return with the decedent. How to amend a 2012 tax return You are a personal representative filing an original Form 1040 or Form 1040NR for the decedent and a court certificate showing your appointment is attached to the return. How to amend a 2012 tax return A personal representative is an executor or administrator of a decedent's estate, as certified or appointed by the court. How to amend a 2012 tax return A copy of the decedent's will cannot be accepted as evidence that you are the personal representative. How to amend a 2012 tax return      If you have proof of death but do not have enough tax information to file a timely claim for a refund, file Form 1040X with Form 1310. How to amend a 2012 tax return Include a statement saying an amended return will be filed as soon as the necessary tax information is available. How to amend a 2012 tax return Where To File The IRS has set up a special office for processing returns and claims for tax forgiveness. How to amend a 2012 tax return Use one of the addresses shown below. How to amend a 2012 tax return Where you file the returns or claims depends on whether you use the U. How to amend a 2012 tax return S. How to amend a 2012 tax return Postal Service or a private delivery service. How to amend a 2012 tax return Please do not send these returns or claims to any of the addresses shown in the tax form instructions. How to amend a 2012 tax return U. How to amend a 2012 tax return S. How to amend a 2012 tax return Postal Service. How to amend a 2012 tax return   If you use the U. How to amend a 2012 tax return S. How to amend a 2012 tax return Postal Service, file these returns and claims at the following address. How to amend a 2012 tax return Internal Revenue Service P. How to amend a 2012 tax return O. How to amend a 2012 tax return Box 4053 Woburn, MA 01888 Private delivery service. How to amend a 2012 tax return   Private delivery services cannot deliver items to P. How to amend a 2012 tax return O. How to amend a 2012 tax return boxes. How to amend a 2012 tax return If you use a private delivery service, file these returns and claims at the following address. How to amend a 2012 tax return Internal Revenue Service Stop 661 310 Lowell St. How to amend a 2012 tax return Andover, MA 01810 Designated private delivery services. How to amend a 2012 tax return   You can use the following private delivery services to file these returns and claims. How to amend a 2012 tax return Airborne Express (Airborne): Overnight Air Express Service, Next Afternoon Service, and Second Day Service. How to amend a 2012 tax return DHL Worldwide Express (DHL): DHL “Same Day” Service, and DHL USA Overnight. How to amend a 2012 tax return Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, and FedEx 2Day. How to amend a 2012 tax return United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A. How to amend a 2012 tax return M. How to amend a 2012 tax return , UPS Worldwide Express Plus, and UPS Worldwide Express. How to amend a 2012 tax return The private delivery service can tell you how to get written proof of the mailing date. How to amend a 2012 tax return Payments to Survivors The following section discusses the tax treatment of certain amounts received by survivors. How to amend a 2012 tax return September 11th Victim Compensation Fund of 2001 Payments from the September 11th Victim Compensation Fund of 2001 are not included in income. How to amend a 2012 tax return Qualified Disaster Relief Payments Qualified disaster relief payments are not included in income. How to amend a 2012 tax return These payments are not subject to income tax, self-employment tax, or employment taxes (social security, Medicare, and federal unemployment taxes). How to amend a 2012 tax return No withholding applies to these payments. How to amend a 2012 tax return Qualified disaster relief payments include payments you receive (regardless of the source) after September 10, 2001, for the following expenses. How to amend a 2012 tax return Reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a terrorist attack. How to amend a 2012 tax return Reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence due to a terrorist attack. How to amend a 2012 tax return (A personal residence can be a rented residence or one you own. How to amend a 2012 tax return ) Reasonable and necessary expenses incurred for the repair or replacement of the contents of a personal residence due to a terrorist attack. How to amend a 2012 tax return Qualified disaster relief payments also include the following. How to amend a 2012 tax return Payments made by common carriers (for example, American Airlines and United Airlines regarding the September 11 attacks) because of death or physical injury incurred as a result of a terrorist attack. How to amend a 2012 tax return Amounts paid by a federal, state, or local government in connection with a terrorist attack to those affected by the attack. How to amend a 2012 tax return Qualified disaster relief payments do not include: Insurance or other reimbursements for expenses, or Income replacement payments, such as payments of lost wages, lost business income, or unemployment compensation. How to amend a 2012 tax return Disability Payments For tax years ending after September 10, 2001, disability payments for injuries incurred as a direct result of a terrorist attack directed against the United States (or its allies), whether outside or within the United States, are not included in income. How to amend a 2012 tax return Death Benefits Payments received by an individual or the estate of a decedent from the employer of an employee who died as a result of the Oklahoma City or September 11 terrorist attacks, or as a result of the anthrax attacks, are not included in income. How to amend a 2012 tax return Only the amount that exceeds the benefits that would have been payable if the death had occurred for a reason other than a terrorist or anthrax attack is excludable. How to amend a 2012 tax return However, the exclusion does apply to incidental death benefits paid under a qualified retirement plan even if these amounts would have been payable if the death had occurred for a reason other than a terrorist or anthrax attack. How to amend a 2012 tax return If you included death benefits in income on a previously filed return and they are now excludable under the above rule, file Form 1040X to amend that return. How to amend a 2012 tax return For information on the period for filing Form 1040X, see Period for filing claim for credit or refund earlier under Refund of Taxes Paid. How to amend a 2012 tax return If that period has expired, you are granted an extension. How to amend a 2012 tax return You have until January 22, 2003, to file Form 1040X to exclude the death benefits. How to amend a 2012 tax return On top of page 1 of Form 1040X, write “Extension of Limitations Under PL 107–134, sec. How to amend a 2012 tax return 102(b)(2). How to amend a 2012 tax return ” Canceled Debt Canceled debt is not included in your income (or the income of the estate) if: You (or the estate) were liable, or became liable, for the debt of a decedent, and The debt was canceled after September 10, 2001, and before January 1, 2002, because the decedent died as a result of the September 11 attacks or anthrax attacks. How to amend a 2012 tax return The lender is not required to report the canceled debt on Form 1099–C, Cancellation of Debt. How to amend a 2012 tax return Payments to Survivors of Public Safety Officers If you are a survivor of a public safety officer who died in the line of duty, certain amounts you receive are not included in income. How to amend a 2012 tax return Bureau of Justice Assistance payments. How to amend a 2012 tax return   If you are a surviving dependent of a public safety officer (law enforcement officer or firefighter) who died in the line of duty, do not include in your income the death benefit paid to you by the Bureau of Justice Assistance. How to amend a 2012 tax return Government plan annuity. How to amend a 2012 tax return   If you receive a survivor annuity as the child or spouse (or former spouse) of a public safety officer who was killed in the line of duty, you generally do not have to include it in income. How to amend a 2012 tax return This exclusion applies to the amount of the annuity based on the officer's service as a public safety officer. How to amend a 2012 tax return For this purpose, the term public safety officer includes police and law enforcement officers, firefighters, and rescue squad and ambulance crews. How to amend a 2012 tax return More information. How to amend a 2012 tax return   For more information, see Publication 559. How to amend a 2012 tax return Postponed Tax Deadlines The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a terrorist attack. How to amend a 2012 tax return The tax deadlines the IRS may postpone include those for filing income and employment tax returns, paying income and employment taxes, and making contributions to a traditional IRA or Roth IRA. How to amend a 2012 tax return If any tax deadline is postponed, the IRS will publicize the postponement in the affected area and publish a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin (IRB). How to amend a 2012 tax return Affected taxpayers. How to amend a 2012 tax return   If the IRS postpones a tax deadline, the following taxpayers are eligible for the postponement. How to amend a 2012 tax return Any individual whose main home is located in a covered area (defined later). How to amend a 2012 tax return Any business entity or sole proprietor whose principal place of business is located in a covered area. How to amend a 2012 tax return Any individual, business entity, or sole proprietor whose records needed to meet a postponed deadline are maintained in a covered area. How to amend a 2012 tax return The main home or principal place of business does not have to be located in the covered area. How to amend a 2012 tax return Any estate or trust whose tax records necessary to meet a postponed tax deadline are maintained in a covered area. How to amend a 2012 tax return Any individual who is a relief worker affiliated with a recognized government or philanthropic organization and who is assisting in a covered area. How to amend a 2012 tax return The spouse on a joint return with a taxpayer who is eligible for postponements. How to amend a 2012 tax return Any other person determined by the IRS to be affected by a terrorist attack. How to amend a 2012 tax return Covered area. How to amend a 2012 tax return   This is an area in which a terrorist attack took place and in which the IRS has decided to postpone tax deadlines for up to 1 year. How to amend a 2012 tax return Abatement of interest. How to amend a 2012 tax return   The IRS may abate (forgive) the interest on any underpaid income tax for the length of any postponement. How to amend a 2012 tax return Disaster Area Losses If your property was damaged or destroyed as a result of the September 11 attacks, you can choose to deduct your disaster loss on your 2000 return (or amended return) rather than on your 2001 return. How to amend a 2012 tax return You must make this choice to deduct your loss on your 2000 return by the later of the following dates. How to amend a 2012 tax return The due date (without extensions) for filing your 2001 income tax return (April 15, 2002, if you are a calendar year taxpayer). How to amend a 2012 tax return The due date (with extensions) for the 2000 return. How to amend a 2012 tax return For more information about disaster area losses, see Publication 547. How to amend a 2012 tax return Estate Tax Reduction The federal estate tax is reduced for taxable estates of individuals who died as a result of the Oklahoma City attack, the September 11 attacks, and the anthrax attacks. How to amend a 2012 tax return The estate tax is computed using a new rate schedule on page 25 of the November 2001 revision of the instructions for Form 706. How to amend a 2012 tax return The estate tax is reduced by credits against the estate tax, including the unified credit and the state death tax credit. How to amend a 2012 tax return These credits may reduce or eliminate the estate tax due. How to amend a 2012 tax return A special rule extends until January 22, 2003, the period of time allowed to file a claim for a refund of estate taxes that have been paid. How to amend a 2012 tax return Recovery from the September 11th Victim Compensation Fund. How to amend a 2012 tax return   The value of claims for a decedent's pain and suffering is normally included in the gross estate. How to amend a 2012 tax return However, if the estate chooses to seek recovery from this fund, the IRS has determined that, in view of the unique circumstances of this situation and the high likelihood that such claims will be valued at a nominal or zero amount, the claims will be valued at zero for estate tax purposes. How to amend a 2012 tax return Thus, there are no federal estate tax consequences if an estate or beneficiary receives a recovery from this fund. How to amend a 2012 tax return Which estates must file a return. How to amend a 2012 tax return   For decedents dying in 2001, Form 706 must be filed by the executor for the estate of every U. How to amend a 2012 tax return S. How to amend a 2012 tax return citizen or resident whose gross estate, plus adjusted taxable gifts and specific exemption, is more than $675,000. How to amend a 2012 tax return Form 706 must be filed within 9 months after the date of decedent's death unless you receive an extension of time to file. How to amend a 2012 tax return Use Form 4768, Application for Extension of Time To File a Return and/or Pay U. How to amend a 2012 tax return S. How to amend a 2012 tax return Estate (and Generation-Skipping Transfer) Taxes, to apply for an extension. How to amend a 2012 tax return Where to file. How to amend a 2012 tax return   Returns on which the new rate schedule is used should be sent to the following address, which was not available when Form 706 went to print. How to amend a 2012 tax return Internal Revenue Service E & G Department/Stop 824T 201 W. How to amend a 2012 tax return Rivercenter Blvd. How to amend a 2012 tax return Covington, KY 41011 More information. How to amend a 2012 tax return   For more information on the federal estate tax, see the instructions for Form 706. How to amend a 2012 tax return Structured Settlement Factoring Transactions A person who acquires payment rights in a structured settlement arrangement after February 21, 2002, may be subject to a 40% excise tax unless the transfer of the payment rights was approved in advance in a qualified order. How to amend a 2012 tax return The excise tax is figured on the excess of the undiscounted amount of the payments being acquired over the total amount actually paid to acquire them. How to amend a 2012 tax return However, this tax will not apply to transactions entered into from February 22, 2002, to July 1, 2002, if certain requirements are met. How to amend a 2012 tax return For information about these requirements, see Internal Revenue Code section 5891. How to amend a 2012 tax return Worksheet B Illustrated. How to amend a 2012 tax return Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. How to amend a 2012 tax return 1 2000 2001   2 Enter the decedent's taxable income. How to amend a 2012 tax return Figure taxable income as if a separate return had been filed. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 2 $17,259 $14,295   3 Enter the decedent's total tax. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 3 6,123 5,250   4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 4 3,532 3,109   5 Subtract line 4 from line 3. How to amend a 2012 tax return 5 2,591 2,141   6 Enter the surviving spouse's taxable income. How to amend a 2012 tax return Figure taxable income as if a separate return had been filed. How to amend a 2012 tax return See the instructions for line 2. How to amend a 2012 tax return 6 29,025 29,850   7 Enter the surviving spouse's total tax. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 7 5,277 5,391   8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. How to amend a 2012 tax return 8 0 0   9 Subtract line 8 from line 7. How to amend a 2012 tax return 9 5,277 5,391   10 Add lines 5 and 9. How to amend a 2012 tax return 10 7,868 7,532   11 Enter the total tax from the joint return. How to amend a 2012 tax return See Table 1 on page 5 for the line number for years before 2002. How to amend a 2012 tax return 11 10,789 9,728   12 Add lines 4 and 8. How to amend a 2012 tax return 12 3,532 3,109   13 Subtract line 12 from line 11. How to amend a 2012 tax return 13 7,257 6,619   14 Divide line 5 by line 10. How to amend a 2012 tax return Enter the result as a decimal. How to amend a 2012 tax return 14 . How to amend a 2012 tax return 329 . How to amend a 2012 tax return 284   15 Tax to be forgiven. How to amend a 2012 tax return Multiply line 13 by line 14 and enter the result. How to amend a 2012 tax return 15 $2,388 $1,880   Note. How to amend a 2012 tax return If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. How to amend a 2012 tax return Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. How to amend a 2012 tax return If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. How to amend a 2012 tax return The IRS will determine the amount to be refunded. How to amend a 2012 tax return Worksheet B Illustrated. How to amend a 2012 tax return Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. How to amend a 2012 tax return 1 2000 2001   2 Enter the decedent's taxable income. How to amend a 2012 tax return Figure taxable income as if a separate return had been filed. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 2 $17,259 $14,295   3 Enter the decedent's total tax. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 3 6,123 5,250   4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 4 3,532 3,109   5 Subtract line 4 from line 3. How to amend a 2012 tax return 5 2,591 2,141   6 Enter the surviving spouse's taxable income. How to amend a 2012 tax return Figure taxable income as if a separate return had been filed. How to amend a 2012 tax return See the instructions for line 2. How to amend a 2012 tax return 6 29,025 29,850   7 Enter the surviving spouse's total tax. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 7 5,277 5,391   8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. How to amend a 2012 tax return 8 0 0   9 Subtract line 8 from line 7. How to amend a 2012 tax return 9 5,277 5,391   10 Add lines 5 and 9. How to amend a 2012 tax return 10 7,868 7,532   11 Enter the total tax from the joint return. How to amend a 2012 tax return See Table 1 on page 5 for the line number for years before 2002. How to amend a 2012 tax return 11 10,789 9,728   12 Add lines 4 and 8. How to amend a 2012 tax return 12 3,532 3,109   13 Subtract line 12 from line 11. How to amend a 2012 tax return 13 7,257 6,619   14 Divide line 5 by line 10. How to amend a 2012 tax return Enter the result as a decimal. How to amend a 2012 tax return 14 . How to amend a 2012 tax return 329 . How to amend a 2012 tax return 284   15 Tax to be forgiven. How to amend a 2012 tax return Multiply line 13 by line 14 and enter the result. How to amend a 2012 tax return 15 $2,388 $1,880   Note. How to amend a 2012 tax return If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. How to amend a 2012 tax return Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. How to amend a 2012 tax return If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. How to amend a 2012 tax return The IRS will determine the amount to be refunded. How to amend a 2012 tax return Illustrated Worksheets B and C A wife lost her husband in the September 11 attack on the World Trade Center. How to amend a 2012 tax return They filed a joint return for 2000 and the wife chose to file a joint return as a surviving spouse for 2001. How to amend a 2012 tax return The returns for 2000 and 2001 showed the following income, deductions, and tax liabilities. How to amend a 2012 tax return After the husband died, his estate received income of $4,000. How to amend a 2012 tax return Of that amount, $1,000 is net profit from Schedule C received before the end of 2001. How to amend a 2012 tax return This net profit is exempt from income tax as explained earlier under Income received after date of death. How to amend a 2012 tax return The wife files Form 1041 because the gross income of the estate for the tax year ($3,000) is $600 or more. How to amend a 2012 tax return To determine how much of the husband's tax liability for 2000 and 2001 is to be forgiven, the wife completes Worksheet B. How to amend a 2012 tax return She also completes Worksheet C because the forgiven tax liabilities for 2000 and 2001 (line 15 of Worksheet B) total less than $10,000. How to amend a 2012 tax return To claim tax relief for 2000, the wife files Form 1040X and attaches a copy of Worksheet B. How to amend a 2012 tax return To claim tax relief for 2001, she files Form 1040 and attaches copies of Worksheets B and C. How to amend a 2012 tax return   2000 2001 Wages (wife) $35,000 $36,000 Net profit from Schedule C, Profit or Loss From Business (husband) 25,000 22,000 Interest income (joint account) 1,000 1,100 Deduction for ½ of self-employment tax (husband) (1,766) (1,555) Standard deduction (7,350) (7,600) Personal exemptions (2) (5,600) (5,800) Taxable income $46,284 $44,145 Joint income tax liability $7,257 $6,619 Plus: Self-employment tax (husband) 3,532 3,109 Total tax liability $10,789 $9,728   2000 2001 Wages (wife) $35,000 $36,000 Net profit from Schedule C, Profit or Loss From Business (husband) 25,000 22,000 Interest income (joint account) 1,000 1,100 Deduction for ½ of self-employment tax (husband) (1,766) (1,555) Standard deduction (7,350) (7,600) Personal exemptions (2) (5,600) (5,800) Taxable income $46,284 $44,145 Joint income tax liability $7,257 $6,619 Plus: Self-employment tax (husband) 3,532 3,109 Total tax liability $10,789 $9,728 Worksheet C Illustrated. How to amend a 2012 tax return Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. How to amend a 2012 tax return Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. How to amend a 2012 tax return 1 Minimum relief amount. How to amend a 2012 tax return Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. How to amend a 2012 tax return 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2 2,400     3 Enter the distribution deduction from line 18 (Form 1041) . How to amend a 2012 tax return 3 0     4 Add lines 2 and 3. How to amend a 2012 tax return 4 2,400     5 Enter exempt income received after death minus expenses allocable to exempt income. How to amend a 2012 tax return (See Income received after date of death on page 5. How to amend a 2012 tax return ) 5 1,000     6 Add lines 4 and 5. How to amend a 2012 tax return 6 3,400     7 Figure the tax on line 6 using Schedule G (Form 1041). How to amend a 2012 tax return 7 710     8 Figure the tax on line 4 using Schedule G (Form 1041). How to amend a 2012 tax return 8 435     9 Tax on exempt income. How to amend a 2012 tax return Subtract line 8 from line 7. How to amend a 2012 tax return 9 275     10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. How to amend a 2012 tax return If the decedent was not required to file tax returns for the eligible tax years, enter -0-. How to amend a 2012 tax return 10 4,268     11 Add lines 9 and 10. How to amend a 2012 tax return 11 $4,543 12 Additional payment allowed. How to amend a 2012 tax return If line 11 is $10,000 or more, enter -0- and stop here. How to amend a 2012 tax return No additional amount is allowed as a tax payment. How to amend a 2012 tax return Otherwise, subtract line 11 from line 1 and enter the result. How to amend a 2012 tax return 12 $5,457 Note. How to amend a 2012 tax return The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). How to amend a 2012 tax return Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. How to amend a 2012 tax return If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. How to amend a 2012 tax return Write "Sec. How to amend a 2012 tax return 692(d)(2) Payment" and the amount to the right of the entry space. How to amend a 2012 tax return Also indicate whether a Form 1041 is being filed for the decedent's estate. How to amend a 2012 tax return If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). How to amend a 2012 tax return Write “Sec. How to amend a 2012 tax return 692(d)(2) Payment” on the dotted line to the left of the entry space. How to amend a 2012 tax return Worksheet C Illustrated. How to amend a 2012 tax return Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum relief of $10,000. How to amend a 2012 tax return Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. How to amend a 2012 tax return 1 Minimum relief amount. How to amend a 2012 tax return Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. How to amend a 2012 tax return 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2 2,400     3 Enter the distribution deduction from line 18 (Form 1041) . How to amend a 2012 tax return 3 0     4 Add lines 2 and 3. How to amend a 2012 tax return 4 2,400     5 Enter exempt income received after death minus expenses allocable to exempt income. How to amend a 2012 tax return (See Income received after date of death on page 5. How to amend a 2012 tax return ) 5 1,000     6 Add lines 4 and 5. How to amend a 2012 tax return 6 3,400     7 Figure the tax on line 6 using Schedule G (Form 1041). How to amend a 2012 tax return 7 710     8 Figure the tax on line 4 using Schedule G (Form 1041). How to amend a 2012 tax return 8 435     9 Tax on exempt income. How to amend a 2012 tax return Subtract line 8 from line 7. How to amend a 2012 tax return 9 275     10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. How to amend a 2012 tax return If the decedent was not required to file tax returns for the eligible tax years, enter -0-. How to amend a 2012 tax return 10 4,268     11 Add lines 9 and 10. How to amend a 2012 tax return 11 $4,543 12 Additional payment allowed. How to amend a 2012 tax return If line 11 is $10,000 or more, enter -0- and stop here. How to amend a 2012 tax return No additional amount is allowed as a tax payment. How to amend a 2012 tax return Otherwise, subtract line 11 from line 1 and enter the result. How to amend a 2012 tax return 12 $5,457 Note. How to amend a 2012 tax return The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). How to amend a 2012 tax return Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. How to amend a 2012 tax return If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. How to amend a 2012 tax return Write "Sec. How to amend a 2012 tax return 692(d)(2) Payment" and the amount to the right of the entry space. How to amend a 2012 tax return Also indicate whether a Form 1041 is being filed for the decedent's estate. How to amend a 2012 tax return If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). How to amend a 2012 tax return Write “Sec. How to amend a 2012 tax return 692(d)(2) Payment” on the dotted line to the left of the entry space. How to amend a 2012 tax return Additional Worksheets The following additional worksheets are provided for your convenience. How to amend a 2012 tax return Worksheet A. How to amend a 2012 tax return Figuring the Tax To Be Forgiven (For Decedents Who Filed a Return as Single, Married Filing Separately, Head of Household, or Qualifying Widow(er))         (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for tax forgiveness. How to amend a 2012 tax return 1       2 Enter the total tax from the decedent's income tax return. How to amend a 2012 tax return See Table 1 on page 5 for the line number for years before 2002. How to amend a 2012 tax return 2       3 Enter the following taxes, if any, shown on the decedent's income tax return. How to amend a 2012 tax return (These taxes are not eligible for forgiveness. How to amend a 2012 tax return )           a Self-employment tax. How to amend a 2012 tax return 3a         b Social security and Medicare tax on tip income not reported to employer. How to amend a 2012 tax return 3b         c Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). How to amend a 2012 tax return 3c         d Tax on excess accumulation in qualified retirement plans. How to amend a 2012 tax return 3d         e Household employment taxes. How to amend a 2012 tax return 3e         f Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. How to amend a 2012 tax return 3f         g Tax on golden parachute payments. How to amend a 2012 tax return 3g       4 Add lines 3a through 3g. How to amend a 2012 tax return 4       5 Tax to be forgiven. How to amend a 2012 tax return Subtract line 4 from line 2. How to amend a 2012 tax return 5       Note. How to amend a 2012 tax return If the total of columns (A), (B), and (C) of line 5 (including any amounts shown on line 15 of Worksheet B) is less than $10,000, also complete Worksheet C. How to amend a 2012 tax return Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. How to amend a 2012 tax return If filing Form 1040X for an eligible year, enter the amount from line 5 above on Form 1040X in column B of line 10 as a decrease in tax. How to amend a 2012 tax return The IRS will determine the amount to be refunded. How to amend a 2012 tax return Worksheet A. How to amend a 2012 tax return Figuring the Tax To Be Forgiven (For Decedents Who Filed a Return as Single, Married Filing Separately, Head of Household, or Qualifying Widow(er))         (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for tax forgiveness. How to amend a 2012 tax return 1       2 Enter the total tax from the decedent's income tax return. How to amend a 2012 tax return See Table 1 on page 5 for the line number for years before 2002. How to amend a 2012 tax return 2       3 Enter the following taxes, if any, shown on the decedent's income tax return. How to amend a 2012 tax return (These taxes are not eligible for forgiveness. How to amend a 2012 tax return )           a Self-employment tax. How to amend a 2012 tax return 3a         b Social security and Medicare tax on tip income not reported to employer. How to amend a 2012 tax return 3b         c Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). How to amend a 2012 tax return 3c         d Tax on excess accumulation in qualified retirement plans. How to amend a 2012 tax return 3d         e Household employment taxes. How to amend a 2012 tax return 3e         f Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. How to amend a 2012 tax return 3f         g Tax on golden parachute payments. How to amend a 2012 tax return 3g       4 Add lines 3a through 3g. How to amend a 2012 tax return 4       5 Tax to be forgiven. How to amend a 2012 tax return Subtract line 4 from line 2. How to amend a 2012 tax return 5       Note. How to amend a 2012 tax return If the total of columns (A), (B), and (C) of line 5 (including any amounts shown on line 15 of Worksheet B) is less than $10,000, also complete Worksheet C. How to amend a 2012 tax return Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. How to amend a 2012 tax return If filing Form 1040X for an eligible year, enter the amount from line 5 above on Form 1040X in column B of line 10 as a decrease in tax. How to amend a 2012 tax return The IRS will determine the amount to be refunded. How to amend a 2012 tax return Worksheet B. How to amend a 2012 tax return Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. How to amend a 2012 tax return 1       2 Enter the decedent's taxable income. How to amend a 2012 tax return Figure taxable income as if a separate return had been filed. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 2       3 Enter the decedent's total tax. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 4       5 Subtract line 4 from line 3. How to amend a 2012 tax return 5       6 Enter the surviving spouse's taxable income. How to amend a 2012 tax return Figure taxable income as if a separate return had been filed. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 6       7 Enter the surviving spouse's total tax. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. How to amend a 2012 tax return 8       9 Subtract line 8 from line 7. How to amend a 2012 tax return 9       10 Add lines 5 and 9. How to amend a 2012 tax return 10       11 Enter the total tax from the joint return. How to amend a 2012 tax return See Table 1 on page 5 for the line number for years before 2002. How to amend a 2012 tax return 11       12 Add lines 4 and 8. How to amend a 2012 tax return 12       13 Subtract line 12 from line 11. How to amend a 2012 tax return 13       14 Divide line 5 by line 10. How to amend a 2012 tax return Enter the result as a decimal. How to amend a 2012 tax return 14       15 Tax to be forgiven. How to amend a 2012 tax return Multiply line 13 by line 14 and enter the result. How to amend a 2012 tax return 15       Note. How to amend a 2012 tax return If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. How to amend a 2012 tax return Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. How to amend a 2012 tax return If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. How to amend a 2012 tax return The IRS will determine the amount to be refunded. How to amend a 2012 tax return Worksheet B. How to amend a 2012 tax return Figuring the Tax To Be Forgiven (For Decedents Who Filed a Joint Return)       (A) First Eligible Year (1994 or 2000) (B) Second Eligible Year (1995 or 2001) (C) Third Eligible Year (1996 or 2002) 1 Enter the years eligible for forgiveness. How to amend a 2012 tax return 1       2 Enter the decedent's taxable income. How to amend a 2012 tax return Figure taxable income as if a separate return had been filed. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 2       3 Enter the decedent's total tax. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 3       4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 4       5 Subtract line 4 from line 3. How to amend a 2012 tax return 5       6 Enter the surviving spouse's taxable income. How to amend a 2012 tax return Figure taxable income as if a separate return had been filed. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 6       7 Enter the surviving spouse's total tax. How to amend a 2012 tax return See the instructions. How to amend a 2012 tax return 7       8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. How to amend a 2012 tax return 8       9 Subtract line 8 from line 7. How to amend a 2012 tax return 9       10 Add lines 5 and 9. How to amend a 2012 tax return 10       11 Enter the total tax from the joint return. How to amend a 2012 tax return See Table 1 on page 5 for the line number for years before 2002. How to amend a 2012 tax return 11       12 Add lines 4 and 8. How to amend a 2012 tax return 12       13 Subtract line 12 from line 11. How to amend a 2012 tax return 13       14 Divide line 5 by line 10. How to amend a 2012 tax return Enter the result as a decimal. How to amend a 2012 tax return 14       15 Tax to be forgiven. How to amend a 2012 tax return Multiply line 13 by line 14 and enter the result. How to amend a 2012 tax return 15       Note. How to amend a 2012 tax return If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C. How to amend a 2012 tax return Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1. How to amend a 2012 tax return If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. How to amend a 2012 tax return The IRS will determine the amount to be refunded. How to amend a 2012 tax return Worksheet C. How to amend a 2012 tax return Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum tax forgiveness of $10,000. How to amend a 2012 tax return Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. How to amend a 2012 tax return 1 Minimum tax forgiveness. How to amend a 2012 tax return Note. How to amend a 2012 tax return Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. How to amend a 2012 tax return 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . How to amend a 2012 tax return 3       4 Add lines 2 and 3. How to amend a 2012 tax return 4       5 Enter exempt income received after death minus expenses allocable to exempt income. How to amend a 2012 tax return (See Income received after date of death on page 5. How to amend a 2012 tax return ) 5       6 Add lines 4 and 5. How to amend a 2012 tax return 6       7 Figure the tax on line 6 using Schedule G (Form 1041). How to amend a 2012 tax return 7       8 Figure the tax on line 4 using Schedule G (Form 1041). How to amend a 2012 tax return 8       9 Tax on exempt income. How to amend a 2012 tax return Subtract line 8 from line 7. How to amend a 2012 tax return 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. How to amend a 2012 tax return If the decedent was not required to file tax returns for the eligible tax years, enter -0-. How to amend a 2012 tax return 10       11 Add lines 9 and 10. How to amend a 2012 tax return 11   12 Additional payment allowed. How to amend a 2012 tax return If line 11 is $10,000 or more, enter -0- and stop here. How to amend a 2012 tax return No additional amount is allowed as a tax payment. How to amend a 2012 tax return Otherwise, subtract line 11 from line 1 and enter the result. How to amend a 2012 tax return 12   Note. How to amend a 2012 tax return The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). How to amend a 2012 tax return Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. How to amend a 2012 tax return If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. How to amend a 2012 tax return Write "Sec. How to amend a 2012 tax return 692(d)(2) Payment" and the amount to the right of the entry space. How to amend a 2012 tax return Also indicate whether a Form 1041 is being filed for the decedent's estate. How to amend a 2012 tax return If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). How to amend a 2012 tax return Write “Sec. How to amend a 2012 tax return 692(d)(2) Payment” on the dotted line to the left of the entry space. How to amend a 2012 tax return Worksheet C. How to amend a 2012 tax return Amount Treated as Tax Payment for Decedent's Last Tax Year Caution: The decedent is entitled to minimum tax forgiveness of $10,000. How to amend a 2012 tax return Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000. How to amend a 2012 tax return 1 Minimum tax forgiveness. How to amend a 2012 tax return Note. How to amend a 2012 tax return Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. How to amend a 2012 tax return 1 $10,000 2 Enter the taxable income from line 22 (Form 1041) 2       3 Enter the distribution deduction from line 18 (Form 1041) . How to amend a 2012 tax return 3       4 Add lines 2 and 3. How to amend a 2012 tax return 4       5 Enter exempt income received after death minus expenses allocable to exempt income. How to amend a 2012 tax return (See Income received after date of death on page 5. How to amend a 2012 tax return ) 5       6 Add lines 4 and 5. How to amend a 2012 tax return 6       7 Figure the tax on line 6 using Schedule G (Form 1041). How to amend a 2012 tax return 7       8 Figure the tax on line 4 using Schedule G (Form 1041). How to amend a 2012 tax return 8       9 Tax on exempt income. How to amend a 2012 tax return Subtract line 8 from line 7. How to amend a 2012 tax return 9       10 Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. How to amend a 2012 tax return If the decedent was not required to file tax returns for the eligible tax years, enter -0-. How to amend a 2012 tax return 10       11 Add lines 9 and 10. How to amend a 2012 tax return 11   12 Additional payment allowed. How to amend a 2012 tax return If line 11 is $10,000 or more, enter -0- and stop here. How to amend a 2012 tax return No additional amount is allowed as a tax payment. How to amend a 2012 tax return Otherwise, subtract line 11 from line 1 and enter the result. How to amend a 2012 tax return 12   Note. How to amend a 2012 tax return The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001). How to amend a 2012 tax return Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. How to amend a 2012 tax return If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. How to amend a 2012 tax return Write "Sec. How to amend a 2012 tax return 692(d)(2) Payment" and the amount to the right of the entry space. How to amend a 2012 tax return Also indicate whether a Form 1041 is being filed for the decedent's estate. How to amend a 2012 tax return If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). How to amend a 2012 tax return Write “Sec. How to amend a 2012 tax return 692(d)(2) Payment” on the dotted line to the left of the entry space. How to amend a 2012 tax return How To Get Tax Help Special IRS assistance. How to amend a 2012 tax return   The IRS is providing special help for those affected by the terrorist attacks, as well as survivors and personal representatives of the victims. How to amend a 2012 tax return We have set up a special toll-free number for people who may have trouble filing or paying their taxes because they were affected by the terrorist attacks, or who have other tax issues related to the attacks. How to amend a 2012 tax return Call 1–866–562–5227 Monday through Friday In English–7 a. How to amend a 2012 tax return m. How to amend a 2012 tax return to 10 p. How to amend a 2012 tax return m. How to amend a 2012 tax return local time In Spanish–8 a. How to amend a 2012 tax return m. How to amend a 2012 tax return to 9:30 p. How to amend a 2012 tax return m. How to amend a 2012 tax return local time   The IRS web site at www. How to amend a 2012 tax return irs. How to amend a 2012 tax return gov has notices and other tax relief information. How to amend a 2012 tax return Check it periodically for any new guidance or to see if Congress has enacted new legislation. How to amend a 2012 tax return   Business taxpayers affected by the attacks can e-mail their questions to corp. How to amend a 2012 tax return disaster. How to amend a 2012 tax return relief@irs. How to amend a 2012 tax return gov. How to amend a 2012 tax return   For current information on Presidentially declared disaster areas, check the Federal Emergency Management Agency Web site at www. How to amend a 2012 tax return fema. How to amend a 2012 tax return gov. How to amend a 2012 tax return Other help from the IRS. How to amend a 2012 tax return   You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get more information from the IRS in several ways. How to amend a 2012 tax return By selecting the method that is best for you, you will have quick and easy access to tax help. How to amend a 2012 tax return Contacting your Taxpayer Advocate. How to amend a 2012 tax return   If you have attempted to deal with an IRS problem unsuccessfully, you should contact your Taxpayer Advocate. How to amend a 2012 tax return   The Taxpayer Advocate represents your interests and concerns within the IRS by protecting your rights and resolving problems that have not been fixed through normal channels. How to amend a 2012 tax return While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that your case is given a complete and impartial review. How to amend a 2012 tax return   To contact your Taxpayer Advocate: Call the Taxpayer Advocate at 1–877–777–4778. How to amend a 2012 tax return Call the IRS at 1–800–829–1040. How to amend a 2012 tax return Call, write, or fax the Taxpayer Advocate office in your area. How to amend a 2012 tax return Call 1–800–829–4059 if you are a TTY/TDD user. How to amend a 2012 tax return   For more information, see Publication 1546, The Taxpayer Advocate Service of the IRS. How to amend a 2012 tax return Free tax services. How to amend a 2012 tax return   To find out what services are available, get Publication 910, Guide to Free Tax Services. How to amend a 2012 tax return It contains a list of free tax publications and an index of tax topics. How to amend a 2012 tax return It also describes other free tax information services, including tax education and assistance programs and a list of TeleTax topics. How to amend a 2012 tax return Personal computer. How to amend a 2012 tax return With your personal computer and modem, you can access the IRS on the Internet at www. How to amend a 2012 tax return irs. How to amend a 2012 tax return gov. How to amend a 2012 tax return While visiting our web site, you can: Find answers to questions you may have. How to amend a 2012 tax return Download forms and publications or search for forms and pub
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Tax Information for Bond Professionals

IRS Revises Form for Tax-Exempt Bonds
IR-2005-12– The IRS today released a revised form used by municipalities and other issuers of tax-exempt bonds to make arbitrage related payments.

Circular 230 Tax Professionals
The Office of Professional Responsibility (OPR) establishes and enforces consistent standards of competence, integrity and conduct for tax professionals enrolled agents, attorneys, CPAs, and other individuals and groups covered by Circular 230.

Index of Applicable Federal Rates (AFRs)
Each month, the IRS provides various prescribed rates for federal income tax purposes. These rates, known as Applicable Federal Rates, or AFRs, are regularly published as Revenue Rulings. The Revenue Rulings containing current and recent-past AFRs are available here in Adobe PDF format.

TEB CPE Texts
A series of articles published by the Service as the Tax Exempt Bonds Continuing Professional Education Technical Instruction Program.

Page Last Reviewed or Updated: 19-Feb-2014

The How To Amend A 2012 Tax Return

How to amend a 2012 tax return Publication 542 - Main Content Table of Contents Businesses Taxed as CorporationsPersonal services. How to amend a 2012 tax return Employee-owners. How to amend a 2012 tax return Other rules. How to amend a 2012 tax return Other rules. How to amend a 2012 tax return Property Exchanged for StockNonqualified preferred stock. How to amend a 2012 tax return Liabilities. How to amend a 2012 tax return Election to reduce basis. How to amend a 2012 tax return Capital Contributions Filing and Paying Income TaxesIncome Tax Return Penalties Estimated Tax U. How to amend a 2012 tax return S. How to amend a 2012 tax return Real Property Interest Accounting MethodsSection 481(a) adjustment. How to amend a 2012 tax return Accounting Periods Recordkeeping Income, Deductions, and Special ProvisionsCosts of Going Into Business Related Persons Income From Qualifying Shipping Activities Election to Expense Qualified Refinery Property Deduction to Comply With EPA Sulfur Regulations Energy-Efficient Commercial Building Property Deduction Corporate Preference Items Dividends-Received Deduction Extraordinary Dividends Below-Market Loans Charitable Contributions Capital Losses Net Operating Losses At-Risk Limits Passive Activity Limits Figuring TaxTax Rate Schedule Alternative Minimum Tax (AMT) Credits Recapture Taxes Accumulated Earnings Tax Distributions to ShareholdersMoney or Property Distributions Distributions of Stock or Stock Rights Constructive Distributions Reporting Dividends and Other Distributions How To Get Tax Help Businesses Taxed as Corporations The rules you must use to determine whether a business is taxed as a corporation changed for businesses formed after 1996. How to amend a 2012 tax return Business formed before 1997. How to amend a 2012 tax return   A business formed before 1997 and taxed as a corporation under the old rules will generally continue to be taxed as a corporation. How to amend a 2012 tax return Business formed after 1996. How to amend a 2012 tax return   The following businesses formed after 1996 are taxed as corporations. How to amend a 2012 tax return A business formed under a federal or state law that refers to it as a corporation, body corporate, or body politic. How to amend a 2012 tax return A business formed under a state law that refers to it as a joint-stock company or joint-stock association. How to amend a 2012 tax return An insurance company. How to amend a 2012 tax return Certain banks. How to amend a 2012 tax return A business wholly owned by a state or local government. How to amend a 2012 tax return A business specifically required to be taxed as a corporation by the Internal Revenue Code (for example, certain publicly traded partnerships). How to amend a 2012 tax return Certain foreign businesses. How to amend a 2012 tax return Any other business that elects to be taxed as a corporation. How to amend a 2012 tax return For example, a limited liability company (LLC) can elect to be treated as an association taxable as a corporation by filing Form 8832, Entity Classification Election. How to amend a 2012 tax return For more information about LLCs, see Publication 3402, Taxation of Limited Liability Companies. How to amend a 2012 tax return S corporations. How to amend a 2012 tax return   Some corporations may meet the qualifications for electing to be S corporations. How to amend a 2012 tax return For information on S corporations, see the instructions for Form 1120S, U. How to amend a 2012 tax return S. How to amend a 2012 tax return Income Tax Return for an S Corporation. How to amend a 2012 tax return Personal service corporations. How to amend a 2012 tax return   A corporation is a personal service corporation if it meets all of the following requirements. How to amend a 2012 tax return Its principal activity during the “testing period” is performing personal services (defined later). How to amend a 2012 tax return Generally, the testing period for any tax year is the prior tax year. How to amend a 2012 tax return If the corporation has just been formed, the testing period begins on the first day of its tax year and ends on the earlier of: The last day of its tax year, or The last day of the calendar year in which its tax year begins. How to amend a 2012 tax return Its employee-owners substantially perform the services in (1), above. How to amend a 2012 tax return This requirement is met if more than 20% of the corporation's compensation cost for its activities of performing personal services during the testing period is for personal services performed by employee-owners. How to amend a 2012 tax return Its employee-owners own more than 10% of the fair market value of its outstanding stock on the last day of the testing period. How to amend a 2012 tax return Personal services. How to amend a 2012 tax return   Personal services include any activity performed in the fields of accounting, actuarial science, architecture, consulting, engineering, health (including veterinary services), law, and the performing arts. How to amend a 2012 tax return Employee-owners. How to amend a 2012 tax return   A person is an employee-owner of a personal service corporation if both of the following apply. How to amend a 2012 tax return He or she is an employee of the corporation or performs personal services for, or on behalf of, the corporation (even if he or she is an independent contractor for other purposes) on any day of the testing period. How to amend a 2012 tax return He or she owns any stock in the corporation at any time during the testing period. How to amend a 2012 tax return Other rules. How to amend a 2012 tax return   For other rules that apply to personal service corporations see Accounting Periods, later. How to amend a 2012 tax return Closely held corporations. How to amend a 2012 tax return   A corporation is closely held if all of the following apply. How to amend a 2012 tax return It is not a personal service corporation. How to amend a 2012 tax return At any time during the last half of the tax year, more than 50% of the value of its outstanding stock is, directly or indirectly, owned by or for five or fewer individuals. How to amend a 2012 tax return “Individual” includes certain trusts and private foundations. How to amend a 2012 tax return Other rules. How to amend a 2012 tax return   For the at-risk rules that apply to closely held corporations, seeAt-Risk Limits, later. How to amend a 2012 tax return Property Exchanged for Stock If you transfer property (or money and property) to a corporation in exchange for stock in that corporation (other than nonqualified preferred stock, described later), and immediately afterward you are in control of the corporation, the exchange is usually not taxable. How to amend a 2012 tax return This rule applies both to individuals and to groups who transfer property to a corporation. How to amend a 2012 tax return It also applies whether the corporation is being formed or is already operating. How to amend a 2012 tax return It does not apply in the following situations. How to amend a 2012 tax return The corporation is an investment company. How to amend a 2012 tax return You transfer the property in a bankruptcy or similar proceeding in exchange for stock used to pay creditors. How to amend a 2012 tax return The stock is received in exchange for the corporation's debt (other than a security) or for interest on the corporation's debt (including a security) that accrued while you held the debt. How to amend a 2012 tax return Both the corporation and any person involved in a nontaxable exchange of property for stock must attach to their income tax returns a complete statement of all facts pertinent to the exchange. How to amend a 2012 tax return For more information, see section 1. How to amend a 2012 tax return 351-3 of the Regulations. How to amend a 2012 tax return Control of a corporation. How to amend a 2012 tax return   To be in control of a corporation, you or your group of transferors must own, immediately after the exchange, at least 80% of the total combined voting power of all classes of stock entitled to vote and at least 80% of the outstanding shares of each class of nonvoting stock. How to amend a 2012 tax return Example 1. How to amend a 2012 tax return You and Bill Jones buy property for $100,000. How to amend a 2012 tax return You both organize a corporation when the property has a fair market value of $300,000. How to amend a 2012 tax return You transfer the property to the corporation for all its authorized capital stock, which has a par value of $300,000. How to amend a 2012 tax return No gain is recognized by you, Bill, or the corporation. How to amend a 2012 tax return Example 2. How to amend a 2012 tax return You and Bill transfer the property with a basis of $100,000 to a corporation in exchange for stock with a fair market value of $300,000. How to amend a 2012 tax return This represents only 75% of each class of stock of the corporation. How to amend a 2012 tax return The other 25% was already issued to someone else. How to amend a 2012 tax return You and Bill recognize a taxable gain of $200,000 on the transaction. How to amend a 2012 tax return Services rendered. How to amend a 2012 tax return   The term property does not include services rendered or to be rendered to the issuing corporation. How to amend a 2012 tax return The value of stock received for services is income to the recipient. How to amend a 2012 tax return Example. How to amend a 2012 tax return You transfer property worth $35,000 and render services valued at $3,000 to a corporation in exchange for stock valued at $38,000. How to amend a 2012 tax return Right after the exchange, you own 85% of the outstanding stock. How to amend a 2012 tax return No gain is recognized on the exchange of property. How to amend a 2012 tax return However, you recognize ordinary income of $3,000 as payment for services you rendered to the corporation. How to amend a 2012 tax return Property of relatively small value. How to amend a 2012 tax return   The term property does not include property of a relatively small value when it is compared to the value of stock and securities already owned or to be received for services by the transferor if the main purpose of the transfer is to qualify for the nonrecognition of gain or loss by other transferors. How to amend a 2012 tax return   Property transferred will not be considered to be of relatively small value if its fair market value is at least 10% of the fair market value of the stock and securities already owned or to be received for services by the transferor. How to amend a 2012 tax return Stock received in disproportion to property transferred. How to amend a 2012 tax return   If a group of transferors exchange property for corporate stock, each transferor does not have to receive stock in proportion to his or her interest in the property transferred. How to amend a 2012 tax return If a disproportionate transfer takes place, it will be treated for tax purposes in accordance with its true nature. How to amend a 2012 tax return It may be treated as if the stock were first received in proportion and then some of it used to make gifts, pay compensation for services, or satisfy the transferor's obligations. How to amend a 2012 tax return Money or other property received. How to amend a 2012 tax return   If, in an otherwise nontaxable exchange of property for corporate stock, you also receive money or property other than stock, you may have to recognize gain. How to amend a 2012 tax return You must recognize gain only up to the amount of money plus the fair market value of the other property you receive. How to amend a 2012 tax return The rules for figuring the recognized gain in this situation generally follow those for a partially nontaxable exchange discussed in Publication 544 under Like-Kind Exchanges. How to amend a 2012 tax return If the property you give up includes depreciable property, the recognized gain may have to be reported as ordinary income from depreciation. How to amend a 2012 tax return See chapter 3 of Publication 544. How to amend a 2012 tax return No loss is recognized. How to amend a 2012 tax return Nonqualified preferred stock. How to amend a 2012 tax return   Nonqualified preferred stock is treated as property other than stock. How to amend a 2012 tax return Generally, it is preferred stock with any of the following features. How to amend a 2012 tax return The holder has the right to require the issuer or a related person to redeem or buy the stock. How to amend a 2012 tax return The issuer or a related person is required to redeem or buy the stock. How to amend a 2012 tax return The issuer or a related person has the right to redeem or buy the stock and, on the issue date, it is more likely than not that the right will be exercised. How to amend a 2012 tax return The dividend rate on the stock varies with reference to interest rates, commodity prices, or similar indices. How to amend a 2012 tax return For a detailed definition of nonqualified preferred stock, see section 351(g)(2) of the Internal Revenue Code. How to amend a 2012 tax return Liabilities. How to amend a 2012 tax return   If the corporation assumes your liabilities, the exchange generally is not treated as if you received money or other property. How to amend a 2012 tax return There are two exceptions to this treatment. How to amend a 2012 tax return If the liabilities the corporation assumes are more than your adjusted basis in the property you transfer, gain is recognized up to the difference. How to amend a 2012 tax return However, if the liabilities assumed give rise to a deduction when paid, such as a trade account payable or interest, no gain is recognized. How to amend a 2012 tax return If there is no good business reason for the corporation to assume your liabilities, or if your main purpose in the exchange is to avoid federal income tax, the assumption is treated as if you received money in the amount of the liabilities. How to amend a 2012 tax return For more information on the assumption of liabilities, see section 357(d) of the Internal Revenue Code. How to amend a 2012 tax return Example. How to amend a 2012 tax return You transfer property to a corporation for stock. How to amend a 2012 tax return Immediately after the transfer, you control the corporation. How to amend a 2012 tax return You also receive $10,000 in the exchange. How to amend a 2012 tax return Your adjusted basis in the transferred property is $20,000. How to amend a 2012 tax return The stock you receive has a fair market value (FMV) of $16,000. How to amend a 2012 tax return The corporation also assumes a $5,000 mortgage on the property for which you are personally liable. How to amend a 2012 tax return Gain is realized as follows. How to amend a 2012 tax return FMV of stock received $16,000 Cash received 10,000 Liability assumed by corporation 5,000 Total received $31,000 Minus: Adjusted basis of property transferred 20,000 Realized gain $11,000   The liability assumed is not treated as money or other property. How to amend a 2012 tax return The recognized gain is limited to $10,000, the cash received. How to amend a 2012 tax return Loss on exchange. How to amend a 2012 tax return   If you have a loss from an exchange and own, directly or indirectly, more than 50% of the corporation's stock, you cannot deduct the loss. How to amend a 2012 tax return For more information, see Nondeductible Loss under Sales and Exchanges Between Related Persons in chapter 2 of Publication 544. How to amend a 2012 tax return Basis of stock or other property received. How to amend a 2012 tax return   The basis of the stock you receive is generally the adjusted basis of the property you transfer. How to amend a 2012 tax return Increase this amount by any amount treated as a dividend, plus any gain recognized on the exchange. How to amend a 2012 tax return Decrease this amount by any cash you received, the fair market value of any other property you received, and any loss recognized on the exchange. How to amend a 2012 tax return Also decrease this amount by the amount of any liability the corporation or another party to the exchange assumed from you, unless payment of the liability gives rise to a deduction when paid. How to amend a 2012 tax return    Further decreases may be required when the corporation or another party to the exchange assumes from you a liability that gives rise to a deduction when paid, if the basis of the stock would otherwise be higher than its fair market value on the date of the exchange. How to amend a 2012 tax return This rule does not apply if the entity assuming the liability acquired either substantially all of the assets or the trade or business with which the liability is associated. How to amend a 2012 tax return The basis of any other property you receive is its fair market value on the date of the trade. How to amend a 2012 tax return Basis of property transferred. How to amend a 2012 tax return   A corporation that receives property from you in exchange for its stock generally has the same basis you had in the property, increased by any gain you recognized on the exchange. How to amend a 2012 tax return However, the increase for the gain recognized may be limited. How to amend a 2012 tax return For more information, see section 362 of the Internal Revenue Code. How to amend a 2012 tax return Election to reduce basis. How to amend a 2012 tax return   In a section 351 transaction, if the adjusted basis of the property transferred exceeds the property's fair market value, the transferor and transferee may make an irrevocable election to treat the basis of the stock received by the transferor as having a basis equal to the fair market value of the property transferred. How to amend a 2012 tax return The transferor and transferee make this election by attaching a statement to their tax returns filed by the due date (including extensions) for the tax year in which the transaction occurred. How to amend a 2012 tax return However, if the transferor makes the election by including the certification provided in Notice 2005-70, 2005-41, I. How to amend a 2012 tax return R. How to amend a 2012 tax return B. How to amend a 2012 tax return 694, on or with its tax return filed by the due date (including extensions), then no election need be made by the transferee. How to amend a 2012 tax return    For more information on making this election, see section 362(e)(2)(C) of the Internal Revenue Code, and Notice 2005-70. How to amend a 2012 tax return Capital Contributions This section explains the tax treatment of contributions from shareholders and nonshareholders. How to amend a 2012 tax return Paid-in capital. How to amend a 2012 tax return   Contributions to the capital of a corporation, whether or not by shareholders, are paid-in capital. How to amend a 2012 tax return These contributions are not taxable to the corporation. How to amend a 2012 tax return Basis. How to amend a 2012 tax return   The corporation's basis of property contributed to capital by a shareholder is the same as the basis the shareholder had in the property, increased by any gain the shareholder recognized on the exchange. How to amend a 2012 tax return However, the increase for the gain recognized may be limited. How to amend a 2012 tax return For more information, see Basis of property transferred, above, and section 362 of the Internal Revenue Code. How to amend a 2012 tax return   The basis of property contributed to capital by a person other than a shareholder is zero. How to amend a 2012 tax return   If a corporation receives a cash contribution from a person other than a shareholder, the corporation must reduce the basis of any property acquired with the contribution during the 12-month period beginning on the day it received the contribution by the amount of the contribution. How to amend a 2012 tax return If the amount contributed is more than the cost of the property acquired, then reduce, but not below zero, the basis of the other properties held by the corporation on the last day of the 12-month period in the following order. How to amend a 2012 tax return Depreciable property. How to amend a 2012 tax return Amortizable property. How to amend a 2012 tax return Property subject to cost depletion but not to percentage depletion. How to amend a 2012 tax return All other remaining properties. How to amend a 2012 tax return   Reduce the basis of property in each category to zero before going on to the next category. How to amend a 2012 tax return   There may be more than one piece of property in each category. How to amend a 2012 tax return Base the reduction of the basis of each property on the following ratio:   Basis of each piece of property   Bases of all properties (within that category) If the corporation wishes to make this adjustment in some other way, it must get IRS approval. How to amend a 2012 tax return The corporation files a request for approval with its income tax return for the tax year in which it receives the contribution. How to amend a 2012 tax return Filing and Paying Income Taxes The federal income tax is a pay-as-you-go tax. How to amend a 2012 tax return A corporation generally must make estimated tax payments as it earns or receives income during its tax year. How to amend a 2012 tax return After the end of the year, the corporation must file an income tax return. How to amend a 2012 tax return This section will help you determine when and how to pay and file corporate income taxes. How to amend a 2012 tax return For certain corporations affected by Presidentially declared disasters such as hurricanes, the due dates for filing returns, paying taxes, and performing other time-sensitive acts may be extended. How to amend a 2012 tax return The IRS may also forgive the interest and penalties on any underpaid tax for the length of any extension. How to amend a 2012 tax return For more information, visit www. How to amend a 2012 tax return irs. How to amend a 2012 tax return gov/newsroom/article/0,,id=108362. How to amend a 2012 tax return 00. How to amend a 2012 tax return Income Tax Return This section will help you determine when and how to report a corporation's income tax. How to amend a 2012 tax return Who must file. How to amend a 2012 tax return   Unless exempt under section 501 of the Internal Revenue Code, all domestic corporations in existence for any part of a tax year (including corporations in bankruptcy) must file an income tax return whether or not they have taxable income. How to amend a 2012 tax return Which form to file. How to amend a 2012 tax return   A corporation generally must file Form 1120, U. How to amend a 2012 tax return S. How to amend a 2012 tax return Corporation Income Tax Return, to report its income, gains, losses, deductions, credits, and to figure its income tax liability. How to amend a 2012 tax return Certain organizations and entities must file special returns. How to amend a 2012 tax return For more information, see Special Returns for Certain Organizations, in the Instructions for Form 1120. How to amend a 2012 tax return Electronic filing. How to amend a 2012 tax return   Corporations can generally electronically file (e-file) Form 1120 and certain related forms, schedules, and attachments. How to amend a 2012 tax return Certain corporations with total assets of $10 million or more, that file at least 250 returns a year must e-file Form 1120. How to amend a 2012 tax return However, in certain instances, these corporations can request a waiver. How to amend a 2012 tax return For more information regarding electronic filing, visit www. How to amend a 2012 tax return irs. How to amend a 2012 tax return gov/efile. How to amend a 2012 tax return When to file. How to amend a 2012 tax return   Generally, a corporation must file its income tax return by the 15th day of the 3rd month after the end of its tax year. How to amend a 2012 tax return A new corporation filing a short-period return must generally file by the 15th day of the 3rd month after the short period ends. How to amend a 2012 tax return A corporation that has dissolved must generally file by the 15th day of the 3rd month after the date it dissolved. How to amend a 2012 tax return Example 1. How to amend a 2012 tax return A corporation's tax year ends December 31. How to amend a 2012 tax return It must file its income tax return by March 15th. How to amend a 2012 tax return Example 2. How to amend a 2012 tax return A corporation's tax year ends June 30. How to amend a 2012 tax return It must file its income tax return by September 15th. How to amend a 2012 tax return   If the due date falls on a Saturday, Sunday, or legal holiday, the due date is extended to the next business day. How to amend a 2012 tax return Extension of time to file. How to amend a 2012 tax return   File Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information and Other Returns, to request an extension of time to file a corporation income tax return. How to amend a 2012 tax return The IRS will grant the extension if you complete the form properly, file it, and pay any tax due by the original due date for the return. How to amend a 2012 tax return   Form 7004 does not extend the time for paying the tax due on the return. How to amend a 2012 tax return Interest, and possibly penalties, will be charged on any part of the final tax due not shown as a balance due on Form 7004. How to amend a 2012 tax return The interest is figured from the original due date of the return to the date of payment. How to amend a 2012 tax return   For more information, see the instructions for Form 7004. How to amend a 2012 tax return How to pay your taxes. How to amend a 2012 tax return   A corporation must pay its tax due in full no later than the 15th day of the 3rd month after the end of its tax year. How to amend a 2012 tax return Electronic Federal Tax Payment System (EFTPS). How to amend a 2012 tax return   Corporations generally must use EFTPS to make deposits of all tax liabilities (including social security, Medicare, withheld income, excise, and corporate income taxes). How to amend a 2012 tax return For more information on EFTPS and enrollment, visit www. How to amend a 2012 tax return eftps. How to amend a 2012 tax return gov or call 1-800-555-4477. How to amend a 2012 tax return Also see Publication 966, The Secure Way to Pay Your Federal Taxes. How to amend a 2012 tax return Note. How to amend a 2012 tax return Forms 8109 and 8109-B, Federal Tax Deposit Coupon, can no longer be used to make federal tax deposits. How to amend a 2012 tax return Penalties Generally, if the corporation receives a notice about interest and penalties after it files its return, send the IRS an explanation and we will determine if the corporation meets reasonable-cause criteria. How to amend a 2012 tax return Do not attach an explanation when the corporation's return is filed. How to amend a 2012 tax return See the instructions for your income tax return. How to amend a 2012 tax return Late filing of return. How to amend a 2012 tax return    A corporation that does not file its tax return by the due date, including extensions, may be penalized 5% of the unpaid tax for each month or part of a month the return is late, up to a maximum of 25% of the unpaid tax. How to amend a 2012 tax return If the corporation is charged a penalty for late payment of tax (discussed next) for the same period of time, the penalty for late filing is reduced by the amount of the penalty for late payment. How to amend a 2012 tax return The minimum penalty for a return that is over 60 days late is the smaller of the tax due or $100. How to amend a 2012 tax return The penalty will not be imposed if the corporation can show the failure to file on time was due to a reasonable cause. How to amend a 2012 tax return Late payment of tax. How to amend a 2012 tax return    A corporation that does not pay the tax when due may be penalized ½ of 1% of the unpaid tax for each month or part of a month the tax is not paid, up to a maximum of 25% of the unpaid tax. How to amend a 2012 tax return The penalty will not be imposed if the corporation can show that the failure to pay on time was due to a reasonable cause. How to amend a 2012 tax return Trust fund recovery penalty. How to amend a 2012 tax return   If income, social security, and Medicare taxes that a corporation must withhold from employee wages are not withheld or are not deposited or paid to the United States Treasury, the trust fund recovery penalty may apply. How to amend a 2012 tax return The penalty is the full amount of the unpaid trust fund tax. How to amend a 2012 tax return This penalty may apply to you if these unpaid taxes cannot be immediately collected from the business. How to amend a 2012 tax return   The trust fund recovery penalty may be imposed on all persons who are determined by the IRS to be responsible for collecting, accounting for, and paying these taxes, and who acted willfully in not doing so. How to amend a 2012 tax return   A responsible person can be an officer or employee of a corporation, an accountant, or a volunteer director/trustee. How to amend a 2012 tax return A responsible person also may include one who signs checks for the corporation or otherwise has authority to cause the spending of business funds. How to amend a 2012 tax return   Willfully means voluntarily, consciously, and intentionally. How to amend a 2012 tax return A responsible person acts willfully if the person knows the required actions are not taking place. How to amend a 2012 tax return   For more information on withholding and paying these taxes, see Publication 15 (Circular E), Employer's Tax Guide, and Publication 51, (Circular A), Agricultural Employer's Tax Guide. How to amend a 2012 tax return Other penalties. How to amend a 2012 tax return   Other penalties can be imposed for negligence, substantial understatement of tax, reportable transaction understatements, and fraud. How to amend a 2012 tax return See sections 6662, 6662A, and 6663 of the Internal Revenue Code. How to amend a 2012 tax return Estimated Tax Generally, a corporation must make installment payments if it expects its estimated tax for the year to be $500 or more. How to amend a 2012 tax return If the corporation does not pay the installments when they are due, it could be subject to an underpayment penalty. How to amend a 2012 tax return This section will explain how to avoid this penalty. How to amend a 2012 tax return When to pay estimated tax. How to amend a 2012 tax return   Installment payments are due by the 15th day of the 4th, 6th, 9th, and 12th months of the corporation's tax year. How to amend a 2012 tax return Example 1. How to amend a 2012 tax return Your corporation's tax year ends December 31. How to amend a 2012 tax return Installment payments are due on April 15, June 15, September 15, and December 15. How to amend a 2012 tax return Example 2. How to amend a 2012 tax return Your corporation's tax year ends June 30. How to amend a 2012 tax return Installment payments are due on October 15, December 15, March 15, and June 15. How to amend a 2012 tax return   If any due date falls on a Saturday, Sunday, or legal holiday, the installment is due on the next business day. How to amend a 2012 tax return How to figure each required installment. How to amend a 2012 tax return   Use Form 1120-W, Estimated Tax for Corporations, as a worksheet to figure each required installment of estimated tax. How to amend a 2012 tax return You will generally use one of the following two methods to figure each required installment. How to amend a 2012 tax return You should use the method that yields the smallest installment payments. How to amend a 2012 tax return Note. How to amend a 2012 tax return In these discussions, “return” generally refers to the corporation's original return. How to amend a 2012 tax return However, an amended return is considered the original return if it is filed by the due date (including extensions) of the original return. How to amend a 2012 tax return Method 1. How to amend a 2012 tax return   Each required installment is 25% of the income tax the corporation will show on its return for the current year. How to amend a 2012 tax return Method 2. How to amend a 2012 tax return   Each required installment is 25% of the income tax shown on the corporation's return for the previous year. How to amend a 2012 tax return   To use Method 2: The corporation must have filed a return for the previous year, The return must have been for a full 12 months, and The return must have shown a positive tax liability (not zero). How to amend a 2012 tax return Also, if the corporation is a large corporation, it can use Method 2 to figure the first installment only. How to amend a 2012 tax return   See the Instructions for Form 1120-W, for the definition of a large corporation and other special rules for large corporations. How to amend a 2012 tax return Other methods. How to amend a 2012 tax return   If a corporation's income is expected to vary during the year because, for example, its business is seasonal, it may be able to lower the amount of one or more required installments by using one or both of the following methods. How to amend a 2012 tax return The annualized income installment method. How to amend a 2012 tax return The adjusted seasonal installment method. How to amend a 2012 tax return Use Schedule A of Form 1120-W to determine if using one or both of these methods will lower the amount of any required installments. How to amend a 2012 tax return Refiguring required installments. How to amend a 2012 tax return   If after the corporation figures and deposits its estimated tax it finds that its tax liability for the year will be more or less than originally estimated, it may have to refigure its required installments to see if an underpayment penalty may apply. How to amend a 2012 tax return An immediate catchup payment should be made to reduce any penalty resulting from the underpayment of any earlier installments. How to amend a 2012 tax return Underpayment penalty. How to amend a 2012 tax return   If the corporation does not pay a required installment of estimated tax by its due date, it may be subject to a penalty. How to amend a 2012 tax return The penalty is figured separately for each installment due date. How to amend a 2012 tax return The corporation may owe a penalty for an earlier due date, even if it paid enough tax later to make up the underpayment. How to amend a 2012 tax return This is true even if the corporation is due a refund when its return is filed. How to amend a 2012 tax return Form 2220. How to amend a 2012 tax return   Use Form 2220, Underpayment of Estimated Tax by Corporations, to determine if a corporation is subject to the penalty for underpayment of estimated tax and to figure the amount of the penalty. How to amend a 2012 tax return   If the corporation is charged a penalty, the amount of the penalty depends on the following three factors. How to amend a 2012 tax return The amount of the underpayment. How to amend a 2012 tax return The period during which the underpayment was due and unpaid. How to amend a 2012 tax return The interest rate for underpayments published quarterly by the IRS in the Internal Revenue Bulletin. How to amend a 2012 tax return   A corporation generally does not have to file Form 2220 with its income tax return because the IRS will figure any penalty and bill the corporation. How to amend a 2012 tax return However, even if the corporation does not owe a penalty, complete and attach the form to the corporation's tax return if any of the following apply. How to amend a 2012 tax return The annualized income installment method was used to figure any required installment. How to amend a 2012 tax return The adjusted seasonal installment method was used to figure any required installment. How to amend a 2012 tax return The corporation is a large corporation figuring its first required installment based on the prior year's tax. How to amend a 2012 tax return How to pay estimated tax. How to amend a 2012 tax return   A corporation is generally required to use EFTPS to pay its taxes. How to amend a 2012 tax return See Electronic Federal Tax Payment System (EFTPS), earlier. How to amend a 2012 tax return Also see the Instructions for Form 1120-W. How to amend a 2012 tax return Quick refund of overpayments. How to amend a 2012 tax return   A corporation that has overpaid its estimated tax for the tax year may be able to apply for a quick refund. How to amend a 2012 tax return Use Form 4466, Corporation Application for Quick Refund of Overpayment of Estimated Tax, to apply for a quick refund of an overpayment of estimated tax. How to amend a 2012 tax return A corporation can apply for a quick refund if the overpayment is: At least 10% of its expected tax liability, and At least $500. How to amend a 2012 tax return Use Form 4466 to figure the corporation's expected tax liability and the overpayment of estimated tax. How to amend a 2012 tax return File Form 4466 before the 16th day of the 3rd month after the end of the tax year, but before the corporation files its income tax return. How to amend a 2012 tax return Do not file Form 4466 before the end of the corporation's tax year. How to amend a 2012 tax return An extension of time to file the corporation's income tax return will not extend the time for filing Form 4466. How to amend a 2012 tax return The IRS will act on the form within 45 days from the date you file it. How to amend a 2012 tax return U. How to amend a 2012 tax return S. How to amend a 2012 tax return Real Property Interest If a domestic corporation acquires a U. How to amend a 2012 tax return S. How to amend a 2012 tax return real property interest from a foreign person or firm, the corporation may have to withhold tax on the amount it pays for the property. How to amend a 2012 tax return The amount paid includes cash, the fair market value of other property, and any assumed liability. How to amend a 2012 tax return If a domestic corporation distributes a U. How to amend a 2012 tax return S. How to amend a 2012 tax return real property interest to a foreign person or firm, it may have to withhold tax on the fair market value of the property. How to amend a 2012 tax return A corporation that fails to withhold may be liable for the tax, and any penalties and interest that apply. How to amend a 2012 tax return For more information, see section 1445 of the Internal Revenue Code; Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities; Form 8288, U. How to amend a 2012 tax return S. How to amend a 2012 tax return Withholding Tax Return for Dispositions by Foreign Persons of U. How to amend a 2012 tax return S. How to amend a 2012 tax return Real Property Interests; and Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U. How to amend a 2012 tax return S. How to amend a 2012 tax return Real Property Interests. How to amend a 2012 tax return Accounting Methods An accounting method is a set of rules used to determine when and how income and expenses are reported. How to amend a 2012 tax return Taxable income should be determined using the method of accounting regularly used in keeping the corporation's books and records. How to amend a 2012 tax return In all cases, the method used must clearly show taxable income. How to amend a 2012 tax return Generally, permissible methods include: Cash, Accrual, or Any other method authorized by the Internal Revenue Code. How to amend a 2012 tax return Accrual method. How to amend a 2012 tax return   Generally, a corporation (other than a qualified personal service corporation) must use the accrual method of accounting if its average annual gross receipts exceed $5 million. How to amend a 2012 tax return A corporation engaged in farming operations also must use the accrual method. How to amend a 2012 tax return   If inventories are required, the accrual method generally must be used for sales and purchases of merchandise. How to amend a 2012 tax return However, qualifying taxpayers and eligible businesses of qualifying small business taxpayers are excepted from using the accrual method for eligible trades or businesses and may account for inventoriable items as materials and supplies that are not incidental. How to amend a 2012 tax return   Under the accrual method, an amount is includable in income when: All the events have occurred that fix the right to receive the income, which is the earliest of the date: The required performance takes place, Payment is due, or Payment is received; and The amount can be determined with reasonable accuracy. How to amend a 2012 tax return   Generally, an accrual basis taxpayer can deduct accrued expenses in the tax year when: All events that determine the liability have occurred, The amount of the liability can be figured with reasonable accuracy, and Economic performance takes place with respect to the expense. How to amend a 2012 tax return   There are exceptions to the economic performance rule for certain items, including recurring expenses. How to amend a 2012 tax return See section 461(h) of the Internal Revenue Code and the related regulations for the rules for determining when economic performance takes place. How to amend a 2012 tax return Nonaccrual experience method. How to amend a 2012 tax return   Accrual method corporations are not required to maintain accruals for certain amounts from the performance of services that, on the basis of their experience, will not be collected, if: The services are in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, or consulting; or The corporation's average annual gross receipts for the 3 prior tax years does not exceed $5 million. How to amend a 2012 tax return   This provision does not apply if interest is required to be paid on the amount or if there is any penalty for failure to pay the amount timely. How to amend a 2012 tax return Percentage of completion method. How to amend a 2012 tax return   Long-term contracts (except for certain real property construction contracts) must generally be accounted for using the percentage of completion method described in section 460 of the Internal Revenue Code. How to amend a 2012 tax return Mark-to-market accounting method. How to amend a 2012 tax return   Generally, dealers in securities must use the mark-to-market accounting method described in section 475 of the Internal Revenue Code. How to amend a 2012 tax return Under this method any security held by a dealer as inventory must be included in inventory at its FMV. How to amend a 2012 tax return Any security not held as inventory at the close of the tax year is treated as sold at its FMV on the last business day of the tax year. How to amend a 2012 tax return Any gain or loss must be taken into account in determining gross income. How to amend a 2012 tax return The gain or loss taken into account is treated as ordinary gain or loss. How to amend a 2012 tax return   Dealers in commodities and traders in securities and commodities can elect to use the mark-to-market accounting method. How to amend a 2012 tax return Change in accounting method. How to amend a 2012 tax return   A corporation can change its method of accounting used to report taxable income (for income as a whole or for the treatment of any material item). How to amend a 2012 tax return The corporation must file Form 3115, Application for Change in Accounting Method. How to amend a 2012 tax return For more information, see Form 3115 and Publication 538. How to amend a 2012 tax return Section 481(a) adjustment. How to amend a 2012 tax return   The corporation may have to make an adjustment under section 481(a) of the Internal Revenue Code to prevent amounts of income or expense from being duplicated or omitted. How to amend a 2012 tax return The section 481(a) adjustment period is generally 1 year for a net negative adjustment and 4 years for a net positive adjustment. How to amend a 2012 tax return However, a corporation can elect to use a 1-year adjustment period if the net section 481(a) adjustment for the change is less than $25,000. How to amend a 2012 tax return The corporation must complete the appropriate lines of Form 3115 to make the election. How to amend a 2012 tax return See the Instructions for Form 3115. How to amend a 2012 tax return Accounting Periods A corporation must figure its taxable income on the basis of a tax year. How to amend a 2012 tax return A tax year is the annual accounting period a corporation uses to keep its records and report its income and expenses. How to amend a 2012 tax return Generally, corporations can use either a calendar year or a fiscal year as its tax year. How to amend a 2012 tax return Unless special rules apply, a corporation generally adopts a tax year by filing its first federal income tax return using that tax year. How to amend a 2012 tax return For more information, see Publication 538. How to amend a 2012 tax return Personal service corporation. How to amend a 2012 tax return   A personal service corporation must use a calendar year as its tax year unless: It elects to use a 52–53 week tax year that ends with reference to the calendar year; It can establish a business purpose for a different tax year and obtains approval of the IRS. How to amend a 2012 tax return See Form 1128, Application To Adopt, Change, or Retain a Tax Year, and Publication 538; or It elects under section 444 of the Internal Revenue Code to have a tax year other than a calendar year. How to amend a 2012 tax return Use Form 8716, Election to Have a Tax Year Other Than a Required Tax Year, to make the election. How to amend a 2012 tax return   If a personal service corporation makes a section 444 election, its deduction for certain amounts paid to employee-owners may be limited. How to amend a 2012 tax return See Schedule H (Form 1120), Section 280H Limitations for a Personal Service Corporation (PSC), to figure the maximum deduction. How to amend a 2012 tax return Change of tax year. How to amend a 2012 tax return   Generally, a corporation must get the consent of the IRS before changing its tax year by filing Form 1128. How to amend a 2012 tax return However, under certain conditions, a corporation can change its tax year without getting the consent. How to amend a 2012 tax return For more information, see Form 1128 and Publication 538. How to amend a 2012 tax return Recordkeeping A corporation should keep its records for as long as they may be needed for the administration of any provision of the Internal Revenue Code. How to amend a 2012 tax return Usually records that support items of income, deductions, or credits on the return must be kept for 3 years from the date the return is due or filed, whichever is later. How to amend a 2012 tax return Keep records that verify the corporation's basis in property for as long as they are needed to figure the basis of the original or replacement property. How to amend a 2012 tax return The corporation should keep copies of all filed returns. How to amend a 2012 tax return They help in preparing future and amended returns and in the calculation of earnings and profits. How to amend a 2012 tax return Income, Deductions, and Special Provisions Rules on income and deductions that apply to individuals also apply, for the most part, to corporations. How to amend a 2012 tax return However, the following special provisions apply only to corporations. How to amend a 2012 tax return Costs of Going Into Business When you go into business, treat all costs you incur to get your business started as capital expenses. How to amend a 2012 tax return However, a corporation can elect to deduct a limited amount of start-up or organizational costs. How to amend a 2012 tax return Any costs not deducted can be amortized. How to amend a 2012 tax return Start-up costs are costs for creating an active trade or business or investigating the creation or acquisition of an active trade or business. How to amend a 2012 tax return Organizational costs are the direct costs of creating the corporation. How to amend a 2012 tax return For more information on deducting or amortizing start-up and organizational costs, see the instructions for your income tax return. How to amend a 2012 tax return Also see, Publication 535, chapter 7, Costs You Can Deduct or Capitalize, and chapter 8, Amortization. How to amend a 2012 tax return Related Persons A corporation that uses an accrual method of accounting cannot deduct business expenses and interest owed to a related person who uses the cash method of accounting until the corporation makes the payment and the corresponding amount is includible in the related person's gross income. How to amend a 2012 tax return Determine the relationship, for this rule, as of the end of the tax year for which the expense or interest would otherwise be deductible. How to amend a 2012 tax return If a deduction is denied, the rule will continue to apply even if the corporation's relationship with the person ends before the expense or interest is includible in the gross income of that person. How to amend a 2012 tax return These rules also deny the deduction of losses on the sale or exchange of property between related persons. How to amend a 2012 tax return Related persons. How to amend a 2012 tax return   For purposes of this rule, the following persons are related to a corporation. How to amend a 2012 tax return Another corporation, that is a member of the same controlled group (as defined in section 267(f) of the Internal Revenue Code). How to amend a 2012 tax return An individual who owns, directly or indirectly, more than 50% of the value of the outstanding stock of the corporation. How to amend a 2012 tax return A trust fiduciary, when the trust or the grantor of the trust owns, directly or indirectly, more than 50% in value of the outstanding stock of the corporation. How to amend a 2012 tax return An S corporation, if the same persons own more than 50% in value of the outstanding stock of each corporation. How to amend a 2012 tax return A partnership, if the same persons own more than 50% in value of the outstanding stock of the corporation and more than 50% of the capital or profits interest in the partnership. How to amend a 2012 tax return Any employee-owner, if the corporation is a personal service corporation (see Personal service corporation, earlier), regardless of the amount of stock owned by the employee-owner. How to amend a 2012 tax return Ownership of stock. How to amend a 2012 tax return   To determine whether an individual directly or indirectly owns any of the outstanding stock of a corporation, the following apply. How to amend a 2012 tax return Stock owned, directly or indirectly, by or for a corporation, partnership, estate, or trust, is treated as being owned proportionately by or for its shareholders, partners, or beneficiaries. How to amend a 2012 tax return An individual is treated as owning the stock owned, directly or indirectly, by or for the individual's family. How to amend a 2012 tax return Family includes only brothers and sisters (including half brothers and half sisters), a spouse, ancestors, and lineal descendants. How to amend a 2012 tax return Any individual owning (other than by applying (2), above) stock in a corporation, is treated as also owning the stock owned directly or indirectly by that individual's partner. How to amend a 2012 tax return To apply (1), (2), or (3), above, stock constructively owned by a person under (1) is treated as actually owned by that person. How to amend a 2012 tax return But stock constructively owned by an individual under (2) or (3) is not treated as actually owned by the individual for applying either (2) or (3) to make another person the constructive owner of that stock. How to amend a 2012 tax return Reallocation of income and deductions. How to amend a 2012 tax return   Where it is necessary to clearly show income or prevent tax evasion, the IRS can reallocate gross income, deductions, credits, or allowances between two or more organizations, trades, or businesses owned or controlled directly, or indirectly, by the same interests. How to amend a 2012 tax return Complete liquidations. How to amend a 2012 tax return   The disallowance of losses from the sale or exchange of property between related persons does not apply to liquidating distributions. How to amend a 2012 tax return More information. How to amend a 2012 tax return   For more information about the related person rules, see Publication 544. How to amend a 2012 tax return Income From Qualifying Shipping Activities A corporation may make an election to be taxed on its notional shipping income at the highest corporate tax rate. How to amend a 2012 tax return If a corporation makes this election it may exclude income from qualifying shipping activities from gross income. How to amend a 2012 tax return Also if the election is made, the corporation generally may not claim any loss, deduction, or credit with respect to qualifying shipping activities. How to amend a 2012 tax return A corporation making this election may also elect to defer gain on the disposition of a qualifying vessel. How to amend a 2012 tax return A corporation uses Form 8902, Alternative Tax on Qualifying Shipping Activities, to make the election and figure the alternative tax. How to amend a 2012 tax return For more information regarding the election, see Form 8902. How to amend a 2012 tax return Election to Expense Qualified Refinery Property A corporation can make an irrevocable election on its tax return filed by the due date (including extensions) to deduct 50% of the cost of qualified refinery property (defined in section 179C(c) of the Internal Revenue Code), placed in service before January 1, 2014. How to amend a 2012 tax return The deduction is allowed for the year in which the property is placed in service. How to amend a 2012 tax return A subchapter T cooperative can make an irrevocable election on its return by the due date (including extensions) to allocate this deduction to its owners based on their ownership interest. How to amend a 2012 tax return For more information, see section 179C of the Internal Revenue Code and the related Regulations. How to amend a 2012 tax return Deduction to Comply With EPA Sulfur Regulations A small business refiner can make an irrevocable election on its tax return filed by the due date (including extensions) to deduct up to 75% of qualified costs paid or incurred to comply with the Highway Diesel Fuel Sulfur Control Requirements of the Environmental Protection Agency (EPA). How to amend a 2012 tax return A subchapter T cooperative can make an irrevocable election on its return filed by the due date (including extensions) to allocate the deduction to its owners based on their ownership interest. How to amend a 2012 tax return For more information, see sections 45H and 179B of the Internal Revenue Code and the related Regulations. How to amend a 2012 tax return Energy-Efficient Commercial Building Property Deduction A corporation can claim a deduction for costs associated with energy-efficient commercial building property, placed in service before January 1, 2014. How to amend a 2012 tax return In order to qualify for the deduction: The costs must be associated with depreciable or amortizable property in a Standard 90. How to amend a 2012 tax return 1-2001 domestic building; The property must be either a part of the interior lighting system, the heating, cooling, ventilation and hot water system, or the building envelope (defined in section 179D(c)(1)(C) of the Internal Revenue Code); and The property must be installed as part of a plan to reduce the total annual energy and power costs of the building by 50% or more. How to amend a 2012 tax return The deduction is limited to $1. How to amend a 2012 tax return 80 per square foot of the building less the total amount of deductions taken for this property in prior tax years. How to amend a 2012 tax return Other rules and limitations apply. How to amend a 2012 tax return The corporation must reduce the basis of any property by any deduction taken. How to amend a 2012 tax return The deduction is subject to recapture if the corporation fails to fully implement an energy savings plan. How to amend a 2012 tax return For more information, see section 179D of the Internal Revenue Code. How to amend a 2012 tax return Also see Notice 2006-52, 2006-26 I. How to amend a 2012 tax return R. How to amend a 2012 tax return B. How to amend a 2012 tax return 1175, clarified and amplified by Notice 2008-40, 2008-14 I. How to amend a 2012 tax return R. How to amend a 2012 tax return B. How to amend a 2012 tax return 725, and any successor. How to amend a 2012 tax return Corporate Preference Items A corporation must make special adjustments to certain items before it takes them into account in determining its taxable income. How to amend a 2012 tax return These items are known as corporate preference items and they include the following. How to amend a 2012 tax return Gain on the disposition of section 1250 property. How to amend a 2012 tax return For more information, see section 1250 Property under Depreciation Recapture in chapter 3 of Publication 544. How to amend a 2012 tax return Percentage depletion for iron ore and coal (including lignite). How to amend a 2012 tax return For more information, see Mines and Geothermal Deposits under Mineral Property in chapter 9 of Publication 535. How to amend a 2012 tax return Amortization of pollution control facilities. How to amend a 2012 tax return For more information, see Pollution Control Facilities in chapter 8 of Publication 535 and section 291(a)(5) of the Internal Revenue Code. How to amend a 2012 tax return Mineral exploration and development costs. How to amend a 2012 tax return For more information, see Exploration Costs and Development Costs in chapter 7 of Publication 535. How to amend a 2012 tax return For more information on corporate preference items, see section 291 of the Internal Revenue Code. How to amend a 2012 tax return Dividends-Received Deduction A corporation can deduct a percentage of certain dividends received during its tax year. How to amend a 2012 tax return This section discusses the general rules that apply. How to amend a 2012 tax return The deduction is figured on Form 1120, Schedule C, or the applicable schedule of your income tax return. How to amend a 2012 tax return For more information, see the Instructions for Form 1120, or the instructions for your applicable income tax return. How to amend a 2012 tax return Dividends from domestic corporations. How to amend a 2012 tax return   A corporation can deduct, within certain limits, 70% of the dividends received if the corporation receiving the dividend owns less than 20% of the corporation distributing the dividend. How to amend a 2012 tax return If the corporation owns 20% or more of the distributing corporation's stock, it can, subject to certain limits, deduct 80% of the dividends received. How to amend a 2012 tax return Ownership. How to amend a 2012 tax return   Determine ownership, for these rules, by the amount of voting power and value of the paying corporation's stock (other than certain preferred stock) the receiving corporation owns. How to amend a 2012 tax return Small business investment companies. How to amend a 2012 tax return   Small business investment companies can deduct 100% of the dividends received from taxable domestic corporations. How to amend a 2012 tax return Dividends from regulated investment companies. How to amend a 2012 tax return   Regulated investment company dividends received are subject to certain limits. How to amend a 2012 tax return Capital gain dividends received from a regulated investment company do not qualify for the deduction. How to amend a 2012 tax return For more information, see section 854 of the Internal Revenue Code. How to amend a 2012 tax return No deduction allowed for certain dividends. How to amend a 2012 tax return   Corporations cannot take a deduction for dividends received from the following entities. How to amend a 2012 tax return A real estate investment trust (REIT). How to amend a 2012 tax return A corporation exempt from tax under section 501 or 521 of the Internal Revenue Code either for the tax year of the distribution or the preceding tax year. How to amend a 2012 tax return A corporation whose stock was held less than 46 days during the 91-day period beginning 45 days before the stock became ex-dividend with respect to the dividend. How to amend a 2012 tax return Ex-dividend means the holder has no rights to the dividend. How to amend a 2012 tax return A corporation whose preferred stock was held less than 91 days during the 181-day period beginning 90 days before the stock became ex-dividend with respect to the dividend if the dividends received are for a period or periods totaling more than 366 days. How to amend a 2012 tax return Any corporation, if your corporation is under an obligation (pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property. How to amend a 2012 tax return Dividends on deposits. How to amend a 2012 tax return   Dividends on deposits or withdrawable accounts in domestic building and loan associations, mutual savings banks, cooperative banks, and similar organizations are interest, not dividends. How to amend a 2012 tax return They do not qualify for this deduction. How to amend a 2012 tax return Limit on deduction for dividends. How to amend a 2012 tax return   The total deduction for dividends received or accrued is generally limited (in the following order) to: 80% of the difference between taxable income and the 100% deduction allowed for dividends received from affiliated corporations, or by a small business investment company, for dividends received or accrued from 20%-owned corporations, then 70% of the difference between taxable income and the 100% deduction allowed for dividends received from affiliated corporations, or by a small business investment company, for dividends received or accrued from less-than-20%-owned corporations (reducing taxable income by the total dividends received from 20%-owned corporations). How to amend a 2012 tax return Figuring the limit. How to amend a 2012 tax return   In figuring the limit, determine taxable income without the following items. How to amend a 2012 tax return The net operating loss deduction. How to amend a 2012 tax return The domestic production activities deduction. How to amend a 2012 tax return The deduction for dividends received. How to amend a 2012 tax return Any adjustment due to the nontaxable part of an extraordinary dividend (see Extraordinary Dividends, below). How to amend a 2012 tax return Any capital loss carryback to the tax year. How to amend a 2012 tax return Effect of net operating loss. How to amend a 2012 tax return   If a corporation has a net operating loss (NOL) for a tax year, the limit of 80% (or 70%) of taxable income does not apply. How to amend a 2012 tax return To determine whether a corporation has an NOL, figure the dividends-received deduction without the 80% (or 70%) of taxable income limit. How to amend a 2012 tax return Example 1. How to amend a 2012 tax return A corporation loses $25,000 from operations. How to amend a 2012 tax return It receives $100,000 in dividends from a 20%-owned corporation. How to amend a 2012 tax return Its taxable income is $75,000 ($100,000 – $25,000) before the deduction for dividends received. How to amend a 2012 tax return If it claims the full dividends-received deduction of $80,000 ($100,000 × 80%) and combines it with an operations loss of $25,000, it will have an NOL of ($5,000). How to amend a 2012 tax return Therefore, the 80% of taxable income limit does not apply. How to amend a 2012 tax return The corporation can deduct the full $80,000. How to amend a 2012 tax return Example 2. How to amend a 2012 tax return Assume the same facts as in Example 1, except that the corporation only loses $15,000 from operations. How to amend a 2012 tax return Its taxable income is $85,000 before the deduction for dividends received. How to amend a 2012 tax return After claiming the dividends-received deduction of $80,000 ($100,000 × 80%), its taxable income is $5,000. How to amend a 2012 tax return Because the corporation will not have an NOL after applying a full dividends-received deduction, its allowable dividends-received deduction is limited to 80% of its taxable income, or $68,000 ($85,000 × 80%). How to amend a 2012 tax return Extraordinary Dividends If a corporation receives an extraordinary dividend on stock held 2 years or less before the dividend announcement date, it generally must reduce its basis in the stock by the nontaxed part of the dividend. How to amend a 2012 tax return The nontaxed part is any dividends-received deduction allowable for the dividends. How to amend a 2012 tax return Extraordinary dividend. How to amend a 2012 tax return   An extraordinary dividend is any dividend on stock that equals or exceeds a certain percentage of the corporation's adjusted basis in the stock. How to amend a 2012 tax return The percentages are: 5% for stock preferred as to dividends, or 10% for other stock. How to amend a 2012 tax return Treat all dividends received that have ex-dividend dates within an 85-consecutive-day period as one dividend. How to amend a 2012 tax return Treat all dividends received that have ex-dividend dates within a 365-consecutive-day period as extraordinary dividends if the total of the dividends exceeds 20% of the corporation's adjusted basis in the stock. How to amend a 2012 tax return Disqualified preferred stock. How to amend a 2012 tax return   Any dividend on disqualified preferred stock is treated as an extraordinary dividend regardless of the period of time the corporation held the stock. How to amend a 2012 tax return   Disqualified preferred stock is any stock preferred as to dividends if any of the following apply. How to amend a 2012 tax return The stock when issued has a dividend rate that declines (or can reasonably be expected to decline) in the future. How to amend a 2012 tax return The issue price of the stock exceeds its liquidation rights or stated redemption price. How to amend a 2012 tax return The stock is otherwise structured to avoid the rules for extraordinary dividends and to enable corporate shareholders to reduce tax through a combination of dividends-received deductions and loss on the disposition of the stock. How to amend a 2012 tax return   These rules apply to stock issued after July 10, 1989, unless it was issued under a written binding contract in effect on that date, and thereafter, before the issuance of the stock. How to amend a 2012 tax return More information. How to amend a 2012 tax return   For more information on extraordinary dividends, see section 1059 of the Internal Revenue Code. How to amend a 2012 tax return Below-Market Loans If a corporation receives a below-market loan and uses the proceeds for its trade or business, it may be able to deduct the forgone interest. How to amend a 2012 tax return A below-market loan is a loan on which no interest is charged or on which interest is charged at a rate below the applicable federal rate. How to amend a 2012 tax return A below-market loan generally is treated as an arm's-length transaction in which the borrower is considered as having received both the following: A loan in exchange for a note that requires payment of interest at the applicable federal rate, and An additional payment in an amount equal to the forgone interest. How to amend a 2012 tax return Treat the additional payment as a gift, dividend, contribution to capital, payment of compensation, or other payment, depending on the substance of the transaction. How to amend a 2012 tax return Foregone interest. How to amend a 2012 tax return   For any period, forgone interest is equal to: The interest that would be payable for that period if interest accrued on the loan at the applicable federal rate and was payable annually on December 31, minus Any interest actually payable on the loan for the period. How to amend a 2012 tax return See Below-market loans, in chapter 4 of Publication 535 for more information. How to amend a 2012 tax return Charitable Contributions A corporation can claim a limited deduction for charitable contributions made in cash or other property. How to amend a 2012 tax return The contribution is deductible if made to, or for the use of, a qualified organization. How to amend a 2012 tax return For more information on qualified organizations, see Publication 526, Charitable Contributions. How to amend a 2012 tax return Also see, Exempt Organizations Select Check (EO Select Check) at www. How to amend a 2012 tax return irs. How to amend a 2012 tax return gov/charities, the on-line search tool for finding information on organizations eligible to receive tax-deductible contributions. How to amend a 2012 tax return Note. How to amend a 2012 tax return You cannot take a deduction if any of the net earnings of an organization receiving contributions benefit any private shareholder or individual. How to amend a 2012 tax return Cash method corporation. How to amend a 2012 tax return   A corporation using the cash method of accounting deducts contributions in the tax year paid. How to amend a 2012 tax return Accrual method corporation. How to amend a 2012 tax return   A corporation using an accrual method of accounting can choose to deduct unpaid contributions for the tax year the board of directors authorizes them if it pays them by the 15th day of the 3rd month after the close of that tax year. How to amend a 2012 tax return Make the choice by reporting the contribution on the corporation's return for the tax year. How to amend a 2012 tax return A declaration stating that the board of directors adopted the resolution during the tax year must accompany the return. How to amend a 2012 tax return The declaration must include the date the resolution was adopted. How to amend a 2012 tax return Limitations on deduction. How to amend a 2012 tax return   A corporation cannot deduct charitable contributions that exceed 10% of its taxable income for the tax year. How to amend a 2012 tax return Figure taxable income for this purpose without the following. How to amend a 2012 tax return The deduction for charitable contributions. How to amend a 2012 tax return The dividends-received deduction. How to amend a 2012 tax return The deduction allowed under section 249 of the Internal Revenue Code. How to amend a 2012 tax return The domestic production activities deduction. How to amend a 2012 tax return Any net operating loss carryback to the tax year. How to amend a 2012 tax return Any capital loss carryback to the tax year. How to amend a 2012 tax return Farmers and ranchers. How to amend a 2012 tax return    Corporations that are farmers and ranchers should see section 170(b)(2) of the Internal Revenue Code for special rules that may affect the deduction limit. How to amend a 2012 tax return Carryover of excess contributions. How to amend a 2012 tax return   You can carry over, within certain limits, to each of the subsequent 5 years any charitable contributions made during the current year that exceed the 10% limit. How to amend a 2012 tax return You lose any excess not used within that period. How to amend a 2012 tax return For example, if a corporation has a carryover of excess contributions paid in 2010 and it does not use all the excess on its return for 2011, it can carry any excess over to 2012, 2013, 2014, and 2015, if applicable. How to amend a 2012 tax return Any excess not used in 2015 is lost. How to amend a 2012 tax return Do not deduct a carryover of excess contributions in the carryover year until after you deduct contributions made in that year (subject to the 10% limit). How to amend a 2012 tax return You cannot deduct a carryover of excess contributions to the extent it increases a net operating loss carryover. How to amend a 2012 tax return Cash contributions. How to amend a 2012 tax return   A corporation must maintain a record of any contribution of cash, check, or other monetary contribution, regardless of the amount. How to amend a 2012 tax return The record can be a bank record, receipt, letter, or other written communication from the donee indicating the name of the organization, the date of the contribution, and the amount of the contribution. How to amend a 2012 tax return Keep the record of the contribution with the other corporate records. How to amend a 2012 tax return Do not attach the records to the corporation's return. How to amend a 2012 tax return For more information on cash contributions, see Publication 526. How to amend a 2012 tax return Gifts of $250 or more. How to amend a 2012 tax return   Generally, no deduction is allowed for any contribution of $250 or more unless the corporation gets a written acknowledgement from the donee organization. How to amend a 2012 tax return The acknowledgement should show the amount of cash contributed, a description of the property contributed, and either gives a description and a good faith estimate of the value of any goods or services provided in return for the contribution or states that no goods or services were provided in return for the contribution. How to amend a 2012 tax return The acknowledgement should be received by the due date (including extensions) of the return, or, if earlier, the date the return was filed. How to amend a 2012 tax return Keep the acknowledgement with other corporate records. How to amend a 2012 tax return Do not attach the acknowledgement to the return. How to amend a 2012 tax return Contributions of property other than cash. How to amend a 2012 tax return   If a corporation (other than a closely-held or a personal service corporation) claims a deduction of more than $500 for contributions of property other than cash, a schedule describing the property and the method used to determine its fair market value must be attached to the corporation's return. How to amend a 2012 tax return In addition the corporation should keep a record of: The approximate date and manner of acquisition of the donated property and The cost or other basis of the donated property held by the donor for less than 12 months prior to contribution. How to amend a 2012 tax return   Closely held and personal service corporations must complete and attach Form 8283, Noncash Charitable Contributions, to their returns if they claim a deduction of more than $500 for non-cash contributions. How to amend a 2012 tax return For all other corporations, if the deduction claimed for donated property exceeds $5,000, complete Form 8283 and attach it to the corporation's return. How to amend a 2012 tax return   A corporation must obtain a qualified appraisal for all deductions of property claimed in excess of $5,000. How to amend a 2012 tax return A qualified appraisal is not required for the donation of cash, publicly traded securities, inventory, and any qualified vehicles sold by a donee organization without any significant intervening use or material improvement. How to amend a 2012 tax return The appraisal should be maintained with other corporate records and only attached to the corporation's return when the deduction claimed exceeds $500,000; $20,000 for donated art work. How to amend a 2012 tax return   See Form 8283 for more information. How to amend a 2012 tax return Qualified conservation contributions. How to amend a 2012 tax return   If a corporation makes a qualified conservation contribution, the corporation must provide information regarding the legal interest being donated, the fair market value of the underlying property before and after the donation, and a description of the conservation purpose for which the property will be used. How to amend a 2012 tax return For more information, see section 170(h) of the Internal Revenue Code. How to amend a 2012 tax return Contributions of used vehicles. How to amend a 2012 tax return   A corporation is allowed a deduction for the contribution of used motor vehicles, boats, and airplanes. How to amend a 2012 tax return The deduction is limited, and other special rules apply. How to amend a 2012 tax return For more information, see Publication 526. How to amend a 2012 tax return Reduction for contributions of certain property. How to amend a 2012 tax return   For a charitable contribution of property, the corporation must reduce the contribution by the sum of: The ordinary income and short-term capital gain that would have resulted if the property were sold at its FMV and For certain contributions, the long-term capital gain that would have resulted if the property were sold at its FMV. How to amend a 2012 tax return   The reduction for the long-term capital gain applies to: Contributions of tangible personal property for use by an exempt organization for a purpose or function unrelated to the basis for its exemption; Contributions of any property to or for the use of certain private foundations except for stock for which market quotations are readily available; and Contributions of any patent, certain copyrights, trademark, trade name, trade secret, know-how, software (that is a section 197 intangible), or similar property, or applications or registrations of such property. How to amend a 2012 tax return Larger deduction. How to amend a 2012 tax return   A corporation (other than an S corporation) may be able to claim a deduction equal to the lesser of (a) the basis of the donated inventory or property plus one-half of the inventory or property's appreciation (gain if the donated inventory or property was sold at fair market value on the date of the donation), or (b) two times basis of the donated inventory or property. How to amend a 2012 tax return This deduction may be allowed for certain contributions of: Certain inventory and other property made to a donee organization and used solely for the care of the ill, the needy, and infants. How to amend a 2012 tax return Scientific property constructed by the corporation (other than an S corporation, personal holding company, or personal service corporation) and donated no later than 2 years after substantial completion of the construction. How to amend a 2012 tax return The property must be donated to a qualified organization and its original use must be by the donee for research, experimentation, or research training within the United States in the area of physical or biological science. How to amend a 2012 tax return Computer technology and equipment acquired or constructed and donated no later than 3 years after either acquisition or substantial completion of construction to an educational organization for educational purposes within the United States. How to amend a 2012 tax return Contributions to organizations conducting lobbying activities. How to amend a 2012 tax return   Contributions made to an organization that conducts lobbying activities are not deductible if: The lobbying activities relate to matters of direct financial interest to the donor's trade or business and The principal purpose of the contribution was to avoid federal income tax by obtaining a deduction for activities that would have been nondeductible under the lobbying expense rules if conducted directly by the donor. How to amend a 2012 tax return More information. How to amend a 2012 tax return   For more information on charitable contributions, including substantiation and recordkeeping requirements, see section 170 of the Internal Revenue Code, the related regulations, and Publication 526. How to amend a 2012 tax return Capital Losses A corporation can deduct capital losses only up to the amount of its capital gains. How to amend a 2012 tax return In other words, if a corporation has an excess capital loss, it cannot deduct the loss in the current tax year. How to amend a 2012 tax return Instead, it carries the loss to other tax years and deducts it from any net capital gains that occur in those years. How to amend a 2012 tax return A capital loss is carried to other years in the following order. How to amend a 2012 tax return 3 years prior to the loss year. How to amend a 2012 tax return 2 years prior to the loss year. How to amend a 2012 tax return 1 year prior to the loss year. How to amend a 2012 tax return Any loss remaining is carried forward for 5 years. How to amend a 2012 tax return When you carry a net capital loss to another tax year, treat it as a short-term loss. How to amend a 2012 tax return It does not retain its original identity as long term or short term. How to amend a 2012 tax return Example. How to amend a 2012 tax return A calendar year corporation has a net short-term capital gain of $3,000 and a net long-term capital loss of $9,000. How to amend a 2012 tax return The short-term gain offsets some of the long-term loss, leaving a net capital loss of $6,000. How to amend a 2012 tax return The corporation treats this $6,000 as a short-term loss when carried back or forward. How to amend a 2012 tax return The corporation carries the $6,000 short-term loss back 3 years. How to amend a 2012 tax return In year 1, the corporation had a net short-term capital gain of $8,000 and a net long-term capital gain of $5,000. How to amend a 2012 tax return It subtracts the $6,000 short-term loss first from the net short-term gain. How to amend a 2012 tax return This results in a net capital gain for year 1 of $7,000. How to amend a 2012 tax return This consists of a net short-term capital gain of $2,000 ($8,000 − $6,000) and a net long-term capital gain of $5,000. How to amend a 2012 tax return S corporation status. How to amend a 2012 tax return   A corporation may not carry a capital loss from, or to, a year for which it is an S corporation. How to amend a 2012 tax return Rules for carryover and carryback. How to amend a 2012 tax return   When carrying a capital loss from one year to another, the following rules apply. How to amend a 2012 tax return When figuring the current year's net capital loss, you cannot combine it with a capital loss carried from another year. How to amend a 2012 tax return In other words, you can carry capital losses only to years that would otherwise have a total net capital gain. How to amend a 2012 tax return If you carry capital losses from 2 or more years to the same year, deduct the loss from the earliest year first. How to amend a 2012 tax return You cannot use a capital loss carried from another year to produce or increase a net operating loss in the year to which you carry it back. How to amend a 2012 tax return Refunds. How to amend a 2012 tax return   When you carry back a capital loss to an earlier tax year, refigure your tax for that year. How to amend a 2012 tax return If your corrected tax is less than the tax you originally owed, use either Form 1139, Corporate Application for Tentative Refund, or Form 1120X, Amended U. How to amend a 2012 tax return S. How to amend a 2012 tax return Corporation Income Tax Return, to apply for a refund. How to amend a 2012 tax return Form 1139. How to amend a 2012 tax return    A corporation can get a refund faster by using Form 1139. How to amend a 2012 tax return It cannot file Form 1139 before filing the return for the corporation's capital loss year, but it must file Form 1139 no later than 1 year after the year it sustains the capital loss. How to amend a 2012 tax return Form 1120X. How to amend a 2012 tax return   If the corporation does not file Form 1139, it must file Form 1120X to apply for a refund. How to amend a 2012 tax return The corporation must file the Form 1120X within 3 years of the due date, includin