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How To File 2012 Taxes

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How To File 2012 Taxes

How to file 2012 taxes 13. How to file 2012 taxes   Basis of Property Table of Contents Introduction Useful Items - You may want to see: Cost BasisReal Property Adjusted BasisIncreases to Basis Decreases to Basis Basis Other Than CostProperty Received for Services Taxable Exchanges Involuntary Conversions Nontaxable Exchanges Property Transferred From a Spouse Property Received as a Gift Inherited Property Property Changed From Personal to Business or Rental Use Stocks and Bonds Introduction This chapter discusses how to figure your basis in property. How to file 2012 taxes It is divided into the following sections. How to file 2012 taxes Cost basis. How to file 2012 taxes Adjusted basis. How to file 2012 taxes Basis other than cost. How to file 2012 taxes Your basis is the amount of your investment in property for tax purposes. How to file 2012 taxes Use the basis to figure gain or loss on the sale, exchange, or other disposition of property. How to file 2012 taxes Also use it to figure deductions for depreciation, amortization, depletion, and casualty losses. How to file 2012 taxes If you use property for both business or investment purposes and for personal purposes, you must allocate the basis based on the use. How to file 2012 taxes Only the basis allocated to the business or investment use of the property can be depreciated. How to file 2012 taxes Your original basis in property is adjusted (increased or decreased) by certain events. How to file 2012 taxes For example, if you make improvements to the property, increase your basis. How to file 2012 taxes If you take deductions for depreciation or casualty losses, or claim certain credits, reduce your basis. How to file 2012 taxes Keep accurate records of all items that affect the basis of your property. How to file 2012 taxes For more information on keeping records, see chapter 1. How to file 2012 taxes Useful Items - You may want to see: Publication 15-B Employer's Tax Guide to Fringe Benefits 525 Taxable and Nontaxable Income 535 Business Expenses 537 Installment Sales 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 551 Basis of Assets 946 How To Depreciate Property Cost Basis The basis of property you buy is usually its cost. How to file 2012 taxes The cost is the amount you pay in cash, debt obligations, other property, or services. How to file 2012 taxes Your cost also includes amounts you pay for the following items: Sales tax, Freight, Installation and testing, Excise taxes, Legal and accounting fees (when they must be capitalized), Revenue stamps, Recording fees, and Real estate taxes (if you assume liability for the seller). How to file 2012 taxes In addition, the basis of real estate and business assets may include other items. How to file 2012 taxes Loans with low or no interest. How to file 2012 taxes    If you buy property on a time-payment plan that charges little or no interest, the basis of your property is your stated purchase price minus any amount considered to be unstated interest. How to file 2012 taxes You generally have unstated interest if your interest rate is less than the applicable federal rate. How to file 2012 taxes   For more information, see Unstated Interest and Original Issue Discount (OID) in Publication 537. How to file 2012 taxes Real Property Real property, also called real estate, is land and generally anything built on, growing on, or attached to land. How to file 2012 taxes If you buy real property, certain fees and other expenses you pay are part of your cost basis in the property. How to file 2012 taxes Lump sum purchase. How to file 2012 taxes   If you buy buildings and the land on which they stand for a lump sum, allocate the cost basis among the land and the buildings. How to file 2012 taxes Allocate the cost basis according to the respective fair market values (FMVs) of the land and buildings at the time of purchase. How to file 2012 taxes Figure the basis of each asset by multiplying the lump sum by a fraction. How to file 2012 taxes The numerator is the FMV of that asset and the denominator is the FMV of the whole property at the time of purchase. How to file 2012 taxes    If you are not certain of the FMVs of the land and buildings, you can allocate the basis according to their assessed values for real estate tax purposes. How to file 2012 taxes Fair market value (FMV). How to file 2012 taxes   FMV is the price at which the property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the necessary facts. How to file 2012 taxes Sales of similar property on or about the same date may be helpful in figuring the FMV of the property. How to file 2012 taxes Assumption of mortgage. How to file 2012 taxes   If you buy property and assume (or buy the property subject to) an existing mortgage on the property, your basis includes the amount you pay for the property plus the amount to be paid on the mortgage. How to file 2012 taxes Settlement costs. How to file 2012 taxes   Your basis includes the settlement fees and closing costs you paid for buying the property. How to file 2012 taxes (A fee for buying property is a cost that must be paid even if you buy the property for cash. How to file 2012 taxes ) Do not include fees and costs for getting a loan on the property in your basis. How to file 2012 taxes   The following are some of the settlement fees or closing costs you can include in the basis of your property. How to file 2012 taxes Abstract fees (abstract of title fees). How to file 2012 taxes Charges for installing utility services. How to file 2012 taxes Legal fees (including fees for the title search and preparation of the sales contract and deed). How to file 2012 taxes Recording fees. How to file 2012 taxes Survey fees. How to file 2012 taxes Transfer taxes. How to file 2012 taxes Owner's title insurance. How to file 2012 taxes Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions. How to file 2012 taxes   Settlement costs do not include amounts placed in escrow for the future payment of items such as taxes and insurance. How to file 2012 taxes   The following are some of the settlement fees and closing costs you cannot include in the basis of property. How to file 2012 taxes Casualty insurance premiums. How to file 2012 taxes Rent for occupancy of the property before closing. How to file 2012 taxes Charges for utilities or other services related to occupancy of the property before closing. How to file 2012 taxes Charges connected with getting a loan, such as points (discount points, loan origination fees), mortgage insurance premiums, loan assumption fees, cost of a credit report, and fees for an appraisal required by a lender. How to file 2012 taxes Fees for refinancing a mortgage. How to file 2012 taxes Real estate taxes. How to file 2012 taxes   If you pay real estate taxes the seller owed on real property you bought, and the seller did not reimburse you, treat those taxes as part of your basis. How to file 2012 taxes You cannot deduct them as an expense. How to file 2012 taxes    If you reimburse the seller for taxes the seller paid for you, you can usually deduct that amount as an expense in the year of purchase. How to file 2012 taxes Do not include that amount in the basis of your property. How to file 2012 taxes If you did not reimburse the seller, you must reduce your basis by the amount of those taxes. How to file 2012 taxes Points. How to file 2012 taxes   If you pay points to get a loan (including a mortgage, second mortgage, line of credit, or a home equity loan), do not add the points to the basis of the related property. How to file 2012 taxes Generally, you deduct the points over the term of the loan. How to file 2012 taxes For more information on how to deduct points, see chapter 23. How to file 2012 taxes Points on home mortgage. How to file 2012 taxes   Special rules may apply to points you and the seller pay when you get a mortgage to buy your main home. How to file 2012 taxes If certain requirements are met, you can deduct the points in full for the year in which they are paid. How to file 2012 taxes Reduce the basis of your home by any seller-paid points. How to file 2012 taxes Adjusted Basis Before figuring gain or loss on a sale, exchange, or other disposition of property or figuring allowable depreciation, depletion, or amortization, you must usually make certain adjustments (increases and decreases) to the cost basis or basis other than cost (discussed later) of the property. How to file 2012 taxes The result is the adjusted basis. How to file 2012 taxes Increases to Basis Increase the basis of any property by all items properly added to a capital account. How to file 2012 taxes Examples of items that increase basis are shown in Table 13-1. How to file 2012 taxes These include the items discussed below. How to file 2012 taxes Improvements. How to file 2012 taxes   Add to your basis in property the cost of improvements having a useful life of more than 1 year, that increase the value of the property, lengthen its life, or adapt it to a different use. How to file 2012 taxes For example, improvements include putting a recreation room in your unfinished basement, adding another bathroom or bedroom, putting up a fence, putting in new plumbing or wiring, installing a new roof, or paving your driveway. How to file 2012 taxes Assessments for local improvements. How to file 2012 taxes   Add to the basis of property assessments for improvements such as streets and sidewalks if they increase the value of the property assessed. How to file 2012 taxes Do not deduct them as taxes. How to file 2012 taxes However, you can deduct as taxes assessments for maintenance or repairs, or for meeting interest charges related to the improvements. How to file 2012 taxes Example. How to file 2012 taxes Your city changes the street in front of your store into an enclosed pedestrian mall and assesses you and other affected property owners for the cost of the conversion. How to file 2012 taxes Add the assessment to your property's basis. How to file 2012 taxes In this example, the assessment is a depreciable asset. How to file 2012 taxes Decreases to Basis Decrease the basis of any property by all items that represent a return of capital for the period during which you held the property. How to file 2012 taxes Examples of items that decrease basis are shown in Table 13-1. How to file 2012 taxes These include the items discussed below. How to file 2012 taxes Table 13-1. How to file 2012 taxes Examples of Adjustments to Basis Increases to Basis Decreases to Basis • Capital improvements: • Exclusion from income of   Putting an addition on your home subsidies for energy conservation   Replacing an entire roof measures   Paving your driveway     Installing central air conditioning • Casualty or theft loss deductions   Rewiring your home and insurance reimbursements       • Assessments for local improvements:     Water connections     Extending utility service lines to the property • Postponed gain from the sale of a home   Sidewalks • Alternative motor vehicle credit  (Form 8910)   Roads       • Alternative fuel vehicle refueling     property credit (Form 8911)           • Residential energy credits (Form 5695)       • Casualty losses: • Depreciation and section 179 deduction   Restoring damaged property     • Nontaxable corporate distributions • Legal fees:     Cost of defending and perfecting a title • Certain canceled debt excluded from   Fees for getting a reduction of an assessment income     • Zoning costs • Easements           • Adoption tax benefits Casualty and theft losses. How to file 2012 taxes   If you have a casualty or theft loss, decrease the basis in your property by any insurance proceeds or other reimbursement and by any deductible loss not covered by insurance. How to file 2012 taxes    You must increase your basis in the property by the amount you spend on repairs that restore the property to its pre-casualty condition. How to file 2012 taxes   For more information on casualty and theft losses, see chapter 25. How to file 2012 taxes Depreciation and section 179 deduction. How to file 2012 taxes   Decrease the basis of your qualifying business property by any section 179 deduction you take and the depreciation you deducted, or could have deducted (including any special depreciation allowance), on your tax returns under the method of depreciation you selected. How to file 2012 taxes   For more information about depreciation and the section 179 deduction, see Publication 946 and the Instructions for Form 4562. How to file 2012 taxes Example. How to file 2012 taxes You owned a duplex used as rental property that cost you $40,000, of which $35,000 was allocated to the building and $5,000 to the land. How to file 2012 taxes You added an improvement to the duplex that cost $10,000. How to file 2012 taxes In February last year, the duplex was damaged by fire. How to file 2012 taxes Up to that time, you had been allowed depreciation of $23,000. How to file 2012 taxes You sold some salvaged material for $1,300 and collected $19,700 from your insurance company. How to file 2012 taxes You deducted a casualty loss of $1,000 on your income tax return for last year. How to file 2012 taxes You spent $19,000 of the insurance proceeds for restoration of the duplex, which was completed this year. How to file 2012 taxes You must use the duplex's adjusted basis after the restoration to determine depreciation for the rest of the property's recovery period. How to file 2012 taxes Figure the adjusted basis of the duplex as follows: Original cost of duplex $35,000 Addition to duplex 10,000 Total cost of duplex $45,000 Minus: Depreciation 23,000 Adjusted basis before casualty $22,000 Minus: Insurance proceeds $19,700     Deducted casualty loss 1,000     Salvage proceeds 1,300 22,000 Adjusted basis after casualty $-0- Add: Cost of restoring duplex 19,000 Adjusted basis after restoration $19,000 Note. How to file 2012 taxes Your basis in the land is its original cost of $5,000. How to file 2012 taxes Easements. How to file 2012 taxes   The amount you receive for granting an easement is generally considered to be proceeds from the sale of an interest in real property. How to file 2012 taxes It reduces the basis of the affected part of the property. How to file 2012 taxes If the amount received is more than the basis of the part of the property affected by the easement, reduce your basis in that part to zero and treat the excess as a recognized gain. How to file 2012 taxes   If the gain is on a capital asset, see chapter 16 for information about how to report it. How to file 2012 taxes If the gain is on property used in a trade or business, see Publication 544 for information about how to report it. How to file 2012 taxes Exclusion of subsidies for energy conservation measures. How to file 2012 taxes   You can exclude from gross income any subsidy you received from a public utility company for the purchase or installation of an energy conservation measure for a dwelling unit. How to file 2012 taxes Reduce the basis of the property for which you received the subsidy by the excluded amount. How to file 2012 taxes For more information about this subsidy, see chapter 12. How to file 2012 taxes Postponed gain from sale of home. How to file 2012 taxes    If you postponed gain from the sale of your main home under rules in effect before May 7, 1997, you must reduce the basis of the home you acquired as a replacement by the amount of the postponed gain. How to file 2012 taxes For more information on the rules for the sale of a home, see chapter 15. How to file 2012 taxes Basis Other Than Cost There are many times when you cannot use cost as basis. How to file 2012 taxes In these cases, the fair market value or the adjusted basis of the property can be used. How to file 2012 taxes Fair market value (FMV) and adjusted basis were discussed earlier. How to file 2012 taxes Property Received for Services If you receive property for your services, include the FMV of the property in income. How to file 2012 taxes The amount you include in income becomes your basis. How to file 2012 taxes If the services were performed for a price agreed on beforehand, it will be accepted as the FMV of the property if there is no evidence to the contrary. How to file 2012 taxes Restricted property. How to file 2012 taxes   If you receive property for your services and the property is subject to certain restrictions, your basis in the property is its FMV when it becomes substantially vested. How to file 2012 taxes However, this rule does not apply if you make an election to include in income the FMV of the property at the time it is transferred to you, less any amount you paid for it. How to file 2012 taxes Property is substantially vested when it is transferable or when it is not subject to a substantial risk of forfeiture (you do not have a good chance of losing it). How to file 2012 taxes For more information, see Restricted Property in Publication 525. How to file 2012 taxes Bargain purchases. How to file 2012 taxes   A bargain purchase is a purchase of an item for less than its FMV. How to file 2012 taxes If, as compensation for services, you buy goods or other property at less than FMV, include the difference between the purchase price and the property's FMV in your income. How to file 2012 taxes Your basis in the property is its FMV (your purchase price plus the amount you include in income). How to file 2012 taxes   If the difference between your purchase price and the FMV is a qualified employee discount, do not include the difference in income. How to file 2012 taxes However, your basis in the property is still its FMV. How to file 2012 taxes See Employee Discounts in Publication 15-B. How to file 2012 taxes Taxable Exchanges A taxable exchange is one in which the gain is taxable or the loss is deductible. How to file 2012 taxes A taxable gain or deductible loss also is known as a recognized gain or loss. How to file 2012 taxes If you receive property in exchange for other property in a taxable exchange, the basis of the property you receive is usually its FMV at the time of the exchange. How to file 2012 taxes Involuntary Conversions If you receive replacement property as a result of an involuntary conversion, such as a casualty, theft, or condemnation, figure the basis of the replacement property using the basis of the converted property. How to file 2012 taxes Similar or related property. How to file 2012 taxes   If you receive replacement property similar or related in service or use to the converted property, the replacement property's basis is the same as the converted property's basis on the date of the conversion, with the following adjustments. How to file 2012 taxes Decrease the basis by the following. How to file 2012 taxes Any loss you recognize on the involuntary conversion. How to file 2012 taxes Any money you receive that you do not spend on similar property. How to file 2012 taxes Increase the basis by the following. How to file 2012 taxes Any gain you recognize on the involuntary conversion. How to file 2012 taxes Any cost of acquiring the replacement property. How to file 2012 taxes Money or property not similar or related. How to file 2012 taxes    If you receive money or property not similar or related in service or use to the converted property, and you buy replacement property similar or related in service or use to the converted property, the basis of the replacement property is its cost decreased by the gain not recognized on the conversion. How to file 2012 taxes Example. How to file 2012 taxes The state condemned your property. How to file 2012 taxes The adjusted basis of the property was $26,000 and the state paid you $31,000 for it. How to file 2012 taxes You realized a gain of $5,000 ($31,000 − $26,000). How to file 2012 taxes You bought replacement property similar in use to the converted property for $29,000. How to file 2012 taxes You recognize a gain of $2,000 ($31,000 − $29,000), the unspent part of the payment from the state. How to file 2012 taxes Your unrecognized gain is $3,000, the difference between the $5,000 realized gain and the $2,000 recognized gain. How to file 2012 taxes The basis of the replacement property is figured as follows: Cost of replacement property $29,000 Minus: Gain not recognized 3,000 Basis of replacement property $26,000 Allocating the basis. How to file 2012 taxes   If you buy more than one piece of replacement property, allocate your basis among the properties based on their respective costs. How to file 2012 taxes Basis for depreciation. How to file 2012 taxes   Special rules apply in determining and depreciating the basis of MACRS property acquired in an involuntary conversion. How to file 2012 taxes For information, see What Is the Basis of Your Depreciable Property? in chapter 1 of Publication 946. How to file 2012 taxes Nontaxable Exchanges A nontaxable exchange is an exchange in which you are not taxed on any gain and you cannot deduct any loss. How to file 2012 taxes If you receive property in a nontaxable exchange, its basis is generally the same as the basis of the property you transferred. How to file 2012 taxes See Nontaxable Trades in chapter 14. How to file 2012 taxes Like-Kind Exchanges The exchange of property for the same kind of property is the most common type of nontaxable exchange. How to file 2012 taxes To qualify as a like-kind exchange, the property traded and the property received must be both of the following. How to file 2012 taxes Qualifying property. How to file 2012 taxes Like-kind property. How to file 2012 taxes The basis of the property you receive is generally the same as the adjusted basis of the property you gave up. How to file 2012 taxes If you trade property in a like-kind exchange and also pay money, the basis of the property received is the adjusted basis of the property you gave up increased by the money you paid. How to file 2012 taxes Qualifying property. How to file 2012 taxes   In a like-kind exchange, you must hold for investment or for productive use in your trade or business both the property you give up and the property you receive. How to file 2012 taxes Like-kind property. How to file 2012 taxes   There must be an exchange of like-kind property. How to file 2012 taxes Like-kind properties are properties of the same nature or character, even if they differ in grade or quality. How to file 2012 taxes The exchange of real estate for real estate and personal property for similar personal property are exchanges of like-kind property. How to file 2012 taxes Example. How to file 2012 taxes You trade in an old truck used in your business with an adjusted basis of $1,700 for a new one costing $6,800. How to file 2012 taxes The dealer allows you $2,000 on the old truck, and you pay $4,800. How to file 2012 taxes This is a like-kind exchange. How to file 2012 taxes The basis of the new truck is $6,500 (the adjusted basis of the old one, $1,700, plus the amount you paid, $4,800). How to file 2012 taxes If you sell your old truck to a third party for $2,000 instead of trading it in and then buy a new one from the dealer, you have a taxable gain of $300 on the sale (the $2,000 sale price minus the $1,700 adjusted basis). How to file 2012 taxes The basis of the new truck is the price you pay the dealer. How to file 2012 taxes Partially nontaxable exchanges. How to file 2012 taxes   A partially nontaxable exchange is an exchange in which you receive unlike property or money in addition to like-kind property. How to file 2012 taxes The basis of the property you receive is the same as the adjusted basis of the property you gave up, with the following adjustments. How to file 2012 taxes Decrease the basis by the following amounts. How to file 2012 taxes Any money you receive. How to file 2012 taxes Any loss you recognize on the exchange. How to file 2012 taxes Increase the basis by the following amounts. How to file 2012 taxes Any additional costs you incur. How to file 2012 taxes Any gain you recognize on the exchange. How to file 2012 taxes If the other party to the exchange assumes your liabilities, treat the debt assumption as money you received in the exchange. How to file 2012 taxes Allocation of basis. How to file 2012 taxes   If you receive like-kind and unlike properties in the exchange, allocate the basis first to the unlike property, other than money, up to its FMV on the date of the exchange. How to file 2012 taxes The rest is the basis of the like-kind property. How to file 2012 taxes More information. How to file 2012 taxes   See Like-Kind Exchanges in chapter 1 of Publication 544 for more information. How to file 2012 taxes Basis for depreciation. How to file 2012 taxes   Special rules apply in determining and depreciating the basis of MACRS property acquired in a like-kind exchange. How to file 2012 taxes For information, see What Is the Basis of Your Depreciable Property? in chapter 1 of Publication 946. How to file 2012 taxes Property Transferred From a Spouse The basis of property transferred to you or transferred in trust for your benefit by your spouse is the same as your spouse's adjusted basis. How to file 2012 taxes The same rule applies to a transfer by your former spouse that is incident to divorce. How to file 2012 taxes However, for property transferred in trust, adjust your basis for any gain recognized by your spouse or former spouse if the liabilities assumed, plus the liabilities to which the property is subject, are more than the adjusted basis of the property transferred. How to file 2012 taxes If the property transferred to you is a series E, series EE, or series I U. How to file 2012 taxes S. How to file 2012 taxes savings bond, the transferor must include in income the interest accrued to the date of transfer. How to file 2012 taxes Your basis in the bond immediately after the transfer is equal to the transferor's basis increased by the interest income includible in the transferor's income. How to file 2012 taxes For more information on these bonds, see chapter 7. How to file 2012 taxes At the time of the transfer, the transferor must give you the records needed to determine the adjusted basis and holding period of the property as of the date of the transfer. How to file 2012 taxes For more information about the transfer of property from a spouse, see chapter 14. How to file 2012 taxes Property Received as a Gift To figure the basis of property you receive as a gift, you must know its adjusted basis to the donor just before it was given to you, its FMV at the time it was given to you, and any gift tax paid on it. How to file 2012 taxes FMV less than donor's adjusted basis. How to file 2012 taxes   If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property. How to file 2012 taxes Your basis for figuring gain is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you held the property. How to file 2012 taxes Your basis for figuring loss is its FMV when you received the gift plus or minus any required adjustments to basis while you held the property. How to file 2012 taxes See Adjusted Basis , earlier. How to file 2012 taxes Example. How to file 2012 taxes You received an acre of land as a gift. How to file 2012 taxes At the time of the gift, the land had an FMV of $8,000. How to file 2012 taxes The donor's adjusted basis was $10,000. How to file 2012 taxes After you received the property, no events occurred to increase or decrease your basis. How to file 2012 taxes If you later sell the property for $12,000, you will have a $2,000 gain because you must use the donor's adjusted basis at the time of the gift ($10,000) as your basis to figure gain. How to file 2012 taxes If you sell the property for $7,000, you will have a $1,000 loss because you must use the FMV at the time of the gift ($8,000) as your basis to figure loss. How to file 2012 taxes If the sales price is between $8,000 and $10,000, you have neither gain nor loss. How to file 2012 taxes Business property. How to file 2012 taxes   If you hold the gift as business property, your basis for figuring any depreciation, depletion, or amortization deductions is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you hold the property. How to file 2012 taxes FMV equal to or greater than donor's adjusted basis. How to file 2012 taxes   If the FMV of the property is equal to or greater than the donor's adjusted basis, your basis is the donor's adjusted basis at the time you received the gift. How to file 2012 taxes Increase your basis by all or part of any gift tax paid, depending on the date of the gift, explained later. How to file 2012 taxes   Also, for figuring gain or loss from a sale or other disposition or for figuring depreciation, depletion, or amortization deductions on business property, you must increase or decrease your basis (the donor's adjusted basis) by any required adjustments to basis while you held the property. How to file 2012 taxes See Adjusted Basis , earlier. How to file 2012 taxes   If you received a gift during the tax year, increase your basis in the gift (the donor's adjusted basis) by the part of the gift tax paid on it due to the net increase in value of the gift. How to file 2012 taxes Figure the increase by multiplying the gift tax paid by a fraction. How to file 2012 taxes The numerator of the fraction is the net increase in value of the gift and the denominator is the amount of the gift. How to file 2012 taxes   The net increase in value of the gift is the FMV of the gift minus the donor's adjusted basis. How to file 2012 taxes The amount of the gift is its value for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. How to file 2012 taxes Example. How to file 2012 taxes In 2013, you received a gift of property from your mother that had an FMV of $50,000. How to file 2012 taxes Her adjusted basis was $20,000. How to file 2012 taxes The amount of the gift for gift tax purposes was $36,000 ($50,000 minus the $14,000 annual exclusion). How to file 2012 taxes She paid a gift tax of $7,320 on the property. How to file 2012 taxes Your basis is $26,076, figured as follows: Fair market value $50,000 Minus: Adjusted basis −20,000 Net increase in value $30,000     Gift tax paid $7,320 Multiplied by ($30,000 ÷ $36,000) × . How to file 2012 taxes 83 Gift tax due to net increase in value $6,076 Adjusted basis of property to your mother +20,000 Your basis in the property $26,076 Note. How to file 2012 taxes If you received a gift before 1977, your basis in the gift (the donor's adjusted basis) includes any gift tax paid on it. How to file 2012 taxes However, your basis cannot exceed the FMV of the gift at the time it was given to you. How to file 2012 taxes Inherited Property Your basis in property you inherited from a decedent, who died before January 1, 2010, or after December 31, 2010, is generally one of the following: The FMV of the property at the date of the decedent's death. How to file 2012 taxes The FMV on the alternate valuation date if the personal representative for the estate elects to use alternate valuation. How to file 2012 taxes The value under the special-use valuation method for real property used in farming or a closely held business if elected for estate tax purposes. How to file 2012 taxes The decedent's adjusted basis in land to the extent of the value excluded from the decedent's taxable estate as a qualified conservation easement. How to file 2012 taxes If a federal estate tax return does not have to be filed, your basis in the inherited property is its appraised value at the date of death for state inheritance or transmission taxes. How to file 2012 taxes For more information, see the instructions to Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return. How to file 2012 taxes Property inherited from a decedent who died in 2010. How to file 2012 taxes   If you inherited property from a decedent who died in 2010, special rules may apply. How to file 2012 taxes For more information, see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010. How to file 2012 taxes Community property. How to file 2012 taxes   In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), husband and wife are each usually considered to own half the community property. How to file 2012 taxes When either spouse dies, the total value of the community property, even the part belonging to the surviving spouse, generally becomes the basis of the entire property. How to file 2012 taxes For this rule to apply, at least half the value of the community property interest must be includible in the decedent's gross estate, whether or not the estate must file a return. How to file 2012 taxes Example. How to file 2012 taxes You and your spouse owned community property that had a basis of $80,000. How to file 2012 taxes When your spouse died, half the FMV of the community interest was includible in your spouse's estate. How to file 2012 taxes The FMV of the community interest was $100,000. How to file 2012 taxes The basis of your half of the property after the death of your spouse is $50,000 (half of the $100,000 FMV). How to file 2012 taxes The basis of the other half to your spouse's heirs is also $50,000. How to file 2012 taxes For more information about community property, see Publication 555, Community Property. How to file 2012 taxes Property Changed From Personal to Business or Rental Use If you hold property for personal use and then change it to business use or use it to produce rent, you can begin to depreciate the property at the time of the change. How to file 2012 taxes To do so, you must figure its basis for depreciation at the time of the change. How to file 2012 taxes An example of changing property held for personal use to business or rental use would be renting out your former personal residence. How to file 2012 taxes Basis for depreciation. How to file 2012 taxes   The basis for depreciation is the lesser of the following amounts. How to file 2012 taxes The FMV of the property on the date of the change. How to file 2012 taxes Your adjusted basis on the date of the change. How to file 2012 taxes Example. How to file 2012 taxes Several years ago, you paid $160,000 to have your house built on a lot that cost $25,000. How to file 2012 taxes You paid $20,000 for permanent improvements to the house and claimed a $2,000 casualty loss deduction for damage to the house before changing the property to rental use last year. How to file 2012 taxes Because land is not depreciable, you include only the cost of the house when figuring the basis for depreciation. How to file 2012 taxes Your adjusted basis in the house when you changed its use was $178,000 ($160,000 + $20,000 − $2,000). How to file 2012 taxes On the same date, your property had an FMV of $180,000, of which $15,000 was for the land and $165,000 was for the house. How to file 2012 taxes The basis for figuring depreciation on the house is its FMV on the date of the change ($165,000) because it is less than your adjusted basis ($178,000). How to file 2012 taxes Sale of property. How to file 2012 taxes   If you later sell or dispose of property changed to business or rental use, the basis you use will depend on whether you are figuring gain or loss. How to file 2012 taxes Gain. How to file 2012 taxes   The basis for figuring a gain is your adjusted basis in the property when you sell the property. How to file 2012 taxes Example. How to file 2012 taxes Assume the same facts as in the previous example except that you sell the property at a gain after being allowed depreciation deductions of $37,500. How to file 2012 taxes Your adjusted basis for figuring gain is $165,500 ($178,000 + $25,000 (land) − $37,500). How to file 2012 taxes Loss. How to file 2012 taxes   Figure the basis for a loss starting with the smaller of your adjusted basis or the FMV of the property at the time of the change to business or rental use. How to file 2012 taxes Then make adjustments (increases and decreases) for the period after the change in the property's use, as discussed earlier under Adjusted Basis . How to file 2012 taxes Example. How to file 2012 taxes Assume the same facts as in the previous example, except that you sell the property at a loss after being allowed depreciation deductions of $37,500. How to file 2012 taxes In this case, you would start with the FMV on the date of the change to rental use ($180,000), because it is less than the adjusted basis of $203,000 ($178,000 + $25,000 (land)) on that date. How to file 2012 taxes Reduce that amount ($180,000) by the depreciation deductions ($37,500). How to file 2012 taxes The basis for loss is $142,500 ($180,000 − $37,500). How to file 2012 taxes Stocks and Bonds The basis of stocks or bonds you buy generally is the purchase price plus any costs of purchase, such as commissions and recording or transfer fees. How to file 2012 taxes If you get stocks or bonds other than by purchase, your basis is usually determined by the FMV or the previous owner's adjusted basis, as discussed earlier. How to file 2012 taxes You must adjust the basis of stocks for certain events that occur after purchase. How to file 2012 taxes For example, if you receive additional stock from nontaxable stock dividends or stock splits, reduce your basis for each share of stock by dividing the adjusted basis of the old stock by the number of shares of old and new stock. How to file 2012 taxes This rule applies only when the additional stock received is identical to the stock held. How to file 2012 taxes Also reduce your basis when you receive nontaxable distributions. How to file 2012 taxes They are a return of capital. How to file 2012 taxes Example. How to file 2012 taxes In 2011 you bought 100 shares of XYZ stock for $1,000 or $10 a share. How to file 2012 taxes In 2012 you bought 100 shares of XYZ stock for $1,600 or $16 a share. How to file 2012 taxes In 2013 XYZ declared a 2-for-1 stock split. How to file 2012 taxes You now have 200 shares of stock with a basis of $5 a share and 200 shares with a basis of $8 a share. How to file 2012 taxes Other basis. How to file 2012 taxes   There are other ways to figure the basis of stocks or bonds depending on how you acquired them. How to file 2012 taxes For detailed information, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. How to file 2012 taxes Identifying stocks or bonds sold. How to file 2012 taxes   If you can adequately identify the shares of stock or the bonds you sold, their basis is the cost or other basis of the particular shares of stocks or bonds. How to file 2012 taxes If you buy and sell securities at various times in varying quantities and you cannot adequately identify the shares you sell, the basis of the securities you sell is the basis of the securities you acquired first. How to file 2012 taxes For more information about identifying securities you sell, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550. How to file 2012 taxes Mutual fund shares. How to file 2012 taxes   If you sell mutual fund shares you acquired at various times and prices and left on deposit in an account kept by a custodian or agent, you can elect to use an average basis. How to file 2012 taxes For more information, see Publication 550. How to file 2012 taxes Bond premium. How to file 2012 taxes   If you buy a taxable bond at a premium and elect to amortize the premium, reduce the basis of the bond by the amortized premium you deduct each year. How to file 2012 taxes See Bond Premium Amortization in chapter 3 of Publication 550 for more information. How to file 2012 taxes Although you cannot deduct the premium on a tax-exempt bond, you must amortize the premium each year and reduce your basis in the bond by the amortized amount. How to file 2012 taxes Original issue discount (OID) on debt instruments. How to file 2012 taxes   You must increase your basis in an OID debt instrument by the OID you include in income for that instrument. How to file 2012 taxes See Original Issue Discount (OID) in chapter 7 and Publication 1212, Guide To Original Issue Discount (OID) Instruments. How to file 2012 taxes Tax-exempt obligations. How to file 2012 taxes    OID on tax-exempt obligations is generally not taxable. How to file 2012 taxes However, when you dispose of a tax-exempt obligation issued after September 3, 1982, and acquired after March 1, 1984, you must accrue OID on the obligation to determine its adjusted basis. How to file 2012 taxes The accrued OID is added to the basis of the obligation to determine your gain or loss. How to file 2012 taxes See chapter 4 of Publication 550. How to file 2012 taxes Prev  Up  Next   Home   More Online Publications
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1099-K Reporting Requirements for Payment Settlement Entities

Beginning in January, 2012, payment settlement entities (PSEs) are required by the Housing Assistance Tax Act of 2008 to report on Form 1099-K the following transactions:

  • All payments made in settlement of payment card transactions (e.g., credit card);
  • Payments in settlement of third party network transactions IF:
    -Gross payments to a participating payee exceed $20,000; AND
    -There are more than 200 transactions with the participating payee.

Filing Deadlines & Procedures

Your 1099-Ks are due to merchants by January 31, 2014. Electronically filed 1099-Ks are due to the IRS April 1, 2014 (normally March 31), while paper 1099-Ks are due February 28, 2014.

File your 1099-K electronically through the FIRE (Filing Information Returns Electronically) option. For information, review Publication 1220 (PDF). If you are considering filing on paper, review General Instructions for Certain Information Returns.

Verification Processes

We verify that tax returns are correct and complete using the following processes:

More Information

You can find more about the 1099-K and other information returns at our Third Party Reporting Information Center.

You may also want to see Frequently Asked Question about Backup Withholding

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Page Last Reviewed or Updated: 20-Mar-2014

The How To File 2012 Taxes

How to file 2012 taxes 1. How to file 2012 taxes   Fuel Taxes Table of Contents Definitions Information Returns Registration RequirementsAdditional information. How to file 2012 taxes Gasoline and Aviation GasolineTaxable Events Gasoline Blendstocks Diesel Fuel and KeroseneTaxable Events Dyed Diesel Fuel and Dyed Kerosene Alaska and Feedstocks Back-up Tax Diesel-Water Fuel Emulsion Kerosene for Use in AviationTaxable Events Liability For Tax Surtax on any liquid used in a fractional ownership program aircraft as fuel Certificate for Commercial Aviation and Exempt UsesExempt use. How to file 2012 taxes Reseller statement. How to file 2012 taxes Other Fuels (Including Alternative Fuels)Taxable Events Compressed Natural Gas (CNG)Taxable Events Fuels Used on Inland WaterwaysFishing vessels. How to file 2012 taxes Deep-draft ocean-going vessels. How to file 2012 taxes Passenger vessels. How to file 2012 taxes Ocean-going barges. How to file 2012 taxes State or local governments. How to file 2012 taxes Cellulosic or Second Generation Biofuel Not Used as Fuel Biodiesel Sold as But Not Used as Fuel Definitions Excise taxes are imposed on all the following fuels. How to file 2012 taxes Gasoline, including aviation gasoline and gasoline blendstocks. How to file 2012 taxes Diesel fuel, including dyed diesel fuel. How to file 2012 taxes Diesel-water fuel emulsion. How to file 2012 taxes Kerosene, including dyed kerosene and kerosene used in aviation. How to file 2012 taxes Other Fuels (including alternative fuels). How to file 2012 taxes Compressed natural gas (CNG). How to file 2012 taxes Fuels used in commercial transportation on inland waterways. How to file 2012 taxes Any liquid used in a fractional ownership program aircraft as fuel. How to file 2012 taxes The following terms are used throughout the discussion of fuel taxes. How to file 2012 taxes Other terms are defined in the discussion of the specific fuels to which they pertain. How to file 2012 taxes Agri-biodiesel. How to file 2012 taxes   Agri-biodiesel means biodiesel derived solely from virgin oils, including esters derived from virgin vegetable oils from corn, soybeans, sunflower seeds, cottonseeds, canola, crambe, rapeseeds, safflowers, flaxseeds, rice bran, mustard seeds, and camelina, and from animal fats. How to file 2012 taxes Approved terminal or refinery. How to file 2012 taxes   This is a terminal operated by a registrant that is a terminal operator or a refinery operated by a registrant that is a refiner. How to file 2012 taxes Biodiesel. How to file 2012 taxes   Biodiesel means the monoalkyl esters of long chain fatty acids derived from plant or animal matter that meet the registration requirements for fuels and fuel additives established by the Environmental Protection Agency (EPA) under section 211 of the Clean Air Act, and the requirements of the American Society of Testing Materials (ASTM) D6751. How to file 2012 taxes Blended taxable fuel. How to file 2012 taxes   This means any taxable fuel produced outside the bulk transfer/terminal system by mixing taxable fuel on which excise tax has been imposed and any other liquid on which excise tax has not been imposed. How to file 2012 taxes This does not include a mixture removed or sold during the calendar quarter if all such mixtures removed or sold by the blender contain less than 400 gallons of a liquid on which the tax has not been imposed. How to file 2012 taxes Blender. How to file 2012 taxes   This is the person that produces blended taxable fuel. How to file 2012 taxes Bulk transfer. How to file 2012 taxes   This is the transfer of taxable fuel by pipeline or vessel. How to file 2012 taxes Bulk transfer/terminal system. How to file 2012 taxes   This is the taxable fuel distribution system consisting of refineries, pipelines, vessels, and terminals. How to file 2012 taxes Fuel in the supply tank of any engine, or in any tank car, railcar, trailer, truck, or other equipment suitable for ground transportation is not in the bulk transfer/terminal system. How to file 2012 taxes Cellulosic biofuel. How to file 2012 taxes   Cellulosic biofuel means any liquid fuel produced from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis that meets the registration requirements for fuels and fuel additives established by the EPA under section 211 of the Clean Air Act. How to file 2012 taxes Cellulosic biofuel does not include any alcohol with a proof of less than 150 (without regard to denaturants). How to file 2012 taxes For fuels sold or used after December 31, 2009, cellulosic biofuel does not include fuel of which more than 4% (determined by weight) is any combination of water and sediment, fuel of which the ash content is more than 1%, or fuel that has an acid number greater than 25. How to file 2012 taxes Also see Second generation biofuel below. How to file 2012 taxes Diesel-water fuel emulsion. How to file 2012 taxes   A diesel-water fuel emulsion means an emulsion at least 14% of which is water. How to file 2012 taxes The emulsion additive used to produce the fuel must be registered by a United States manufacturer with the EPA under section 211 of the Clean Air Act as in effect on March 31, 2003. How to file 2012 taxes Dry lease aircraft exchange. How to file 2012 taxes   See later, under Surtax on any liquid used in a fractional ownership program aircraft as fuel. How to file 2012 taxes Enterer. How to file 2012 taxes   This is the importer of record (under customs law) for the taxable fuel. How to file 2012 taxes However, if the importer of record is acting as an agent, such as a customs broker, the person for whom the agent is acting is the enterer. How to file 2012 taxes If there is no importer of record, the owner at the time of entry into the United States is the enterer. How to file 2012 taxes Entry. How to file 2012 taxes   Taxable fuel is entered into the United States when it is brought into the United States and applicable customs law requires that it be entered for consumption, use, or warehousing. How to file 2012 taxes This does not apply to fuel brought into Puerto Rico (which is part of the U. How to file 2012 taxes S. How to file 2012 taxes customs territory), but does apply to fuel brought into the United States from Puerto Rico. How to file 2012 taxes Fractional ownership aircraft program and fractional program aircraft. How to file 2012 taxes   See later, under Surtax on any liquid used in a fractional ownership program aircraft as fuel. How to file 2012 taxes Measurement of taxable fuel. How to file 2012 taxes   Volumes of taxable fuel can be measured on the basis of actual volumetric gallons or gallons adjusted to 60 degrees Fahrenheit. How to file 2012 taxes Other fuels. How to file 2012 taxes   See Other Fuels (Including Alternative Fuels), later, and Alternative Fuel Credit and Alternative Fuel Mixture Credit in chapter 2. How to file 2012 taxes Pipeline operator. How to file 2012 taxes   This is the person that operates a pipeline within the bulk transfer/terminal system. How to file 2012 taxes Position holder. How to file 2012 taxes   This is the person that holds the inventory position in the taxable fuel in the terminal, as reflected in the records of the terminal operator. How to file 2012 taxes You hold the inventory position when you have a contractual agreement with the terminal operator for the use of the storage facilities and terminaling services for the taxable fuel. How to file 2012 taxes A terminal operator that owns taxable fuel in its terminal is a position holder. How to file 2012 taxes Rack. How to file 2012 taxes   This is a mechanism capable of delivering fuel into a means of transport other than a pipeline or vessel. How to file 2012 taxes Refiner. How to file 2012 taxes   This is any person that owns, operates, or otherwise controls a refinery. How to file 2012 taxes Refinery. How to file 2012 taxes   This is a facility used to produce taxable fuel and from which taxable fuel may be removed by pipeline, by vessel, or at a rack. How to file 2012 taxes However, this term does not include a facility where only blended fuel, and no other type of fuel, is produced. How to file 2012 taxes For this purpose, blended fuel is any mixture that would be blended taxable fuel if produced outside the bulk transfer/terminal system. How to file 2012 taxes Registrant. How to file 2012 taxes   This is a taxable fuel registrant (see Registration Requirements, later). How to file 2012 taxes Removal. How to file 2012 taxes   This is any physical transfer of taxable fuel. How to file 2012 taxes It also means any use of taxable fuel other than as a material in the production of taxable fuel or Other Fuels. How to file 2012 taxes However, taxable fuel is not removed when it evaporates or is otherwise lost or destroyed. How to file 2012 taxes Renewable diesel. How to file 2012 taxes   See Renewable Diesel Credits in chapter 2. How to file 2012 taxes Sale. How to file 2012 taxes   For taxable fuel not in a terminal, this is the transfer of title to, or substantial incidents of ownership in, taxable fuel to the buyer for money, services, or other property. How to file 2012 taxes For taxable fuel in a terminal, this is the transfer of the inventory position if the transferee becomes the position holder for that taxable fuel. How to file 2012 taxes Second generation biofuel. How to file 2012 taxes   This is any liquid fuel derived by, or from, qualified feedstocks, and meets the registration requirements for fuels and fuel additives established by the Environmental Protection Agency under section 211 of the Clean Air Act (42 U. How to file 2012 taxes S. How to file 2012 taxes C. How to file 2012 taxes 7545). How to file 2012 taxes It also includes certain liquid fuel which is derived by, or from, any cultivated algae, cyanobacteria, or lemna. How to file 2012 taxes It is not alcohol of less than 150 proof (disregard any added denaturants). How to file 2012 taxes See Form 6478 for more information. How to file 2012 taxes State. How to file 2012 taxes   This includes any state, any of its political subdivisions, the District of Columbia, and the American Red Cross. How to file 2012 taxes An Indian tribal government is treated as a state only if transactions involve the exercise of an essential tribal government function. How to file 2012 taxes Taxable fuel. How to file 2012 taxes   This means gasoline, diesel fuel, and kerosene. How to file 2012 taxes Terminal. How to file 2012 taxes   This is a storage and distribution facility supplied by pipeline or vessel, and from which taxable fuel may be removed at a rack. How to file 2012 taxes It does not include a facility at which gasoline blendstocks are used in the manufacture of products other than finished gasoline if no gasoline is removed from the facility. How to file 2012 taxes A terminal does not include any facility where finished gasoline, diesel fuel, or kerosene is stored if the facility is operated by a registrant and all such taxable fuel stored at the facility has been previously taxed upon removal from a refinery or terminal. How to file 2012 taxes Terminal operator. How to file 2012 taxes   This is any person that owns, operates, or otherwise controls a terminal. How to file 2012 taxes Throughputter. How to file 2012 taxes   This is any person that is a position holder or that owns taxable fuel within the bulk transfer/terminal system (other than in a terminal). How to file 2012 taxes Vessel operator. How to file 2012 taxes   This is the person that operates a vessel within the bulk transfer/terminal system. How to file 2012 taxes However, vessel does not include a deep draft ocean-going vessel. How to file 2012 taxes Information Returns Form 720-TO and Form 720-CS are information returns used to report monthly receipts and disbursements of liquid products. How to file 2012 taxes A liquid product is any liquid transported into storage at a terminal or delivered out of a terminal. How to file 2012 taxes For a list of products, see the product code table in the Instructions for Forms 720-TO and 720-CS. How to file 2012 taxes The returns are due the last day of the month following the month in which the transaction occurs. How to file 2012 taxes Generally, these returns can be filed on paper or electronically. How to file 2012 taxes For information on filing electronically, see Publication 3536, Motor Fuel Excise Tax EDI Guide. How to file 2012 taxes Publication 3536 is only available on the IRS website. How to file 2012 taxes Form 720-TO. How to file 2012 taxes   This information return is used by terminal operators to report receipts and disbursements of all liquid products to and from all approved terminals. How to file 2012 taxes Each terminal operator must file a separate form for each approved terminal. How to file 2012 taxes Form 720-CS. How to file 2012 taxes   This information return must be filed by bulk transport carriers (barges, vessels, and pipelines) who receive liquid product from an approved terminal or deliver liquid product to an approved terminal. How to file 2012 taxes Registration Requirements The following discussion applies to excise tax registration requirements for activities relating to fuels only. How to file 2012 taxes See Form 637 for other persons who must register and for more information about registration. How to file 2012 taxes Persons that are required to be registered. How to file 2012 taxes   You are required to be registered if you are a: Blender; Enterer; Pipeline operator; Position holder; Refiner; Terminal operator; Vessel operator; Producer or importer of alcohol, biodiesel, agri-biodiesel, and renewable diesel; or Producer of cellulosic or second generation biofuel. How to file 2012 taxes Persons that may register. How to file 2012 taxes   You may, but are not required to, register if you are a: Feedstock user, Industrial user, Throughputter that is not a position holder, Ultimate vendor, Diesel-water fuel emulsion producer, Credit card issuer, or Alternative fuel claimant. How to file 2012 taxes Ultimate vendors, credit card issuers, and alternative fuel claimants do not need to be registered to buy or sell fuel. How to file 2012 taxes However, they must be registered to file claims for certain sales and uses of fuel. How to file 2012 taxes See Form 637 for more information. How to file 2012 taxes Taxable fuel registrant. How to file 2012 taxes   This is an enterer, an industrial user, a refiner, a terminal operator, or a throughputter who received a Letter of Registration under the excise tax registration provisions and whose registration has not been revoked or suspended. How to file 2012 taxes The term registrant as used in the discussions of these fuels means a taxable fuel registrant. How to file 2012 taxes Additional information. How to file 2012 taxes   See the Form 637 instructions for the information you must submit when you apply for registration. How to file 2012 taxes Failure to register. How to file 2012 taxes   The penalty for failure to register if you must register, unless due to reasonable cause, is $10,000 for the initial failure, and then $1,000 each day thereafter you fail to register. How to file 2012 taxes Gasoline and Aviation Gasoline Gasoline. How to file 2012 taxes   Gasoline means all products commonly or commercially known or sold as gasoline with an octane rating of 75 or more that are suitable for use as a motor fuel. How to file 2012 taxes Gasoline includes any gasoline blend other than: Qualified ethanol and methanol fuel (at least 85 percent of the blend consists of alcohol produced from coal, including peat), Partially exempt ethanol and methanol fuel (at least 85 percent of the blend consists of alcohol produced from natural gas), or Denatured alcohol. How to file 2012 taxes Gasoline also includes gasoline blendstocks, discussed later. How to file 2012 taxes Aviation gasoline. How to file 2012 taxes   This means all special grades of gasoline suitable for use in aviation reciprocating engines and covered by ASTM specification D910 or military specification MIL-G-5572. How to file 2012 taxes Taxable Events The tax on gasoline is $. How to file 2012 taxes 184 per gallon. How to file 2012 taxes The tax on aviation gasoline is $. How to file 2012 taxes 194 per gallon. How to file 2012 taxes When used in a fractional ownership program aircraft, gasoline also is subject to a surtax of $. How to file 2012 taxes 141 per gallon. How to file 2012 taxes See Surtax on any liquid used in a fractional ownership program aircraft as fuel, later. How to file 2012 taxes Tax is imposed on the removal, entry, or sale of gasoline. How to file 2012 taxes Each of these events is discussed later. How to file 2012 taxes Also, see the special rules that apply to gasoline blendstocks, later. How to file 2012 taxes If the tax is paid on the gasoline in more than one event, a refund may be allowed for the “second” tax paid. How to file 2012 taxes See Refunds of Second Tax in chapter 2. How to file 2012 taxes Removal from terminal. How to file 2012 taxes   All removals of gasoline at a terminal rack are taxable. How to file 2012 taxes The position holder for that gasoline is liable for the tax. How to file 2012 taxes Two-party exchanges. How to file 2012 taxes   In a two-party exchange, the receiving person, not the delivering person, is liable for the tax imposed on the removal of taxable fuel from the terminal at the terminal rack. How to file 2012 taxes A two-party exchange means a transaction (other than a sale) where the delivering person and receiving person are both taxable fuel registrants and all of the following apply. How to file 2012 taxes The transaction includes a transfer from the delivering person, who holds the inventory position for the taxable fuel in the terminal as reflected in the records of the terminal operator. How to file 2012 taxes The exchange transaction occurs before or at the same time as removal across the rack by the receiving person. How to file 2012 taxes The terminal operator in its records treats the receiving person as the person that removes the product across the terminal rack for purposes of reporting the transaction on Form 720-TO. How to file 2012 taxes The transaction is subject to a written contract. How to file 2012 taxes Terminal operator's liability. How to file 2012 taxes   The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator and is not a registrant. How to file 2012 taxes   However, a terminal operator meeting all the following conditions at the time of the removal will not be liable for the tax. How to file 2012 taxes The terminal operator is a registrant. How to file 2012 taxes The terminal operator has an unexpired notification certificate (discussed later) from the position holder. How to file 2012 taxes The terminal operator has no reason to believe any information on the certificate is false. How to file 2012 taxes Removal from refinery. How to file 2012 taxes   The removal of gasoline from a refinery is taxable if the removal meets either of the following conditions. How to file 2012 taxes It is made by bulk transfer and the refiner, the owner of the gasoline immediately before the removal, or the operator of the pipeline or vessel is not a registrant. How to file 2012 taxes It is made at the refinery rack. How to file 2012 taxes The refiner is liable for the tax. How to file 2012 taxes Exception. How to file 2012 taxes   The tax does not apply to a removal of gasoline at the refinery rack if all the following requirements are met. How to file 2012 taxes The gasoline is removed from an approved refinery not served by pipeline (other than for receiving crude oil) or vessel. How to file 2012 taxes The gasoline is received at a facility operated by a registrant and located within the bulk transfer/terminal system. How to file 2012 taxes The removal from the refinery is by railcar. How to file 2012 taxes The same person operates the refinery and the facility at which the gasoline is received. How to file 2012 taxes Entry into the United States. How to file 2012 taxes   The entry of gasoline into the United States is taxable if the entry meets either of the following conditions. How to file 2012 taxes It is made by bulk transfer and the enterer or the operator of the pipeline or vessel is not a registrant. How to file 2012 taxes It is not made by bulk transfer. How to file 2012 taxes The enterer is liable for the tax. How to file 2012 taxes Importer of record's liability. How to file 2012 taxes   The importer of record is jointly and severally liable for the tax with the enterer if the importer of record is not the enterer of the taxable fuel and the enterer is not a taxable fuel registrant. How to file 2012 taxes   However, an importer of record meeting both of the following conditions at the time of the entry will not be liable for the tax. How to file 2012 taxes The importer of record has an unexpired notification certificate (discussed later) from the enterer. How to file 2012 taxes The importer of record has no reason to believe any information in the certificate is false. How to file 2012 taxes Customs bond. How to file 2012 taxes   The customs bond will not be charged for the tax imposed on the entry of the gasoline if at the time of entry the surety has an unexpired notification certificate from the enterer and has no reason to believe any information in the certificate is false. How to file 2012 taxes Removal from a terminal by unregistered position holder or unregistered pipeline or vessel operator. How to file 2012 taxes   The removal by bulk transfer of gasoline from a terminal is taxable if the position holder for the gasoline or the operator of the pipeline or vessel is not a registrant. How to file 2012 taxes The position holder is liable for the tax. How to file 2012 taxes The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator. How to file 2012 taxes However, see Terminal operator's liability under Removal from terminal, earlier, for an exception. How to file 2012 taxes Bulk transfers not received at approved terminal or refinery. How to file 2012 taxes   The removal by bulk transfer of gasoline from a terminal or refinery, or the entry of gasoline by bulk transfer into the United States, is taxable if the following conditions apply. How to file 2012 taxes No tax was previously imposed (as discussed earlier) on any of the following events. How to file 2012 taxes The removal from the refinery. How to file 2012 taxes The entry into the United States. How to file 2012 taxes The removal from a terminal by an unregistered position holder. How to file 2012 taxes Upon removal from the pipeline or vessel, the gasoline is not received at an approved terminal or refinery (or at another pipeline or vessel). How to file 2012 taxes   The owner of the gasoline when it is removed from the pipeline or vessel is liable for the tax. How to file 2012 taxes However, an owner meeting all the following conditions at the time of the removal will not be liable for the tax. How to file 2012 taxes The owner is a registrant. How to file 2012 taxes The owner has an unexpired notification certificate (discussed later) from the operator of the terminal or refinery where the gasoline is received. How to file 2012 taxes The owner has no reason to believe any information on the certificate is false. How to file 2012 taxes The operator of the facility where the gasoline is received is liable for the tax if the owner meets these conditions. How to file 2012 taxes The operator is jointly and severally liable if the owner does not meet these conditions. How to file 2012 taxes Sales to unregistered person. How to file 2012 taxes   The sale of gasoline located within the bulk transfer/terminal system to a person that is not a registrant is taxable if tax was not previously imposed under any of the events discussed earlier. How to file 2012 taxes   The seller is liable for the tax. How to file 2012 taxes However, a seller meeting all the following conditions at the time of the sale will not be liable for the tax. How to file 2012 taxes   The seller is a registrant. How to file 2012 taxes The seller has an unexpired notification certificate (discussed later) from the buyer. How to file 2012 taxes The seller has no reason to believe any information on the certificate is false. How to file 2012 taxes The buyer of the gasoline is liable for the tax if the seller meets these conditions. How to file 2012 taxes The buyer is jointly and severally liable if the seller does not meet these conditions. How to file 2012 taxes Exception. How to file 2012 taxes   The tax does not apply to a sale if all of the following apply. How to file 2012 taxes The buyer's principal place of business is not in the United States. How to file 2012 taxes The sale occurs as the fuel is delivered into a transport vessel with a capacity of at least 20,000 barrels of fuel. How to file 2012 taxes The seller is a registrant and the exporter of record. How to file 2012 taxes The fuel was exported. How to file 2012 taxes Removal or sale of blended gasoline. How to file 2012 taxes   The removal or sale of blended gasoline by the blender is taxable. How to file 2012 taxes See Blended taxable fuel under Definitions, earlier. How to file 2012 taxes   The blender is liable for the tax. How to file 2012 taxes The tax is figured on the number of gallons not previously subject to the tax on gasoline. How to file 2012 taxes   Persons who blend alcohol with gasoline to produce an alcohol fuel mixture outside the bulk transfer/terminal system must pay the gasoline tax on the volume of alcohol in the mixture. How to file 2012 taxes See Form 720 to report this tax. How to file 2012 taxes You also must be registered with the IRS as a blender. How to file 2012 taxes See Form 637. How to file 2012 taxes   However, if an untaxed liquid is sold as taxed taxable fuel and that untaxed liquid is used to produce blended taxable fuel, the person that sold the untaxed liquid is jointly and severally liable for the tax imposed on the blender's sale or removal of the blended taxable fuel. How to file 2012 taxes Notification certificate. How to file 2012 taxes   The notification certificate is used to notify a person of the registration status of the registrant. How to file 2012 taxes A copy of the registrant's letter of registration cannot be used as a notification certificate. How to file 2012 taxes A model notification certificate is shown in the Appendix as Model Certificate C. How to file 2012 taxes A notification certificate must contain all information necessary to complete the model. How to file 2012 taxes   The certificate may be included as part of any business records normally used for a sale. How to file 2012 taxes A certificate expires on the earlier of the date the registrant provides a new certificate, or the date the recipient of the certificate is notified that the registrant's registration has been revoked or suspended. How to file 2012 taxes The registrant must provide a new certificate if any information on a certificate has changed. How to file 2012 taxes Additional persons liable. How to file 2012 taxes   When the person liable for the tax willfully fails to pay the tax, joint and several liability for the tax is imposed on: Any officer, employee, or agent of the person who is under a duty to ensure the payment of the tax and who willfully fails to perform that duty, or Anyone who willfully causes the person to fail to pay the tax. How to file 2012 taxes Gasoline Blendstocks Gasoline blendstocks may be subject to $. How to file 2012 taxes 001 per gallon LUST tax as discussed below. How to file 2012 taxes Gasoline includes gasoline blendstocks. How to file 2012 taxes The previous discussions apply to these blendstocks. How to file 2012 taxes However, if certain conditions are met, the removal, entry, or sale of gasoline blendstocks are taxed at $. How to file 2012 taxes 001 per gallon or are not subject to the excise tax. How to file 2012 taxes Blendstocks. How to file 2012 taxes   Gasoline blendstocks are: Alkylate, Butane, Butene, Catalytically cracked gasoline, Coker gasoline, Ethyl tertiary butyl ether (ETBE), Hexane, Hydrocrackate, Isomerate, Methyl tertiary butyl ether (MTBE), Mixed xylene (not including any separated isomer of xylene), Natural gasoline, Pentane, Pentane mixture, Polymer gasoline, Raffinate, Reformate, Straight-run gasoline, Straight-run naphtha, Tertiary amyl methyl ether (TAME), Tertiary butyl alcohol (gasoline grade) (TBA), Thermally cracked gasoline, and Toluene. How to file 2012 taxes   However, gasoline blendstocks do not include any product that cannot be used without further processing in the production of finished gasoline. How to file 2012 taxes Not used to produce finished gasoline. How to file 2012 taxes   Gasoline blendstocks not used to produce finished gasoline are not taxable (other than LUST) if the following conditions are met. How to file 2012 taxes Removals and entries not connected to sale. How to file 2012 taxes   Nonbulk removals and entries are not taxable if the person otherwise liable for the tax (position holder, refiner, or enterer) is a registrant. How to file 2012 taxes Removals and entries connected to sale. How to file 2012 taxes   Nonbulk removals and entries are not taxable if the person otherwise liable for the tax (position holder, refiner, or enterer) is a registrant, and at the time of the sale, meets the following requirements. How to file 2012 taxes The person has an unexpired certificate (discussed later) from the buyer. How to file 2012 taxes The person has no reason to believe any information in the certificate is false. How to file 2012 taxes Sales after removal or entry. How to file 2012 taxes   The sale of a gasoline blendstock that was not subject to tax on its nonbulk removal or entry, as discussed earlier, is taxable. How to file 2012 taxes The seller is liable for the tax. How to file 2012 taxes However, the sale is not taxable if, at the time of the sale, the seller meets the following requirements. How to file 2012 taxes The seller has an unexpired certificate (discussed next) from the buyer. How to file 2012 taxes The seller has no reason to believe any information in the certificate is false. How to file 2012 taxes Certificate of buyer. How to file 2012 taxes   The certificate from the buyer certifies the gasoline blendstocks will not be used to produce finished gasoline. How to file 2012 taxes The certificate may be included as part of any business records normally used for a sale. How to file 2012 taxes A model certificate is shown in the Appendix as Model Certificate D. How to file 2012 taxes The certificate must contain all information necessary to complete the model. How to file 2012 taxes   A certificate expires on the earliest of the following dates. How to file 2012 taxes The date 1 year after the effective date (not earlier than the date signed) of the certificate. How to file 2012 taxes The date a new certificate is provided to the seller. How to file 2012 taxes The date the seller is notified that the buyer's right to provide a certificate has been withdrawn. How to file 2012 taxes The buyer must provide a new certificate if any information on a certificate has changed. How to file 2012 taxes   The IRS may withdraw the buyer's right to provide a certificate if that buyer uses the gasoline blendstocks in the production of finished gasoline or resells the blendstocks without getting a certificate from its buyer. How to file 2012 taxes Received at approved terminal or refinery. How to file 2012 taxes   The nonbulk removal or entry of gasoline blendstocks received at an approved terminal or refinery is not taxable if the person otherwise liable for the tax (position holder, refiner, or enterer) meets all the following requirements. How to file 2012 taxes The person is a registrant. How to file 2012 taxes The person has an unexpired notification certificate (discussed earlier) from the operator of the terminal or refinery where the gasoline blendstocks are received. How to file 2012 taxes The person has no reason to believe any information on the certificate is false. How to file 2012 taxes Bulk transfers to registered industrial user. How to file 2012 taxes   The removal of gasoline blendstocks from a pipeline or vessel is not taxable (other than LUST) if the blendstocks are received by a registrant that is an industrial user. How to file 2012 taxes An industrial user is any person that receives gasoline blendstocks by bulk transfer for its own use in the manufacture of any product other than finished gasoline. How to file 2012 taxes Credits or Refunds. How to file 2012 taxes   A credit or refund of the gasoline tax may be allowable if gasoline is used for a nontaxable purpose or exempt use. How to file 2012 taxes For more information, see chapter 2. How to file 2012 taxes Diesel Fuel and Kerosene Generally, diesel fuel and kerosene are taxed in the same manner as gasoline (discussed earlier). How to file 2012 taxes However, special rules (discussed later) apply to dyed diesel fuel and dyed kerosene, and to undyed diesel fuel and undyed kerosene sold or used in Alaska for certain nontaxable uses and undyed kerosene used for a feedstock purpose. How to file 2012 taxes Diesel fuel means: Any liquid that without further processing or blending is suitable for use as a fuel in a diesel-powered highway vehicle or train, and Transmix. How to file 2012 taxes A liquid is suitable for this use if the liquid has practical and commercial fitness for use in the propulsion engine of a diesel-powered highway vehicle or diesel-powered train. How to file 2012 taxes A liquid may possess this practical and commercial fitness even though the specified use is not the predominant use of the liquid. How to file 2012 taxes However, a liquid does not possess this practical and commercial fitness solely by reason of its possible or rare use as a fuel in the propulsion engine of a diesel-powered highway vehicle or diesel-powered train. How to file 2012 taxes Diesel fuel does not include gasoline, kerosene, excluded liquid, No. How to file 2012 taxes 5 and No. How to file 2012 taxes 6 fuel oils covered by ASTM specification D396, or F-76 (Fuel Naval Distillate) covered by military specification MIL-F-16884. How to file 2012 taxes An excluded liquid is either of the following. How to file 2012 taxes A liquid that contains less than 4% normal paraffins. How to file 2012 taxes A liquid with all the following properties. How to file 2012 taxes Distillation range of 125 degrees Fahrenheit or less. How to file 2012 taxes Sulfur content of 10 ppm or less. How to file 2012 taxes Minimum color of +27 Saybolt. How to file 2012 taxes Transmix means a by-product of refined products created by the mixing of different specification products during pipeline transportation. How to file 2012 taxes Kerosene. How to file 2012 taxes   This means any of the following liquids. How to file 2012 taxes One of the two grades of kerosene (No. How to file 2012 taxes 1-K and No. How to file 2012 taxes 2-K) covered by ASTM specification D3699. How to file 2012 taxes Kerosene-type jet fuel covered by ASTM specification D1655 or military specification MIL-DTL-5624T (Grade JP-5) or MIL-DTL-83133E (Grade JP-8). How to file 2012 taxes See Kerosene for Use in Aviation, later. How to file 2012 taxes   However, kerosene does not include excluded liquid, discussed earlier. How to file 2012 taxes   Kerosene also includes any liquid that would be described above but for the presence of a dye of the type used to dye kerosene for a nontaxable use. How to file 2012 taxes Diesel-powered highway vehicle. How to file 2012 taxes   This is any self-propelled vehicle designed to carry a load over public highways (whether or not also designed to perform other functions) and propelled by a diesel-powered engine. How to file 2012 taxes Specially designed mobile machinery for nontransportation functions and vehicles specially designed for off-highway transportation are generally not considered diesel-powered highway vehicles. How to file 2012 taxes For more information about these vehicles and for information about vehicles not considered highway vehicles, see Off-Highway Business Use (No. How to file 2012 taxes 2) in chapter 2. How to file 2012 taxes Diesel-powered train. How to file 2012 taxes   This is any diesel-powered equipment or machinery that rides on rails. How to file 2012 taxes The term includes a locomotive, work train, switching engine, and track maintenance machine. How to file 2012 taxes Taxable Events The tax on diesel fuel and kerosene is $. How to file 2012 taxes 244 per gallon. How to file 2012 taxes It is imposed on the removal, entry, or sale of diesel fuel and kerosene. How to file 2012 taxes Each of these events is discussed later. How to file 2012 taxes Only the $. How to file 2012 taxes 001 LUST tax applies to dyed diesel fuel and dyed kerosene, discussed later. How to file 2012 taxes If the tax is paid on the diesel fuel or kerosene in more than one event, a refund may be allowed for the “second” tax paid. How to file 2012 taxes See Refunds of Second Tax in chapter 2. How to file 2012 taxes Use in certain intercity and local buses. How to file 2012 taxes   Dyed diesel fuel and dyed kerosene cannot be used in certain intercity and local buses. How to file 2012 taxes A claim for $. How to file 2012 taxes 17 per gallon may be made by the registered ultimate vendor (under certain conditions) or the ultimate purchaser for undyed diesel fuel or undyed kerosene sold for use in certain intercity or local buses. How to file 2012 taxes An intercity or local bus is a bus engaged in furnishing (for compensation) passenger land transportation available to the general public. How to file 2012 taxes The bus must be engaged in one of the following activities. How to file 2012 taxes Scheduled transportation along regular routes regardless of the size of the bus. How to file 2012 taxes Nonscheduled transportation if the seating capacity of the bus is at least 20 adults (not including the driver). How to file 2012 taxes A bus is available to the general public if the bus is available for hire to more than a limited number of persons, groups, or organizations. How to file 2012 taxes Removal from terminal. How to file 2012 taxes   All removals of diesel fuel and kerosene at a terminal rack are taxable. How to file 2012 taxes The position holder for that fuel is liable for the tax. How to file 2012 taxes Two-party exchanges. How to file 2012 taxes   In a two-party exchange, the receiving person, not the delivering person, is liable for the tax imposed on the removal of taxable fuel from the terminal at the terminal rack. How to file 2012 taxes A two-party exchange means a transaction (other than a sale) where the delivering person and receiving person are both taxable fuel registrants and all of the following apply. How to file 2012 taxes The transaction includes a transfer from the delivering person, who holds the inventory position for the taxable fuel in the terminal as reflected in the records of the terminal operator. How to file 2012 taxes The exchange transaction occurs before or at the same time as completion of removal across the rack by the receiving person. How to file 2012 taxes The terminal operator in its records treats the receiving person as the person that removes the product across the terminal rack for purposes of reporting the transaction on Form 720-TO. How to file 2012 taxes The transaction is subject to a written contract. How to file 2012 taxes Terminal operator's liability. How to file 2012 taxes   The terminal operator is jointly and severally liable for the tax if the terminal operator provides any person with any bill of lading, shipping paper, or similar document indicating that diesel fuel or kerosene is dyed (discussed later). How to file 2012 taxes   The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator and is not a registrant. How to file 2012 taxes However, a terminal operator will not be liable for the tax in this situation if, at the time of the removal, the following conditions are met. How to file 2012 taxes The terminal operator is a registrant. How to file 2012 taxes The terminal operator has an unexpired notification certificate (discussed under Gasoline) from the position holder. How to file 2012 taxes The terminal operator has no reason to believe any information on the certificate is false. How to file 2012 taxes Removal from refinery. How to file 2012 taxes   The removal of diesel fuel or kerosene from a refinery is taxable if the removal meets either of the following conditions. How to file 2012 taxes It is made by bulk transfer and the refiner, the owner of the fuel immediately before the removal, or the operator of the pipeline or vessel is not a registrant. How to file 2012 taxes It is made at the refinery rack. How to file 2012 taxes The refiner is liable for the tax. How to file 2012 taxes Exception. How to file 2012 taxes   The tax does not apply to a removal of diesel fuel or kerosene at the refinery rack if all the following conditions are met. How to file 2012 taxes The diesel fuel or kerosene is removed from an approved refinery not served by pipeline (other than for receiving crude oil) or vessel. How to file 2012 taxes The diesel fuel or kerosene is received at a facility operated by a registrant and located within the bulk transfer/terminal system. How to file 2012 taxes The removal from the refinery is by: Railcar and the same person operates the refinery and the facility at which the diesel fuel or kerosene is received, or For diesel fuel only, a trailer or semi-trailer used exclusively to transport the diesel fuel from a refinery (described in (1)) to a facility (described in (2)) less than 20 miles from the refinery. How to file 2012 taxes Entry into the United States. How to file 2012 taxes   The entry of diesel fuel or kerosene into the United States is taxable if the entry meets either of the following conditions. How to file 2012 taxes It is made by bulk transfer and the enterer or the operator of the pipeline or vessel is not a registrant. How to file 2012 taxes It is not made by bulk transfer. How to file 2012 taxes The enterer is liable for the tax. How to file 2012 taxes Importer of record's liability. How to file 2012 taxes   The importer of record is jointly and severally liable for the tax with the enterer if the importer of record is not the enterer of the taxable fuel and the enterer is not a taxable fuel registrant. How to file 2012 taxes   However, an importer of record meeting both of the following conditions at the time of the entry will not be liable for the tax. How to file 2012 taxes The importer of record has an unexpired notification certificate (discussed under Gasoline) from the enterer. How to file 2012 taxes The importer of record has no reason to believe any information in the certificate is false. How to file 2012 taxes Customs bond. How to file 2012 taxes   The customs bond will not be charged for the tax imposed on the entry of the diesel fuel or kerosene if at the time of entry the surety has an unexpired notification certificate from the enterer and has no reason to believe any information in the certificate is false. How to file 2012 taxes Removal from a terminal by unregistered position holder or unregistered pipeline or vessel operator. How to file 2012 taxes   The removal by bulk transfer of diesel fuel or kerosene from a terminal is taxable if the position holder for that fuel or the operator of the pipeline or vessel is not a registrant. How to file 2012 taxes The position holder is liable for the tax. How to file 2012 taxes The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator. How to file 2012 taxes However, see Terminal operator's liability under Removal from terminal, earlier, for an exception. How to file 2012 taxes Bulk transfers not received at approved terminal or refinery. How to file 2012 taxes   The removal by bulk transfer of diesel fuel or kerosene from a terminal or refinery or the entry of diesel fuel or kerosene by bulk transfer into the United States is taxable if the following conditions apply. How to file 2012 taxes No tax was previously imposed (as discussed earlier) on any of the following events. How to file 2012 taxes The removal from the refinery. How to file 2012 taxes The entry into the United States. How to file 2012 taxes The removal from a terminal by an unregistered position holder. How to file 2012 taxes Upon removal from the pipeline or vessel, the diesel fuel or kerosene is not received at an approved terminal or refinery (or at another pipeline or vessel). How to file 2012 taxes   The owner of the diesel fuel or kerosene when it is removed from the pipeline or vessel is liable for the tax. How to file 2012 taxes However, an owner meeting all the following conditions at the time of the removal will not be liable for the tax. How to file 2012 taxes The owner is a registrant. How to file 2012 taxes The owner has an unexpired notification certificate (discussed under Gasoline) from the operator of the terminal or refinery where the diesel fuel or kerosene is received. How to file 2012 taxes The owner has no reason to believe any information on the certificate is false. How to file 2012 taxes The operator of the facility where the diesel fuel or kerosene is received is liable for the tax if the owner meets these conditions. How to file 2012 taxes The operator is jointly and severally liable if the owner does not meet these conditions. How to file 2012 taxes Sales to unregistered person. How to file 2012 taxes   The sale of diesel fuel or kerosene located within the bulk transfer/terminal system to a person that is not a registrant is taxable if tax was not previously imposed under any of the events discussed earlier. How to file 2012 taxes   The seller is liable for the tax. How to file 2012 taxes However, a seller meeting all the following conditions at the time of the sale will not be liable for the tax. How to file 2012 taxes The seller is a registrant. How to file 2012 taxes The seller has an unexpired notification certificate (discussed under Gasoline) from the buyer. How to file 2012 taxes The seller has no reason to believe any information on the certificate is false. How to file 2012 taxes The buyer of the diesel fuel or kerosene is liable for the tax if the seller meets these conditions. How to file 2012 taxes The buyer is jointly and severally liable if the seller does not meet these conditions. How to file 2012 taxes Exception. How to file 2012 taxes   The tax does not apply to a sale if all of the following apply. How to file 2012 taxes The buyer's principal place of business is not in the United States. How to file 2012 taxes The sale occurs as the fuel is delivered into a transport vessel with a capacity of at least 20,000 barrels of fuel. How to file 2012 taxes The seller is a registrant and the exporter of record. How to file 2012 taxes The fuel was exported. How to file 2012 taxes Removal or sale of blended diesel fuel or kerosene. How to file 2012 taxes   The removal or sale of blended diesel fuel or blended kerosene by the blender is taxable. How to file 2012 taxes Blended taxable fuel produced using biodiesel is subject to the tax. How to file 2012 taxes See Blended taxable fuel under Definitions, earlier. How to file 2012 taxes   The blender is liable for the tax. How to file 2012 taxes The tax is figured on the number of gallons not previously subject to the tax. How to file 2012 taxes   Persons who blend biodiesel with undyed diesel fuel to produce and sell or use a biodiesel mixture outside the bulk transfer/terminal system must pay the diesel fuel tax on the volume of biodiesel in the mixture. How to file 2012 taxes Generally, the biodiesel mixture must be diesel fuel (defined earlier). How to file 2012 taxes See Form 720 to report this tax. How to file 2012 taxes You also must be registered by the IRS as a blender. How to file 2012 taxes See Form 637 for more information. How to file 2012 taxes   However, if an untaxed liquid is sold as taxable fuel and that untaxed liquid is used to produce blended taxable fuel, the person that sold the untaxed liquid is jointly and severally liable for the tax imposed on the blender's sale or removal of the blended taxable fuel. How to file 2012 taxes Additional persons liable. How to file 2012 taxes   When the person liable for the tax willfully fails to pay the tax, joint and several liability for the tax applies to: Any officer, employee, or agent of the person who is under a duty to ensure the payment of the tax and who willfully fails to perform that duty; or Anyone who willfully causes the person to fail to pay the tax. How to file 2012 taxes Credits or Refunds. How to file 2012 taxes   A credit or refund is allowable for the tax on undyed diesel fuel or undyed kerosene used for a nontaxable use. How to file 2012 taxes For more information, see chapter 2. How to file 2012 taxes Dyed Diesel Fuel and Dyed Kerosene Dyed diesel fuel and dyed kerosene are subject to $. How to file 2012 taxes 001 per gallon LUST tax as discussed below, unless the fuel is for export. How to file 2012 taxes The excise tax is not imposed on the removal, entry, or sale of diesel fuel or kerosene (other than the LUST tax) if all the following tests are met. How to file 2012 taxes The person otherwise liable for tax (for example, the position holder) is a registrant. How to file 2012 taxes In the case of a removal from a terminal, the terminal is an approved terminal. How to file 2012 taxes The diesel fuel or kerosene satisfies the dyeing requirements (described next). How to file 2012 taxes Dyeing requirements. How to file 2012 taxes   Diesel fuel or kerosene satisfies the dyeing requirements only if it satisfies the following requirements. How to file 2012 taxes It contains the dye Solvent Red 164 (and no other dye) at a concentration spectrally equivalent to at least 3. How to file 2012 taxes 9 pounds of the solid dye standard Solvent Red 26 per thousand barrels of fuel or any dye of a type and in a concentration that has been approved by the Commissioner. How to file 2012 taxes Is indelibly dyed by mechanical injection. How to file 2012 taxes See section 6 of Notice 2005-80 for transition rules that apply until final regulations are issued by the IRS. How to file 2012 taxes Notice required. How to file 2012 taxes   A legible and conspicuous notice stating either: DYED DIESEL FUEL, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE or DYED KEROSENE, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE must be: Provided by the terminal operator to any person that receives dyed diesel fuel or dyed kerosene at a terminal rack of that operator, and Posted by a seller on any retail pump or other delivery facility where it sells dyed diesel fuel or dyed kerosene for use by its buyer. How to file 2012 taxes   The notice under item (1) must be provided by the time of the removal and must appear on all shipping papers, bills of lading, and similar documents accompanying the removal of the fuel. How to file 2012 taxes   Any seller that fails to post the required notice under item (2) is presumed to know that the fuel will be used for a taxable use (a use other than a nontaxable use listed later). How to file 2012 taxes That seller is subject to the penalty described next. How to file 2012 taxes Penalty. How to file 2012 taxes   A penalty is imposed on a person if any of the following situations apply. How to file 2012 taxes Any dyed fuel is sold or held for sale by the person for a use the person knows or has reason to know is not a nontaxable use of the fuel. How to file 2012 taxes Any dyed fuel is held for use or used by the person for a use other than a nontaxable use and the person knew, or had reason to know, that the fuel was dyed. How to file 2012 taxes The person willfully alters, chemically or otherwise, or attempts to so alter, the strength or composition of any dye in dyed fuel. How to file 2012 taxes The person has knowledge that a dyed fuel that has been altered, as described in (3) above, sells or holds for sale such fuel for any use for which the person knows or has reason to know is not a nontaxable use of the fuel. How to file 2012 taxes   The penalty is the greater of $1,000 or $10 per gallon of the dyed diesel fuel or dyed kerosene involved. How to file 2012 taxes After the first violation, the $1,000 portion of the penalty increases depending on the number of violations. How to file 2012 taxes   This penalty is in addition to any tax imposed on the fuel. How to file 2012 taxes   If the penalty is imposed, each officer, employee, or agent of a business entity who willfully participated in any act giving rise to the penalty is jointly and severally liable with that entity for the penalty. How to file 2012 taxes   There is no administrative appeal or review allowed for the third and subsequent penalty imposed by section 6715 on any person except for: Fraud or a mistake in the chemical analysis, or Mathematical calculation of the penalty. How to file 2012 taxes   If you are liable for the penalty, you may also be liable for the back-up tax, discussed later. How to file 2012 taxes However, the penalty applies only to dyed diesel fuel and dyed kerosene, while the back-up tax may apply to other fuels. How to file 2012 taxes The penalty may apply if the fuel is held for sale or use for a taxable use while the back-up tax does not apply unless the fuel is delivered into a fuel supply tank. How to file 2012 taxes Exception to penalty. How to file 2012 taxes   The penalty under item (3) will not apply in any of the following situations. How to file 2012 taxes Diesel fuel or kerosene meeting the dyeing requirements (described earlier) is blended with any undyed liquid and the resulting product meets the dyeing requirements. How to file 2012 taxes Diesel fuel or kerosene meeting the dyeing requirements (described earlier) is blended with any other liquid (other than diesel fuel or kerosene) that contains the type and amount of dye required to meet the dyeing requirements. How to file 2012 taxes The alteration or attempted alteration occurs in an exempt area of Alaska. How to file 2012 taxes See Removal for sale or use in Alaska, later. How to file 2012 taxes Diesel fuel or kerosene meeting the dyeing requirements (described earlier) is blended with diesel fuel or kerosene not meeting the dyeing requirements and the blending occurs as part of a nontaxable use (other than export), discussed later. How to file 2012 taxes Alaska and Feedstocks Tax of $. How to file 2012 taxes 001 per gallon is imposed on: Undyed diesel fuel or undyed kerosene sold or used in Alaska for certain nontaxable uses (see Later sales on page 10). How to file 2012 taxes Undyed kerosene used for feedstock purposes. How to file 2012 taxes Removal for sale or use in Alaska. How to file 2012 taxes   No tax is imposed on the removal, entry, or sale of diesel fuel or kerosene in Alaska for ultimate sale or use in certain areas of Alaska for certain nontaxable uses. How to file 2012 taxes The removal or entry of any diesel fuel or kerosene is not taxed if all the following requirements are satisfied. How to file 2012 taxes The person otherwise liable for the tax (position holder, refiner, or enterer): Is a registrant, Can show satisfactory evidence of the nontaxable nature of the transaction, and Has no reason to believe the evidence is false. How to file 2012 taxes In the case of a removal from a terminal, the terminal is an approved terminal. How to file 2012 taxes The owner of the fuel immediately after the removal or entry holds the fuel for its own use in a nontaxable use (discussed later) or is a qualified dealer. How to file 2012 taxes   If all three of the requirements above are not met, then tax is imposed at $. How to file 2012 taxes 244 per gallon. How to file 2012 taxes   A qualified dealer is any person that holds a qualified dealer license from the state of Alaska or has been registered by the IRS as a qualified retailer. How to file 2012 taxes Satisfactory evidence may include copies of qualified dealer licenses or exemption certificates obtained for state tax purposes. How to file 2012 taxes Later sales. How to file 2012 taxes   The excise tax applies to diesel fuel or kerosene sold by a qualified dealer after the removal or entry. How to file 2012 taxes The tax is imposed at the time of the sale and the qualified dealer is liable for the tax. How to file 2012 taxes However, the sale is not taxable (other than the LUST tax at $. How to file 2012 taxes 001 per gallon) if all the following requirements are met. How to file 2012 taxes The fuel is sold in Alaska for certain nontaxable uses. How to file 2012 taxes The buyer buys the fuel for its own use in a nontaxable use or is a qualified dealer. How to file 2012 taxes The seller can show satisfactory evidence of the nontaxable nature of the transaction and has no reason to believe the evidence is false. How to file 2012 taxes Feedstock purposes. How to file 2012 taxes   The $. How to file 2012 taxes 001 per gallon LUST tax is imposed on the removal or entry of undyed kerosene if all the following conditions are met. How to file 2012 taxes The person otherwise liable for tax (position holder, refiner, or enterer) is a registrant. How to file 2012 taxes In the case of a removal from a terminal, the terminal is an approved terminal. How to file 2012 taxes Either: The person otherwise liable for tax uses the kerosene for a feedstock purpose, or The kerosene is sold for use by the buyer for a feedstock purpose and, at the time of the sale, the person otherwise liable for tax has an unexpired certificate (described later) from the buyer and has no reason to believe any information on the certificate is false. How to file 2012 taxes   If all of the requirements above are not met, then tax is imposed at $. How to file 2012 taxes 244 per gallon. How to file 2012 taxes   Kerosene is used for a feedstock purpose when it is used for nonfuel purposes in the manufacture or production of any substance other than gasoline, diesel fuel, or Other Fuels. How to file 2012 taxes For example, kerosene is used for a feedstock purpose when it is used as an ingredient in the production of paint, but is not used for a feedstock purpose when it is used to power machinery at a factory where paint is produced. How to file 2012 taxes A feedstock user is a person that uses kerosene for a feedstock purpose. How to file 2012 taxes A registered feedstock user is a person that has been registered by the IRS as a feedstock user. How to file 2012 taxes See Registration Requirements, earlier. How to file 2012 taxes Later sales. How to file 2012 taxes   The excise tax ($. How to file 2012 taxes 244 per gallon) applies to kerosene sold for use by the buyer for a feedstock purpose (item (3)(b) above) if the buyer in that sale later sells the kerosene. How to file 2012 taxes The tax is imposed at the time of the later sale and that seller is liable for the tax. How to file 2012 taxes Certificate. How to file 2012 taxes   The certificate from the buyer certifies the buyer is a registered feedstock user and the kerosene will be used by the buyer for a feedstock purpose. How to file 2012 taxes The certificate may be included as part of any business records normally used for a sale. How to file 2012 taxes A model certificate is shown in the Appendix as Model Certificate G. How to file 2012 taxes Your certificate must contain all information necessary to complete the model. How to file 2012 taxes   A certificate expires on the earliest of the following dates. How to file 2012 taxes The date 1 year after the effective date (not earlier than the date signed) of the certificate. How to file 2012 taxes The date the seller is provided a new certificate or notice that the current certificate is invalid. How to file 2012 taxes The date the seller is notified the buyer's registration has been revoked or suspended. How to file 2012 taxes   The buyer must provide a new certificate if any information on a certificate has changed. How to file 2012 taxes Back-up Tax Tax is imposed on the delivery of any of the following into the fuel supply tank of a diesel-powered highway vehicle. How to file 2012 taxes Any dyed diesel fuel or dyed kerosene for other than a nontaxable use. How to file 2012 taxes Any undyed diesel fuel or undyed kerosene on which a credit or refund (for fuel used for a nontaxable purpose) has been allowed. How to file 2012 taxes Any liquid other than gasoline, diesel fuel, or kerosene. How to file 2012 taxes Generally, this back-up tax is imposed at a rate of $. How to file 2012 taxes 244 per gallon. How to file 2012 taxes Liability for tax. How to file 2012 taxes   Generally, the operator of the vehicle into which the fuel is delivered is liable for the tax. How to file 2012 taxes In addition, the seller of the diesel fuel or kerosene is jointly and severally liable for the tax if the seller knows or has reason to know that the fuel will be used for other than a nontaxable use. How to file 2012 taxes Exemptions from the back-up tax. How to file 2012 taxes   The back-up tax does not apply to a delivery of diesel fuel or kerosene for uses 1, 2, 6, 7, 12, 13, 14, and 15 listed under Definitions of Nontaxable Uses in chapter 2. How to file 2012 taxes   In addition, since the back-up tax is imposed only on the delivery into the fuel supply tank of a diesel-powered vehicle or train, the tax does not apply to diesel fuel or kerosene used as heating oil or in stationary engines. How to file 2012 taxes Diesel-Water Fuel Emulsion Diesel-water fuel emulsion means diesel fuel at least 14% of which is water and for which the emulsion additive is registered by a United States manufacturer with the EPA under section 211 of the Clean Air Act as in effect on March 31, 2003. How to file 2012 taxes A reduced tax rate of $. How to file 2012 taxes 198 per gallon is imposed on a diesel-water fuel emulsion. How to file 2012 taxes To be eligible for the reduced rate, the person who sells, removes, or uses the diesel-water fuel emulsion must be registered by the IRS. How to file 2012 taxes If the diesel-water fuel emulsion does not meet the requirements above, or if the person who sells, removes, or uses the fuel is not registered, the diesel-water fuel emulsion is taxed at $. How to file 2012 taxes 244 per gallon. How to file 2012 taxes Credits or refunds. How to file 2012 taxes   The allowance for a credit or refund on a diesel-water fuel emulsion is discussed in chapter 2. How to file 2012 taxes Kerosene for Use in Aviation Taxable Events Generally, kerosene is taxed at $. How to file 2012 taxes 244 per gallon unless a reduced rate applies (see Diesel Fuel and Kerosene, earlier). How to file 2012 taxes For kerosene removed directly from a terminal into the fuel tank of an aircraft for use in noncommercial aviation, the tax rate is $. How to file 2012 taxes 219. How to file 2012 taxes The rate of $. How to file 2012 taxes 219 also applies if kerosene is removed into any aircraft from a qualified refueler truck, tanker, or tank wagon that is loaded with the kerosene from a terminal that is located within an airport. How to file 2012 taxes The airport terminal does not need to be a secured airport terminal for this rate to apply. How to file 2012 taxes However, the refueler truck, tanker, or tank wagon must meet the requirements discussed under Certain refueler trucks, tankers, and tank wagons, treated as terminals, later. How to file 2012 taxes For kerosene removed directly into the fuel tank of an aircraft for use in commercial aviation, the rate of tax is $. How to file 2012 taxes 044 per gallon. How to file 2012 taxes For kerosene removed into an aircraft from a qualified refueler truck, tanker, or tank wagon, the $. How to file 2012 taxes 044 rate applies only if the truck, tanker, or tank wagon is loaded at a terminal that is located in a secured area of the airport. How to file 2012 taxes See Terminal located within a secured area of an airport, later. How to file 2012 taxes In addition, the operator must provide the position holder with a certificate similar to Model Certificate K in the Appendix. How to file 2012 taxes For kerosene removed directly into the fuel tank of an aircraft for a use exempt from tax under section 4041(c) (such as use in an aircraft for the exclusive use of a state or local government), the rate of tax is $. How to file 2012 taxes 001. How to file 2012 taxes There is no tax on kerosene removed directly into the fuel tank of an aircraft for use in foreign trade. How to file 2012 taxes The kerosene must be removed from a qualifying refueler truck, tanker, or tank wagon loaded at a terminal located within a secured area of an airport. How to file 2012 taxes See Terminal located within a secured area of an airport, later. How to file 2012 taxes In addition, the operator must provide the position holder with a certificate similar to Model Certificate K in the Appendix. How to file 2012 taxes The position holder is liable for the $. How to file 2012 taxes 001 per gallon tax. How to file 2012 taxes For kerosene removed directly from a terminal into the fuel tank of an fractional ownership program aircraft after March 31, 2012, a surtax of $. How to file 2012 taxes 141 per gallon applies. How to file 2012 taxes Certain refueler trucks, tankers, and tank wagons treated as terminals. How to file 2012 taxes   For purposes of the tax imposed on kerosene for use in aviation removed directly into the fuel tank of an aircraft for use in commercial aviation, certain refueler trucks, tankers, and tank wagons are treated as part of a terminal if the following conditions are met. How to file 2012 taxes Such terminal is located within an area of an airport. How to file 2012 taxes Any kerosene for use in aviation that is loaded in a refueler truck, tanker, or tank wagon at a terminal is for delivery into aircraft at the airport in which the terminal is located. How to file 2012 taxes Except in exigent circumstances, such as those identified in Notice 2005-80, no vehicle registered for highway use is loaded with kerosene for use in aviation at the terminal. How to file 2012 taxes The refueler truck, tanker, or tank wagon meets the following requirements: Has storage tanks, hose, and coupling equipment designed and used for fueling aircraft, Is not registered for highway use, and Is operated by the terminal operator or a person that makes a daily accounting to the terminal operator of each delivery of fuel from the refueler truck, tanker, or tank wagon. How to file 2012 taxes Information reporting will be required by terminal operators regarding this provision. How to file 2012 taxes Until the format of this information reporting is issued, taxpayers are required to retain records regarding the daily accounting, but are not required to report such information. How to file 2012 taxes Terminal located within a secured area of an airport. How to file 2012 taxes   See Notice 2005-4 and Notice 2005-80 for the list of terminals located within a secured area of an airport. How to file 2012 taxes This list refers to fueling operations at airport terminals as it applies to the federal excise tax on kerosene for use in aviation, and has nothing to do with the general security of airports either included or not included in the list. How to file 2012 taxes Liability For Tax If the kerosene is removed directly into the fuel tank of an aircraft for use in commercial aviation, the operator of the aircraft in commercial aviation is liable for the tax on the removal at the rate of $. How to file 2012 taxes 044 per gallon. How to file 2012 taxes However, the position holder is liable for the LUST tax for kerosene for use in aviation removed directly into the fuel tank of an aircraft for use exempt from tax under section 4041(c) (except foreign trade). How to file 2012 taxes For example, for kerosene removed directly into the aircraft for use in military aircraft, the position holder is liable for the tax. How to file 2012 taxes For the aircraft operator to be liable for the tax $. How to file 2012 taxes 044 rate, the position holder must meet the following requirements: Is a taxable fuel registrant, Has an unexpired certificate (a model certificate is shown in the Appendix as Model Certificate K) from the operator of the aircraft, and Has no reason to believe any of the information in the certificate is false. How to file 2012 taxes Commercial aviation. How to file 2012 taxes   Commercial aviation is any use of an aircraft in the business of transporting persons or property by air for pay. How to file 2012 taxes However, commercial aviation does not include any of the following uses. How to file 2012 taxes Any use exclusively for the purpose of skydiving. How to file 2012 taxes Certain air transportation by seaplane. How to file 2012 taxes See Seaplanes under Transportation of Persons by Air in chapter 4. How to file 2012 taxes Any use of an aircraft owned or leased by a member of an affiliated group and unavailable for hire by nonmembers. How to file 2012 taxes For more information, see Aircraft used by affiliated corporations under Special Rules on Transportation Taxes in chapter 4. How to file 2012 taxes Any use of an aircraft that has a maximum certificated takeoff weight of 6,000 pounds or less, unless the aircraft is operated on an established line. How to file 2012 taxes For more information, see Small aircraft under Special Rules on Transportation Taxes in chapter 4. How to file 2012 taxes Any use where the surtax on fuel used in a fractional ownership program aircraft is imposed. How to file 2012 taxes See Surtax on any liquid used in a fractional ownership program aircraft as fuel below. How to file 2012 taxes Surtax on any liquid used in a fractional ownership program aircraft as fuel Fuel used in a fractional ownership program aircraft (as defined below) after March 31, 2012, is subject to a surtax of $. How to file 2012 taxes 141 per gallon. How to file 2012 taxes The fractional ownership program manager is liable for the tax. How to file 2012 taxes The surtax applies in addition to any other taxes imposed on the removal, entry, use, or sale of the fuel. How to file 2012 taxes If the surtax is imposed, the following air transportation taxes do not apply. How to file 2012 taxes Transportation of persons by air. How to file 2012 taxes Transportation of property by air. How to file 2012 taxes Use of international air travel facilities. How to file 2012 taxes These taxes are described under Air Transportation Taxes, later. How to file 2012 taxes A fractional ownership program aircraft flight is considered noncommercial aviation, for the rules for kerosene used in noncommercial aviation, see Kerosene for Use in Aviation above. How to file 2012 taxes Fractional ownership aircraft program    is a program under which:  A single fractional ownership program manager provides fractional ownership program management services on behalf of the fractional owners; There are one or more fractional owners per fractional program aircraft, with at least one fractional program aircraft having more than one owner; For at least two fractional program aircraft, none of the ownership interests in the aircraft are less than the minimum fractional ownership interest or held by the program manager; There exists a dry-lease aircraft exchange arrangement among all of the fractional owners; and There are multi-year program agreements covering the fractional ownership, fractional ownership program management services, and dry-lease aircraft exchange aspects of the program. How to file 2012 taxes Fractional program aircraft. How to file 2012 taxes   Any aircraft that, in any fractional ownership aircraft program, is listed as a fractional program aircraft in the management specifications issued to the manager of such program by Federal Aviation Administration under subpart K of part 91 title 14, Code of Federal Regulations, and is registered in the U. How to file 2012 taxes S. How to file 2012 taxes   Fractional program aircraft are not considered used for transportation of a qualified fractional owner, or on account of such qualified fractional owner when they are used for flight demonstration, maintenance or crew training. How to file 2012 taxes In such situations, the flight is not commercial aviation. How to file 2012 taxes Instead, the tax on the fuel used in the flight is imposed at the non-commercial aviation rate. How to file 2012 taxes Fractional owner. How to file 2012 taxes   Any person owning any interest (including the entire interest) in a fractional program aircraft. How to file 2012 taxes Dry lease aircraft exchange. How to file 2012 taxes   An agreement, documented by the written program agreements, under which the fractional program aircraft are available, on an as-needed basis without crew, to each fractional owner. How to file 2012 taxes Special rule relating to deadhead service. How to file 2012 taxes   A fractional program aircraft will not be considered to be used on account of a qualified fractional owner when it is used in deadhead service and a person other than a qualified fractional owner is separately charged for such service. How to file 2012 taxes More information. How to file 2012 taxes   See section 4043 for more information on the surtax. How to file 2012 taxes Certificate for Commercial Aviation and Exempt Uses A certificate is required from the aircraft operator: To support aircraft operator liability for tax on removal of kerosene for use in aviation directly into the fuel tank of an aircraft in commercial aviation, or For exempt uses. How to file 2012 taxes Certificate. How to file 2012 taxes   The certificate may be included as part of any business records normally used for a sale. How to file 2012 taxes See Model Certificate K in the Appendix. How to file 2012 taxes   A certificate expires on the earliest of the following dates. How to file 2012 taxes The date 1 year after the effective date (not earlier than the date signed) of the certificate. How to file 2012 taxes The date the buyer provides the seller a new certificate or notice that the current certificate is invalid. How to file 2012 taxes The date the IRS or the buyer notifies the seller that the buyer's right to provide a certificate has been withdrawn. How to file 2012 taxes   The buyer must provide a new certificate if any information on a certificate has changed. How to file 2012 taxes   The IRS may withdraw the buyer's right to provide a certificate if the buyer uses the kerosene for use in aviation to which a certificate relates other than as stated in the certificate. How to file 2012 taxes Exempt use. How to file 2012 taxes   The rate on kerosene for use in aviation is $. How to file 2012 taxes 001 (LUST tax) if it is removed from any refinery or terminal directly into the fuel tank of an aircraft for an exempt use. How to file 2012 taxes An exempt use includes kerosene for the exclusive use of a state or local government. How to file 2012 taxes There is no tax on kerosene removed directly into the fuel tank of an aircraft for use in foreign trade. How to file 2012 taxes Flash title transaction. How to file 2012 taxes   A position holder is not liable for tax if, among other conditions, it obtains a certificate (described above) from the operator of the aircraft into which the kerosene is delivered. How to file 2012 taxes In a “flash title transaction” the position holder sells the kerosene to a wholesale distributor (reseller) that in turn sells the kerosene to the aircraft operator as the kerosene is being removed from a terminal into the fuel tank of an aircraft. How to file 2012 taxes In this case, the position holder will be treated as having a certificate from the operator of the aircraft if: The aircraft operator puts the reseller's name, address, and EIN on the certificate in place of the position holder's information; and The reseller provides the position holder with a statement of the kerosene reseller. How to file 2012 taxes Reseller statement. How to file 2012 taxes   This is a statement that is signed under penalties of perjury by a person with authority to bind the reseller; is provided at the bottom or on the back of the certificate (or in an attached document); and contains: The reseller's name, address, and EIN; The position holder's name, address, and EIN; and A statement that the reseller has no reason to believe that any information in the accompanying aircraft operator's certificate is false. How to file 2012 taxes Credits or Refunds. How to file 2012 taxes   A claim may be made by the ultimate purchaser (the operator) for taxed kerosene for use in aviation used in commercial aviation (other than foreign trade) and noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia). How to file 2012 taxes A claim may be made by a registered ultimate vendor for certain sales. How to file 2012 taxes For more information, see chapter 2. How to file 2012 taxes Other Fuels (Including Alternative Fuels) Other Fuels means any liquid except gas oil, fuel oil, or any product taxable under section 4081. How to file 2012 taxes Other Fuels include alternative fuels. How to file 2012 taxes Alternative fuels are: Liquefied petroleum gas (LPG), “P Series” fuels, Compressed natural gas (CNG) (discussed later), Liquefied hydrogen, Any liquid fuel derived from coal (including peat) through the Fischer-Tropsch process, Liquid fuel derived from biomass, Liquefied natural gas (LNG), and Liquefied gas derived from biomass. How to file 2012 taxes Liquefied petroleum gas includes propane, butane, pentane, or mixtures of those products. How to file 2012 taxes Qualified methanol and ethanol fuels. How to file 2012 taxes   Qualified ethanol and methanol means any liquid at least 85 percent of which consists of alcohol produced from coal, including peat. How to file 2012 taxes The tax rates are listed in the Instructions for Form 720. How to file 2012 taxes Partially exempt methanol and ethanol fuels. How to file 2012 taxes   A reduced tax rate applies to these fuels. How to file 2012 taxes Partially exempt ethanol and methanol means any liquid at least 85 percent of which consists of alcohol produced from natural gas. How to file 2012 taxes The tax rates are listed in the Instructions for Form 720. How to file 2012 taxes Motor vehicles. How to file 2012 taxes   Motor vehicles include all types of vehicles, whether or not registered (or required to be registered) for highway use, that have both the following characteristics. How to file 2012 taxes They are propelled by a motor. How to file 2012 taxes They are designed for carrying or towing loads from one place to another, regardless of the type of material or load carried or t