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How To File State Income Tax

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How To File State Income Tax

How to file state income tax Publication 523 - Main Content Table of Contents Main HomeVacant land. How to file state income tax Factors used to determine main home. How to file state income tax Figuring Gain or LossSelling Price Amount Realized Adjusted Basis Amount of Gain or Loss Dispositions Other Than Sales Determining BasisCost As Basis Basis Other Than Cost Adjusted Basis Excluding the GainMaximum Exclusion Ownership and Use Tests Reduced Maximum Exclusion Nonqualified Use Business Use or Rental of HomeUnrecaptured section 1250 gain. How to file state income tax Property Used Partly for Business or Rental Reporting the SaleSeller-financed mortgage. How to file state income tax Individual taxpayer identification number (ITIN). How to file state income tax More information. How to file state income tax Comprehensive Examples Special SituationsException for sales to related persons. How to file state income tax Deducting Taxes in the Year of SaleForm 1099-S. How to file state income tax More information. How to file state income tax Recapturing (Paying Back) a Federal Mortgage Subsidy Recapture of First-Time Homebuyer CreditExample. How to file state income tax Worksheets How To Get Tax HelpLow Income Taxpayer Clinics Main Home This section explains the term “main home. How to file state income tax ” Usually, the home you live in most of the time is your main home and can be a: House, Houseboat, Mobile home, Cooperative apartment, or Condominium. How to file state income tax To exclude gain under the rules in this publication, you in most cases must have owned and lived in the property as your main home for at least 2 years during the 5-year period ending on the date of sale. How to file state income tax Land. How to file state income tax   If you sell the land on which your main home is located, but not the house itself, you cannot exclude any gain you have from the sale of the land. How to file state income tax Example. How to file state income tax You buy a piece of land and move your main home to it. How to file state income tax Then, you sell the land on which your main home was located. How to file state income tax This sale is not considered a sale of your main home, and you cannot exclude any gain on the sale of the land. How to file state income tax Vacant land. How to file state income tax   The sale of vacant land is not a sale of your main home unless: The vacant land is adjacent to land containing your home, You owned and used the vacant land as part of your main home, The separate sale of your home satisfies the requirements for exclusion and occurs within 2 years before or 2 years after the date of the sale of the vacant land, and The other requirements for excluding gain from the sale of a main home have been satisfied with respect to the vacant land. How to file state income tax If these requirements are met, the sale of the home and the sale of the vacant land are treated as one sale and only one maximum exclusion can be applied to any gain. How to file state income tax See Excluding the Gain , later. How to file state income tax The destruction of your home is treated as a sale of your home. How to file state income tax As a result, you may be able to meet these requirements if you sell vacant land used as a part of your main home within 2 years from the date of the destruction of your main home. How to file state income tax For information, see Publication 547. How to file state income tax More than one home. How to file state income tax   If you have more than one home, you can exclude gain only from the sale of your main home. How to file state income tax You must include in income the gain from the sale of any other home. How to file state income tax If you have two homes and live in each of them, your main home is ordinarily the one you live in most of the time during the year. How to file state income tax Example 1. How to file state income tax You own two homes, one in New York and one in Florida. How to file state income tax From 2009 through 2013, you live in the New York home for 7 months and in the Florida residence for 5 months of each year. How to file state income tax In the absence of facts and circumstances indicating otherwise, the New York home is your main home. How to file state income tax You would be eligible to exclude the gain from the sale of the New York home but not of the Florida home in 2013. How to file state income tax Example 2. How to file state income tax You own a house, but you live in another house that you rent. How to file state income tax The rented house is your main home. How to file state income tax Example 3. How to file state income tax You own two homes, one in Virginia and one in New Hampshire. How to file state income tax In 2009 and 2010, you lived in the Virginia home. How to file state income tax In 2011 and 2012, you lived in the New Hampshire home. How to file state income tax In 2013, you lived again in the Virginia home. How to file state income tax Your main home in 2009, 2010, and 2013 is the Virginia home. How to file state income tax Your main home in 2011 and 2012 is the New Hampshire home. How to file state income tax You would be eligible to exclude gain from the sale of either home (but not both) in 2013. How to file state income tax Factors used to determine main home. How to file state income tax   In addition to the amount of time you live in each home, other factors are relevant in determining which home is your main home. How to file state income tax Those factors include the following. How to file state income tax Your place of employment. How to file state income tax The location of your family members' main home. How to file state income tax Your mailing address for bills and correspondence. How to file state income tax The address listed on your: Federal and state tax returns, Driver's license, Car registration, and Voter registration card. How to file state income tax The location of the banks you use. How to file state income tax The location of recreational clubs and religious organizations of which you are a member. How to file state income tax Property used partly as your main home. How to file state income tax   If you use only part of the property as your main home, the rules discussed in this publication apply only to the gain or loss on the sale of that part of the property. How to file state income tax For details, see Business Use or Rental of Home , later. How to file state income tax Figuring Gain or Loss To figure the gain or loss on the sale of your main home, you must know the selling price, the amount realized, and the adjusted basis. How to file state income tax Subtract the adjusted basis from the amount realized to get your gain or loss. How to file state income tax     Selling price     − Selling expenses       Amount realized     − Adjusted basis       Gain or loss   Gain. How to file state income tax   Gain is the excess of the amount realized over the adjusted basis of the property. How to file state income tax Loss. How to file state income tax   Loss is the excess of the adjusted basis over the amount realized for the property. How to file state income tax Selling Price The selling price is the total amount you receive for your home. How to file state income tax It includes money and the fair market value of any other property or any other services you receive and all notes, mortgages or other debts assumed by the buyer as part of the sale. How to file state income tax Personal property. How to file state income tax   The selling price of your home does not include amounts you received for personal property sold with your home. How to file state income tax Personal property is property that is not a permanent part of the home. How to file state income tax Examples are furniture, draperies, rugs, a washer and dryer, and lawn equipment. How to file state income tax Separately stated amounts you received for these items should not be shown on Form 1099-S (discussed later). How to file state income tax Any gains from sales of personal property must be included in your income, but not as part of the sale of your home. How to file state income tax Payment by employer. How to file state income tax   You may have to sell your home because of a job transfer. How to file state income tax If your employer pays you for a loss on the sale or for your selling expenses, do not include the payment as part of the selling price. How to file state income tax Your employer will include it as wages in box 1 of your Form W-2 and you will include it in your income on Form 1040, line 7, or on Form 1040NR, line 8. How to file state income tax Option to buy. How to file state income tax   If you grant an option to buy your home and the option is exercised, add the amount you receive for the option to the selling price of your home. How to file state income tax If the option is not exercised, you must report the amount as ordinary income in the year the option expires. How to file state income tax Report this amount on Form 1040, line 21, or on Form 1040NR, line 21. How to file state income tax Form 1099-S. How to file state income tax   If you received Form 1099-S, box 2 (gross proceeds) should show the total amount you received for your home. How to file state income tax   However, box 2 will not include the fair market value of any services or property other than cash or notes you received or will receive. How to file state income tax Instead, box 4 will be checked to indicate your receipt or expected receipt of these items. How to file state income tax Amount Realized The amount realized is the selling price minus selling expenses. How to file state income tax Selling expenses. How to file state income tax   Selling expenses include: Commissions, Advertising fees, Legal fees, and Loan charges paid by the seller, such as loan placement fees or “points. How to file state income tax ” Adjusted Basis While you owned your home, you may have made adjustments (increases or decreases) to the basis. How to file state income tax This adjusted basis must be determined before you can figure gain or loss on the sale of your home. How to file state income tax For information on how to figure your home's adjusted basis, see Determining Basis , later. How to file state income tax Amount of Gain or Loss To figure the amount of gain or loss, compare the amount realized to the adjusted basis. How to file state income tax Gain on sale. How to file state income tax   If the amount realized is more than the adjusted basis, the difference is a gain and, except for any part you can exclude, generally is taxable. How to file state income tax Loss on sale. How to file state income tax   If the amount realized is less than the adjusted basis, the difference is a loss. How to file state income tax Generally, a loss on the sale of your main home cannot be deducted. How to file state income tax Jointly owned home. How to file state income tax   If you and your spouse sell your jointly owned home and file a joint return, you figure your gain or loss as one taxpayer. How to file state income tax Separate returns. How to file state income tax   If you file separate returns, each of you must figure your own gain or loss according to your ownership interest in the home. How to file state income tax Your ownership interest is generally determined by state law. How to file state income tax Joint owners not married. How to file state income tax   If you and a joint owner other than your spouse sell your jointly owned home, each of you must figure your own gain or loss according to your ownership interest in the home. How to file state income tax Each of you applies the rules discussed in this publication on an individual basis. How to file state income tax Dispositions Other Than Sales Some special rules apply to other dispositions of your main home. How to file state income tax Foreclosure or repossession. How to file state income tax   If your home was foreclosed on or repossessed, you have a disposition. How to file state income tax See Publication 4681 to determine if you have ordinary income, gain, or loss. How to file state income tax More information. How to file state income tax   If part of a home is used for business or rental purposes, see Foreclosures and Repossessions in chapter 1 of Publication 544 for more information. How to file state income tax Publication 544 has examples of how to figure gain or loss on a foreclosure or repossession. How to file state income tax Abandonment. How to file state income tax   If you abandon your home, see Publication 4681 to determine if you have ordinary income, gain, or loss. How to file state income tax Trading (exchanging) homes. How to file state income tax   If you trade your home for another home, treat the trade as a sale and a purchase. How to file state income tax Example. How to file state income tax You owned and lived in a home with an adjusted basis of $41,000. How to file state income tax A real estate dealer accepted your old home as a trade-in and allowed you $50,000 toward a new home priced at $80,000. How to file state income tax This is treated as a sale of your old home for $50,000 with a gain of $9,000 ($50,000 − $41,000). How to file state income tax If the dealer had allowed you $27,000 and assumed your unpaid mortgage of $23,000 on your old home, your sales price would still be $50,000 (the $27,000 trade-in allowed plus the $23,000 mortgage assumed). How to file state income tax Transfer to spouse. How to file state income tax   If you transfer your home to your spouse or you transfer it to your former spouse incident to your divorce, you in most cases have no gain or loss (unless the Exception, discussed next, applies). How to file state income tax This is true even if you receive cash or other consideration for the home. How to file state income tax As a result, the rules explained in this publication do not apply. How to file state income tax   If you owned your home jointly with your spouse and transfer your interest in the home to your spouse, or to your former spouse incident to your divorce, the same rule applies. How to file state income tax You have no gain or loss. How to file state income tax Exception. How to file state income tax   These transfer rules do not apply if your spouse or former spouse is a nonresident alien. How to file state income tax In that case, you generally will have a gain or loss. How to file state income tax More information. How to file state income tax    See Property Settlements in Publication 504, Divorced or Separated Individuals, for more information. How to file state income tax Involuntary conversion. How to file state income tax   You have a disposition when your home is destroyed or condemned and you receive other property or money in payment, such as insurance or a condemnation award. How to file state income tax This is treated as a sale and you may be able to exclude all or part of any gain from the destruction or condemnation of your home, as explained later under Special Situations (see Home destroyed or condemned ). How to file state income tax Determining Basis You need to know your basis in your home to figure any gain or loss when you sell it. How to file state income tax Your basis in your home is determined by how you got the home. How to file state income tax Generally, your basis is its cost if you bought it or built it. How to file state income tax If you got it in some other way (inheritance, gift, etc. How to file state income tax ), your basis is generally either its fair market value when you received it or the adjusted basis of the previous owner. How to file state income tax While you owned your home, you may have made adjustments (increases or decreases) to your home's basis. How to file state income tax The result of these adjustments is your home's adjusted basis, which is used to figure gain or loss on the sale of your home. How to file state income tax To figure your adjusted basis, you can use Worksheet 1, near the end of this publication. How to file state income tax Filled-in examples of that worksheet are included in the Comprehensive Examples , later. How to file state income tax Cost As Basis The cost of property is the amount you paid for it in cash, debt obligations, other property, or services. How to file state income tax Purchase. How to file state income tax   If you bought your home, your basis is its cost to you. How to file state income tax This includes the purchase price and certain settlement or closing costs. How to file state income tax In most cases, your purchase price includes your down payment and any debt, such as a first or second mortgage or notes you gave the seller in payment for the home. How to file state income tax If you build, or contract to build, a new home, your purchase price can include costs of construction, as discussed later. How to file state income tax Seller-paid points. How to file state income tax   If the person who sold you your home paid points on your loan, you may have to reduce your home's basis by the amount of the points, as shown in the following chart. How to file state income tax    IF you bought your home. How to file state income tax . How to file state income tax . How to file state income tax THEN reduce your home's basis by the seller-paid points. How to file state income tax . How to file state income tax . How to file state income tax after 1990 but before April 4, 1994 only if you deducted them as home mortgage interest in the year paid. How to file state income tax after April 3, 1994 even if you did not deduct them. How to file state income tax Settlement fees or closing costs. How to file state income tax   When you bought your home, you may have paid settlement fees or closing costs in addition to the contract price of the property. How to file state income tax You can include in your basis some of the settlement fees and closing costs you paid for buying the home, but not the fees and costs for getting a mortgage loan. How to file state income tax A fee paid for buying the home is any fee you would have had to pay even if you paid cash for the home (that is, without the need for financing). How to file state income tax   Settlement fees do not include amounts placed in escrow for the future payment of items such as taxes and insurance. How to file state income tax   Some of the settlement fees or closing costs that you can include in your basis are: Abstract fees (abstract of title fees), Charges for installing utility services, Legal fees (including fees for the title search and preparing the sales contract and deed), Recording fees, Survey fees, Transfer or stamp taxes, Owner's title insurance, and Any amounts the seller owes that you agree to pay, such as: Certain real estate taxes (discussed later), Back interest, Recording or mortgage fees, Charges for improvements or repairs, and Sales commissions. How to file state income tax   Some settlement fees and closing costs you cannot include in your basis are: Fire insurance premiums, Rent for occupancy of the house before closing, Charges for utilities or other services related to occupancy of the house before closing, Any fee or cost that you deducted as a moving expense (allowed for certain fees and costs before 1994), Charges connected with getting a mortgage loan, such as: Mortgage insurance premiums (including funding fees connected with loans guaranteed by the Department of Veterans Affairs), Loan assumption fees, Cost of a credit report, Fee for an appraisal required by a lender, and Fees for refinancing a mortgage. How to file state income tax Real estate taxes. How to file state income tax   Real estate taxes for the year you bought your home may affect your basis, as shown in the following chart. How to file state income tax    IF. How to file state income tax . How to file state income tax . How to file state income tax AND. How to file state income tax . How to file state income tax . How to file state income tax THEN the taxes. How to file state income tax . How to file state income tax . How to file state income tax you pay taxes that the seller owed on the home up to the date of sale the seller does not reimburse you are added to the basis of your home. How to file state income tax the seller reimburses you do not affect the basis of your home. How to file state income tax the seller pays taxes for you (taxes owed beginning on the date of sale) you do not reimburse the seller are subtracted from the basis of your home. How to file state income tax you reimburse the seller do not affect the basis of your home. How to file state income tax Construction. How to file state income tax   If you contracted to have your house built on land you own, your basis is: The cost of the land, plus The amount it cost you to complete the house, including: The cost of labor and materials, Any amounts paid to a contractor, Any architect's fees, Building permit charges, Utility meter and connection charges, and Legal fees directly connected with building the house. How to file state income tax   Your cost includes your down payment and any debt such as a first or second mortgage or notes you gave the seller or builder. How to file state income tax It also includes certain settlement or closing costs. How to file state income tax You may have to reduce your basis by points the seller paid for you. How to file state income tax For more information, see Seller-paid points and Settlement fees or closing costs , earlier. How to file state income tax Built by you. How to file state income tax   If you built all or part of your house yourself, its basis is the total amount it cost you to complete it. How to file state income tax Do not include in the cost of the house: The value of your own labor, or The value of any other labor you did not pay for. How to file state income tax Temporary housing. How to file state income tax   If a builder gave you temporary housing while your home was being finished, you must reduce your basis by the part of the contract price that was for the temporary housing. How to file state income tax To figure the amount of the reduction, multiply the contract price by a fraction. How to file state income tax The numerator is the value of the temporary housing, and the denominator is the sum of the value of the temporary housing plus the value of the new home. How to file state income tax Cooperative apartment. How to file state income tax   If you are a tenant-stockholder in a cooperative housing corporation, your basis in the cooperative apartment used as your home is usually the cost of your stock in the corporation. How to file state income tax This may include your share of a mortgage on the apartment building. How to file state income tax Condominium. How to file state income tax   To determine your basis in a condominium apartment used as your home, use the same rules as for any other home. How to file state income tax Basis Other Than Cost You must use a basis other than cost, such as adjusted basis or fair market value, if you received your home as a gift, inheritance, a trade, or from your spouse. How to file state income tax These situations are discussed in the following pages. How to file state income tax Also, the instructions for Worksheet 1 (near the end of the publication) address each of these issues. How to file state income tax Other special rules may apply in certain situations. How to file state income tax If you converted the property, or some part of it, to business or rental use, see Property Changed to Business or Rental Use, in Publication 551. How to file state income tax Home received as gift. How to file state income tax   Use the following chart to find the basis of a home you received as a gift. How to file state income tax IF the donor's adjusted basis at the time of the gift was. How to file state income tax . How to file state income tax . How to file state income tax THEN your basis is. How to file state income tax . How to file state income tax . How to file state income tax more than the fair market value of the home at that time the same as the donor's adjusted basis at the time of the gift. How to file state income tax   Exception: If using the donor's adjusted basis results in a loss when you sell the home, you must use the fair market value of the home at the time of the gift as your basis. How to file state income tax If using the fair market value results in a gain, you have neither gain nor loss. How to file state income tax equal to or less than the fair market value at that time, and you received the gift before 1977 the smaller of the: • donor's adjusted basis, plus  any federal gift tax paid on  the gift, or • the home's fair market value  at the time of the gift. How to file state income tax equal to or less than the fair market value at that time, and you received the gift after 1976 the same as the donor's adjusted basis, plus the part of any federal gift tax paid that is due to the net increase in value of the home (explained next). How to file state income tax Fair market value. How to file state income tax   The fair market value of property at the time of the gift is the value of the property as appraised for purposes of the federal gift tax. How to file state income tax If the gift was not subject to the federal gift tax, the fair market value is the value as appraised for the purposes of a state gift tax. How to file state income tax Part of federal gift tax due to net increase in value. How to file state income tax   Figure the part of the federal gift tax paid that is due to the net increase in value of the home by multiplying the total federal gift tax paid by a fraction. How to file state income tax The numerator of the fraction is the net increase in the value of the home, and the denominator is the value of the home for gift tax purposes after reduction by any annual exclusion and marital or charitable deduction that applies to the gift. How to file state income tax The net increase in the value of the home is its fair market value minus the donor's adjusted basis immediately before the gift. How to file state income tax Home acquired from a decedent who died before or after 2010. How to file state income tax   If you inherited your home from a decedent who died before or after 2010, your basis is the fair market value of the property on the date of the decedent's death (or the later alternate valuation date chosen by the personal representative of the estate). How to file state income tax If an estate tax return was filed or required to be filed, the value of the property listed on the estate tax return is your basis. How to file state income tax If a federal estate tax return did not have to be filed, your basis in the home is the same as its appraised value at the date of death, for purposes of state inheritance or transmission taxes. How to file state income tax Surviving spouse. How to file state income tax   If you are a surviving spouse and you owned your home jointly, your basis in the home will change. How to file state income tax The new basis for the interest your spouse owned will be its fair market value on the date of death (or alternate valuation date). How to file state income tax The basis in your interest will remain the same. How to file state income tax Your new basis in the home is the total of these two amounts. How to file state income tax   If you and your spouse owned the home either as tenants by the entirety or as joint tenants with right of survivorship, you will each be considered to have owned one-half of the home. How to file state income tax Example. How to file state income tax Your jointly owned home (owned as joint tenants with right of survivorship) had an adjusted basis of $50,000 on the date of your spouse's death, and the fair market value on that date was $100,000. How to file state income tax Your new basis in the home is $75,000 ($25,000 for one-half of the adjusted basis plus $50,000 for one-half of the fair market value). How to file state income tax Community property. How to file state income tax   In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), each spouse is usually considered to own half of the community property. How to file state income tax When either spouse dies, the total fair market value of the community property becomes the basis of the entire property, including the part belonging to the surviving spouse. How to file state income tax For this 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 state income tax   For more information about community property, see Publication 555, Community Property. How to file state income tax    If you are selling a home in which you acquired an interest from a decedent who died in 2010, see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010, to determine your basis. How to file state income tax Home received as trade. How to file state income tax   If you acquired your home as a trade for other property, in most cases, the basis of your home is the fair market value (at the time of the trade) of the property you gave up. How to file state income tax If you traded one home for another, you have made a sale and purchase. How to file state income tax In that case, you may have a gain. How to file state income tax See Trading (exchanging) homes under Dispositions Other Than Sales, earlier, for an example of figuring the gain. How to file state income tax Home received from spouse. How to file state income tax   If you received your home from your spouse or from your former spouse incident to your divorce, your basis in the home depends on the date of the transfer. How to file state income tax Transfers after July 18, 1984. How to file state income tax   If you received the home after July 18, 1984, there was no gain or loss on the transfer. How to file state income tax In most cases, your basis in this home is the same as your spouse's (or former spouse's) adjusted basis just before you received it. How to file state income tax This rule applies even if you received the home in exchange for cash, the release of marital rights, the assumption of liabilities, or other considerations. How to file state income tax   If you owned a home jointly with your spouse and your spouse transferred his or her interest in the home to you, in most cases, your basis in the half interest received from your spouse is the same as your spouse's adjusted basis just before the transfer. How to file state income tax This also applies if your former spouse transferred his or her interest in the home to you incident to your divorce. How to file state income tax Your basis in the half interest you already owned does not change. How to file state income tax Your new basis in the home is the total of these two amounts. How to file state income tax Transfers before July 19, 1984. How to file state income tax   If you received your home before July 19, 1984, in exchange for your release of marital rights, in most cases, your basis in the home is generally its fair market value at the time you received it. How to file state income tax More information. How to file state income tax   For more information on property received from a spouse or former spouse, see Property Settlements in Publication 504. How to file state income tax Involuntary conversion. How to file state income tax   If your home is destroyed or condemned, you may receive insurance proceeds or a condemnation award. How to file state income tax If you acquired a replacement home with these proceeds, the basis is its cost decreased by any gain not recognized on the conversion under the rules explained in: Publication 547, in the case of a home that was destroyed, or Chapter 1 of Publication 544, in the case of a home that was condemned. How to file state income tax Example. How to file state income tax A fire destroyed your home that you owned and used for only 6 months. How to file state income tax The home had an adjusted basis of $80,000 and the insurance company paid you $130,000 for the loss. How to file state income tax Your gain is $50,000 ($130,000 − $80,000). How to file state income tax You bought a replacement home for $100,000. How to file state income tax The part of your gain that is taxable is $30,000 ($130,000 − $100,000), the unspent part of the payment from the insurance company. How to file state income tax The rest of the gain ($20,000) is not taxable, so that amount reduces your basis in the new home. How to file state income tax The basis of the new home is figured as follows. How to file state income tax Cost of replacement home $100,000 Minus: Gain not recognized 20,000 Basis of the replacement home $80,000 More information. How to file state income tax   For more information about basis, see Publication 551. How to file state income tax Adjusted Basis Adjusted basis is your cost or other basis increased or decreased by certain amounts. How to file state income tax To figure your adjusted basis, you can use Worksheet 1, found toward the end of this publication. How to file state income tax Filled-in examples of that worksheet are included in Comprehensive Examples , later. How to file state income tax Recordkeeping. How to file state income tax You should keep records to prove your home's adjusted basis. How to file state income tax Ordinarily, you must keep records for 3 years after the due date for filing your return for the tax year in which you sold your home. How to file state income tax But if you sold a home before May 7, 1997, and postponed tax on any gain, the basis of that home affects the basis of the new home you bought. How to file state income tax Keep records proving the basis of both homes as long as they are needed for tax purposes. How to file state income tax The records you should keep include: Proof of the home's purchase price and purchase expenses; Receipts and other records for all improvements, additions, and other items that affect the home's adjusted basis; Any worksheets or other computations you used to figure the adjusted basis of the home you sold, the gain or loss on the sale, the exclusion, and the taxable gain; Any Form 982 you filed to exclude any discharge of qualified principal residence indebtedness; Any Form 2119, Sale of Your Home, you filed to postpone gain from the sale of a previous home before May 7, 1997; and Any worksheets you used to prepare Form 2119, such as the Adjusted Basis of Home Sold Worksheet or the Capital Improvements Worksheet from the Form 2119 instructions, or other source of computations. How to file state income tax Increases to Basis These include the following. How to file state income tax Additions and other improvements that have a useful life of more than 1 year. How to file state income tax Special assessments for local improvements. How to file state income tax Amounts you spent after a casualty to restore damaged property. How to file state income tax Improvements. How to file state income tax   These add to the value of your home, prolong its useful life, or adapt it to new uses. How to file state income tax You add the cost of additions and other improvements to the basis of your property. How to file state income tax   The following chart lists some other examples of improvements. How to file state income tax Examples of Improvements That Increase Basis Additions Bedroom Bathroom Deck Garage Porch Patio Heating & Air Conditioning Heating system Central air conditioning Furnace Duct work Central humidifier Filtration system Lawn & Grounds Landscaping Driveway Walkway Fence  Retaining wall Sprinkler system Swimming pool  Miscellaneous Storm windows, doors New roof Central vacuum Wiring upgrades Satellite dish Security system  Plumbing Septic system Water heater Soft water system Filtration system  Interior Improvements Built-in appliances  Kitchen modernization  Flooring Wall-to-wall carpeting  Insulation Attic Walls Floors Pipes and duct work Improvements no longer part of home. How to file state income tax   Your home's adjusted basis does not include the cost of any improvements that are replaced and are no longer part of the home. How to file state income tax Example. How to file state income tax You put wall-to-wall carpeting in your home 15 years ago. How to file state income tax Later, you replaced that carpeting with new wall-to-wall carpeting. How to file state income tax The cost of the old carpeting you replaced is no longer part of your home's adjusted basis. How to file state income tax Repairs. How to file state income tax   These maintain your home in good condition but do not add to its value or prolong its life. How to file state income tax You do not add their cost to the basis of your property. How to file state income tax Examples. How to file state income tax Repainting your house inside or outside, fixing your gutters or floors, repairing leaks or plastering, and replacing broken window panes are examples of repairs. How to file state income tax Exception. How to file state income tax   The entire job is considered an improvement if items that would otherwise be considered repairs are done as part of an extensive remodeling or restoration of your home. How to file state income tax For example, if you have a casualty and your home is damaged, increase your basis by the amount you spend on repairs that restore the property to its pre-casualty condition. How to file state income tax Decreases to Basis These include the following. How to file state income tax Discharge of qualified principal residence indebtedness that was excluded from income (but not below zero). How to file state income tax For details, see Publication 4681. How to file state income tax Some or all of the cancellation of debt income that was excluded due to your bankruptcy or insolvency. How to file state income tax For details, see Publication 4681. How to file state income tax Gain you postponed from the sale of a previous home before May 7, 1997. How to file state income tax Deductible casualty losses. How to file state income tax Insurance payments you received or expect to receive for casualty losses. How to file state income tax Payments you received for granting an easement or right-of-way. How to file state income tax Depreciation allowed or allowable if you used your home for business or rental purposes. How to file state income tax Energy-related credits allowed for expenditures made on the residence. How to file state income tax (Reduce the increase in basis otherwise allowable for expenditures on the residence by the amount of credit allowed for those expenditures. How to file state income tax ) Adoption credit you claimed for improvements added to the basis of your home. How to file state income tax Nontaxable payments from an adoption assistance program of your employer you used for improvements you added to the basis of your home. How to file state income tax Energy conservation subsidy excluded from your gross income because you received it (directly or indirectly) from a public utility after 1992 to buy or install any energy conservation measure. How to file state income tax An energy conservation measure is an installation or modification primarily designed either to reduce consumption of electricity or natural gas or to improve the management of energy demand for a home. How to file state income tax District of Columbia first-time homebuyer credit allowed on the purchase of a principal residence in the District of Columbia. How to file state income tax General sales taxes claimed as an itemized deduction on Schedule A (Form 1040) that were imposed on the purchase of personal property, such as a houseboat used as your home or a mobile home. How to file state income tax Discharges of qualified principal residence indebtedness. How to file state income tax   You may be able to exclude from gross income a discharge of qualified principal residence indebtedness. How to file state income tax This exclusion applies to discharges made after 2006 and before 2014. How to file state income tax If you choose to exclude this income, you must reduce (but not below zero) the basis of your principal residence by the amount excluded from gross income. How to file state income tax   File Form 982 with your tax return. How to file state income tax See the form's instructions for detailed information. How to file state income tax    A decrease in basis due to a discharge of qualified principal residence indebtedness that is excluded from income occurs only if you retain ownership of the principal residence after a discharge. How to file state income tax In most cases, this would occur in a refinancing or a restructuring of the mortgage. How to file state income tax Excluding the Gain You may qualify to exclude from your income all or part of any gain from the sale of your main home. How to file state income tax This means that, if you qualify, you will not have to pay tax on the gain up to the limit described under Maximum Exclusion , next. How to file state income tax To qualify, you must meet the ownership and use tests described later. How to file state income tax You can choose not to take the exclusion by including the gain from the sale in your gross income on your tax return for the year of the sale. How to file state income tax This choice can be made (or revoked) at any time before the expiration of a 3-year period beginning on the due date of your return (not including extensions) for the year of the sale. How to file state income tax You can use Worksheet 2 (near the end of this publication) to figure the amount of your exclusion and your taxable gain, if any. How to file state income tax If you have any taxable gain from the sale of your home, you may have to increase your withholding or make estimated tax payments. How to file state income tax See Publication 505, Tax Withholding and Estimated Tax. How to file state income tax Maximum Exclusion You can exclude up to $250,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if all of the following are true. How to file state income tax You meet the ownership test. How to file state income tax You meet the use test. How to file state income tax During the 2-year period ending on the date of the sale, you did not exclude gain from the sale of another home. How to file state income tax For details on gain allocated to periods of nonqualified use, see Nonqualified Use , later. How to file state income tax If you and another person owned the home jointly but file separate returns, each of you can exclude up to $250,000 of gain from the sale of your interest in the home if each of you meets the three conditions just listed. How to file state income tax You may be able to exclude up to $500,000 of the gain (other than gain allocated to periods of nonqualified use) on the sale of your main home if you are married and file a joint return and meet the requirements listed in the discussion of the special rules for joint returns, later, under Married Persons . How to file state income tax Ownership and Use Tests To claim the exclusion, you must meet the ownership and use tests. How to file state income tax This means that during the 5-year period ending on the date of the sale, you must have: Owned the home for at least 2 years (the ownership test), and Lived in the home as your main home for at least 2 years (the use test). How to file state income tax Exception. How to file state income tax   If you owned and lived in the property as your main home for less than 2 years, you can still claim an exclusion in some cases. How to file state income tax However, the maximum amount you may be able to exclude will be reduced. How to file state income tax See Reduced Maximum Exclusion , later. How to file state income tax Example 1—home owned and occupied for at least 2 years. How to file state income tax Mya bought and moved into her main home in September 2011. How to file state income tax She sold the home at a gain in October 2013. How to file state income tax During the 5-year period ending on the date of sale in October 2013, she owned and lived in the home for more than 2 years. How to file state income tax She meets the ownership and use tests. How to file state income tax Example 2—ownership test met but use test not met. How to file state income tax Ayden bought a home, lived in it for 6 months, moved out, and never occupied the home again. How to file state income tax He later sold the home for a gain in June 2013. How to file state income tax He owned the home during the entire 5-year period ending on the date of sale. How to file state income tax He meets the ownership test but not the use test. How to file state income tax He cannot exclude any part of his gain on the sale unless he qualified for a reduced maximum exclusion (explained later). How to file state income tax Period of Ownership and Use The required 2 years of ownership and use during the 5-year period ending on the date of the sale do not have to be continuous nor do they both have to occur at the same time. How to file state income tax You meet the tests if you can show that you owned and lived in the property as your main home for either 24 full months or 730 days (365 × 2) during the 5-year period ending on the date of sale. How to file state income tax Example. How to file state income tax Naomi bought and moved into a house in July 2009. How to file state income tax She lived there for 13 months and then moved in with a friend. How to file state income tax She later moved back into her house and lived there for 12 months until she sold it in August 2013. How to file state income tax Naomi meets the ownership and use tests because, during the 5-year period ending on the date of sale, she owned the house for more than 2 years and lived in it for a total of 25 (13 + 12) months. How to file state income tax Temporary absence. How to file state income tax   Short temporary absences for vacations or other seasonal absences, even if you rent out the property during the absences, are counted as periods of use. How to file state income tax The following examples assume that the reduced maximum exclusion (discussed later) does not apply to the sales. How to file state income tax Example 1. How to file state income tax David Johnson, who is single, bought and moved into his home on February 1, 2011. How to file state income tax Each year during 2011 and 2012, David left his home for a 2-month summer vacation. How to file state income tax David sold the house on March 1, 2013. How to file state income tax Although the total time David lived in his home is less than 2 years (21 months), he meets the use requirement and may exclude gain. How to file state income tax The 2-month vacations are short temporary absences and are counted as periods of use in determining whether David used the home for the required 2 years. How to file state income tax Example 2. How to file state income tax Professor Paul Beard, who is single, bought and moved into a house in December 2010, went abroad for a 1-year sabbatical leave in January 2012, returned to the house in January 2013, and sold it at a gain in February 2013. How to file state income tax Because his leave was not a short temporary absence, he cannot include the period of leave to meet the 2-year use test. How to file state income tax He cannot exclude any part of his gain because he did not use the residence for the required 2 years. How to file state income tax Ownership and use tests met at different times. How to file state income tax   You can meet the ownership and use tests during different 2-year periods. How to file state income tax However, you must meet both tests during the 5-year period ending on the date of the sale. How to file state income tax Example. How to file state income tax Beginning in 2002, Helen Jones lived in a rented apartment. How to file state income tax The apartment building was later converted to condominiums, and she bought her same apartment on December 3, 2010. How to file state income tax In 2011, Helen became ill and on April 14 of that year she moved to her daughter's home. How to file state income tax On July 12, 2013, while still living in her daughter's home, she sold her condominium. How to file state income tax Helen can exclude gain on the sale of her condominium because she met the ownership and use tests during the 5-year period from July 13, 2008, to July 12, 2013, the date she sold the condominium. How to file state income tax She owned her condominium from December 3, 2010, to July 12, 2013 (more than 2 years). How to file state income tax She lived in the property from July 13, 2008 (the beginning of the 5-year period), to April 14, 2011 (more than 2 years). How to file state income tax The time Helen lived in her daughter's home during the 5-year period can be counted toward her period of ownership, and the time she lived in her rented apartment during the 5-year period can be counted toward her period of use. How to file state income tax Cooperative apartment. How to file state income tax   If you sold stock as a tenant-shareholder in a cooperative housing corporation, the ownership and use tests are met if, during the 5-year period ending on the date of sale, you: Owned the stock for at least 2 years, and Lived in the house or apartment that the stock entitled you to occupy as your main home for at least 2 years. How to file state income tax Exceptions to Ownership and Use Tests The following sections contain exceptions to the ownership and use tests for certain taxpayers. How to file state income tax Exception for individuals with a disability. How to file state income tax   There is an exception to the use test if: You become physically or mentally unable to care for yourself, and You owned and lived in your home as your main home for a total of at least 1 year during the 5-year period before the sale of your home. How to file state income tax Under this exception, you are considered to live in your home during any time within the 5-year period that you own the home and live in a facility (including a nursing home) licensed by a state or political subdivision to care for persons in your condition. How to file state income tax   If you meet this exception to the use test, you still have to meet the 2-out-of-5-year ownership test to claim the exclusion. How to file state income tax Previous home destroyed or condemned. How to file state income tax   For the ownership and use tests, you add the time you owned and lived in a previous home that was destroyed or condemned to the time you owned and lived in the replacement home on whose sale you wish to exclude gain. How to file state income tax This rule applies if any part of the basis of the home you sold depended on the basis of the destroyed or condemned home (see Involuntary Conversions in Publication 551). How to file state income tax Otherwise, you must have owned and lived in the same home for 2 of the 5 years before the sale to qualify for the exclusion. How to file state income tax Members of the uniformed services or Foreign Service, employees of the intelligence community, or employees or volunteers of the Peace Corps. How to file state income tax   You can choose to have the 5-year test period for ownership and use suspended during any period you or your spouse serve on qualified official extended duty (defined later) as a member of the uniformed services or Foreign Service of the United States, or as an employee of the intelligence community. How to file state income tax You can choose to have the 5-year test period for ownership and use suspended during any period you or your spouse serve outside the United States either as an employee of the Peace Corps on qualified official extended duty (defined later) or as an enrolled volunteer or volunteer leader of the Peace Corps. How to file state income tax This means that you may be able to meet the 2-year use test even if, because of your service, you did not actually live in your home for at least the required 2 years during the 5-year period ending on the date of sale. How to file state income tax   If this helps you qualify to exclude gain, you can choose to have the 5-year test period suspended by filing a return for the year of sale that does not include the gain. How to file state income tax Example. How to file state income tax John bought and moved into a home in 2005. How to file state income tax He lived in it as his main home for 2½ years. How to file state income tax For the next 6 years, he did not live in it because he was on qualified official extended duty with the Army. How to file state income tax He then sold the home at a gain in 2013. How to file state income tax To meet the use test, John chooses to suspend the 5-year test period for the 6 years he was on qualified official extended duty. How to file state income tax This means he can disregard those 6 years. How to file state income tax Therefore, John's 5-year test period consists of the 5 years before he went on qualified official extended duty. How to file state income tax He meets the ownership and use tests because he owned and lived in the home for 2½ years during this test period. How to file state income tax Period of suspension. How to file state income tax   The period of suspension cannot last more than 10 years. How to file state income tax Together, the 10-year suspension period and the 5-year test period can be as long as, but no more than, 15 years. How to file state income tax You cannot suspend the 5-year period for more than one property at a time. How to file state income tax You can revoke your choice to suspend the 5-year period at any time. How to file state income tax Example. How to file state income tax Mary bought a home on April 1, 1997. How to file state income tax She used it as her main home until August 31, 2000. How to file state income tax On September 1, 2000, she went on qualified official extended duty with the Navy. How to file state income tax She did not live in the house again before selling it on July 31, 2013. How to file state income tax Mary chooses to use the entire 10-year suspension period. How to file state income tax Therefore, the suspension period would extend back from July 31, 2013, to August 1, 2003, and the 5-year test period would extend back to August 1, 1998. How to file state income tax During that period, Mary owned the house all 5 years and lived in it as her main home from August 1, 1998, until August 31, 2000, a period of more than 24 months. How to file state income tax She meets the ownership and use tests because she owned and lived in the home for at least 2 years during this test period. How to file state income tax Uniformed services. How to file state income tax   The uniformed services are: The Armed Forces (the Army, Navy, Air Force, Marine Corps, and Coast Guard), The commissioned corps of the National Oceanic and Atmospheric Administration, and The commissioned corps of the Public Health Service. How to file state income tax Foreign Service member. How to file state income tax   For purposes of the choice to suspend the 5-year test period for ownership and use, you are a member of the Foreign Service if you are any of the following. How to file state income tax A Chief of mission. How to file state income tax An Ambassador at large. How to file state income tax A member of the Senior Foreign Service. How to file state income tax A Foreign Service officer. How to file state income tax Part of the Foreign Service personnel. How to file state income tax Employee of the intelligence community. How to file state income tax   For purposes of the choice to suspend the 5-year test period for ownership and use, you are an employee of the intelligence community if you are an employee of any of the following. How to file state income tax The Office of the Director of National Intelligence. How to file state income tax The Central Intelligence Agency. How to file state income tax The National Security Agency. How to file state income tax The Defense Intelligence Agency. How to file state income tax The National Geospatial-Intelligence Agency. How to file state income tax The National Reconnaissance Office and any other office within the Department of Defense for the collection of specialized national intelligence through reconnaissance programs. How to file state income tax Any of the intelligence elements of the Army, the Navy, the Air Force, the Marine Corps, the Federal Bureau of Investigation, the Department of Treasury, the Department of Energy, and the Coast Guard. How to file state income tax The Bureau of Intelligence and Research of the Department of State. How to file state income tax Any of the elements of the Department of Homeland Security concerned with the analyses of foreign intelligence information. How to file state income tax Qualified official extended duty. How to file state income tax   You are on qualified official extended duty if you are on extended duty while: Serving at a duty station at least 50 miles from your main home, or Living in Government quarters under Government orders. How to file state income tax   You are on extended duty when you are called or ordered to active duty for a period of more than 90 days or for an indefinite period. How to file state income tax Married Persons If you and your spouse file a joint return for the year of sale and one spouse meets the ownership and use tests, you can exclude up to $250,000 of the gain. How to file state income tax (But see Special rules for joint returns, next. How to file state income tax ) Special rules for joint returns. How to file state income tax   You can exclude up to $500,000 of the gain on the sale of your main home if all of the following are true. How to file state income tax You are married and file a joint return for the year. How to file state income tax Either you or your spouse meets the ownership test. How to file state income tax Both you and your spouse meet the use test. How to file state income tax During the 2-year period ending on the date of the sale, neither you nor your spouse excluded gain from the sale of another home. How to file state income tax If either spouse does not satisfy all these requirements, the maximum exclusion that can be claimed by the couple is the total of the maximum exclusions that each spouse would qualify for if not married and the amounts were figured separately. How to file state income tax For this purpose, each spouse is treated as owning the property during the period that either spouse owned the property. How to file state income tax Example 1—one spouse sells a home. How to file state income tax Emily sells her home in June 2013 for a gain of $300,000. How to file state income tax She marries Jamie later in the year. How to file state income tax She meets the ownership and use tests, but Jamie does not. How to file state income tax Emily can exclude up to $250,000 of gain on a separate or joint return for 2013. How to file state income tax The $500,000 maximum exclusion for certain joint returns does not apply because Jamie does not meet the use test. How to file state income tax Example 2—each spouse sells a home. How to file state income tax The facts are the same as in Example 1 except that Jamie also sells a home in 2013 for a gain of $200,000 before he marries Emily. How to file state income tax He meets the ownership and use tests on his home, but Emily does not. How to file state income tax Emily can exclude $250,000 of gain and Jamie can exclude $200,000 of gain on the respective sales of their individual homes. How to file state income tax However, Emily cannot use Jamie's unused exclusion to exclude more than $250,000 of gain. How to file state income tax Therefore, Emily and Jamie must recognize $50,000 of gain on the sale of Emily's home. How to file state income tax The $500,000 maximum exclusion for certain joint returns does not apply because Emily and Jamie do not both meet the use test for the same home. How to file state income tax Sale of main home by surviving spouse. How to file state income tax   If your spouse died and you did not remarry before the date of sale, you are considered to have owned and lived in the property as your main home during any period of time when your spouse owned and lived in it as a main home. How to file state income tax   If you meet all of the following requirements, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home. How to file state income tax The sale or exchange took place after 2008. How to file state income tax The sale or exchange took place no more than 2 years after the date of death of your spouse. How to file state income tax You have not remarried. How to file state income tax You and your spouse met the use test at the time of your spouse's death. How to file state income tax You or your spouse met the ownership test at the time of your spouse's death. How to file state income tax Neither you nor your spouse excluded gain from the sale of another home during the last 2 years before the date of death. How to file state income tax The ownership and use tests were described earlier. How to file state income tax Example. How to file state income tax Harry owned and used a house as his main home since 2009. How to file state income tax Harry and Wilma married on July 1, 2013, and from that date they used Harry's house as their main home. How to file state income tax Harry died on August 15, 2013, and Wilma inherited the property. How to file state income tax Wilma sold the property on September 1, 2013, at which time she had not remarried. How to file state income tax Although Wilma owned and used the house for less than 2 years, Wilma is considered to have satisfied the ownership and use tests because her period of ownership and use includes the period that Harry owned and used the property before death. How to file state income tax Home transferred from spouse. How to file state income tax   If your home was transferred to you by your spouse (or former spouse if the transfer was incident to divorce), you are considered to have owned it during any period of time when your spouse owned it. How to file state income tax Use of home after divorce. How to file state income tax   You are considered to have used property as your main home during any period when: You owned it, and Your spouse or former spouse is allowed to live in it under a divorce or separation instrument and uses it as his or her main home. How to file state income tax Reduced Maximum Exclusion If you fail to meet the requirements to qualify for the $250,000 or $500,000 exclusion, you may still qualify for a reduced exclusion. How to file state income tax This applies to those who: Fail to meet the ownership and use tests, or Have used the exclusion within 2 years of selling their current home. How to file state income tax In both cases, to qualify for a reduced exclusion, the sale of your main home must be due to one of the following reasons. How to file state income tax A change in place of employment. How to file state income tax Health. How to file state income tax Unforeseen circumstances. How to file state income tax Qualified individual. How to file state income tax   For purposes of the reduced maximum exclusion, a qualified individual is any of the following. How to file state income tax You. How to file state income tax Your spouse. How to file state income tax A co-owner of the home. How to file state income tax A person whose main home is the same as yours. How to file state income tax Primary reason for sale. How to file state income tax   One of the three reasons above will be considered to be the primary reason you sold your home if either (1) or (2) is true. How to file state income tax You qualify under a “safe harbor. How to file state income tax ” This is a specific set of facts and circumstances that, if applicable, qualifies you to claim a reduced maximum exclusion. How to file state income tax Safe harbors corresponding to the reasons listed above are described later. How to file state income tax A safe harbor does not apply, but you can establish, based on facts and circumstances, that the primary reason for the sale is a change in place of employment, health, or unforeseen circumstances. How to file state income tax  Factors that may be relevant in determining your primary reason for sale include whether: Your sale and the circumstances causing it were close in time, The circumstances causing your sale occurred during the time you owned and used the property as your main home, The circumstances causing your sale were not reasonably foreseeable when you began using the property as your main home, Your financial ability to maintain the property became materially impaired, The suitability of the property as your main home materially changed, and During the time you owned the property, you used it as your home. How to file state income tax Change in Place of Employment You may qualify for a reduced exclusion if the primary reason for the sale of your main home is a change in the location of employment of a qualified individual. How to file state income tax Employment. How to file state income tax   For this purpose, employment includes the start of work with a new employer or continuation of work with the same employer. How to file state income tax It also includes the start or continuation of self-employment. How to file state income tax Distance safe harbor. How to file state income tax   A change in place of employment is considered to be the reason you sold your home if: The change occurred during the period you owned and used the property as your main home, and The new place of employment is at least 50 miles farther from the home you sold than was the former place of employment (or, if there was no former place of employment, the distance between your new place of employment and the home sold is at least 50 miles). How to file state income tax Example. How to file state income tax Justin was unemployed and living in a townhouse in Florida he had owned and used as his main home since 2012. How to file state income tax He got a job in North Carolina and sold his townhouse in 2013. How to file state income tax Because the distance between Justin's new place of employment and the home he sold is at least 50 miles, the sale satisfies the conditions of the distance safe harbor. How to file state income tax Justin's sale of his home is considered to be because of a change in place of employment, and he is entitled to claim a reduced maximum exclusion of gain from the sale. How to file state income tax Health The sale of your main home is because of health if your primary reason for the sale is: To obtain, provide, or facilitate the diagnosis, cure, mitigation, or treatment of disease, illness, or injury of a qualified individual, or To obtain or provide medical or personal care for a qualified individual suffering from a disease, illness, or injury. How to file state income tax The sale of your home is not because of health if the sale merely benefits a qualified individual's general health or well-being. How to file state income tax For purposes of this reason, a qualified individual includes, in addition to the individuals listed earlier under Qualified individual , any of the following family members of these individuals. How to file state income tax Parent, grandparent, stepmother, stepfather. How to file state income tax Child, grandchild, stepchild, adopted child, eligible foster child. How to file state income tax Brother, sister, stepbrother, stepsister, half-brother, half-sister. How to file state income tax Mother-in-law, father-in-law, brother-in-law, sister-in-law, son-in-law, or daughter-in-law. How to file state income tax Uncle, aunt, nephew, niece, or cousin. How to file state income tax Example. How to file state income tax In 2012, Chase and Lauren, spouses, bought a house that they used as their main home. How to file state income tax Lauren's father has a chronic disease and is unable to care for himself. How to file state income tax In 2013, Chase and Lauren sold their home in order to move into Lauren's father's house to provide care for him. How to file state income tax Because the primary reason for the sale of their home was to provide care for Lauren's father, Chase and Lauren are entitled to a reduced maximum exclusion. How to file state income tax Doctor's recommendation safe harbor. How to file state income tax   Health is considered to be the reason you sold your home if, for one or more of the reasons listed at the beginning of this discussion, a doctor recommends a change of residence. How to file state income tax Unforeseen Circumstances The sale of your main home is because of an unforeseen circumstance if your primary reason for the sale is the occurrence of an event that you could not reasonably have anticipated before buying and occupying that home. How to file state income tax You are not considered to have an unforeseen circumstance if the primary reason you sold your home was that you preferred to get a different home or because your finances improved. How to file state income tax Specific event safe harbors. How to file state income tax   Unforeseen circumstances are considered to be the reason for selling your home if any of the following events occurred while you owned and used the property as your main home. How to file state income tax An involuntary conversion of your home, such as when your home is destroyed or condemned. How to file state income tax Natural or man-made disasters or acts of war or terrorism resulting in a casualty to your home, whether or not your loss is deductible. How to file state income tax In the case of qualified individuals (listed earlier under Qualified individual ): Death, Unemployment (if the individual is eligible for unemployment compensation), A change in employment or self-employment status that results in the individual's inability to pay reasonable basic living expenses (listed under Reasonable basic living expenses , later) for his or her household, Divorce or legal separation under a decree of divorce or separate maintenance, or Multiple births resulting from the same pregnancy. How to file state income tax An event the IRS determined to be an unforeseen circumstance in published guidance of general applicability. How to file state income tax For example, the IRS determined the September 11, 2001, terrorist attacks to be an unforeseen circumstance. How to file state income tax Reasonable basic living expenses. How to file state income tax   Reasonable basic living expenses for your household include the following. How to file state income tax Amounts spent for food. How to file state income tax Amounts spent for clothing. How to file state income tax Housing and related expenses. How to file state income tax Medical expenses. How to file state income tax Transportation expenses. How to file state income tax Tax payments. How to file state income tax Court-ordered payments. How to file state income tax Expenses reasonably necessary to produce income. How to file state income tax   Any of these amounts spent to maintain an affluent or luxurious standard of living are not reasonable basic living expenses. How to file state income tax Nonqualified Use Gain from the sale or exchange of the main home is not excludable from income if it is allocable to periods of nonqualified use. How to file state income tax Nonqualified use means any period after 2008 where neither you nor your spouse (or your former spouse) used the property as a main home, with certain exceptions (see next). How to file state income tax Exceptions. How to file state income tax   A period of nonqualified use does not include: Any portion of the 5-year period ending on the date of the sale or exchange after the last date you (or your spouse) use the property as a main home; Any period (not to exceed an aggregate period of 10 years) during which you (or your spouse) are serving on qualified official extended duty: As a member of the uniformed services; As a member of the Foreign Service of the United States; or As an employee of the intelligence community; and Any other period of temporary absence (not to exceed an aggregate period of 2 years) due to change of employment, health conditions, or such other unforeseen circumstances as may be specified by the IRS. How to file state income tax Calculation. How to file state income tax   To figure the portion of the gain allocated to the period of nonqualified use, multiply the gain (net of any depreciation allowed or allowable on the property for periods after May 6, 1997) by the following fraction:   Total nonqualified use during the period of ownership after 2008     Total period of ownership     This calculation can be found in Worksheet 2, line 10, later in this publication. How to file state income tax   For examples of this calculation, see Business Use or Rental of Home , next. How to file state income tax Business Use or Rental of Home You may be able to exclude gain from the sale of a home you have used for business or to produce rental income if you meet the ownership and use tests. How to file state income tax Example 1. How to file state income tax On May 23, 2007, Amy, who is unmarried for all years in this example, bought a house. How to file state income tax She moved in on that date and lived in it until May 31, 2009, when she moved out of the house and put it up for rent. How to file state income tax The house was rented from June 1, 2009, to March 31, 2011. How to file state income tax Amy claimed depreciation deductions in 2009 through 2011 totaling $10,000. How to file state income tax Amy moved back into the house on April 1, 2011, and lived there until she sold it on January 31, 2013, for a gain of $200,000. How to file state income tax During the 5-year period ending on the date of the sale (January 31, 2008–January 31, 2013), Amy owned and lived in the house for more than 2 years as shown in the following table. How to file state income tax Five-Year Period Used as Home Used as Rental 1/31/08 – 5/31/09 16 months   6/01/09 – 3/31/11   22 months 4/01/11 – 1/31/13 22 months     38 months 22 months       During the period Amy owned the house (2,080 days), her period of nonqualified use was 668 days. How to file state income tax Because the gain attributable to periods of nonqualified use is $60,990, Amy can exclude $129,010 of her gain, as shown on Worksheet 2. How to file state income tax Example 2. How to file state income tax William owned and used a house as his main home from 2007 through 2010. How to file state income tax On January 1, 2011, he moved to another state. How to file state income tax He rented his house from that date until April 30, 2013, when he sold it. How to file state income tax During the 5-year period ending on the date of sale (May 1, 2008-April 30, 2013), William owned and lived in the house for more than 2 years. How to file state income tax Because it was rental property at the time of the sale, he must report the sale on Form 4797. How to file state income tax Because the period of nonqualified use does not include any part of the 5-year period after the last date William lived in the house, he has no period of nonqualified use. How to file state income tax Because he met the ownership and use tests, he can exclude gain up to $250,000. How to file state income tax However, he cannot exclude the part of the gain equal to the depreciation he claimed or could have claimed for renting the house, as explained next. How to file state income tax Depreciation after May 6, 1997. How to file state income tax   If you were entitled to take depreciation deductions because you used your home for business purposes or as rental property, you cannot exclude the part of your gain equal to any depreciation allowed or allowable as a deduction for periods after May 6, 1997. How to file state income tax If you can show by adequate records or other evidence that the depreciation allowed was less than the amount allowable, then you may limit the amount of gain recognized to the depreciation allowed. How to file state income tax Unrecaptured section 1250 gain. How to file state income tax   This is the part of any long-term capital gain from the sale of your home that is due to depreciation and cannot be excluded. How to file state income tax To figure the amount of unrecaptured section 1250 gain to be reported on Schedule D (Form 1040), you must also take into account certain gains or losses from the sale of property other than your home. How to file state income tax Use the Unrecaptured Section 1250 Gain Worksheet in the Schedule D instructions for this purpose. How to file state income tax Worksheet 2. How to file state income tax Taxable Gain on Sale of Home—Completed Example 1 for Amy Part 1. How to file state income tax Gain or (Loss) on Sale       1. How to file state income tax   Selling price of home 1. How to file state income tax     2. How to file state income tax   Selling expenses (including commissions, advertising and legal fees, and seller-paid loan charges) 2. How to file state income tax     3. How to file state income tax   Subtract line 2 from line 1. How to file state income tax This is the amount realized 3. How to file state income tax     4. How to file state income tax   Adjusted basis of home sold (from Worksheet 1, line 13) 4. How to file state income tax     5. How to file state income tax   Gain or (loss) on the sale. How to file state income tax Subtract line 4 from line 3. How to file state income tax If this is a loss, stop here 5. How to file state income tax 200,000   Part 2. How to file state income tax Exclusion and Taxable Gain       6. How to file state income tax   Enter any depreciation allowed or allowable on the property for periods after May 6, 1997. How to file state income tax If none, enter -0- 6. How to file state income tax 10,000   7. How to file state income tax   Subtract line 6 from line 5. How to file state income tax If the result is less than zero, enter -0- 7. How to file state income tax 190,000   8. How to file state income tax   Aggregate number of days of nonqualified use after 2008. How to file state income tax If none, enter -0-. How to file state income tax  If line 8 is equal to zero, skip to line 12 and enter the amount from line 7 on line 12 8. How to file state income tax 668   9. How to file state income tax   Number of days taxpayer owned the property 9. How to file state income tax 2,080   10. How to file state income tax   Divide the amount on line 8 by the amount on line 9. How to file state income tax Enter the result as a decimal (rounded to at least 3 places). How to file state income tax But do not enter an amount greater than 1. How to file state income tax 00 10. How to file state income tax 0. How to file state income tax 321   11. How to file state income tax   Gain allocated to nonqualified use. How to file state income tax (Line 7 multiplied by line 10) 11. How to file state income tax 60,990   12. How to file state income tax   Gain eligible for exclusion. How to file state income tax Subtract line 11 from line 7 12. How to file state income tax 129,010   13. How to file state income tax   If you qualify to exclude gain on the sale, enter your maximum exclusion (see Maximum Exclusion ). How to file state income tax  If you qualify for a reduced maximum exclusion, enter the amount from Worksheet 3, line 7. How to file state income tax If you do  not qualify to exclude gain, enter -0- 13. How to file state income tax 250,000   14. How to file state income tax   Exclusion. How to file state income tax Enter the smaller of line 12 or line 13 14. How to file state income tax 129,010   15. How to file state income tax   Taxable gain. How to file state income tax Subtract line 14 from line 5. How to file state income tax Report your taxable gain as described under Reporting the Sale . How to file state income tax If the amount on line 6 is more than zero, complete line 16 15. How to file state income tax 70,990   16. How to file state income tax   Enter the smaller of line 6 or line 15. How to file state income tax Enter this amount on line 12 of the Unrecaptured Section 1250 Gain  Worksheet in the instructions for Schedule D (Form 1040) 16. How to file state income tax 10,000 Property Used Partly for Business or Rental If you use property partly as a home and partly for business or to produce rental income, the treatment of any gain on the sale depends partly on whether the business or rental part of the property is part of your home or separate from it. How to file state income tax Part of Home Used for Business or Rental If the part of your property used for business or to produce rental income is within your home, such as a room used as a home office for a business, you do not need to allocate gain on the sale of the property between the business part of the property and the part used as a home. How to file state income tax In addition, you do not need to report the sale of the business or rental part on Form 4797. How to file state income tax This is true whether or not you were entitled to claim any depreciation. How to file state income tax However, you cannot exclude the part of any gain equal to any depreciation allowed or allowable after May 6, 1997. How to file state income tax See Depreciation after May 6, 1997, earlier. How to file state income tax Example 1. How to file state income tax Ray sold his main home in 2013 at a $30,000 gain. How to file state income tax He has no gains or losses from the sale of property other than the gain from the sale of his home. How to file state income tax He meets the ownership and use tests to exclude the gain from his income. How to file state income tax However, he used part of the home as a business office in 2012 and claimed $500 depreciation. How to file state income tax Because the business office was part of his home (not separate from it), he does not have to allocate the gain on the sale between the business part of the property and the part used as a home. How to file state income tax In addition, he does not have to report any part of the gain on Form 4797. How to file state income tax Because Ray was entitled to take a depreciation deduction, he must recognize $500 of the gain as unrecaptured section 1250 gain. How to file state income tax He reports his gain, exclusion, and the taxable gain of $500 on Form 8949 and Schedule D (Form 1040). How to file state income tax Example 2. How to file state income tax The facts are the same as in Example 1 except that Ray was not entitled to claim depreciation for the business use of his home. How to file state income tax Since Ray did not claim any depreciation, he can exclude the entire $30,000 gain. How to file state income tax Separate Part of Property Used for Business or Rental You may have used part of your property as your home and a separate part of it for business or to produce rental income. How to file state income tax Examples are: A working farm on which your house was located, A duplex in w
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Tax Information For Businesses

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Industry Issue Resolution Program
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The How To File State Income Tax

How to file state income tax 6. How to file state income tax   Dual-Status Tax Year Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Tax Year Income Subject to Tax Restrictions for Dual-Status Taxpayers Exemptions How To Figure TaxIncome Tax Credits and Payments Forms To File When and Where To File Introduction You have a dual-status tax year when you have been both a resident alien and a nonresident alien in the same year. How to file state income tax Dual status does not refer to your citizenship; it refers only to your resident status in the United States. How to file state income tax In determining your U. How to file state income tax S. How to file state income tax income tax liability for a dual-status tax year, different rules apply for the part of the year you are a resident of the United States and the part of the year you are a nonresident. How to file state income tax The most common dual-status tax years are the years of arrival and departure. How to file state income tax See Dual-Status Aliens in chapter 1. How to file state income tax If you are married and choose to be treated as a U. How to file state income tax S. How to file state income tax resident for the entire year, as explained in chapter 1, the rules of this chapter do not apply to you for that year. How to file state income tax Topics - This chapter discusses: Income subject to tax, Restrictions for dual-status taxpayers, Exemptions, How to figure the tax, Forms to file, When and where to file, and How to fill out a dual-status return. How to file state income tax Useful Items - You may want to see: Publication 503 Child and Dependent Care Expenses 514 Foreign Tax Credit for Individuals 575 Pension and Annuity Income Form (and Instructions) 1040 U. How to file state income tax S. How to file state income tax Individual Income Tax Return 1040-C U. How to file state income tax S. How to file state income tax Departing Alien Income Tax Return 1040-ES Estimated Tax for Individuals 1040-ES (NR) U. How to file state income tax S. How to file state income tax Estimated Tax for Nonresident Alien Individuals 1040NR U. How to file state income tax S. How to file state income tax Nonresident Alien Income Tax Return 1116 Foreign Tax Credit See chapter 12 for information about getting these publications and forms. How to file state income tax Tax Year You must file your tax return on the basis of an annual accounting period called a tax year. How to file state income tax If you have not previously established a fiscal tax year, your tax year is the calendar year. How to file state income tax A calendar year is 12 consecutive months ending on December 31. How to file state income tax If you have previously established a regular fiscal year (12 consecutive months ending on the last day of a month other than December, or a 52–53 week year) and are considered to be a U. How to file state income tax S. How to file state income tax resident for any calendar year, you will be treated as a U. How to file state income tax S. How to file state income tax resident for any part of your fiscal year that falls within that calendar year. How to file state income tax Income Subject to Tax For the part of the year you are a resident alien, you are taxed on income from all sources. How to file state income tax Income from sources outside the United States is taxable if you receive it while you are a resident alien. How to file state income tax The income is taxable even if you earned it while you were a nonresident alien or if you became a nonresident alien after receiving it and before the end of the year. How to file state income tax For the part of the year you are a nonresident alien, you are taxed on income from U. How to file state income tax S. How to file state income tax sources and on certain foreign source income treated as effectively connected with a U. How to file state income tax S. How to file state income tax trade or business. How to file state income tax (The rules for treating foreign source income as effectively connected are discussed in chapter 4 under Foreign Income. How to file state income tax ) Income from sources outside the United States that is not effectively connected with a trade or business in the United States is not taxable if you receive it while you are a nonresident alien. How to file state income tax The income is not taxable even if you earned it while you were a resident alien or if you became a resident alien or a U. How to file state income tax S. How to file state income tax citizen after receiving it and before the end of the year. How to file state income tax Income from U. How to file state income tax S. How to file state income tax sources is taxable whether you receive it while a nonresident alien or a resident alien unless specifically exempt under the Internal Revenue Code or a tax treaty provision. How to file state income tax Generally, tax treaty provisions apply only to the part of the year you were a nonresident. How to file state income tax In certain cases, however, treaty provisions may apply while you were a resident alien. How to file state income tax See chapter 9 for more information. How to file state income tax When determining what income is taxed in the United States, you must consider exemptions under U. How to file state income tax S. How to file state income tax tax law as well as the reduced tax rates and exemptions provided by tax treaties between the United States and certain foreign countries. How to file state income tax For a further discussion of tax treaties, see chapter 9. How to file state income tax Restrictions for Dual-Status Taxpayers The following restrictions apply if you are filing a tax return for a dual-status tax year. How to file state income tax 1) Standard deduction. How to file state income tax   You cannot use the standard deduction allowed on Form 1040. How to file state income tax However, you can itemize any allowable deductions. How to file state income tax 2) Exemptions. How to file state income tax   Your total deduction for the exemptions for your spouse and allowable dependents cannot be more than your taxable income (figured without deducting personal exemptions) for the period you are a resident alien. How to file state income tax 3) Head of household. How to file state income tax   You cannot use the head of household Tax Table column or Tax Computation Worksheet. How to file state income tax 4) Joint return. How to file state income tax   You cannot file a joint return. How to file state income tax However, see Choosing Resident Alien Status under Dual-Status Aliens in chapter 1. How to file state income tax 5) Tax rates. How to file state income tax   If you are married and a nonresident of the United States for all or part of the tax year and you do not choose to file jointly as discussed in chapter 1, you must use the Tax Table column or Tax Computation Worksheet for married filing separately to figure your tax on income effectively connected with a U. How to file state income tax S. How to file state income tax trade or business. How to file state income tax You cannot use the Tax Table column or Tax Computation Worksheet for married filing jointly or single. How to file state income tax However, you may be able to file as single if you lived apart from your spouse during the last 6 months of the year and you are a: Married resident of Canada, Mexico, or South Korea, or Married U. How to file state income tax S. How to file state income tax national. How to file state income tax  See the instructions for Form 1040NR to see if you qualify. How to file state income tax    A U. How to file state income tax S. How to file state income tax national is an individual who, although not a U. How to file state income tax S. How to file state income tax citizen, owes his or her allegiance to the United States. How to file state income tax U. How to file state income tax S. How to file state income tax nationals include American Samoans and Northern Mariana Islanders who chose to become U. How to file state income tax S. How to file state income tax nationals instead of U. How to file state income tax S. How to file state income tax citizens. How to file state income tax 6) Tax credits. How to file state income tax   You cannot claim the education credits, the earned income credit, or the credit for the elderly or the disabled unless: You are married, and You choose to be treated as a resident for all of 2013 by filing a joint return with your spouse who is a U. How to file state income tax S. How to file state income tax citizen or resident, as discussed in chapter 1. How to file state income tax Exemptions As a dual-status taxpayer, you usually will be able to claim your own personal exemption. How to file state income tax Subject to the general rules for qualification, you can claim exemptions for your spouse and dependents when you figure taxable income for the part of the year you are a resident alien. How to file state income tax The amount you can claim for these exemptions is limited to your taxable income (figured before subtracting exemptions) for the part of the year you are a resident alien. How to file state income tax You cannot use exemptions (other than your own) to reduce taxable income to less than zero for that period. How to file state income tax Special rules apply to exemptions for the part of the tax year you are a nonresident alien if you are a: Resident of Canada, Mexico, or South Korea, U. How to file state income tax S. How to file state income tax national, or Student or business apprentice from India. How to file state income tax For more information, see Exemptions in chapter 5. How to file state income tax How To Figure Tax When you figure your U. How to file state income tax S. How to file state income tax tax for a dual-status year, you are subject to different rules for the part of the year you are a resident and the part of the year you are a nonresident. How to file state income tax Income All income for your period of residence and all income that is effectively connected with a trade or business in the United States for your period of nonresidence, after allowable deductions, is added and taxed at the rates that apply to U. How to file state income tax S. How to file state income tax citizens and residents. How to file state income tax Income that is not connected with a trade or business in the United States for your period of nonresidence is subject to the flat 30% rate or lower treaty rate. How to file state income tax You cannot take any deductions against this income. How to file state income tax Social security and railroad retirement benefits. How to file state income tax   During the part of the year you are a nonresident alien, 85% of any U. How to file state income tax S. How to file state income tax social security benefits (and the equivalent portion of tier 1 railroad retirement benefits) you receive is subject to the flat 30% tax, unless exempt, or subject to a lower treaty rate. How to file state income tax (See The 30% Tax in chapter 4. How to file state income tax )   During the part of the year you are a resident alien, part of the social security and the equivalent portion of tier 1 railroad retirement benefits will be taxed at graduated rates if your modified adjusted gross income plus half of these benefits is more than a certain base amount. How to file state income tax Use the Social Security Benefits Worksheet in the Form 1040 instructions to help you figure the taxable part of your social security and equivalent tier 1 railroad retirement benefits for the part of the year you were a resident alien. How to file state income tax If you received U. How to file state income tax S. How to file state income tax social security benefits while you were a nonresident alien, the Social Security Administration will send you Form SSA-1042S showing your combined benefits for the entire year and the amount of tax withheld. How to file state income tax You will not receive separate statements for the benefits received during your periods of U. How to file state income tax S. How to file state income tax residence and nonresidence. How to file state income tax Therefore, it is important for you to keep careful records of these amounts. How to file state income tax You will need this information to properly complete your return and determine your tax liability. How to file state income tax If you received railroad retirement benefits while you were a nonresident alien, the U. How to file state income tax S. How to file state income tax Railroad Retirement Board (RRB) will send you Form RRB-1042S, Statement for Nonresident Alien Recipients of Payments by the Railroad Retirement Board, and/or Form RRB-1099-R, Annuities or Pensions by the Railroad Retirement Board. How to file state income tax If your country of legal residence changed or your rate of tax changed during the tax year, you may receive more than one form. How to file state income tax Tax Credits and Payments This discussion covers tax credits and payments for dual-status aliens. How to file state income tax Credits As a dual-status alien, you generally can claim tax credits using the same rules that apply to resident aliens. How to file state income tax There are certain restrictions that may apply. How to file state income tax These restrictions are discussed here, along with a brief explanation of credits often claimed by individuals. How to file state income tax Foreign tax credit. How to file state income tax   If you have paid or are liable for the payment of income tax to a foreign country on income from foreign sources, you may be able to claim a credit for the foreign taxes. How to file state income tax   If you claim the foreign tax credit, you generally must file Form 1116 with your income tax return. How to file state income tax For more information, see the Instructions for Form 1116 and Publication 514. How to file state income tax Child and dependent care credit. How to file state income tax   You may qualify for this credit if you pay someone to care for your qualifying child who is under age 13, or your disabled dependent or disabled spouse so that you can work or look for work. How to file state income tax Generally, you must be able to claim an exemption for your dependent. How to file state income tax   Married dual-status aliens can claim the credit only if they choose to file a joint return as discussed in chapter 1, or if they qualify as certain married individuals living apart. How to file state income tax   The amount of your child and dependent care expense that qualifies for the credit in any tax year cannot be more than your earned income for that tax year. How to file state income tax   For more information, get Publication 503 and Form 2441. How to file state income tax Retirement savings contributions credit. How to file state income tax   You may qualify for this credit (also known as the saver's credit) if you made eligible contributions to an employer-sponsored retirement plan or to an individual retirement arrangement (IRA) in 2013. How to file state income tax You cannot claim this credit if: You were born after January 1, 1996, You were a full-time student, Your exemption is claimed by someone else on his or her 2013 tax return, or Your adjusted gross income is more than $29,500. How to file state income tax Use Form 8880 to figure the credit. How to file state income tax For more information, see Publication 590. How to file state income tax Child tax credit. How to file state income tax   You may be able to take this credit if you have a qualifying child. How to file state income tax   A qualifying child for purposes of the child tax credit is a child who: Was under age 17 at the end of 2013. How to file state income tax Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of any of them (for example, your grandchild, niece, or nephew). How to file state income tax Is a U. How to file state income tax S. How to file state income tax citizen, a U. How to file state income tax S. How to file state income tax national, or a resident alien. How to file state income tax Did not provide over half of his or her own support for 2013. How to file state income tax Lived with you more than half of 2013. How to file state income tax Temporary absences, such as for school, vacation, or medical care, count as time lived in the home. How to file state income tax Is claimed as a dependent on your return. How to file state income tax An adopted child is always treated as your own child. How to file state income tax An adopted child includes a child lawfully placed with you for legal adoption. How to file state income tax   See your form instructions for additional details. How to file state income tax Adoption credit. How to file state income tax   You may qualify to take a tax credit of up to $12,970 for qualifying expenses paid to adopt an eligible child. How to file state income tax This amount may be allowed for the adoption of a child with special needs regardless of whether you have qualifying expenses. How to file state income tax To claim the adoption credit, file Form 8839 with the U. How to file state income tax S. How to file state income tax income tax return that you file. How to file state income tax   Married dual-status aliens can claim the credit only if they choose to file a joint return with a U. How to file state income tax S. How to file state income tax citizen or resident spouse as discussed in chapter 1, or if they qualify as certain married individuals living apart (see Married Persons Not Filing Jointly in the Form 8839 instructions). How to file state income tax Payments You can report as payments against your U. How to file state income tax S. How to file state income tax income tax liability certain taxes you paid, are considered to have paid, or that were withheld from your income. How to file state income tax These include: Tax withheld from wages earned in the United States, Taxes withheld at the source from various items of income from U. How to file state income tax S. How to file state income tax sources other than wages, Estimated tax paid with Form 1040-ES or Form 1040-ES (NR), and Tax paid with Form 1040-C, at the time of departure from the United States. How to file state income tax Forms To File The U. How to file state income tax S. How to file state income tax income tax return you must file as a dual-status alien depends on whether you are a resident alien or a nonresident alien at the end of the tax year. How to file state income tax Resident at end of year. How to file state income tax   You must file Form 1040 if you are a dual-status taxpayer who becomes a resident during the year and who is a U. How to file state income tax S. How to file state income tax resident on the last day of the tax year. How to file state income tax Write “Dual-Status Return” across the top of the return. How to file state income tax Attach a statement to your return to show the income for the part of the year you are a nonresident. How to file state income tax You can use Form 1040NR or Form 1040NR-EZ as the statement, but be sure to mark “Dual-Status Statement” across the top. How to file state income tax Nonresident at end of year. How to file state income tax   You must file Form 1040NR or Form 1040NR-EZ if you are a dual-status taxpayer who gives up residence in the United States during the year and who is not a U. How to file state income tax S. How to file state income tax resident on the last day of the tax year. How to file state income tax Write “Dual-Status Return” across the top of the return. How to file state income tax Attach a statement to your return to show the income for the part of the year you are a resident. How to file state income tax You can use Form 1040 as the statement, but be sure to mark “Dual-Status Statement” across the top. How to file state income tax   If you expatriated or terminated your residency in 2013, you may be required to file an expatriation statement (Form 8854) with your tax return. How to file state income tax For more information, see Expatriation Tax in chapter 4. How to file state income tax Statement. How to file state income tax   Any statement must have your name, address, and taxpayer identification number on it. How to file state income tax You do not need to sign a separate statement or schedule accompanying your return, because your signature on the return also applies to the supporting statements and schedules. How to file state income tax When and Where To File If you are a resident alien on the last day of your tax year and report your income on a calendar year basis, you must file no later than April 15 of the year following the close of your tax year. How to file state income tax If you report your income on other than a calendar year basis, file your return no later than the 15th day of the 4th month following the close of your tax year. How to file state income tax In either case, file your return with the address for dual-status aliens shown on the back page of the Form 1040 instructions. How to file state income tax If you are a nonresident alien on the last day of your tax year and you report your income on a calendar year basis, you must file no later than April 15 of the year following the close of your tax year if you receive wages subject to withholding. How to file state income tax If you report your income on other than a calendar year basis, file your return no later than the 15th day of the 4th month following the close of your tax year. How to file state income tax If you did not receive wages subject to withholding and you report your income on a calendar year basis, you must file no later than June 15 of the year following the close of your tax year. How to file state income tax If you report your income on other than a calendar year basis, file your return no later than the 15th day of the 6th month following the close of your tax year. How to file state income tax In any case, mail your return to:  Department of the Treasury Internal Revenue Service  Austin, TX 73301-0215 If enclosing a payment, mail your return to:  Internal Revenue Service  P. How to file state income tax O. How to file state income tax Box 1303 Charlotte, NC 28201-1303 If the regular due date for filing falls on a Saturday, Sunday, or legal holiday, the due date is the next day that is not a Saturday, Sunday, or legal holiday. How to file state income tax Prev  Up  Next   Home   More Online Publications