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How To Get 2012 Tax Forms

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How To Get 2012 Tax Forms

How to get 2012 tax forms Publication 561 - Main Contents Table of Contents What Is Fair Market Value (FMV)?Factors. How to get 2012 tax forms Stock. How to get 2012 tax forms Options. How to get 2012 tax forms Determining Fair Market Value Problems in Determining Fair Market Value Valuation of Various Kinds of PropertyHousehold Goods Used Clothing Jewelry and Gems Paintings, Antiques, and Other Objects of Art Collections Cars, Boats, and Aircraft Inventory Patents Stocks and Bonds Real Estate Interest in a Business Annuities, Interests for Life or Terms of Years, Remainders, and Reversions Certain Life Insurance and Annuity Contracts Partial Interest in Property Not in Trust AppraisalsDeductions of More Than $5,000 Deductions of More Than $500,000 Qualified Appraisal Form 8283 Internal Revenue Service Review of Appraisals Penalty How To Get Tax HelpLow income tax clinics (LITCs). How to get 2012 tax forms What Is Fair Market Value (FMV)? To figure how much you may deduct for property that you contribute, you must first determine its fair market value on the date of the contribution. How to get 2012 tax forms Fair market value. How to get 2012 tax forms   Fair market value (FMV) is the price that property would sell for on the open market. How to get 2012 tax forms It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts. How to get 2012 tax forms If you put a restriction on the use of property you donate, the FMV must reflect that restriction. How to get 2012 tax forms Example 1. How to get 2012 tax forms If you give used clothing to the Salvation Army, the FMV would be the price that typical buyers actually pay for clothing of this age, condition, style, and use. How to get 2012 tax forms Usually, such items are worth far less than what you paid for them. How to get 2012 tax forms Example 2. How to get 2012 tax forms If you donate land and restrict its use to agricultural purposes, you must value the land at its value for agricultural purposes, even though it would have a higher FMV if it were not restricted. How to get 2012 tax forms Factors. How to get 2012 tax forms   In making and supporting the valuation of property, all factors affecting value are relevant and must be considered. How to get 2012 tax forms These include: The cost or selling price of the item, Sales of comparable properties, Replacement cost, and Opinions of experts. How to get 2012 tax forms   These factors are discussed later. How to get 2012 tax forms Also, see Table 1 for a summary of questions to ask as you consider each factor. How to get 2012 tax forms Date of contribution. How to get 2012 tax forms   Ordinarily, the date of a contribution is the date that the transfer of the property takes place. How to get 2012 tax forms Stock. How to get 2012 tax forms   If you deliver, without any conditions, a properly endorsed stock certificate to a qualified organization or to an agent of the organization, the date of the contribution is the date of delivery. How to get 2012 tax forms If the certificate is mailed and received through the regular mail, it is the date of mailing. How to get 2012 tax forms If you deliver the certificate to a bank or broker acting as your agent or to the issuing corporation or its agent, for transfer into the name of the organization, the date of the contribution is the date the stock is transferred on the books of the corporation. How to get 2012 tax forms Options. How to get 2012 tax forms   If you grant an option to a qualified organization to buy real property, you have not made a charitable contribution until the organization exercises the option. How to get 2012 tax forms The amount of the contribution is the FMV of the property on the date the option is exercised minus the exercise price. How to get 2012 tax forms Example. How to get 2012 tax forms You grant an option to a local university, which is a qualified organization, to buy real property. How to get 2012 tax forms Under the option, the university could buy the property at any time during a 2-year period for $40,000. How to get 2012 tax forms The FMV of the property on the date the option is granted is $50,000. How to get 2012 tax forms In the following tax year, the university exercises the option. How to get 2012 tax forms The FMV of the property on the date the option is exercised is $55,000. How to get 2012 tax forms Therefore, you have made a charitable contribution of $15,000 ($55,000, the FMV, minus $40,000, the exercise price) in the tax year the option is exercised. How to get 2012 tax forms Determining Fair Market Value Determining the value of donated property would be a simple matter if you could rely only on fixed formulas, rules, or methods. How to get 2012 tax forms Usually it is not that simple. How to get 2012 tax forms Using such formulas, etc. How to get 2012 tax forms , seldom results in an acceptable determination of FMV. How to get 2012 tax forms There is no single formula that always applies when determining the value of property. How to get 2012 tax forms This is not to say that a valuation is only guesswork. How to get 2012 tax forms You must consider all the facts and circumstances connected with the property, such as its desirability, use, and scarcity. How to get 2012 tax forms For example, donated furniture should not be evaluated at some fixed rate such as 15% of the cost of new replacement furniture. How to get 2012 tax forms When the furniture is contributed, it may be out of style or in poor condition, therefore having little or no market value. How to get 2012 tax forms On the other hand, it may be an antique, the value of which could not be determined by using any formula. How to get 2012 tax forms Cost or Selling Price of the Donated Property The cost of the property to you or the actual selling price received by the qualified organization may be the best indication of its FMV. How to get 2012 tax forms However, because conditions in the market change, the cost or selling price of property may have less weight if the property was not bought or sold reasonably close to the date of contribution. How to get 2012 tax forms The cost or selling price is a good indication of the property's value if: The purchase or sale took place close to the valuation date in an open market, The purchase or sale was at “arm's-length,” The buyer and seller knew all relevant facts, The buyer and seller did not have to act, and The market did not change between the date of purchase or sale and the valuation date. How to get 2012 tax forms Example. How to get 2012 tax forms Tom Morgan, who is not a dealer in gems, bought an assortment of gems for $5,000 from a promoter. How to get 2012 tax forms The promoter claimed that the price was “wholesale” even though he and other dealers made similar sales at similar prices to other persons who were not dealers. How to get 2012 tax forms The promoter said that if Tom kept the gems for more than 1 year and then gave them to charity, Tom could claim a charitable deduction of $15,000, which, according to the promoter, would be the value of the gems at the time of contribution. How to get 2012 tax forms Tom gave the gems to a qualified charity 13 months after buying them. How to get 2012 tax forms The selling price for these gems had not changed from the date of purchase to the date he donated them to charity. How to get 2012 tax forms The best evidence of FMV depends on actual transactions and not on some artificial estimate. How to get 2012 tax forms The $5,000 charged Tom and others is, therefore, the best evidence of the maximum FMV of the gems. How to get 2012 tax forms Terms of the purchase or sale. How to get 2012 tax forms   The terms of the purchase or sale should be considered in determining FMV if they influenced the price. How to get 2012 tax forms These terms include any restrictions, understandings, or covenants limiting the use or disposition of the property. How to get 2012 tax forms Rate of increase or decrease in value. How to get 2012 tax forms   Unless you can show that there were unusual circumstances, it is assumed that the increase or decrease in the value of your donated property from your cost has been at a reasonable rate. How to get 2012 tax forms For time adjustments, an appraiser may consider published price indexes for information on general price trends, building costs, commodity costs, securities, and works of art sold at auction in arm's-length sales. How to get 2012 tax forms Example. How to get 2012 tax forms Bill Brown bought a painting for $10,000. How to get 2012 tax forms Thirteen months later he gave it to an art museum, claiming a charitable deduction of $15,000 on his tax return. How to get 2012 tax forms The appraisal of the painting should include information showing that there were unusual circumstances that justify a 50% increase in value for the 13 months Bill held the property. How to get 2012 tax forms Arm's-length offer. How to get 2012 tax forms   An arm's-length offer to buy the property close to the valuation date may help to prove its value if the person making the offer was willing and able to complete the transaction. How to get 2012 tax forms To rely on an offer, you should be able to show proof of the offer and the specific amount to be paid. How to get 2012 tax forms Offers to buy property other than the donated item will help to determine value if the other property is reasonably similar to the donated property. How to get 2012 tax forms Sales of Comparable Properties The sales prices of properties similar to the donated property are often important in determining the FMV. How to get 2012 tax forms The weight to be given to each sale depends on the following. How to get 2012 tax forms The degree of similarity between the property sold and the donated property. How to get 2012 tax forms The time of the sale—whether it was close to the valuation date. How to get 2012 tax forms The circumstances of the sale—whether it was at arm's-length with a knowledgeable buyer and seller, with neither having to act. How to get 2012 tax forms The conditions of the market in which the sale was made—whether unusually inflated or deflated. How to get 2012 tax forms The comparable sales method of valuing real estate is explained later under Valuation of Various Kinds of Property. How to get 2012 tax forms Example 1. How to get 2012 tax forms Mary Black, who is not a book dealer, paid a promoter $10,000 for 500 copies of a single edition of a modern translation of the Bible. How to get 2012 tax forms The promoter had claimed that the price was considerably less than the “retail” price, and gave her a statement that the books had a total retail value of $30,000. How to get 2012 tax forms The promoter advised her that if she kept the Bibles for more than 1 year and then gave them to a qualified organization, she could claim a charitable deduction for the “retail” price of $30,000. How to get 2012 tax forms Thirteen months later she gave all the Bibles to a church that she selected from a list provided by the promoter. How to get 2012 tax forms At the time of her donation, wholesale dealers were selling similar quantities of Bibles to the general public for $10,000. How to get 2012 tax forms The FMV of the Bibles is $10,000, the price at which similar quantities of Bibles were being sold to others at the time of the contribution. How to get 2012 tax forms Example 2. How to get 2012 tax forms The facts are the same as in Example 1, except that the promoter gave Mary Black a second option. How to get 2012 tax forms The promoter said that if Mary wanted a charitable deduction within 1 year of the purchase, she could buy the 500 Bibles at the “retail” price of $30,000, paying only $10,000 in cash and giving a promissory note for the remaining $20,000. How to get 2012 tax forms The principal and interest on the note would not be due for 12 years. How to get 2012 tax forms According to the promoter, Mary could then, within 1 year of the purchase, give the Bibles to a qualified organization and claim the full $30,000 retail price as a charitable contribution. How to get 2012 tax forms She purchased the Bibles under the second option and, 3 months later, gave them to a church, which will use the books for church purposes. How to get 2012 tax forms At the time of the gift, the promoter was selling similar lots of Bibles for either $10,000 or $30,000. How to get 2012 tax forms The difference between the two prices was solely at the discretion of the buyer. How to get 2012 tax forms The promoter was a willing seller for $10,000. How to get 2012 tax forms Therefore, the value of Mary's contribution of the Bibles is $10,000, the amount at which similar lots of Bibles could be purchased from the promoter by members of the general public. How to get 2012 tax forms Replacement Cost The cost of buying, building, or manufacturing property similar to the donated item should be considered in determining FMV. How to get 2012 tax forms However, there must be a reasonable relationship between the replacement cost and the FMV. How to get 2012 tax forms The replacement cost is the amount it would cost to replace the donated item on the valuation date. How to get 2012 tax forms Often there is no relationship between the replacement cost and the FMV. How to get 2012 tax forms If the supply of the donated property is more or less than the demand for it, the replacement cost becomes less important. How to get 2012 tax forms To determine the replacement cost of the donated property, find the “estimated replacement cost new. How to get 2012 tax forms ” Then subtract from this figure an amount for depreciation due to the physical condition and obsolescence of the donated property. How to get 2012 tax forms You should be able to show the relationship between the depreciated replacement cost and the FMV, as well as how you arrived at the “estimated replacement cost new. How to get 2012 tax forms ” Opinions of Experts Generally, the weight given to an expert's opinion on matters such as the authenticity of a coin or a work of art, or the most profitable and best use of a piece of real estate, depends on the knowledge and competence of the expert and the thoroughness with which the opinion is supported by experience and facts. How to get 2012 tax forms For an expert's opinion to deserve much weight, the facts must support the opinion. How to get 2012 tax forms For additional information, see Appraisals, later. How to get 2012 tax forms Table 1. How to get 2012 tax forms Factors That Affect FMV IF the factor you are considering is. How to get 2012 tax forms . How to get 2012 tax forms . How to get 2012 tax forms THEN you should ask these questions. How to get 2012 tax forms . How to get 2012 tax forms . How to get 2012 tax forms     cost or selling price Was the purchase or sale of the property reasonably close to the date of contribution? Was any increase or decrease in value, as compared to your cost, at a reasonable rate? Do the terms of purchase or sale limit what can be done with the property? Was there an arm's-length offer to buy the property close to the valuation date?     sales of comparable properties How similar is the property sold to the property donated? How close is the date of sale to the valuation date? Was the sale at arm's-length? What was the condition of the market at the time of sale?     replacement cost What would it cost to replace the donated property? Is there a reasonable relationship between replacement cost and FMV? Is the supply of the donated property more or less than the demand for it?     opinions of experts Is the expert knowledgeable and competent? Is the opinion thorough and supported by facts and experience? Problems in Determining Fair Market Value There are a number of problems in determining the FMV of donated property. How to get 2012 tax forms Unusual Market Conditions The sale price of the property itself in an arm's-length transaction in an open market is often the best evidence of its value. How to get 2012 tax forms When you rely on sales of comparable property, the sales must have been made in an open market. How to get 2012 tax forms If those sales were made in a market that was artificially supported or stimulated so as not to be truly representative, the prices at which the sales were made will not indicate the FMV. How to get 2012 tax forms For example, liquidation sale prices usually do not indicate the FMV. How to get 2012 tax forms Also, sales of stock under unusual circumstances, such as sales of small lots, forced sales, and sales in a restricted market, may not represent the FMV. How to get 2012 tax forms Selection of Comparable Sales Using sales of comparable property is an important method for determining the FMV of donated property. How to get 2012 tax forms However, the amount of weight given to a sale depends on the degree of similarity between the comparable and the donated properties. How to get 2012 tax forms The degree of similarity must be close enough so that this selling price would have been given consideration by reasonably well-informed buyers or sellers of the property. How to get 2012 tax forms Example. How to get 2012 tax forms You give a rare, old book to your former college. How to get 2012 tax forms The book is a third edition and is in poor condition because of a missing back cover. How to get 2012 tax forms You discover that there was a sale for $300, near the valuation date, of a first edition of the book that was in good condition. How to get 2012 tax forms Although the contents are the same, the books are not at all similar because of the different editions and their physical condition. How to get 2012 tax forms Little consideration would be given to the selling price of the $300 property by knowledgeable buyers or sellers. How to get 2012 tax forms Future Events You may not consider unexpected events happening after your donation of property in making the valuation. How to get 2012 tax forms You may consider only the facts known at the time of the gift, and those that could be reasonably expected at the time of the gift. How to get 2012 tax forms Example. How to get 2012 tax forms You give farmland to a qualified charity. How to get 2012 tax forms The transfer provides that your mother will have the right to all income and full use of the property for her life. How to get 2012 tax forms Even though your mother dies 1 week after the transfer, the value of the property on the date it is given is its present value, subject to the life interest as estimated from actuarial tables. How to get 2012 tax forms You may not take a higher deduction because the charity received full use and possession of the land only 1 week after the transfer. How to get 2012 tax forms Using Past Events to Predict the Future A common error is to rely too much on past events that do not fairly reflect the probable future earnings and FMV. How to get 2012 tax forms Example. How to get 2012 tax forms You give all your rights in a successful patent to your favorite charity. How to get 2012 tax forms Your records show that before the valuation date there were three stages in the patent's history of earnings. How to get 2012 tax forms First, there was rapid growth in earnings when the invention was introduced. How to get 2012 tax forms Then, there was a period of high earnings when the invention was being exploited. How to get 2012 tax forms Finally, there was a decline in earnings when competing inventions were introduced. How to get 2012 tax forms The entire history of earnings may be relevant in estimating the future earnings. How to get 2012 tax forms However, the appraiser must not rely too much on the stage of rapid growth in earnings, or of high earnings. How to get 2012 tax forms The market conditions at those times do not represent the condition of the market at the valuation date. How to get 2012 tax forms What is most significant is the trend of decline in earnings up to the valuation date. How to get 2012 tax forms For more information about donations of patents, see Patents, later. How to get 2012 tax forms Valuation of Various Kinds of Property This section contains information on determining the FMV of ordinary kinds of donated property. How to get 2012 tax forms For information on appraisals, see Appraisals, later. How to get 2012 tax forms Household Goods The FMV of used household goods, such as furniture, appliances, and linens, is usually much lower than the price paid when new. How to get 2012 tax forms Such used property may have little or no market value because of its worn condition. How to get 2012 tax forms It may be out of style or no longer useful. How to get 2012 tax forms You cannot take a deduction for household goods donated after August 17, 2006, unless they are in good used condition or better. How to get 2012 tax forms A household good that is not in good used condition or better for which you take a deduction of more than $500 requires a qualified appraisal. How to get 2012 tax forms See Deduction over $500 for certain clothing or household items, later. How to get 2012 tax forms If the property is valuable because it is old or unique, see the discussion under Paintings, Antiques, and Other Objects of Art. How to get 2012 tax forms Used Clothing Used clothing and other personal items are usually worth far less than the price you paid for them. How to get 2012 tax forms Valuation of items of clothing does not lend itself to fixed formulas or methods. How to get 2012 tax forms The price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops, is an indication of the value. How to get 2012 tax forms You cannot take a deduction for clothing donated after August 17, 2006, unless it is in good used condition or better. How to get 2012 tax forms An item of clothing that is not in good used condition or better for which you take a deduction of more than $500 requires a qualified appraisal. How to get 2012 tax forms See Deduction over $500 for certain clothing or household items, later. How to get 2012 tax forms For valuable furs or very expensive gowns, a Form 8283 may have to be sent with your tax return. How to get 2012 tax forms Jewelry and Gems Jewelry and gems are of such a specialized nature that it is almost always necessary to get an appraisal by a specialized jewelry appraiser. How to get 2012 tax forms The appraisal should describe, among other things, the style of the jewelry, the cut and setting of the gem, and whether it is now in fashion. How to get 2012 tax forms If not in fashion, the possibility of having the property redesigned, recut, or reset should be reported in the appraisal. How to get 2012 tax forms The stone's coloring, weight, cut, brilliance, and flaws should be reported and analyzed. How to get 2012 tax forms Sentimental personal value has no effect on FMV. How to get 2012 tax forms But if the jewelry was owned by a famous person, its value might increase. How to get 2012 tax forms Paintings, Antiques, and Other Objects of Art Your deduction for contributions of paintings, antiques, and other objects of art, should be supported by a written appraisal from a qualified and reputable source, unless the deduction is $5,000 or less. How to get 2012 tax forms Examples of information that should be included in appraisals of art objects—paintings in particular—are found later under Qualified Appraisal. How to get 2012 tax forms Art valued at $20,000 or more. How to get 2012 tax forms   If you claim a deduction of $20,000 or more for donations of art, you must attach a complete copy of the signed appraisal to your return. How to get 2012 tax forms For individual objects valued at $20,000 or more, a photograph of a size and quality fully showing the object, preferably an 8 x 10 inch color photograph or a color transparency no smaller than 4 x 5 inches, must be provided upon request. How to get 2012 tax forms Art valued at $50,000 or more. How to get 2012 tax forms   If you donate an item of art that has been appraised at $50,000 or more, you can request a Statement of Value for that item from the IRS. How to get 2012 tax forms You must request the statement before filing the tax return that reports the donation. How to get 2012 tax forms Your request must include the following. How to get 2012 tax forms A copy of a qualified appraisal of the item. How to get 2012 tax forms See Qualified Appraisal, later. How to get 2012 tax forms A $2,500 check or money order payable to the Internal Revenue Service for the user fee that applies to your request regarding one, two, or three items of art. How to get 2012 tax forms Add $250 for each item in excess of three. How to get 2012 tax forms A completed Form 8283, Section B. How to get 2012 tax forms The location of the IRS territory that has examination responsibility for your return. How to get 2012 tax forms If your request lacks essential information, you will be notified and given 30 days to provide the missing information. How to get 2012 tax forms   Send your request to: Internal Revenue Service Attention: Art Appraisal (C:AP:ART) P. How to get 2012 tax forms O. How to get 2012 tax forms Box 27720 McPherson Station Washington, DC 20038 Refunds. How to get 2012 tax forms   You can withdraw your request for a Statement of Value at any time before it is issued. How to get 2012 tax forms However, the IRS will not refund the user fee if you do. How to get 2012 tax forms   If the IRS declines to issue a Statement of Value in the interest of efficient tax administration, the IRS will refund the user fee. How to get 2012 tax forms Authenticity. How to get 2012 tax forms   The authenticity of the donated art must be determined by the appraiser. How to get 2012 tax forms Physical condition. How to get 2012 tax forms   Important items in the valuation of antiques and art are physical condition and extent of restoration. How to get 2012 tax forms These have a significant effect on the value and must be fully reported in an appraisal. How to get 2012 tax forms An antique in damaged condition, or lacking the “original brasses,” may be worth much less than a similar piece in excellent condition. How to get 2012 tax forms Art appraisers. How to get 2012 tax forms   More weight will usually be given to an appraisal prepared by an individual specializing in the kind and price range of the art being appraised. How to get 2012 tax forms Certain art dealers or appraisers specialize, for example, in old masters, modern art, bronze sculpture, etc. How to get 2012 tax forms Their opinions on the authenticity and desirability of such art would usually be given more weight than the opinions of more generalized art dealers or appraisers. How to get 2012 tax forms They can report more recent comparable sales to support their opinion. How to get 2012 tax forms   To identify and locate experts on unique, specialized items or collections, you may wish to use the current Official Museum Directory of the American Association of Museums. How to get 2012 tax forms It lists museums both by state and by category. How to get 2012 tax forms   To help you locate a qualified appraiser for your donation, you may wish to ask an art historian at a nearby college or the director or curator of a local museum. How to get 2012 tax forms The Yellow Pages often list specialized art and antique dealers, auctioneers, and art appraisers. How to get 2012 tax forms You may be able to find a qualified appraiser on the Internet. How to get 2012 tax forms You may also contact associations of dealers for guidance. How to get 2012 tax forms Collections Since many kinds of hobby collections may be the subject of a charitable donation, it is not possible to discuss all of the possible collectibles in this publication. How to get 2012 tax forms Most common are rare books, autographs, sports memorabilia, dolls, manuscripts, stamps, coins, guns, phonograph records, and natural history items. How to get 2012 tax forms Many of the elements of valuation that apply to paintings and other objects of art, discussed earlier, also apply to miscellaneous collections. How to get 2012 tax forms Reference material. How to get 2012 tax forms   Publications available to help you determine the value of many kinds of collections include catalogs, dealers' price lists, and specialized hobby periodicals. How to get 2012 tax forms When using one of these price guides, you must use the current edition at the date of contribution. How to get 2012 tax forms However, these sources are not always reliable indicators of FMV and should be supported by other evidence. How to get 2012 tax forms   For example, a dealer may sell an item for much less than is shown on a price list, particularly after the item has remained unsold for a long time. How to get 2012 tax forms The price an item sold for in an auction may have been the result of a rigged sale or a mere bidding duel. How to get 2012 tax forms The appraiser must analyze the reference material, and recognize and make adjustments for misleading entries. How to get 2012 tax forms If you are donating a valuable collection, you should get an appraisal. How to get 2012 tax forms If your donation appears to be of little value, you may be able to make a satisfactory valuation using reference materials available at a state, city, college, or museum library. How to get 2012 tax forms Stamp collections. How to get 2012 tax forms   Most libraries have catalogs or other books that report the publisher's estimate of values. How to get 2012 tax forms Generally, two price levels are shown for each stamp: the price postmarked and the price not postmarked. How to get 2012 tax forms Stamp dealers generally know the value of their merchandise and are able to prepare satisfactory appraisals of valuable collections. How to get 2012 tax forms Coin collections. How to get 2012 tax forms   Many catalogs and other reference materials show the writer's or publisher's opinion of the value of coins on or near the date of the publication. How to get 2012 tax forms Like many other collectors' items, the value of a coin depends on the demand for it, its age, and its rarity. How to get 2012 tax forms Another important factor is the coin's condition. How to get 2012 tax forms For example, there is a great difference in the value of a coin that is in mint condition and a similar coin that is only in good condition. How to get 2012 tax forms   Catalogs usually establish a category for coins, based on their physical condition—mint or uncirculated, extremely fine, very fine, fine, very good, good, fair, or poor—with a different valuation for each category. How to get 2012 tax forms Books. How to get 2012 tax forms   The value of books is usually determined by selecting comparable sales and adjusting the prices according to the differences between the comparable sales and the item being evaluated. How to get 2012 tax forms This is difficult to do and, except for a collection of little value, should be done by a specialized appraiser. How to get 2012 tax forms Within the general category of literary property, there are dealers who specialize in certain areas, such as Americana, foreign imports, Bibles, and scientific books. How to get 2012 tax forms Modest value of collection. How to get 2012 tax forms   If the collection you are donating is of modest value, not requiring a written appraisal, the following information may help you in determining the FMV. How to get 2012 tax forms   A book that is very old, or very rare, is not necessarily valuable. How to get 2012 tax forms There are many books that are very old or rare, but that have little or no market value. How to get 2012 tax forms Condition of book. How to get 2012 tax forms   The condition of a book may have a great influence on its value. How to get 2012 tax forms Collectors are interested in items that are in fine, or at least good, condition. How to get 2012 tax forms When a book has a missing page, a loose binding, tears, stains, or is otherwise in poor condition, its value is greatly lowered. How to get 2012 tax forms Other factors. How to get 2012 tax forms   Some other factors in the valuation of a book are the kind of binding (leather, cloth, paper), page edges, and illustrations (drawings and photographs). How to get 2012 tax forms Collectors usually want first editions of books. How to get 2012 tax forms However, because of changes or additions, other editions are sometimes worth as much as, or more than, the first edition. How to get 2012 tax forms Manuscripts, autographs, diaries, and similar items. How to get 2012 tax forms   When these items are handwritten, or at least signed by famous people, they are often in demand and are valuable. How to get 2012 tax forms The writings of unknowns also may be of value if they are of unusual historical or literary importance. How to get 2012 tax forms Determining the value of such material is difficult. How to get 2012 tax forms For example, there may be a great difference in value between two diaries that were kept by a famous person—one kept during childhood and the other during a later period in his or her life. How to get 2012 tax forms The appraiser determines a value in these cases by applying knowledge and judgment to such factors as comparable sales and conditions. How to get 2012 tax forms Signatures. How to get 2012 tax forms   Signatures, or sets of signatures, that were cut from letters or other papers usually have little or no value. How to get 2012 tax forms But complete sets of the signatures of U. How to get 2012 tax forms S. How to get 2012 tax forms presidents are in demand. How to get 2012 tax forms Cars, Boats, and Aircraft If you donate a car, a boat, or an aircraft to a charitable organization, its FMV must be determined. How to get 2012 tax forms Certain commercial firms and trade organizations publish monthly or seasonal guides for different regions of the country, containing complete dealer sale prices or dealer average prices for recent model years. How to get 2012 tax forms Prices are reported for each make, model, and year. How to get 2012 tax forms These guides also provide estimates for adjusting for unusual equipment, unusual mileage, and physical condition. How to get 2012 tax forms The prices are not “official,” and these publications are not considered an appraisal of any specific donated property. How to get 2012 tax forms But they do provide clues for making an appraisal and suggest relative prices for comparison with current sales and offerings in your area. How to get 2012 tax forms These publications are sometimes available from public libraries or at a bank, credit union, or finance company. How to get 2012 tax forms You can also find pricing information about used cars on the Internet. How to get 2012 tax forms An acceptable measure of the FMV of a donated car, boat, or airplane is an amount not in excess of the price listed in a used vehicle pricing guide for a private party sale, not the dealer retail value, of a similar vehicle. How to get 2012 tax forms However, the FMV may be less than that amount if the vehicle has engine trouble, body damage, high mileage, or any type of excessive wear. How to get 2012 tax forms The FMV of a donated vehicle is the same as the price listed in a used vehicle pricing guide for a private party sale only if the guide lists a sales price for a vehicle that is the same make, model, and year, sold in the same area, in the same condition, with the same or similar options or accessories, and with the same or similar warranties as the donated vehicle. How to get 2012 tax forms Example. How to get 2012 tax forms You donate a used car in poor condition to a local high school for use by students studying car repair. How to get 2012 tax forms A used car guide shows the dealer retail value for this type of car in poor condition is $1,600. How to get 2012 tax forms However, the guide shows the price for a private party sale of the car is only $750. How to get 2012 tax forms The FMV of the car is considered to be no more than $750. How to get 2012 tax forms Boats. How to get 2012 tax forms   Except for inexpensive small boats, the valuation of boats should be based on an appraisal by a marine surveyor because the physical condition is so critical to the value. How to get 2012 tax forms More information. How to get 2012 tax forms   Your deduction for a donated car, boat, or airplane generally is limited to the gross proceeds from its sale by the qualified organization. How to get 2012 tax forms This rule applies if the claimed value of the donated vehicle is more than $500. How to get 2012 tax forms In certain cases, you can deduct the vehicle's FMV. How to get 2012 tax forms For details, see Publication 526. How to get 2012 tax forms Inventory If you donate any inventory item to a charitable organization, the amount of your deductible contribution generally is the FMV of the item, minus any gain you would have realized if you had sold the item at its FMV on the date of the gift. How to get 2012 tax forms For more information, see Publication 526. How to get 2012 tax forms Patents To determine the FMV of a patent, you must take into account, among other factors: Whether the patented technology has been made obsolete by other technology; Any restrictions on the donee's use of, or ability to transfer, the patented technology; and The length of time remaining before the patent expires. How to get 2012 tax forms However, your deduction for a donation of a patent or other intellectual property is its FMV, minus any gain you would have realized if you had sold the property at its FMV on the date of the gift. How to get 2012 tax forms Generally, this means your deduction is the lesser of the property's FMV or its basis. How to get 2012 tax forms For details, see Publication 526. How to get 2012 tax forms Stocks and Bonds The value of stocks and bonds is the FMV of a share or bond on the valuation date. How to get 2012 tax forms See Date of contribution, earlier, under What Is Fair Market Value (FMV). How to get 2012 tax forms Selling prices on valuation date. How to get 2012 tax forms   If there is an active market for the contributed stocks or bonds on a stock exchange, in an over-the-counter market, or elsewhere, the FMV of each share or bond is the average price between the highest and lowest quoted selling prices on the valuation date. How to get 2012 tax forms For example, if the highest selling price for a share was $11, and the lowest $9, the average price is $10. How to get 2012 tax forms You get the average price by adding $11 and $9 and dividing the sum by 2. How to get 2012 tax forms No sales on valuation date. How to get 2012 tax forms   If there were no sales on the valuation date, but there were sales within a reasonable period before and after the valuation date, you determine FMV by taking the average price between the highest and lowest sales prices on the nearest date before and on the nearest date after the valuation date. How to get 2012 tax forms Then you weight these averages in inverse order by the respective number of trading days between the selling dates and the valuation date. How to get 2012 tax forms Example. How to get 2012 tax forms   On the day you gave stock to a qualified organization, there were no sales of the stock. How to get 2012 tax forms Sales of the stock nearest the valuation date took place two trading days before the valuation date at an average selling price of $10 and three trading days after the valuation date at an average selling price of $15. How to get 2012 tax forms The FMV on the valuation date was $12, figured as follows: [(3 x $10) + (2 x $15)] ÷ 5 = $12 Listings on more than one stock exchange. How to get 2012 tax forms   Stocks or bonds listed on more than one stock exchange are valued based on the prices of the exchange on which they are principally dealt. How to get 2012 tax forms This applies if these prices are published in a generally available listing or publication of general circulation. How to get 2012 tax forms If this is not applicable, and the stocks or bonds are reported on a composite listing of combined exchanges in a publication of general circulation, use the composite list. How to get 2012 tax forms See also Unavailable prices or closely held corporation, later. How to get 2012 tax forms Bid and asked prices on valuation date. How to get 2012 tax forms   If there were no sales within a reasonable period before and after the valuation date, the FMV is the average price between the bona fide bid and asked prices on the valuation date. How to get 2012 tax forms Example. How to get 2012 tax forms Although there were no sales of Blue Corporation stock on the valuation date, bona fide bid and asked prices were available on that date of $14 and $16, respectively. How to get 2012 tax forms The FMV is $15, the average price between the bid and asked prices. How to get 2012 tax forms No prices on valuation date. How to get 2012 tax forms   If there were no prices available on the valuation date, you determine FMV by taking the average prices between the bona fide bid and asked prices on the closest trading date before and after the valuation date. How to get 2012 tax forms Both dates must be within a reasonable period. How to get 2012 tax forms Then you weight these averages in inverse order by the respective number of trading days between the bid and asked dates and the valuation date. How to get 2012 tax forms Example. How to get 2012 tax forms On the day you gave stock to a qualified organization, no prices were available. How to get 2012 tax forms Bona fide bid and asked prices 3 days before the valuation date were $10 and 2 days after the valuation date were $15. How to get 2012 tax forms The FMV on the valuation date is $13, figured as follows: [(2 x $10) + (3 x $15)] ÷ 5 = $13 Prices only before or after valuation date, but not both. How to get 2012 tax forms   If no selling prices or bona fide bid and asked prices are available on a date within a reasonable period before the valuation date, but are available on a date within a reasonable period after the valuation date, or vice versa, then the average price between the highest and lowest of such available prices may be treated as the value. How to get 2012 tax forms Large blocks of stock. How to get 2012 tax forms   When a large block of stock is put on the market, it may lower the selling price of the stock if the supply is greater than the demand. How to get 2012 tax forms On the other hand, market forces may exist that will afford higher prices for large blocks of stock. How to get 2012 tax forms Because of the many factors to be considered, determining the value of large blocks of stock usually requires the help of experts specializing in underwriting large quantities of securities, or in trading in the securities of the industry of which the particular company is a part. How to get 2012 tax forms Unavailable prices or closely held corporation. How to get 2012 tax forms   If selling prices or bid and asked prices are not available, or if securities of a closely held corporation are involved, determine the FMV by considering the following factors. How to get 2012 tax forms For bonds, the soundness of the security, the interest yield, the date of maturity, and other relevant factors. How to get 2012 tax forms For shares of stock, the company's net worth, prospective earning power and dividend-paying capacity, and other relevant factors. How to get 2012 tax forms Other factors. How to get 2012 tax forms   Other relevant factors include: The nature and history of the business, especially its recent history, The goodwill of the business, The economic outlook in the particular industry, The company's position in the industry, its competitors, and its management, and The value of securities of corporations engaged in the same or similar business. How to get 2012 tax forms For preferred stock, the most important factors are its yield, dividend coverage, and protection of its liquidation preference. How to get 2012 tax forms   You should keep complete financial and other information on which the valuation is based. How to get 2012 tax forms This includes copies of reports of examinations of the company made by accountants, engineers, or any technical experts on or close to the valuation date. How to get 2012 tax forms Restricted securities. How to get 2012 tax forms   Some classes of stock cannot be traded publicly because of restrictions imposed by the Securities and Exchange Commission, or by the corporate charter or a trust agreement. How to get 2012 tax forms These restricted securities usually trade at a discount in relation to freely traded securities. How to get 2012 tax forms   To arrive at the FMV of restricted securities, factors that you must consider include the resale provisions found in the restriction agreements, the relative negotiating strengths of the buyer and seller, and the market experience of freely traded securities of the same class as the restricted securities. How to get 2012 tax forms Real Estate Because each piece of real estate is unique and its valuation is complicated, a detailed appraisal by a professional appraiser is necessary. How to get 2012 tax forms The appraiser must be thoroughly trained in the application of appraisal principles and theory. How to get 2012 tax forms In some instances the opinions of equally qualified appraisers may carry unequal weight, such as when one appraiser has a better knowledge of local conditions. How to get 2012 tax forms The appraisal report must contain a complete description of the property, such as street address, legal description, and lot and block number, as well as physical features, condition, and dimensions. How to get 2012 tax forms The use to which the property is put, zoning and permitted uses, and its potential use for other higher and better uses are also relevant. How to get 2012 tax forms In general, there are three main approaches to the valuation of real estate. How to get 2012 tax forms An appraisal may require the combined use of two or three methods rather than one method only. How to get 2012 tax forms 1. How to get 2012 tax forms Comparable Sales The comparable sales method compares the donated property with several similar properties that have been sold. How to get 2012 tax forms The selling prices, after adjustments for differences in date of sale, size, condition, and location, would then indicate the estimated FMV of the donated property. How to get 2012 tax forms If the comparable sales method is used to determine the value of unimproved real property (land without significant buildings, structures, or any other improvements that add to its value), the appraiser should consider the following factors when comparing the potential comparable property and the donated property: Location, size, and zoning or use restrictions, Accessibility and road frontage, and available utilities and water rights, Riparian rights (right of access to and use of the water by owners of land on the bank of a river) and existing easements, rights-of-way, leases, etc. How to get 2012 tax forms , Soil characteristics, vegetative cover, and status of mineral rights, and Other factors affecting value. How to get 2012 tax forms For each comparable sale, the appraisal must include the names of the buyer and seller, the deed book and page number, the date of sale and selling price, a property description, the amount and terms of mortgages, property surveys, the assessed value, the tax rate, and the assessor's appraised FMV. How to get 2012 tax forms The comparable selling prices must be adjusted to account for differences between the sale property and the donated property. How to get 2012 tax forms Because differences of opinion may arise between appraisers as to the degree of comparability and the amount of the adjustment considered necessary for comparison purposes, an appraiser should document each item of adjustment. How to get 2012 tax forms Only comparable sales having the least adjustments in terms of items and/or total dollar adjustments should be considered as comparable to the donated property. How to get 2012 tax forms 2. How to get 2012 tax forms Capitalization of Income This method capitalizes the net income from the property at a rate that represents a fair return on the particular investment at the particular time, considering the risks involved. How to get 2012 tax forms The key elements are the determination of the income to be capitalized and the rate of capitalization. How to get 2012 tax forms 3. How to get 2012 tax forms Replacement Cost New or Reproduction Cost Minus Observed Depreciation This method, used alone, usually does not result in a determination of FMV. How to get 2012 tax forms Instead, it generally tends to set the upper limit of value, particularly in periods of rising costs, because it is reasonable to assume that an informed buyer will not pay more for the real estate than it would cost to reproduce a similar property. How to get 2012 tax forms Of course, this reasoning does not apply if a similar property cannot be created because of location, unusual construction, or some other reason. How to get 2012 tax forms Generally, this method serves to support the value determined from other methods. How to get 2012 tax forms When the replacement cost method is applied to improved realty, the land and improvements are valued separately. How to get 2012 tax forms The replacement cost of a building is figured by considering the materials, the quality of workmanship, and the number of square feet or cubic feet in the building. How to get 2012 tax forms This cost represents the total cost of labor and material, overhead, and profit. How to get 2012 tax forms After the replacement cost has been figured, consideration must be given to the following factors: Physical deterioration—the wear and tear on the building itself, Functional obsolescence—usually in older buildings with, for example, inadequate lighting, plumbing, or heating, small rooms, or a poor floor plan, and Economic obsolescence—outside forces causing the whole area to become less desirable. How to get 2012 tax forms Interest in a Business The FMV of any interest in a business, whether a sole proprietorship or a partnership, is the amount that a willing buyer would pay for the interest to a willing seller after consideration of all relevant factors. How to get 2012 tax forms The relevant factors to be considered in valuing the business are: The FMV of the assets of the business, The demonstrated earnings capacity of the business, based on a review of past and current earnings, and The other factors used in evaluating corporate stock, if they apply. How to get 2012 tax forms The value of the goodwill of the business should also be taken into consideration. How to get 2012 tax forms You should keep complete financial and other information on which you base the valuation. How to get 2012 tax forms This includes copies of reports of examinations of the business made by accountants, engineers, or any technical experts on or close to the valuation date. How to get 2012 tax forms Annuities, Interests for Life or Terms of Years, Remainders, and Reversions The value of these kinds of property is their present value, except in the case of annuities under contracts issued by companies regularly engaged in their sale. How to get 2012 tax forms The valuation of these commercial annuity contracts and of insurance policies is discussed later under Certain Life Insurance and Annuity Contracts. How to get 2012 tax forms To determine present value, you must know the applicable interest rate and use actuarial tables. How to get 2012 tax forms Interest rate. How to get 2012 tax forms   The applicable interest rate varies. How to get 2012 tax forms It is announced monthly in a news release and published in the Internal Revenue Bulletin as a Revenue Ruling. How to get 2012 tax forms The interest rate to use is under the heading “Rate Under Section 7520” for a given month and year. How to get 2012 tax forms You can call the IRS office at 1-800-829-1040 to obtain this rate. How to get 2012 tax forms Actuarial tables. How to get 2012 tax forms   You need to refer to actuarial tables to determine a qualified interest in the form of an annuity, any interest for life or a term of years, or any remainder interest to a charitable organization. How to get 2012 tax forms   Use the valuation tables set forth in IRS Publications 1457, Actuarial Values (Book Aleph), and 1458, Actuarial Values (Book Beth). How to get 2012 tax forms Both of these publications provide tables containing actuarial factors to be used in determining the present value of an annuity, an interest for life or for a term of years, or a remainder or reversionary interest. How to get 2012 tax forms For qualified charitable transfers, you can use the factor for the month in which you made the contribution or for either of the 2 months preceding that month. How to get 2012 tax forms   Publication 1457 also contains actuarial factors for computing the value of a remainder interest in a charitable remainder annuity trust and a pooled income fund. How to get 2012 tax forms Publication 1458 contains the factors for valuing the remainder interest in a charitable remainder unitrust. How to get 2012 tax forms You can download Publications 1457 and 1458 from www. How to get 2012 tax forms irs. How to get 2012 tax forms gov. How to get 2012 tax forms In addition, they are available for purchase via the website of the U. How to get 2012 tax forms S. How to get 2012 tax forms Government Printing Office, by phone at (202) 512-1800, or by mail from the: Superintendent of Documents P. How to get 2012 tax forms O. How to get 2012 tax forms Box 371954 Pittsburgh, PA 15250-7954 Tables containing actuarial factors for transfers to pooled income funds may also be found in Income Tax Regulation 1. How to get 2012 tax forms 642(c)-6(e)(6), transfers to charitable remainder unitrusts in Regulation 1. How to get 2012 tax forms 664-4(e), and other transfers in Regulation 20. How to get 2012 tax forms 2031-7(d)(6). How to get 2012 tax forms Special factors. How to get 2012 tax forms   If you need a special factor for an actual transaction, you can request a letter ruling. How to get 2012 tax forms Be sure to include the date of birth of each person the duration of whose life may affect the value of the interest. How to get 2012 tax forms Also include copies of the relevant instruments. How to get 2012 tax forms IRS charges a user fee for providing special factors. How to get 2012 tax forms   For more information about requesting a ruling, see Revenue Procedure 2006-1 (or annual update), 2006-1 I. How to get 2012 tax forms R. How to get 2012 tax forms B. How to get 2012 tax forms 1. How to get 2012 tax forms Revenue Procedure 2006-1 is available at www. How to get 2012 tax forms irs. How to get 2012 tax forms gov/irb/2006-01_IRB/ar06. How to get 2012 tax forms html. How to get 2012 tax forms   For information on the circumstances under which a charitable deduction may be allowed for the donation of a partial interest in property not in trust, see Partial Interest in Property Not in Trust, later. How to get 2012 tax forms Certain Life Insurance and Annuity Contracts The value of an annuity contract or a life insurance policy issued by a company regularly engaged in the sale of such contracts or policies is the amount that company would charge for a comparable contract. How to get 2012 tax forms But if the donee of a life insurance policy may reasonably be expected to cash the policy rather than hold it as an investment, then the FMV is the cash surrender value rather than the replacement cost. How to get 2012 tax forms If an annuity is payable under a combination annuity contract and life insurance policy (for example, a retirement income policy with a death benefit) and there was no insurance element when it was transferred to the charity, the policy is treated as an annuity contract. How to get 2012 tax forms Partial Interest in Property Not in Trust Generally, no deduction is allowed for a charitable contribution, not made in trust, of less than your entire interest in property. How to get 2012 tax forms However, this does not apply to a transfer of less than your entire interest if it is a transfer of: A remainder interest in your personal residence or farm, An undivided part of your entire interest in property, or A qualified conservation contribution. How to get 2012 tax forms Remainder Interest in Real Property The amount of the deduction for a donation of a remainder interest in real property is the FMV of the remainder interest at the time of the contribution. How to get 2012 tax forms To determine this value, you must know the FMV of the property on the date of the contribution. How to get 2012 tax forms Multiply this value by the appropriate factor. How to get 2012 tax forms Publications 1457 and 1458 contain these factors. How to get 2012 tax forms You must make an adjustment for depreciation or depletion using the factors shown in Publication 1459, Actuarial Values (Book Gimel). How to get 2012 tax forms You can use the factors for the month in which you made the contribution or for either of the two months preceding that month. How to get 2012 tax forms See the earlier discussion on Annuities, Interests for Life or Terms of Years, Remainders, and Reversions. How to get 2012 tax forms You can download Publication 1459 from www. How to get 2012 tax forms irs. How to get 2012 tax forms gov. How to get 2012 tax forms For this purpose, the term “depreciable property” means any property subject to wear and tear or obsolescence, even if not used in a trade or business or for the production of income. How to get 2012 tax forms If the remainder interest includes both depreciable and nondepreciable property, for example a house and land, the FMV must be allocated between each kind of property at the time of the contribution. How to get 2012 tax forms This rule also applies to a gift of a remainder interest that includes property that is part depletable and part not depletable. How to get 2012 tax forms Take into account depreciation or depletion only for the property that is subject to depreciation or depletion. How to get 2012 tax forms For more information, see section 1. How to get 2012 tax forms 170A-12 of the Income Tax Regulations. How to get 2012 tax forms Undivided Part of Your Entire Interest A contribution of an undivided part of your entire interest in property must consist of a part of each and every substantial interest or right you own in the property. How to get 2012 tax forms It must extend over the entire term of your interest in the property. How to get 2012 tax forms For example, you are entitled to the income from certain property for your life (life estate) and you contribute 20% of that life estate to a qualified organization. How to get 2012 tax forms You can claim a deduction for the contribution if you do not have any other interest in the property. How to get 2012 tax forms To figure the value of a contribution involving a partial interest, see Publication 1457. How to get 2012 tax forms If the only interest you own in real property is a remainder interest and you transfer part of that interest to a qualified organization, see the previous discussion on valuation of a remainder interest in real property. How to get 2012 tax forms Qualified Conservation Contribution A qualified conservation contribution is a contribution of a qualified real property interest to a qualified organization to be used only for conservation purposes. How to get 2012 tax forms Qualified organization. How to get 2012 tax forms   For purposes of a qualified conservation contribution, a qualified organization is: A governmental unit, A publicly supported charitable, religious, scientific, literary, educational, etc. How to get 2012 tax forms , organization, or An organization that is controlled by, and operated for the exclusive benefit of, a governmental unit or a publicly supported charity. How to get 2012 tax forms The organization also must have a commitment to protect the conservation purposes of the donation and must have the resources to enforce the restrictions. How to get 2012 tax forms Conservation purposes. How to get 2012 tax forms   Your contribution must be made only for one of the following conservation purposes. How to get 2012 tax forms Preserving land areas for outdoor recreation by, or for the education of, the general public. How to get 2012 tax forms Protecting a relatively natural habitat of fish, wildlife, or plants, or a similar ecosystem. How to get 2012 tax forms Preserving open space, including farmland and forest land, if it yields a significant public benefit. How to get 2012 tax forms It must be either for the scenic enjoyment of the general public or under a clearly defined federal, state, or local governmental conservation policy. How to get 2012 tax forms Preserving a historically important land area or a certified historic structure. How to get 2012 tax forms There must be some visual public access to the property. How to get 2012 tax forms Factors used in determining the type and amount of public access required include the historical significance of the property, the remoteness or accessibility of the site, and the extent to which intrusions on the privacy of individuals living on the property would be unreasonable. How to get 2012 tax forms Building in registered historic district. How to get 2012 tax forms   A contribution after July 25, 2006, of a qualified real property interest that is an easement or other restriction on the exterior of a building in a registered historic district is deductible only if it meets all of the following three conditions. How to get 2012 tax forms The restriction must preserve the entire exterior of the building and must prohibit any change to the exterior of the building that is inconsistent with its historical character. How to get 2012 tax forms You and the organization receiving the contribution must enter into a written agreement certifying, that the organization is a qualified organization and that it has the resources and commitment to maintain the property as donated. How to get 2012 tax forms If you make the contribution in a tax year beginning after August 17, 2006, you must include with your return: A qualified appraisal, Photographs of the building's entire exterior, and A description of all restrictions on development of the building, such as zoning laws and restrictive covenants. How to get 2012 tax forms   If you make this type of contribution after February 12, 2007, and claim a deduction of more than $10,000, your deduction will not be allowed unless you pay a $500 filing fee. How to get 2012 tax forms See Form 8283-V, Payment Voucher for Filing Fee Under Section 170(f)(13), and its instructions. How to get 2012 tax forms Qualified real property interest. How to get 2012 tax forms   This is any of the following interests in real property. How to get 2012 tax forms Your entire interest in real estate other than a mineral interest (subsurface oil, gas, or other minerals, and the right of access to these minerals). How to get 2012 tax forms A remainder interest. How to get 2012 tax forms A restriction (granted in perpetuity) on the use that may be made of the real property. How to get 2012 tax forms Valuation. How to get 2012 tax forms   A qualified real property interest described in (1) should be valued in a manner that is consistent with the type of interest transferred. How to get 2012 tax forms If you transferred all the interest in the property, the FMV of the property is the amount of the contribution. How to get 2012 tax forms If you do not transfer the mineral interest, the FMV of the surface rights in the property is the amount of the contribution. How to get 2012 tax forms   If you owned only a remainder interest or an income interest (life estate), see Undivided Part of Your Entire Interest, earlier. How to get 2012 tax forms If you owned the entire property but transferred only a remainder interest (item (2)), see Remainder Interest in Real Property, earlier. How to get 2012 tax forms   In determining the value of restrictions, you should take into account the selling price in arm's-length transactions of other properties that have comparable restrictions. How to get 2012 tax forms If there are no comparable sales, the restrictions are valued indirectly as the difference between the FMVs of the property involved before and after the grant of the restriction. How to get 2012 tax forms   The FMV of the property before contribution of the restriction should take into account not only current use but the likelihood that the property, without the restriction, would be developed. How to get 2012 tax forms You should also consider any zoning, conservation, or historical preservation laws that would restrict development. How to get 2012 tax forms Granting an easement may increase, rather than reduce, the value of property, and in such a situation no deduction would be allowed. How to get 2012 tax forms Example. How to get 2012 tax forms   You own 10 acres of farmland. How to get 2012 tax forms Similar land in the area has an FMV of $2,000 an acre. How to get 2012 tax forms However, land in the general area that is restricted solely to farm use has an FMV of $1,500 an acre. How to get 2012 tax forms Your county wants to preserve open space and prevent further development in your area. How to get 2012 tax forms   You grant to the county an enforceable open space easement in perpetuity on 8 of the 10 acres, restricting its use to farmland. How to get 2012 tax forms The value of this easement is $4,000, determined as follows: FMV of the property before granting easement:   $2,000 × 10 acres $20,000 FMV of the property after granting easement:   $1,500 × 8 acres $12,000   $2,000 × 2 acres 4,000 16,000 Value of easement   $4,000   If you later transfer in fee your remaining interest in the 8 acres to another qualified organization, the FMV of your remaining interest is the FMV of the 8 acres reduced by the FMV of the easement granted to the first organization. How to get 2012 tax forms More information. How to get 2012 tax forms   For more information about qualified conservation contributions, see Publication 526. How to get 2012 tax forms Appraisals Appraisals are not necessary for items of property for which you claim a deduction of $5,000 or less. How to get 2012 tax forms (There is one exception, described next, for certain clothing and household items. How to get 2012 tax forms ) However, you generally will need an appraisal for donated property for which you claim a deduction of more than $5,000. How to get 2012 tax forms There are exceptions. How to get 2012 tax forms See Deductions of More Than $5,000, later. How to get 2012 tax forms The weight given an appraisal depends on the completeness of the report, the qualifications of the appraiser, and the appraiser's demonstrated knowledge of the donated property. How to get 2012 tax forms An appraisal must give all the facts on which to base an intelligent judgment of the value of the property. How to get 2012 tax forms The appraisal will not be given much weight if: All the factors that apply are not considered, The opinion is not supported with facts, such as purchase price and comparable sales, or The opinion is not consistent with known facts. How to get 2012 tax forms The appraiser's opinion is never more valid than the facts on which it is based; without these facts it is simply a guess. How to get 2012 tax forms The opinion of a person claiming to be an expert is not binding on the Internal Revenue Service. How to get 2012 tax forms All facts associated with the donation must be considered. How to get 2012 tax forms Deduction over $500 for certain clothing or household items. How to get 2012 tax forms   You must include with your return a qualified appraisal of any single item of clothing or any household item that is not in good used condition or better, that you donated after August 17, 2006, and for which you deduct more than $500. How to get 2012 tax forms See Household Goods and Used Clothing, earlier. How to get 2012 tax forms Cost of appraisals. How to get 2012 tax forms   You may not take a charitable contribution deduction for fees you pay for appraisals of your donated property. How to get 2012 tax forms However, these fees may qualify as a miscellaneous deduction, subject to the 2% limit, on Schedule A (Form 1040) if paid to determine the amount allowable as a charitable contribution. How to get 2012 tax forms Deductions of More Than $5,000 Generally, if the claimed deduction for an item or group of similar items of donated property is more than $5,000, you must get a qualified appraisal made by a qualified appraiser, and you must attach Section B of Form 8283 to your tax return. How to get 2012 tax forms There are exceptions, discussed later. How to get 2012 tax forms You should keep the appraiser's report with your written records. How to get 2012 tax forms Records are discussed in Publication 526. How to get 2012 tax forms The phrase “similar items” means property of the same generic category or type (whether or not donated to the same donee), such as stamp collections, coin collections, lithographs, paintings, photographs, books, nonpublicly traded stock, nonpublicly traded securities other than nonpublicly traded stock, land, buildings, clothing, jewelry, furniture, electronic equipment, household appliances, toys, everyday kitchenware, china, crystal, or silver. How to get 2012 tax forms For example, if you give books to three schools and you deduct $2,000, $2,500, and $900, respectively, your claimed deduction is more than $5,000 for these books. How to get 2012 tax forms You must get a qualified appraisal of the books and for each school you must attach a fully completed Form 8283, Section B, to your tax return. How to get 2012 tax forms Exceptions. How to get 2012 tax forms   You do not need an appraisal if the property is: Nonpublicly traded stock of $10,000 or less, A vehicle (including a car, boat, or airplane) for which your deduction is limited to the gross proceeds from its sale, Qualified intellectual property, such as a patent, Certain publicly traded securities described next, Inventory and other property donated by a corporation that are “qualified contributions” for the care of the ill, the needy, or infants, within the meaning of section 170(e)(3)(A) of the Internal Revenue Code, or Stock in trade, inventory, or property held primarily for sale to customers in the ordinary course of your trade or business. How to get 2012 tax forms   Although an appraisal is not required for the types of property just listed, you must provide certain information about a donation of any of these types of property on Form 8283. How to get 2012 tax forms Publicly traded securities. How to get 2012 tax forms   Even if your claimed deduction is more than $5,000, neither a qualified appraisal nor Section B of Form 8283 is required for publicly traded securities that are: Listed on a stock exchange in which quotations are published on a daily basis, Regularly traded in a national or regional over-the-counter market for which published quotations are available, or Shares of an open-end investment company (mutual fund) for which quotations are published on a daily basis in a newspaper of general circulation throughout the United States. How to get 2012 tax forms Publicly traded securities that meet these requirements must be reported on Form 8283, Section A. How to get 2012 tax forms   A qualified appraisal is not required, but Form 8283, Section B, Parts I and IV, must be completed, for an issue of a security that does not meet the requirements just listed but does meet these requirements: The issue is regularly traded during the computation period (defined later) in a market for which there is an “interdealer quotation system” (defined later), The issuer or agent computes the “average trading price” (defined later) for the same issue for the computation period, The average trading price and total volume of the issue during the computation period are published in a newspaper of general circulation throughout the United States, not later than the last day of the month following the end of the calendar quarter in which the computation period ends, The issuer or agent keeps books and records that list for each transaction during the computation period the date of settlement of the transaction, the name and address of the broker or dealer making the market in which the transaction occurred, and the trading price and volume, and The issuer or agent permits the Internal Revenue Service to review the books and records described in item (4) with respect to transactions during the computation period upon receiving reasonable notice. How to get 2012 tax forms   An interdealer quotation system is any system of general circulation to brokers and dealers that regularly disseminates quotations of obligations by two or more identified brokers or dealers who are not related to either the issuer or agent who computes the average trading price of the security. How to get 2012 tax forms A quotation sheet prepared and distributed by a broker or dealer in the regular course of business and containing only quotations of that broker or dealer is not an interdealer quotation system. How to get 2012 tax forms   The average trading price is the average price of all transactions (weighted by volume), other than original issue or redemption transactions, conducted through a United States office of a broker or dealer who maintains a market in the issue of the security during the computation period. How to get 2012 tax forms Bid and asked quotations are not taken into account. How to get 2012 tax forms   The computation period is weekly during October through December and monthly during January through September. How to get 2012 tax forms The weekly computation periods during October through December begin with the first Monday in October and end with the first Sunday following the last Monday in December. How to get 2012 tax forms Nonpublicly traded stock. How to get 2012 tax forms   If you contribute nonpublicly traded stock, for which you claim a deduction of $10,000 or less, a qualified appraisal is not required. How to get 2012 tax forms However, you must attach Form 8283 to your tax return, with Section B, Parts I and IV, completed. How to get 2012 tax forms Deductions of More Than $500,000 If you claim a deduction of more than $500,000 for a donation of property, you must attach a qualified appraisal of the property to your return. How to get 2012 tax forms This does not apply to contributions of cash, inventory, publicly traded stock, or intellectual property. How to get 2012 tax forms If you do not attach the appraisal, you cannot deduct your contribution, unless your failure to attach the appraisal is due to reasonable cause and not to willful neglect. How to get 2012 tax forms Qualified Appraisal Generally, if the claimed deduction for an item or group of similar items of donated property is more than $5,000, you must get a qualified appraisal made by a qualified appraiser. How to get 2012 tax forms You must also complete Form 8283, Section B, and attach it to your tax return. How to get 2012 tax forms See Deductions of More Than $5,000, earlier. How to get 2012 tax forms A qualified appraisal is an appraisal document that: Is made, signed, and dated by a qualified appraiser (defined later) in accordance with generally accepted appraisal standards, Meets the relevant requirements of Regulations section 1. How to get 2012 tax forms 170A-13(c)(3) and Notice 2006-96, 2006-46 I. How to get 2012 tax forms R. How to get 2012 tax forms B. How to get 2012 tax forms 902 (available at www. How to get 2012 tax forms irs. How to get 2012 tax forms gov/irb/2006-46_IRB/ar13. How to get 2012 tax forms html), Relates to an appraisal made not earlier than 60 days before the date of contribution of the appraised property, Does not involve a prohibited appraisal fee, and Includes certain information (covered later). How to get 2012 tax forms You must receive the qualified appraisal before the due date, including extensions, of the return on which a charitable contribution deduction is first claimed for the donated property. How to get 2012 tax forms If the deduction is first claimed on an amended return, the qualified appraisal must be received before the date on which the amended return is filed. How to get 2012 tax forms Form 8283, Section B, must be attached to your tax return. How to get 2012 tax forms Generally, you do not need to attach the qualified appraisal itself, but you should keep a copy as long as it may be relevant under the tax law. How to get 2012 tax forms There are four exceptions. How to get 2012 tax forms If you claim a deduction of $20,000 or more for donations of art, you must attach a complete copy of the appraisal. How to get 2012 tax forms See Paintings, Antiques, and Other Objects of Art, earlier. How to get 2012 tax forms If you claim a deduction of more than $500,000 for a donation of property, you must attach the appraisal. How to get 2012 tax forms See Deductions of More Than $500,000, earlier. How to get 2012 tax forms If you claim a deduction of more than $500 for an article of clothing, or a household item, that is not in good used condition or better, that you donated after August 17, 2006, you must attach the appraisal. How to get 2012 tax forms See Deduction over $500 for certain clothing or household items, earlier. How to get 2012 tax forms If you claim a deduction in a tax year beginning after August 17, 2006, for an easement or other restriction on the exterior of a building in a historic district, you must attach the appraisal. How to get 2012 tax forms See Building in registered historic district, earlier. How to get 2012 tax forms Prohibited appraisal fee. How to get 2012 tax forms   Generally, no part of the fee arrangement for a qualified appraisal can be based on a percentage of the appraised value of the property. How to get 2012 tax forms If a fee arrangement is based on what is allowed as a deduction, after Internal Revenue Service examination or otherwise, it is treated as a fee based on a percentage of appraised value. How to get 2012 tax forms However, appraisals are not disqualified when an otherwise prohi
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Airline delays caused by bad weather, traffic control problems, and mechanical repairs are hard to predict. If your flight is canceled, most airlines will rebook you on the earliest flight possible to your destination, at no additional charge. If you're able to find a flight on another airline, ask the first airline to endorse your ticket to the new carrier. This could save you a fare increase, but there is no rule requiring them to do this.

Each airline has its own policies about what it will do for delayed passengers; there are no federal requirements. If your flight is delayed or canceled, ask the airline if it will pay for meals or a phone call. Contrary to what many people believe, airlines are not required to do so.

Tarmac Delays

Under new federal rules, U.S. airlines operating domestic flights must allow passengers to deplane after a tarmac delay of three hours. The only exceptions allowed are for safety or security, or if air traffic control advises the pilot otherwise. Carriers are also required to provided adequate food and drinking water within two hours of being delayed on the tarmac; they must also maintain operable lavatories and, if necessary, provide medical attention.
There are other protections as well, such as prohibiting airlines from scheduling chronically delayed flights. For more information, search for Airline Passenger Protections on the Department of Transportation's website.

Overbooked Flights

Selling more tickets than there are seats is not illegal. Most airlines overbook their flights to compensate for "no-shows." If there are more passengers than seats just before a plane is scheduled to depart, you could be "bumped" or left behind against your will. Whether you are bumped or not may depend on when you officially check-in for your flight, so try to arrive early. The U.S. Department of Transportation requires airlines to ask people to give up their seats voluntarily, in exchange for compensation. Airlines decide what to offer volunteers, such as money, a free trip, food or lodging.

Federal rules protect you if you are "bumped" on most flights within the United States and on outbound international flights. Passengers who are involuntarily bumped are protected under Federal Aviation Administration guidelines. If you volunteer to be bumped, your agreement with the airline that is not regulated and will depend on negotiating at the gate.
The airline must give you a written statement describing your rights, as well as the airline's boarding priority rules and criteria. If the airline is not able to get you to your final destination within one hour of your original arrival time, the airline must pay you an amount equal to 200% of your one-way fare, with a maximum of $650. To receive this payment, you must have a confirmed reservation. You must also meet the airline's deadlines for ticketing and check-in. An airline may offer you a free ticket on a future flight in place of a check, but you have the right to insist on a check.

The How To Get 2012 Tax Forms

How to get 2012 tax forms 4. How to get 2012 tax forms   Other Section 501(c) Organizations Table of Contents Introduction 501(c)(4) - Civic Leagues and Social Welfare OrganizationsSpecific Organizations 501(c)(5) - Labor, Agricultural and Horticultural OrganizationsLabor Organizations Agricultural and Horticultural Organizations 501(c)(6) - Business Leagues, etc. How to get 2012 tax forms Line of business. How to get 2012 tax forms Examples. How to get 2012 tax forms Improvement of business conditions. How to get 2012 tax forms Exception for local legislation. How to get 2012 tax forms De minimis exception. How to get 2012 tax forms Grass roots lobbying. How to get 2012 tax forms 501(c)(7) - Social and Recreation ClubsLimited membership. How to get 2012 tax forms Support. How to get 2012 tax forms Facilities open to public. How to get 2012 tax forms Gross receipts from nonmembership sources. How to get 2012 tax forms Gross receipts. How to get 2012 tax forms Nontraditional activities. How to get 2012 tax forms 501(c)(8) and 501(c)(10) - Fraternal Beneficiary Societies and Domestic Fraternal SocietiesFraternal Beneficiary Societies (501(c)(8)) Domestic Fraternal Societies (501(c)(10)) 501(c)(4), 501(c)(9), and 501(c)(17) - Employees' AssociationsLocal Employees' Associations (501(c)(4)) Voluntary Employees' Beneficiary Associations (501(c)(9)) Supplemental Unemployment Benefit Trusts (501(c)(17)) 501(c)(12) - Local Benevolent Life Insurance Associations, Mutual Irrigation and Telephone Companies, and Like OrganizationsMembership. How to get 2012 tax forms Losses and expenses. How to get 2012 tax forms Distributions of proceeds. How to get 2012 tax forms The 85% Requirement Local Life Insurance Associations Mutual or Cooperative Associations 501(c)(13) - Cemetery CompaniesBuying cemetery property. How to get 2012 tax forms Perpetual care organization. How to get 2012 tax forms Care of individual plots. How to get 2012 tax forms 501(c)(14) - Credit Unions and Other Mutual Financial OrganizationsState-Chartered Credit Unions Other Mutual Financial Organizations 501(c)(19) - Veterans' Organizations 501(c)(20) - Group Legal Services Plan Organizations 501(c)(21) - Black Lung Benefit TrustsExcise taxes. How to get 2012 tax forms 501(c)(2) - Title-Holding Corporations for Single Parent CorporationsExpenses. How to get 2012 tax forms Waiver of payment of income. How to get 2012 tax forms 501(c)(25) - Title-Holding Corporations or Trusts for Multiple Parent CorporationsUnrelated Business Income 501(c)(26) - State-Sponsored High-Risk Health Coverage Organizations 501(c)(27) - Qualified State-Sponsored Workers' Compensation Organizations 501(c)(29) - CO-OP Health Insurance Issuers New Guidance for IRC 501(c)(29) Qualified Nonprofit Health Insurance Issuers General Requirements for Exemption under 501(c)(29) and Annual Filing Requirement Additional Guidance for Prospective 501(c)(29) Organizations Introduction This chapter contains specific information for certain organizations described in section 501(c), other than those organizations that are described in section 501(c)(3). How to get 2012 tax forms Section 501(c)(3) organizations are covered in chapter 3 of this publication. How to get 2012 tax forms The Table of Contents at the beginning of this publication, as well as the Organization Reference Chart, may help you locate at a glance the type of organization discussed in this chapter. How to get 2012 tax forms 501(c)(4) - Civic Leagues and Social Welfare Organizations If your organization is not organized for profit and will be operated primarily to promote social welfare to benefit the community, you should file Form 1024 to apply for recognition of exemption from federal income tax under section 501(c)(4). How to get 2012 tax forms The discussion that follows describes the information you must provide when applying. How to get 2012 tax forms For application procedures, see chapter 1. How to get 2012 tax forms To qualify for exemption under section 501(c)(4), the organization's net earnings must be devoted primarily to charitable, educational, or recreational purposes. How to get 2012 tax forms In addition, no part of the organization's net earnings can inure to the benefit of any private shareholder or individual. How to get 2012 tax forms If the organization provides an excess benefit to certain persons, an excise tax may be imposed. How to get 2012 tax forms See Excise tax on excess benefit transactions , under Excess Benefit Transactions in chapter 5 for more information about this tax. How to get 2012 tax forms Examples. How to get 2012 tax forms   Types of organizations that are considered to be social welfare organizations are civic associations and volunteer fire companies. How to get 2012 tax forms Nonprofit operation. How to get 2012 tax forms   You must submit evidence that your organization is organized and will be operated on a nonprofit basis. How to get 2012 tax forms However, such evidence, including the fact that your organization is organized under a state law relating to nonprofit corporations, will not in itself establish a social welfare purpose. How to get 2012 tax forms Social welfare. How to get 2012 tax forms   To establish that your organization is organized primarily to promote social welfare, you should submit evidence with your application showing that your organization will operate primarily to further (in some way) the common good and general welfare of the people of the community (such as by bringing about civic betterment and social improvements). How to get 2012 tax forms   An organization that restricts the use of its facilities to employees of selected corporations and their guests is primarily benefiting a private group rather than the community. How to get 2012 tax forms It therefore does not qualify as a section 501(c)(4) organization. How to get 2012 tax forms Similarly, an organization formed to represent member-tenants of an apartment complex does not qualify, since its activities benefit the member-tenants and not all tenants in the community. How to get 2012 tax forms However, an organization formed to promote the legal rights of all tenants in a particular community may qualify under section 501(c)(4) as a social welfare organization. How to get 2012 tax forms Political activity. How to get 2012 tax forms   Promoting social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office. How to get 2012 tax forms However, if you submit proof that your organization is organized primarily to promote social welfare, it can obtain exemption even if it participates legally in some political activity on behalf of or in opposition to candidates for public office. How to get 2012 tax forms See the discussion in chapter 2 under Political Organization Income Tax Return . How to get 2012 tax forms Social or recreational activity. How to get 2012 tax forms   If social activities will be the primary purpose of your organization, you should not file an application for exemption as a social welfare organization but should file for exemption as a social club described in section 501(c)(7). How to get 2012 tax forms Retirement benefit program. How to get 2012 tax forms   An organization established by its members that has as its primary activity providing supplemental retirement benefits to its members or death benefits to their beneficiaries does not qualify as an exempt social welfare organization. How to get 2012 tax forms It may qualify under another paragraph of section 501(c) depending on all the facts. How to get 2012 tax forms   However, a nonprofit association that is established, maintained, and funded by a local government to provide the only retirement benefits to a class of employees may qualify as a social welfare organization under section 501(c)(4). How to get 2012 tax forms Tax treatment of donations. How to get 2012 tax forms   Donations to volunteer fire companies are deductible on the donor's federal income tax return, but only if made for exclusively public purposes. How to get 2012 tax forms Contributions to civic leagues or other section 501(c)(4) organizations generally are not deductible as charitable contributions for federal income tax purposes. How to get 2012 tax forms They may be deductible as trade or business expenses, if ordinary and necessary in the conduct of the taxpayer's business. How to get 2012 tax forms However, see Deduction not allowed for dues used for political or legislative activities , under 501(c)(6) - Business Leagues, etc. How to get 2012 tax forms for more information. How to get 2012 tax forms For more information on social welfare organizations, see Life Cycle of a Social Welfare Organization at IRS. How to get 2012 tax forms gov. How to get 2012 tax forms Specific Organizations The following information should be contained in the application form and accompanying statements of certain types of civic leagues or social welfare organizations. How to get 2012 tax forms Volunteer fire companies. How to get 2012 tax forms   If your organization wishes to obtain exemption as a volunteer fire company or similar organization, you should submit evidence that its members are actively engaged in fire fighting and similar disaster assistance, whether it actually owns the fire fighting equipment, and whether it provides any assistance for its members, such as death and medical benefits in case of injury to them. How to get 2012 tax forms   If your organization does not have an independent social purpose, such as providing recreational facilities for members, it may be exempt under section 501(c)(3). How to get 2012 tax forms In this event, your organization should file Form 1023. How to get 2012 tax forms Homeowners' associations. How to get 2012 tax forms   A membership organization formed by a real estate developer to own and maintain common green areas, streets, and sidewalks and to enforce covenants to preserve the appearance of the development should show that it is operated for the benefit of all the residents of the community. How to get 2012 tax forms The term community generally refers to a geographical unit recognizable as a governmental subdivision, unit, or district thereof. How to get 2012 tax forms Whether a particular association meets the requirement of benefiting a community depends on the facts and circumstances of each case. How to get 2012 tax forms Even if an area represented by an association is not a community, the association can still qualify for exemption if its activities benefit a community. How to get 2012 tax forms   The association should submit evidence that areas such as roadways and park land that it owns and maintains are open to the general public and not just its own members. How to get 2012 tax forms It also must show that it does not engage in exterior maintenance of private homes. How to get 2012 tax forms   A homeowners' association that is not exempt under section 501(c)(4) and that is a condominium management association, a residential real estate management association, or a timeshare association generally can elect under the provisions of section 528 to receive certain tax benefits that, in effect, permit it to exclude its exempt function income from its gross income. How to get 2012 tax forms Other organizations. How to get 2012 tax forms   Other nonprofit organizations that qualify as social welfare organizations include: An organization operating an airport that is on land owned by a local government, which supervises the airport's operation, and that serves the general public in an area with no other airport, A community association that works to improve public services, housing, and residential parking; publishes a free community newspaper; sponsors a community sports league, holiday programs, and meetings; and contracts with a private security service to patrol the community, A community association devoted to preserving the community's traditions, architecture, and appearance by representing it before the local legislature and administrative agencies in zoning, traffic, and parking matters, An organization that tries to encourage industrial development and relieve unemployment in an area by making loans to businesses so they will relocate to the area, and An organization that holds an annual festival of regional customs and traditions. How to get 2012 tax forms 501(c)(5) - Labor, Agricultural and Horticultural Organizations If you are a member of an organization that wants to obtain recognition of exemption from federal income tax as a labor, agricultural, or horticultural organization, you should submit an application on Form 1024. How to get 2012 tax forms You must indicate in your application for exemption and accompanying statements that no part of the organization's net earnings will inure to the benefit of any member. How to get 2012 tax forms In addition, you should follow the procedure for obtaining recognition of exempt status described in chapter 1. How to get 2012 tax forms Submit any additional information that may be required, as described in this section. How to get 2012 tax forms Tax treatment of donations. How to get 2012 tax forms   Contributions to labor, agricultural, and horticultural organizations are not deductible as charitable contributions on the donor's federal income tax return. How to get 2012 tax forms However, such payments may be deductible as business expenses if they are ordinary and necessary in the conduct of the taxpayer's trade or business. How to get 2012 tax forms For more information about certain limits affecting the deductibility of these business expenses, see Deduction not allowed for dues used for political or legislative activities , under 501(c)(6) - Business Leagues, etc. How to get 2012 tax forms Labor Organizations A labor organization is an association of workers who have combined to protect and promote the interests of the members by bargaining collectively with their employers to secure better working conditions. How to get 2012 tax forms To show that your organization has the purpose of a labor organization, you should include in the articles of organization or accompanying statements (submitted with your exemption application) information establishing that the organization is organized to better the conditions of workers, improve the grade of their products, and develop a higher degree of efficiency in their respective occupations. How to get 2012 tax forms In addition, no net earnings of the organization can inure to the benefit of any member. How to get 2012 tax forms Composition of membership. How to get 2012 tax forms   While a labor organization generally is composed of employees or representatives of the employees (in the form of collective bargaining agents) and similar employee groups, evidence that an organization's membership consists mainly of workers does not in itself indicate an exempt purpose. How to get 2012 tax forms You must show in your application that your organization has the purposes described in the preceding paragraph. How to get 2012 tax forms These purposes can be accomplished by a single labor organization acting alone or by several organizations acting together through a separate organization. How to get 2012 tax forms Benefits to members. How to get 2012 tax forms   The payment by a labor organization of death, sick, accident, and similar benefits to its individual members with funds contributed by its members, if made under a plan to better the conditions of the members, does not preclude exemption as a labor organization. How to get 2012 tax forms However, an organization does not qualify for exemption as a labor organization if it has no authority to represent members in job-related matters, even if it provides weekly income to its members in the event of a lawful strike by the members' union, in return for an annual payment by the member. How to get 2012 tax forms   For more information on labor organizations, see Life Cycle of a Labor Organization at IRS. How to get 2012 tax forms gov. How to get 2012 tax forms Agricultural and Horticultural Organizations Agricultural and horticultural organizations are connected with raising livestock, forestry, cultivating land, raising and harvesting crops or aquatic resources, cultivating useful or ornamental plants, and similar pursuits. How to get 2012 tax forms For the purpose of these provisions, aquatic resources include only animal or vegetable life, but not mineral resources. How to get 2012 tax forms The term harvesting, in this case, includes fishing and related pursuits. How to get 2012 tax forms Agricultural organizations can be quasi-public in character and are often designed to encourage the development of better agricultural and horticultural products through a system of awards, using income from entry fees, gate receipts, and donations to meet the necessary expenses of upkeep and operation. How to get 2012 tax forms When the activities are directed toward the improvement of marketing or other business conditions in one or more lines of business, rather than the improvement of production techniques or the betterment of the conditions of persons engaged in agriculture, the organization must qualify for exemption as a business league, board of trade, or other organization, as discussed next in the section on 501(c)(6) organizations. How to get 2012 tax forms The primary purpose of exempt agricultural and horticultural organizations must be to better the conditions of those engaged in agriculture or horticulture, develop more efficiency in agriculture or horticulture, or improve the products. How to get 2012 tax forms The following list contains some examples of activities that show an agricultural or horticultural purpose. How to get 2012 tax forms Promoting various cooperative agricultural, horticultural, and civic activities among rural residents by a state, farm, or home bureau. How to get 2012 tax forms Exhibiting livestock, farm products, and other characteristic features of agriculture and horticulture. How to get 2012 tax forms Testing soil for members and nonmembers of the farm bureau on a cost basis, the results of the tests and other recommendations being furnished to the community members to educate them in soil treatment. How to get 2012 tax forms Guarding the purity of a specific breed of livestock. How to get 2012 tax forms Encouraging improvements in the production of fish on privately owned fish farms. How to get 2012 tax forms Negotiating with processors for the price to be paid to members for their crops. How to get 2012 tax forms For more information on agricultural or horticultural organizations, see Life Cycle of an Agricultural or Horticultural Organization at IRS. How to get 2012 tax forms gov. How to get 2012 tax forms 501(c)(6) - Business Leagues, etc. How to get 2012 tax forms If your association wants to apply for recognition of exemption from federal income tax as a nonprofit business league, chamber of commerce, real estate board, or board of trade, it should file Form 1024. How to get 2012 tax forms For a discussion of the procedure to follow, see chapter 1. How to get 2012 tax forms Your organization must indicate in its application form and attached statements that no part of its net earnings will inure to the benefit of any private shareholder or individual and that it is not organized for profit or organized to engage in an activity ordinarily carried on for profit (even if the business is operated on a cooperative basis or produces only sufficient income to be self-sustaining). How to get 2012 tax forms In addition, your organization must be primarily engaged in activities or functions that are the basis for its exemption. How to get 2012 tax forms It must be primarily supported by membership dues and other income from activities substantially related to its exempt purpose. How to get 2012 tax forms A business league, in general, is an association of persons having some common business interest, the purpose of which is to promote that common interest and not to engage in a regular business of a kind ordinarily carried on for profit. How to get 2012 tax forms Trade associations and professional associations are considered business leagues. How to get 2012 tax forms Chamber of commerce. How to get 2012 tax forms   A chamber of commerce usually is composed of the merchants and traders of a city. How to get 2012 tax forms Board of trade. How to get 2012 tax forms   A board of trade often consists of persons engaged in similar lines of business. How to get 2012 tax forms For example, a nonprofit organization formed to regulate the sale of a specified agricultural commodity to assure equal treatment of producers, warehouse workers, and buyers is a board of trade. How to get 2012 tax forms   Chambers of commerce and boards of trade usually promote the common economic interests of all the commercial enterprises in a given trade community. How to get 2012 tax forms Real estate board. How to get 2012 tax forms   A real estate board consists of members interested in improving the business conditions in the real estate field. How to get 2012 tax forms It is not organized for profit and no part of the net earnings inures to the benefit of any private shareholder or individual. How to get 2012 tax forms Professional football leagues. How to get 2012 tax forms   The Internal Revenue Code specifically defines professional football leagues as exempt organizations under section 501(c)(6). How to get 2012 tax forms They are exempt whether or not they administer a pension fund for football players. How to get 2012 tax forms General purpose. How to get 2012 tax forms   You must indicate in the material submitted with your application that your organization will be devoted to the improvement of business conditions of one or more lines of business as distinguished from the performance of particular services for individual persons. How to get 2012 tax forms It must be shown that the conditions of a particular trade or the interests of the community will be advanced. How to get 2012 tax forms Merely indicating the name of the organization or the object of the local statute under which it is created is not enough to demonstrate the required general purpose. How to get 2012 tax forms Line of business. How to get 2012 tax forms   This term generally refers either to an entire industry or to all components of an industry within a geographic area. How to get 2012 tax forms It does not include a group composed of businesses that market a particular brand within an industry. How to get 2012 tax forms Common business interest. How to get 2012 tax forms   A common business interest of all members of the organization must be established by the application documents. How to get 2012 tax forms Examples. How to get 2012 tax forms   Activities that would tend to illustrate a common business interest are: Promotion of higher business standards and better business methods and encouragement of uniformity and cooperation by a retail merchants association, Education of the public in the use of credit, Establishment of uniform casualty rates and compilation of statistical information by an insurance rating bureau operated by casualty insurance companies, Establishment and maintenance of the integrity of a local commercial market, Operation of a trade publication primarily intended to benefit an entire industry, and Encouragement of the use of goods and services of an entire industry (such as a lawyer referral service whose main purpose is to introduce individuals to the use of the legal profession in the hope that they will enter into lawyer-client relationships on a paying basis as a result). How to get 2012 tax forms Improvement of business conditions. How to get 2012 tax forms   Generally, this must be shown to be the purpose of the organization. How to get 2012 tax forms This is not established by evidence of particular services that provide a convenience or economy to individual members in their businesses, such as advertising that carries the name of members, interest-free loans, assigning exclusive franchise areas, operation of a real estate multiple listing system, or operation of a credit reporting agency. How to get 2012 tax forms Stock or commodity exchange. How to get 2012 tax forms   A stock or commodity exchange is not a business league, chamber of commerce, real estate board, or board of trade and is not exempt under section 501(c)(6). How to get 2012 tax forms Legislative activity. How to get 2012 tax forms   An organization that is exempt under section 501(c)(6) can work for the enactment of laws to advance the common business interests of the organization's members. How to get 2012 tax forms Deduction not allowed for dues used for political or legislative activities. How to get 2012 tax forms   A taxpayer cannot deduct the part of dues or other payments to a business league, trade association, labor union, or similar organization that is reported to the taxpayer by the organization as having been used for any of the following activities. How to get 2012 tax forms Influencing legislation. How to get 2012 tax forms Participating or intervening in a political campaign for, or against, any candidate for public office. How to get 2012 tax forms Trying to influence the general public, or part of the general public, with respect to elections, legislative matters, or referendums (also known as grass roots lobbying). How to get 2012 tax forms Communicating directly with certain executive branch officials to try to influence their official actions or positions. How to get 2012 tax forms See Dues Used for Lobbying or Political Activities under Required Disclosures in chapter 2 for more information. How to get 2012 tax forms Exception for local legislation. How to get 2012 tax forms   Members can deduct dues (or assessments) to an organization that are for expenses of: Appearing before, submitting statements to, or sending communications to members of a local council or similar governing body with respect to legislation or proposed legislation of direct interest to the member, or Communicating information between the member and the organization with respect to local legislation or proposed legislation of direct interest to the organization or the member. How to get 2012 tax forms Legislation or proposed legislation is of direct interest to a taxpayer if it will, or can reasonably be expected to, affect the taxpayer's trade or business. How to get 2012 tax forms De minimis exception. How to get 2012 tax forms   In-house expenditures of $2,000 or less for the year for activities (1) – (4) listed earlier will not prevent a deduction for dues if the dues meet all other tests to be deductible as a business expense. How to get 2012 tax forms Grass roots lobbying. How to get 2012 tax forms   A tax-exempt trade association, labor union, or similar organization is considered to be engaging in grass roots lobbying if it contacts prospective members or calls upon its own members to contact their employees and customers for the purpose of urging such persons to communicate with their elected state or Congressional representatives to support the promotion, defeat, or repeal of legislation that is of direct interest to the organization. How to get 2012 tax forms Any dues or assessments directly related to such activities are not deductible by the taxpayer, since the individuals being contacted, who are not members of the organization, are a segment of the general public. How to get 2012 tax forms Tax treatment of donations. How to get 2012 tax forms   Contributions to organizations described in this section are not deductible as charitable contributions on the donor's federal income tax return. How to get 2012 tax forms They may be deductible as trade or business expenses if ordinary and necessary in the conduct of the taxpayer's business. How to get 2012 tax forms   For more information on business leagues, see Life Cycle of a Business League (Trade Association) on IRS. How to get 2012 tax forms gov. How to get 2012 tax forms 501(c)(7) - Social and Recreation Clubs If your club is organized for pleasure, recreation, and other similar nonprofitable purposes and substantially all of its activities are for these purposes, it should file Form 1024 to apply for recognition of exemption from federal income tax. How to get 2012 tax forms In applying for recognition of exemption, you should submit the information described in this section. How to get 2012 tax forms Also see chapter 1 for the procedures to follow. How to get 2012 tax forms Typical organizations that should file for recognition of exemption as social clubs include: College alumni associations that are not described in chapter 3 under Alumni association , College fraternities or sororities operating chapter houses for students, Country clubs, Amateur hunting, fishing, tennis, swimming, and other sport clubs, Dinner clubs that provide a meeting place, library, and dining room for members, Hobby clubs, Garden clubs, and Variety clubs. How to get 2012 tax forms Discrimination prohibited. How to get 2012 tax forms   Your organization will not be recognized as tax exempt if its charter, bylaws, or other governing instrument, or any written policy statement provides for discrimination against any person on the basis of race, color, or religion. How to get 2012 tax forms   However, a club that in good faith limits its membership to the members of a particular religion to further the teachings or principles of that religion and not to exclude individuals of a particular race or color will not be considered as discriminating on the basis of religion. How to get 2012 tax forms Also, the restriction on religious discrimination does not apply to a club that is an auxiliary of a fraternal beneficiary society (discussed later) if that society is described in section 501(c)(8) and exempt from tax under section 501(a) and limits its membership to the members of a particular religion. How to get 2012 tax forms Private benefit prohibited. How to get 2012 tax forms   No part of the organization's net earnings can inure to the benefit of any person having a personal and private interest in the activities of the organization. How to get 2012 tax forms For purposes of this requirement, it is not necessary that net earnings be actually distributed. How to get 2012 tax forms Even undistributed earnings can benefit members. How to get 2012 tax forms Examples of this include a decrease in membership dues or an increase in the services the club provides to its members without a corresponding increase in dues or other fees paid for club support. How to get 2012 tax forms However, fixed-fee payments to members who bring new members into the club are not an inurement of the club's net earnings, if the payments are reasonable compensation for performance of a necessary administrative service. How to get 2012 tax forms Purposes. How to get 2012 tax forms   To show that your organization possesses the characteristics of a club within the meaning of the exemption law, you should submit evidence with your application that personal contact, commingling, and fellowship exist among members. How to get 2012 tax forms You must show that members are bound together by a common objective of pleasure, recreation, and other nonprofitable purposes. How to get 2012 tax forms   Fellowship need not be present between each member and every other member of a club if it is a material part in the life of the organization. How to get 2012 tax forms A statewide or nationwide organization that is made up of individual members, but is divided into local groups, satisfies this requirement if fellowship is a material part of the life of each local group. How to get 2012 tax forms   The term other nonprofitable purposes means other purposes similar to pleasure and recreation. How to get 2012 tax forms For example, a club that, in addition to its social activities, has a plan for the payment of sick and death benefits is not operating exclusively for pleasure, recreation, and other nonprofitable purposes. How to get 2012 tax forms Limited membership. How to get 2012 tax forms   The membership in a social club must be limited. How to get 2012 tax forms To show that your organization has a purpose that would characterize it as a club, you should submit evidence with your application that there are limits on admission to membership consistent with the character of the club. How to get 2012 tax forms   A social club that issues corporate membership is dealing with the general public in the form of the corporation's employees. How to get 2012 tax forms Corporate members of a club are not the kind of members contemplated by the law. How to get 2012 tax forms Gross receipts from these members would be a factor in determining whether the club qualifies as a social club. How to get 2012 tax forms See Gross receipts from nonmembership sources , later. How to get 2012 tax forms Bona fide individual memberships paid for by a corporation would not have an effect on the gross receipts source. How to get 2012 tax forms   The fact that a social club may have an associate (nonvoting) class of membership will not be, in and of itself, a cause for nonrecognition of exemption. How to get 2012 tax forms However, if one membership class pays substantially lower dues and fees than another membership class, although both classes enjoy the same rights and privileges in using the club facilities, there may be an inurement of income to the benefited class, resulting in a denial of the club's exemption. How to get 2012 tax forms Support. How to get 2012 tax forms   In general, your club should be supported solely by membership fees, dues, and assessments. How to get 2012 tax forms However, if otherwise entitled to exemption, your club will not be disqualified because it raises revenue from members through the use of club facilities or in connection with club activities. How to get 2012 tax forms Business activities. How to get 2012 tax forms   If your club will engage in business, such as selling real estate, timber, or other products or services, it generally will be denied exemption. How to get 2012 tax forms However, evidence submitted with your application form that your organization will provide meals, refreshments, or services related to its exempt purposes only to its own members or their dependents or guests will not cause denial of exemption. How to get 2012 tax forms Facilities open to public. How to get 2012 tax forms   Evidence that your club's facilities will be open to the general public (persons other than members or their dependents or guests) may cause denial of exemption. How to get 2012 tax forms This does not mean, however, that any dealing with outsiders will automatically deprive a club of exemption. How to get 2012 tax forms Gross receipts from nonmembership sources. How to get 2012 tax forms   A section 501(c)(7) organization can receive up to 35% of its gross receipts, including investment income, from sources outside of its membership without losing its tax-exempt status. How to get 2012 tax forms Income from nontraditional business activity with members is not exempt function income, and thus is included as income from sources outside of the membership. How to get 2012 tax forms Of the 35% gross receipts listed above, up to 15% of the gross receipts can be derived from the use of the club's facilities or services by the general public. How to get 2012 tax forms If an organization has outside income that is more than these limits, all the facts and circumstances will be taken into account in determining whether the organization qualifies for exempt status. How to get 2012 tax forms Gross receipts. How to get 2012 tax forms   Gross receipts, for this purpose, are receipts from the normal and usual (traditionally conducted) activities of the club. How to get 2012 tax forms These receipts include charges, admissions, membership fees, dues, assessments, investment income, and normal recurring capital gains on investments. How to get 2012 tax forms Receipts do not include initiation fees and capital contributions. How to get 2012 tax forms Unusual amounts of income, such as from the sale of a clubhouse or similar facility, are not included in gross receipts or in figuring the percentage limits. How to get 2012 tax forms Nontraditional activities. How to get 2012 tax forms   Activities conducted by a social club need to further its exempt purposes. How to get 2012 tax forms Traditional business activities are those that further a social club's exempt purposes. How to get 2012 tax forms Nontraditional business activities do not further the exempt purposes of a social club even if conducted solely on a membership basis. How to get 2012 tax forms Nontraditional business activities are prohibited (subject to an insubstantial, trivial, and nonrecurrent test) for businesses conducted with both members and nonmembers. How to get 2012 tax forms Examples of nontraditional business activities include sale of package liquor, take-out food, and long-term room rental. How to get 2012 tax forms Fraternity foundations. How to get 2012 tax forms   If your organization is a foundation formed for the exclusive purpose of acquiring and leasing a chapter house to a local fraternity chapter or sorority chapter maintained at an educational institution and does not engage in any social or recreational activities, it may be a title holding corporation (discussed later under section 501(c)(2) organizations and under section 501(c)(25) organizations) rather than a social club. How to get 2012 tax forms Tax treatment of donations. How to get 2012 tax forms   Donations to exempt social and recreation clubs are not deductible as charitable contributions on the donor's federal income tax return. How to get 2012 tax forms 501(c)(8) and 501(c)(10) - Fraternal Beneficiary Societies and Domestic Fraternal Societies This section describes the information to be provided upon application for recognition of exemption by two types of fraternal societies: beneficiary and domestic. How to get 2012 tax forms The major distinction is that fraternal beneficiary societies provide for the payment of life, sick, accident, or other benefits to their members or their dependents, while domestic fraternal societies do not provide these benefits but rather devote their earnings to fraternal, religious, charitable, etc. How to get 2012 tax forms , purposes. How to get 2012 tax forms The procedures to follow in applying for recognition of exemption are described in chapter 1. How to get 2012 tax forms If your organization is controlled by a central organization, you should check with your controlling organization to determine whether your unit has been included in a group exemption letter or can be added. How to get 2012 tax forms If so, your organization need not apply for individual recognition of exemption. How to get 2012 tax forms For more information, see Group Exemption Letter in chapter 1 of this publication. How to get 2012 tax forms Tax treatment of donations. How to get 2012 tax forms   Donations by an individual to a domestic fraternal beneficiary society or a domestic fraternal society operating under the lodge system are deductible as charitable contributions only if used exclusively for religious, charitable, scientific, literary, or educational purposes or for the prevention of cruelty to children or animals. How to get 2012 tax forms Fraternal Beneficiary Societies (501(c)(8)) A fraternal beneficiary society, order, or association must file an application for recognition of exemption from federal income tax on Form 1024. How to get 2012 tax forms The application and accompanying statements should establish that the organization: Is a fraternal organization, Operates under the lodge system or for the exclusive benefit of the members of a fraternal organization itself operating under the lodge system, and Provides for the payment of life, sick, accident, or other benefits to the members of the society, order, or association or their dependents. How to get 2012 tax forms Lodge system. How to get 2012 tax forms   Operating under the lodge system means carrying on activities under a form of organization that comprises local branches, chartered by a parent organization and largely self-governing, called lodges, chapters, or the like. How to get 2012 tax forms Payment of benefits. How to get 2012 tax forms   It is not essential that every member be covered by the society's program of sick, accident, or death benefits. How to get 2012 tax forms An organization can qualify for exemption if most of its members are eligible for benefits, and the benefits are paid from contributions or dues paid by those members. How to get 2012 tax forms   The benefits must be limited to members and their dependents. How to get 2012 tax forms If members will have the ability to confer benefits to other than themselves and their dependents, exemption will not be recognized. How to get 2012 tax forms Whole-life insurance. How to get 2012 tax forms   Whole-life insurance constitutes a life benefit under section 501(c)(8) even though the policy may contain investment features such as a cash surrender value or a policy loan. How to get 2012 tax forms Reinsurance pool. How to get 2012 tax forms   Payments by a fraternal beneficiary society into a state-sponsored reinsurance pool that protects participating insurers against excessive losses on major medical health and accident insurance will not preclude exemption as a fraternal beneficiary society. How to get 2012 tax forms Domestic Fraternal Societies (501(c)(10)) A domestic fraternal society, order, or association must file an application for recognition of exemption from federal income tax on Form 1024. How to get 2012 tax forms The application and accompanying statements should establish that the organization: Is a domestic fraternal organization organized in the U. How to get 2012 tax forms S. How to get 2012 tax forms , Operates under the lodge system, Devotes its net earnings exclusively to religious, charitable, scientific, literary, educational, and fraternal purposes, and Does not provide for the payment of life, sick, accident, or other benefits to its members. How to get 2012 tax forms The organization can arrange with insurance companies to provide optional insurance to its members without jeopardizing its exempt status. How to get 2012 tax forms 501(c)(4), 501(c)(9), and 501(c)(17) - Employees' Associations This section describes the information to be provided upon application for recognition of exemption by the following types of employees' associations: A voluntary employees' beneficiary association (including federal employees' associations) organized to pay life, sick, accident, and similar benefits to members or their dependents, or designated beneficiaries, if no part of the net earnings of the association inures to the benefit of any private shareholder or individual, and A supplemental unemployment benefit trust whose primary purpose is providing for payment of supplemental unemployment benefits. How to get 2012 tax forms Both the application form to file and the information to provide are discussed later under the section that describes your employee association. How to get 2012 tax forms Chapter 1 describes the procedures to follow in applying for exemption. How to get 2012 tax forms Tax treatment of donations. How to get 2012 tax forms   Donations to these organizations are not deductible as charitable contributions on the donor's federal income tax return. How to get 2012 tax forms Local Employees' Associations (501(c)(4)) A local association of employees whose membership is limited to employees of a designated person or persons in a particular municipality, and whose income will be devoted exclusively to charitable, educational, or recreational purposes. How to get 2012 tax forms A local employees' association must apply for recognition of exemption by filing Form 1024. How to get 2012 tax forms The organization must submit evidence that: It is of a purely local character, Its membership is limited to employees of a designated person or persons in a particular locality, and Its net earnings will be devoted exclusively to charitable, educational, or recreational purposes. How to get 2012 tax forms A local association of employees that has established a system of paying retirement or death benefits, or both, to its members will not qualify for exemption since the payment of these benefits is not considered as being for charitable, educational, or recreational purposes. How to get 2012 tax forms Similarly, a local association of employees that is operated primarily as a cooperative buying service for its members in order to obtain discount prices on merchandise, services, and activities does not qualify for exemption. How to get 2012 tax forms Voluntary Employees' Beneficiary Associations (501(c)(9)) An application for recognition of exemption as a voluntary employees' beneficiary association must be filed on Form 1024. How to get 2012 tax forms The material submitted with the application must show that your organization: Is a voluntary association of employees, Will provide for payment of life, sick, accident, or other benefits to members or their dependents or designated beneficiaries and substantially all of its operations are for this purpose, and Will not allow any of its net earnings to inure to the benefit of any private individual or shareholder except in the form of scheduled benefit payments. How to get 2012 tax forms To be complete, an application must include a copy of the document (such as the trust instrument) by which the organization was created; a full description of the benefits available to participants and the terms and conditions of eligibility for benefits (usually contained in a plan document); and, if providing benefits pursuant to a collective bargaining agreement, a copy of that agreement. How to get 2012 tax forms Note. How to get 2012 tax forms Under section 4976, the reversion of funds from a section 501(c)(9) organization to the employer who created the beneficiary association may subject the employer to a 100% penalty excise tax on the amount of the reversion. How to get 2012 tax forms Notice requirement. How to get 2012 tax forms   An organization will not be considered tax exempt under this section unless the organization gives notice to the IRS that it is applying for recognition of exempt status. How to get 2012 tax forms The organization gives notice by filing Form 1024. How to get 2012 tax forms If the notice is not given by 15 months after the end of the month in which the organization was created, the organization will not be exempt for any period before notice is given. How to get 2012 tax forms An extension of time for filing the notice can be granted under the same procedures as those described for section 501(c)(3) organizations in chapter 3 under Application for Recognition of Exemption . How to get 2012 tax forms Membership. How to get 2012 tax forms   Membership of a section 501(c)(9) organization must consist of individuals who are employees and have an employment-related common bond. How to get 2012 tax forms This common bond can be a common employer (or affiliated employers), coverage under one or more collective bargaining agreements, membership in a labor union, or membership in one or more locals of a national or international labor union. How to get 2012 tax forms   The membership of an association can include some individuals who are not employees, provided they have an employment-related bond with the employee-members. How to get 2012 tax forms For example, the owner of a business whose employees are members of the association can be a member. How to get 2012 tax forms An association will be considered composed of employees if 90% of its total membership on one day of each quarter of its tax year consists of employees. How to get 2012 tax forms Employees. How to get 2012 tax forms   Employees include individuals who became entitled to membership because they are or were employees. How to get 2012 tax forms For example, an individual will qualify as an employee even though the individual is on a leave of absence or has been terminated due to retirement, disability, or layoff. How to get 2012 tax forms   Generally, membership is voluntary if an affirmative act is required on the part of an employee to become a member. How to get 2012 tax forms Conversely, membership is involuntary if the designation as a member is due to employee status. How to get 2012 tax forms However, an association will be considered voluntary if employees are required to be members of the organization as a condition of their employment and they do not incur a detriment (such as a payroll deduction) as a result of their membership. How to get 2012 tax forms An employer has not imposed involuntary membership on the employee if membership is required as the result of a collective bargaining agreement or as an incident of membership in a labor organization. How to get 2012 tax forms Payment of benefits. How to get 2012 tax forms   The information submitted with your application must show that your organization will pay life, sick, accident, supplemental unemployment, or other similar benefits. How to get 2012 tax forms The benefits can be provided directly by your association or indirectly by your association through the payments of premiums to an insurance company (or fees to a medical clinic). How to get 2012 tax forms Benefits can be in the form of medical, clinical, or hospital services, transportation furnished for medical care, or money payments. How to get 2012 tax forms Nondiscrimination requirements. How to get 2012 tax forms   An organization that is part of a plan will not be exempt unless the plan meets certain nondiscrimination requirements. How to get 2012 tax forms However, if the organization is part of a plan that is a collective bargaining agreement that was the subject of good faith bargaining between employee organizations and employers, the plan need not meet these requirements for the organization to qualify as tax exempt. How to get 2012 tax forms   A plan meets the nondiscrimination requirements only if both of the following statements are true. How to get 2012 tax forms Each class of benefits under the plan is provided under a classification of employees that is set forth in the plan and does not discriminate in favor of employees who are highly compensated individuals. How to get 2012 tax forms The benefits provided under each class of benefits do not discriminate in favor of highly compensated individuals. How to get 2012 tax forms A life insurance, disability, severance pay, or supplemental unemployment compensation benefit does not discriminate in favor of highly compensated individuals merely because the benefits available bear a uniform relationship to the total compensation, or the basic or regular rate of compensation, of employees covered by the plan. How to get 2012 tax forms   For purposes of determining whether a plan meets the nondiscrimination requirements, the employer can elect to exclude all disability or severance payments payable to individuals who are in pay status as of January 1, 1985. How to get 2012 tax forms This will not apply to any increase in such payment by any plan amendment adopted after June 22, 1984. How to get 2012 tax forms   If a plan provides a benefit for which there is a nondiscrimination provision provided under Chapter 1 of the Internal Revenue Code as a condition of that benefit being excluded from gross income, these nondiscrimination requirements do not apply. How to get 2012 tax forms The benefit will be considered nondiscriminatory only if it meets the nondiscrimination provision of the applicable Code section. How to get 2012 tax forms For example, benefits provided under a medical reimbursement plan would meet the nondiscrimination requirements for an association, if the benefits meet the nondiscrimination requirements of section 105(h)(3) and 105(h)(4). How to get 2012 tax forms Excluded employees. How to get 2012 tax forms   Certain employees who are not covered by a plan can be excluded from consideration in applying these requirements. How to get 2012 tax forms These include employees: Who have not completed 3 years of service, Who have not attained age 21, Who are seasonal or less than half-time employees, Who are not in the plan and who are included in a unit of employees covered by a collective bargaining agreement if the class of benefits involved was the subject of good faith bargaining, or Who are nonresident aliens and who receive no earned income from the employer that has United States source income. How to get 2012 tax forms Highly compensated individual. How to get 2012 tax forms   A highly compensated individual is one who: Owned 5 percent or more of the employer at any time during the current year or the preceding year, Received more than $115,000 in compensation from the employer for the preceding year (the amount is annualized for inflation. How to get 2012 tax forms Go to IRS. How to get 2012 tax forms gov, and search “Pension Plan Limitation” for the year), and Was among the top 20% of employees by compensation for the preceding year. How to get 2012 tax forms However, the employer can choose not to have (3) apply. How to get 2012 tax forms Aggregation rules. How to get 2012 tax forms   The employer can choose to treat two or more plans as one plan for purposes of meeting the nondiscrimination requirements. How to get 2012 tax forms Employees of controlled groups of corporations, trades, or businesses under common control, or members of an affiliated service group, are treated as employees of a single employer. How to get 2012 tax forms Leased employees are treated as employees of the recipient. How to get 2012 tax forms One employee. How to get 2012 tax forms   A trust created to provide benefits to one employee will not qualify as a voluntary employees' beneficiary association under section 501(c)(9). How to get 2012 tax forms Supplemental Unemployment Benefit Trusts (501(c)(17)) A trust or trusts forming part of a written plan (established and maintained by an employer, his or her employees, or both) providing solely for the payment of supplemental unemployment compensation benefits must file the application for recognition of exemption on Form 1024. How to get 2012 tax forms The trust must be a valid, existing trust under local law and must be evidenced by an executed document. How to get 2012 tax forms A conformed copy of the plan of which the trust is a part should be attached to the application. How to get 2012 tax forms To be complete, an application must include a copy of the document (such as the trust instrument) by which the organization was created; a full description of the benefits available to participants and the terms and conditions of eligibility for benefits (usually contained in a plan document); and, if providing benefits pursuant to a collective bargaining agreement, a copy of that agreement. How to get 2012 tax forms Note. How to get 2012 tax forms Under section 4976, the reversion of funds from a section 501(c)(17) organization to the employer who created the supplemental unemployment benefit trust may subject the employer to a 100% penalty excise tax on the amount of the reversion. How to get 2012 tax forms Notice requirement. How to get 2012 tax forms   An organization will not be considered tax exempt under this section unless the organization gives notice to the IRS that it is applying for recognition of exempt status. How to get 2012 tax forms The organization gives notice by filing Form 1024. How to get 2012 tax forms If the notice is not given by 15 months after the end of the month in which the organization was created, the organization will not be exempt for any period before such notice is given. How to get 2012 tax forms An extension of time for filing the notice is granted under the same procedures as those described for section 501(c)(3) organizations in chapter 3 under Application for Recognition of Exemption . How to get 2012 tax forms Types of payments. How to get 2012 tax forms   You must show that the supplemental unemployment compensation benefits will be benefits paid to an employee because of the employee's involuntary separation from employment (whether or not the separation is temporary) resulting directly from a reduction-in-force, discontinuance of a plant or operation, or other similar conditions. How to get 2012 tax forms In addition, sickness and accident benefits (but not vacation, retirement, or death benefits) may be included in the plan if these are subordinate to the unemployment compensation benefits. How to get 2012 tax forms Diversion of funds. How to get 2012 tax forms   It must be impossible under the plan (at any time before the satisfaction of all liabilities with respect to employees under the plan) to use or to divert any of the corpus or income of the trust to any purpose other than the payment of supplemental unemployment compensation benefits (or sickness or accident benefits to the extent just explained). How to get 2012 tax forms Discrimination in benefits. How to get 2012 tax forms   Neither the terms of the plan nor the actual payment of benefits can be discriminatory in favor of the company's officers, stockholders, supervisors, or highly paid employees. How to get 2012 tax forms However, a plan is not discriminatory merely because benefits bear a uniform relationship to compensation or the rate of compensation. How to get 2012 tax forms Prohibited transactions and exemption. How to get 2012 tax forms   If your organization is a supplemental unemployment benefit trust and has received a denial of exemption because it engaged in a prohibited transaction, as defined by section 503(b), it can file a claim for exemption in any tax year following the tax year in which the notice of denial was issued. How to get 2012 tax forms It must file the claim on Form 1024. How to get 2012 tax forms The organization must include a written declaration that it will not knowingly again engage in a prohibited transaction. How to get 2012 tax forms An authorized principal officer of your organization must make this declaration under the penalties of perjury. How to get 2012 tax forms   If your organization has satisfied all requirements as a supplemental unemployment benefit trust described in section 501(c)(17), it will be notified in writing that it has been recognized as exempt. How to get 2012 tax forms However, the organization will be exempt only for those tax years after the tax year in which the claim for exemption (Form 1024) is filed. How to get 2012 tax forms Tax year in this case means the established annual accounting period of the organization or, if the organization has not established an annual accounting period, the calendar year. How to get 2012 tax forms For more information about the requirements for reestablishing an exemption previously denied, contact the IRS. How to get 2012 tax forms 501(c)(12) - Local Benevolent Life Insurance Associations, Mutual Irrigation and Telephone Companies, and Like Organizations Each of the following organizations apply for recognition of exemption from federal income tax by filing Form 1024. How to get 2012 tax forms Benevolent life insurance associations of a purely local character and like organizations. How to get 2012 tax forms Mutual ditch or irrigation companies and like organizations. How to get 2012 tax forms Mutual or cooperative telephone companies and like organizations. How to get 2012 tax forms A like organization is an organization that performs a service comparable to that performed by any one of the above organizations. How to get 2012 tax forms The information to be provided upon application by each of these organizations is described in this section. How to get 2012 tax forms For information as to the procedures to follow in applying for exemption, see chapter 1. How to get 2012 tax forms General requirements. How to get 2012 tax forms   These organizations must use their income solely to cover losses and expenses, with any excess being returned to members or retained to cover future losses and expenses. How to get 2012 tax forms They must collect at least 85% of their income from members for the sole purpose of meeting losses and expenses. How to get 2012 tax forms Mutual character. How to get 2012 tax forms   These organizations, other than benevolent life insurance associations, must be organized and operated on a mutual or cooperative basis. How to get 2012 tax forms They are associations of persons or organizations, or both, banded together to provide themselves a mutually desirable service approximately at cost and on a mutual basis. How to get 2012 tax forms To maintain the mutual characteristic of democratic ownership and control, they must be so organized and operated that their members have the right to choose the management, to receive services at cost, to receive a return of any excess of payments over losses and expenses, and to share in any assets upon dissolution. How to get 2012 tax forms   The rights and interests of members in the annual savings of the organization must be determined in proportion to their business with the organization. How to get 2012 tax forms Upon dissolution, gains from the sale of appreciated assets must be distributed to all persons who were members during the period the assets were owned by the organization in proportion to the amount of business done during that period. How to get 2012 tax forms The bylaws must not provide for forfeiture of a member's rights and interest upon withdrawal or termination. How to get 2012 tax forms Membership. How to get 2012 tax forms   Membership of a mutual organization consists of those who join the organization to obtain its services, and have a voice in its management. How to get 2012 tax forms In a stock company, the stockholders are members. How to get 2012 tax forms However, a mutual life insurance organization cannot have policyholders other than its members. How to get 2012 tax forms Losses and expenses. How to get 2012 tax forms   In furnishing services substantially at cost, an organization must use its income solely for paying losses and expenses. How to get 2012 tax forms Any excess income not retained in reasonable reserves for future losses and expenses belongs to members in proportion to their patronage or business done with the organization. How to get 2012 tax forms If such patronage refunds are retained in reasonable amounts for purposes of expanding and improving facilities, retiring capital indebtedness, acquiring other assets, and unexpected expenses, the organization must maintain records sufficient to reflect the equity of each member in the assets acquired with the funds. How to get 2012 tax forms Distributions of proceeds. How to get 2012 tax forms   The cooperative may distribute the unexpended balance of collections or assessments remaining on hand at the end of the year to members or patrons prorated on the basis of their patronage or business done with the cooperative. How to get 2012 tax forms Such distribution represents a refund in the costs of services rendered to the member. How to get 2012 tax forms The 85% Requirement All of the organizations listed above must submit evidence with their application that they receive 85% or more of their gross income from their members for the sole purpose of meeting losses and expenses. How to get 2012 tax forms Nevertheless, certain items of income are excluded from the computation of the 85% requirement if the organization is a mutual or cooperative telephone or electric company. How to get 2012 tax forms Mutual or cooperative telephone company. How to get 2012 tax forms   A mutual or cooperative telephone company will exclude from the computation of the 85% requirement any income received or accrued from: A nonmember telephone company for the performance of communication services involving the completion of long distance calls to, from, or between members of the mutual or cooperative telephone company, Qualified pole rentals, The sale of display listings in a directory furnished to its members, or The prepayment of a loan created in 1987, 1988, or 1989, under section 306A, 306B, or 311 of the Rural Electrification Act of 1936. How to get 2012 tax forms Mutual or cooperative electric company. How to get 2012 tax forms   A mutual or cooperative electric company will exclude from the computation of the 85% requirement any income received or accrued from: Qualified pole rentals, Any provision or sale of electric energy transmission services or ancillary service if the services are provided on a nondiscriminatory open access basis under an open access transmission tariff approved or accepted by the Federal Energy Regulatory Commission (FERC) or under an independent transmission provider agreement approved or accepted by FERC (other than income received or accrued directly or indirectly from a member), The provision or sale of electric energy distribution services or ancillary services if the services are provided on a nondiscriminatory open-access basis to distribute electric energy not owned by the mutual or electric cooperative company: To end-users who are served by distribution facilities not owned by the company or any of its members (other than income received or accrued directly or indirectly from a member), or Generated by a generation facility not owned or leased by the company or any of its members and which is directly connected to distribution facilities owned by the company or any of its members (other than income received or accrued directly or indirectly from a member), Any nuclear decommissioning transaction, or Any asset exchange or conversion transaction. How to get 2012 tax forms   An electric cooperative's sale of excess fuel at cost in the year of purchase is not income for purposes of determining compliance with the 85% requirement. How to get 2012 tax forms Qualified pole rental. How to get 2012 tax forms   The term qualified pole rental means any rental of a pole (or other structure used to support wires) if the pole (or other structure) is used: By the telephone or electric company to support one or more wires that are used by the company in providing telephone or electric services to its members, and Pursuant to the rental to support one or more wires (in addition to wires described in (1)) for use in connection with the transmission by wire of electricity or of telephone or other communications. How to get 2012 tax forms   The term rental, for this purpose, includes any sale of the right to use the pole (or other structure). How to get 2012 tax forms The 85% requirement is applied on the basis of an annual accounting period. How to get 2012 tax forms Failure of an organization to meet the requirement in a particular year precludes exemption for that year, but has no effect upon exemption for years in which the 85% requirement is met. How to get 2012 tax forms Gain from the sale or conversion of the organization's property is not considered an amount received from members in determining whether the organization's income consists of amounts collected from members. How to get 2012 tax forms Because the 85% income test is based on gross income, capital losses cannot be used to reduce capital gains for purposes of this test. How to get 2012 tax forms Example. How to get 2012 tax forms   The books of an organization reflect the following for the calendar year. How to get 2012 tax forms Collections from members $2,400 Short-term capital gains 600 Short-term capital losses 400 Other income None Gross income ($2,400 + $600 =$3000) 100% Collected from members ($2,400) 80%   Since amounts collected from members do not constitute at least 85% of gross income, the organization is not entitled to exemption from federal income tax for the year. How to get 2012 tax forms   Voluntary contributions in the nature of gifts are not taken into account for purposes of the 85% computation. How to get 2012 tax forms   Other tax-exempt income besides gifts is considered as income received from other than members in applying the 85% test. How to get 2012 tax forms   If the 85% test is not met, your organization, if classifiable under this section, will not qualify for exemption as any other type of organization described in this publication. How to get 2012 tax forms Tax treatment of donations. How to get 2012 tax forms   Donations to an organization described in this section are not deductible as charitable contributions on the donor's federal income tax return. How to get 2012 tax forms Local Life Insurance Associations A benevolent life insurance association or an organization seeking recognition of exemption on grounds of similarity to a benevolent life insurance association must submit evidence upon applying for recognition of exemption that it will be of a purely local character, that its excess funds will be refunded to members or retained in reasonable reserves to meet future losses and expenses, and that it meets the 85% income requirement. How to get 2012 tax forms If an organization issues policies for stipulated cash premiums, or if it requires advance deposits to cover the cost of the insurance and maintains investments from which more than 15% of its income is derived, it will not be entitled to exemption. How to get 2012 tax forms To establish that your organization is of a purely local character, it should show that its activities will be confined to a particular community, place, or district irrespective of political subdivisions. How to get 2012 tax forms If the activities of an organization are limited only by the borders of a state, it cannot be purely local in character. How to get 2012 tax forms A benevolent life insurance association that does not terminate membership when a member moves from the local area in which the association operates will qualify for exemption if it meets the other requirements. How to get 2012 tax forms A copy of each type of policy issued by your organization should be included with the application for recognition of exemption. How to get 2012 tax forms Organizations similar to local benevolent life insurance companies. How to get 2012 tax forms   These organizations include those that in addition to paying death benefits also provide for the payment of sick, accident, or health benefits. How to get 2012 tax forms However, an organization that pays only sick, accident, or health benefits, but not life insurance benefits, is not an organization similar to a benevolent life insurance association and should not apply for recognition of exemption as described in this section. How to get 2012 tax forms Burial and funeral benefit insurance organization. How to get 2012 tax forms   This type of organization can apply for recognition of exemption as an organization similar to a benevolent life insurance company if it establishes that the benefits are paid in cash and if it is not engaged directly in the manufacture of funeral supplies or the performance of funeral services. How to get 2012 tax forms An organization that provides its benefits in the form of supplies and service is not a life insurance company. How to get 2012 tax forms Such an organization can seek recognition of exemption from federal income tax, however, as a mutual insurance company other than life. How to get 2012 tax forms Mutual or Cooperative Associations Mutual ditch or irrigation companies, mutual or cooperative telephone companies, and like organizations need not establish that they are of a purely local character. How to get 2012 tax forms They can serve noncontiguous areas. How to get 2012 tax forms Like organization. How to get 2012 tax forms   A like organization is a cooperative or mutual organization that performs a service similar to mutual ditch, irrigation, telephone, or electric companies. How to get 2012 tax forms Examples include the following: cooperatives that provide protection of river banks to prevent erosion, water and sewer services, cable television, satellite, television, cellular phone services, two-way radio service, or natural gas services. How to get 2012 tax forms 501(c)(13) - Cemetery Companies If your organization wishes to obtain recognition of exemption from federal income tax as a cemetery company or a corporation chartered solely for the purpose of the disposal of human bodies by burial or cremation, it must file an application on Form 1024. How to get 2012 tax forms For the procedure to follow to file an application, see Application, Approval, and Appeal Procedures in chapter 1. How to get 2012 tax forms A nonprofit mutual cemetery company that seeks recognition of exemption should submit evidence with its application that it is owned and operated exclusively for the benefit of its lot owners who hold lots for bona fide burial purposes and not for purposes of resale. How to get 2012 tax forms A mutual cemetery company that also engages in charitable activities, such as the burial of paupers, will be regarded as operating within this standard. How to get 2012 tax forms The fact that a mutual cemetery company limits its membership to a particular class of individuals, such as members of a family, will not affect its status as mutual so long as all the other requirements of section 501(c)(13) are met. How to get 2012 tax forms If your organization is a nonprofit corporation chartered solely for the purpose of the disposal of human bodies by burial or cremation, you should show that it is not permitted by its charter to engage in any business not necessarily incident to that purpose. How to get 2012 tax forms Operating a mortuary is not permitted. How to get 2012 tax forms However, selling monuments, markers, vaults, and flowers solely for use in the cemetery is permitted if the profits from these sales are used to maintain the cemetery as a whole. How to get 2012 tax forms How income can be used. How to get 2012 tax forms   You should show that your organization's earnings are or will be used only in one or more of the following ways. How to get 2012 tax forms To pay the ordinary and necessary expenses of operating, maintaining, and improving the cemetery or crematorium. How to get 2012 tax forms To buy cemetery property. How to get 2012 tax forms To create a fund that will provide a source of income for the perpetual care of the cemetery or a reasonable reserve for any ordinary or necessary purpose. How to get 2012 tax forms No part of the net earnings of your organization can inure to the benefit of any private shareholder or individual. How to get 2012 tax forms Ordinary and necessary expenses in connection with the operation, management, maintenance, and improvement of the cemetery are permitted, as are reasonable fees for the services of a manager. How to get 2012 tax forms Buying cemetery property. How to get 2012 tax forms   Payments can be made to amortize debt incurred to buy land, but cannot be in the nature of profit distributions. How to get 2012 tax forms You must show the method used to finance the purchase of the cemetery property and that the purchase price of the land at the time of its sale to the cemetery was not unreasonable. How to get 2012 tax forms   Except for holders of preferred stock (discussed later), no person can have any interest in the net earnings of a tax-exempt cemetery company or crematorium. How to get 2012 tax forms Therefore, if property is transferred to the organization in exchange for an interest in the organization's net earnings, the organization will not