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I Need 2011 Tax Forms

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I Need 2011 Tax Forms

I need 2011 tax forms 7. I need 2011 tax forms   Costs You Can Deduct or Capitalize Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: Carrying Charges Research and Experimental CostsProduct. I need 2011 tax forms Costs not included. I need 2011 tax forms Intangible Drilling Costs Exploration CostsPartnerships and S corporations. I need 2011 tax forms Development Costs Circulation Costs Business Start-Up and Organizational Costs Reforestation Costs Retired Asset Removal Costs Barrier Removal CostsOther barrier removals. I need 2011 tax forms Film and Television Production Costs What's New Film and television productions costs. I need 2011 tax forms  The election to expense film and television production costs does not apply to productions that begin after December 31, 2013. I need 2011 tax forms See Film and Television Production Costs , later. I need 2011 tax forms Introduction This chapter discusses costs you can elect to deduct or capitalize. I need 2011 tax forms You generally deduct a cost as a current business expense by subtracting it from your income in either the year you incur it or the year you pay it. I need 2011 tax forms If you capitalize a cost, you may be able to recover it over a period of years through periodic deductions for amortization, depletion, or depreciation. I need 2011 tax forms When you capitalize a cost, you add it to the basis of property to which it relates. I need 2011 tax forms A partnership, corporation, estate, or trust makes the election to deduct or capitalize the costs discussed in this chapter except for exploration costs for mineral deposits. I need 2011 tax forms Each individual partner, shareholder, or beneficiary elects whether to deduct or capitalize exploration costs. I need 2011 tax forms You may be subject to the alternative minimum tax (AMT) if you deduct research and experimental, intangible drilling, exploration, development, circulation, or business organizational costs. I need 2011 tax forms For more information on the alternative minimum tax, see the instructions for the following forms. I need 2011 tax forms Form 6251, Alternative Minimum Tax—Individuals. I need 2011 tax forms Form 4626, Alternative Minimum Tax—Corporations. I need 2011 tax forms Topics - This chapter discusses: Carrying charges Research and experimental costs Intangible drilling costs Exploration costs Development costs Circulation costs Qualified disaster expenses Business start-up and organizational costs Reforestation costs Retired asset removal costs Barrier removal costs Film and television production costs Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets Form (and Instructions) 3468 Investment Credit 8826 Disabled Access Credit See chapter 12 for information about getting publications and forms. I need 2011 tax forms Carrying Charges Carrying charges include the taxes and interest you pay to carry or develop real property or to carry, transport, or install personal property. I need 2011 tax forms Certain carrying charges must be capitalized under the uniform capitalization rules. I need 2011 tax forms (For information on capitalization of interest, see chapter 4 . I need 2011 tax forms ) You can elect to capitalize carrying charges not subject to the uniform capitalization rules, but only if they are otherwise deductible. I need 2011 tax forms You can elect to capitalize carrying charges separately for each project you have and for each type of carrying charge. I need 2011 tax forms For unimproved and unproductive real property, your election is good for only 1 year. I need 2011 tax forms You must decide whether to capitalize carrying charges each year the property remains unimproved and unproductive. I need 2011 tax forms For other real property, your election to capitalize carrying charges remains in effect until construction or development is completed. I need 2011 tax forms For personal property, your election is effective until the date you install or first use it, whichever is later. I need 2011 tax forms How to make the election. I need 2011 tax forms   To make the election to capitalize a carrying charge, attach a statement to your original tax return for the year the election is to be effective indicating which charges you are electing to capitalize. I need 2011 tax forms However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). I need 2011 tax forms Attach the statement to the amended return and write “Filed pursuant to section 301. I need 2011 tax forms 9100-2” on the statement. I need 2011 tax forms File the amended return at the same address you filed the original return. I need 2011 tax forms Research and Experimental Costs The costs of research and experimentation are generally capital expenses. I need 2011 tax forms However, you can elect to deduct these costs as a current business expense. I need 2011 tax forms Your election to deduct these costs is binding for the year it is made and for all later years unless you get IRS approval to make a change. I need 2011 tax forms If you meet certain requirements, you may elect to defer and amortize research and experimental costs. I need 2011 tax forms For information on electing to defer and amortize these costs, see Research and Experimental Costs in chapter 8. I need 2011 tax forms Research and experimental costs defined. I need 2011 tax forms   Research and experimental costs are reasonable costs you incur in your trade or business for activities intended to provide information that would eliminate uncertainty about the development or improvement of a product. I need 2011 tax forms Uncertainty exists if the information available to you does not establish how to develop or improve a product or the appropriate design of a product. I need 2011 tax forms Whether costs qualify as research and experimental costs depends on the nature of the activity to which the costs relate rather than on the nature of the product or improvement being developed or the level of technological advancement. I need 2011 tax forms      The costs of obtaining a patent, including attorneys' fees paid or incurred in making and perfecting a patent application, are research and experimental costs. I need 2011 tax forms However, costs paid or incurred to obtain another's patent are not research and experimental costs. I need 2011 tax forms Product. I need 2011 tax forms   The term “product” includes any of the following items. I need 2011 tax forms Formula. I need 2011 tax forms Invention. I need 2011 tax forms Patent. I need 2011 tax forms Pilot model. I need 2011 tax forms Process. I need 2011 tax forms Technique. I need 2011 tax forms Property similar to the items listed above. I need 2011 tax forms It also includes products used by you in your trade or business or held for sale, lease, or license. I need 2011 tax forms Costs not included. I need 2011 tax forms   Research and experimental costs do not include expenses for any of the following activities. I need 2011 tax forms Advertising or promotions. I need 2011 tax forms Consumer surveys. I need 2011 tax forms Efficiency surveys. I need 2011 tax forms Management studies. I need 2011 tax forms Quality control testing. I need 2011 tax forms Research in connection with literary, historical, or similar projects. I need 2011 tax forms The acquisition of another's patent, model, production, or process. I need 2011 tax forms When and how to elect. I need 2011 tax forms   You make the election to deduct research and experimental costs by deducting them on your tax return for the year in which you first pay or incur research and experimental costs. I need 2011 tax forms If you do not make the election to deduct research and experimental costs in the first year in which you pay or incur the costs, you can deduct the costs in a later year only with approval from the IRS. I need 2011 tax forms Deducting or Amortizing Research and Experimentation Costs IF you . I need 2011 tax forms . I need 2011 tax forms . I need 2011 tax forms THEN . I need 2011 tax forms . I need 2011 tax forms . I need 2011 tax forms Elect to deduct research and experimental costs as a current business expense Deduct all research and experimental costs in the first year you pay or incur the costs and all later years. I need 2011 tax forms Do not deduct research and experimental costs as a current business expense If you meet the requirements, amortize them over at least 60 months, starting with the month you first receive an economic benefit from the research. I need 2011 tax forms See Research and Experimental Costs in chapter 8. I need 2011 tax forms Research credit. I need 2011 tax forms   If you pay or incur qualified research expenses, you may be able to take the research credit. I need 2011 tax forms For more information see Form 6765, Credit for Increasing Research Activities and its instructions. I need 2011 tax forms Intangible Drilling Costs The costs of developing oil, gas, or geothermal wells are ordinarily capital expenditures. I need 2011 tax forms You can usually recover them through depreciation or depletion. I need 2011 tax forms However, you can elect to deduct intangible drilling costs (IDCs) as a current business expense. I need 2011 tax forms These are certain drilling and development costs for wells in the United States in which you hold an operating or working interest. I need 2011 tax forms You can deduct only costs for drilling or preparing a well for the production of oil, gas, or geothermal steam or hot water. I need 2011 tax forms You can elect to deduct only the costs of items with no salvage value. I need 2011 tax forms These include wages, fuel, repairs, hauling, and supplies related to drilling wells and preparing them for production. I need 2011 tax forms Your cost for any drilling or development work done by contractors under any form of contract is also an IDC. I need 2011 tax forms However, see Amounts paid to contractor that must be capitalized , later. I need 2011 tax forms You can also elect to deduct the cost of drilling exploratory bore holes to determine the location and delineation of offshore hydrocarbon deposits if the shaft is capable of conducting hydrocarbons to the surface on completion. I need 2011 tax forms It does not matter whether there is any intent to produce hydrocarbons. I need 2011 tax forms If you do not elect to deduct your IDCs as a current business expense, you can elect to deduct them over the 60-month period beginning with the month they were paid or incurred. I need 2011 tax forms Amounts paid to contractor that must be capitalized. I need 2011 tax forms   Amounts paid to a contractor must be capitalized if they are either: Amounts properly allocable to the cost of depreciable property, or Amounts paid only out of production or proceeds from production if these amounts are depletable income to the recipient. I need 2011 tax forms How to make the election. I need 2011 tax forms   You elect to deduct IDCs as a current business expense by taking the deduction on your income tax return for the first tax year you have eligible costs. I need 2011 tax forms No formal statement is required. I need 2011 tax forms If you file Schedule C (Form 1040), enter these costs under “Other expenses. I need 2011 tax forms ”   For oil and gas wells, your election is binding for the year it is made and for all later years. I need 2011 tax forms For geothermal wells, your election can be revoked by the filing of an amended return on which you do not take the deduction. I need 2011 tax forms You can file the amended return for the year up to the normal time of expiration for filing a claim for credit or refund, generally, within 3 years after the date you filed the original return or within 2 years after the date you paid the tax, whichever is later. I need 2011 tax forms Energy credit for costs of geothermal wells. I need 2011 tax forms   If you capitalize the drilling and development costs of geothermal wells that you place in service during the tax year, you may be able to claim a business energy credit. I need 2011 tax forms See the Instructions for Form 3468 for more information. I need 2011 tax forms Nonproductive well. I need 2011 tax forms   If you capitalize your IDCs, you have another option if the well is nonproductive. I need 2011 tax forms You can deduct the IDCs of the nonproductive well as an ordinary loss. I need 2011 tax forms You must indicate and clearly state your election on your tax return for the year the well is completed. I need 2011 tax forms Once made, the election for oil and gas wells is binding for all later years. I need 2011 tax forms You can revoke your election for a geothermal well by filing an amended return that does not claim the loss. I need 2011 tax forms Costs incurred outside the United States. I need 2011 tax forms   You cannot deduct as a current business expense all the IDCs paid or incurred for an oil, gas, or geothermal well located outside the United States. I need 2011 tax forms However, you can elect to include the costs in the adjusted basis of the well to figure depletion or depreciation. I need 2011 tax forms If you do not make this election, you can deduct the costs over the 10-year period beginning with the tax year in which you paid or incurred them. I need 2011 tax forms These rules do not apply to a nonproductive well. I need 2011 tax forms Exploration Costs The costs of determining the existence, location, extent, or quality of any mineral deposit are ordinarily capital expenditures if the costs lead to the development of a mine. I need 2011 tax forms You recover these costs through depletion as the mineral is removed from the ground. I need 2011 tax forms However, you can elect to deduct domestic exploration costs paid or incurred before the beginning of the development stage of the mine (except those for oil and gas wells). I need 2011 tax forms How to make the election. I need 2011 tax forms   You elect to deduct exploration costs by taking the deduction on your income tax return, or on an amended income tax return, for the first tax year for which you wish to deduct the costs paid or incurred during the tax year. I need 2011 tax forms Your return must adequately describe and identify each property or mine, and clearly state how much is being deducted for each one. I need 2011 tax forms The election applies to the tax year you make this election and all later tax years. I need 2011 tax forms Partnerships and S corporations. I need 2011 tax forms   Each partner, not the partnership, elects whether to capitalize or to deduct that partner's share of exploration costs. I need 2011 tax forms Each shareholder, not the S corporation, elects whether to capitalize or to deduct that shareholder's share of exploration costs. I need 2011 tax forms Reduced corporate deductions for exploration costs. I need 2011 tax forms   A corporation (other than an S corporation) can deduct only 70% of its domestic exploration costs. I need 2011 tax forms It must capitalize the remaining 30% of costs and amortize them over the 60-month period starting with the month the exploration costs are paid or incurred. I need 2011 tax forms A corporation may also elect to capitalize and amortize mining exploration costs over a 10-year period. I need 2011 tax forms For more information on this method of amortization, see Internal Revenue Code section 59(e). I need 2011 tax forms   The 30% the corporation capitalizes cannot be added to its basis in the property to figure cost depletion. I need 2011 tax forms However, the amount amortized is treated as additional depreciation and is subject to recapture as ordinary income on a disposition of the property. I need 2011 tax forms See Section 1250 Property under Depreciation Recapture in chapter 3 of Publication 544. I need 2011 tax forms   These rules also apply to the deduction of development costs by corporations. I need 2011 tax forms See Development Costs , later. I need 2011 tax forms Recapture of exploration expenses. I need 2011 tax forms   When your mine reaches the producing stage, you must recapture any exploration costs you elected to deduct. I need 2011 tax forms Use either of the following methods. I need 2011 tax forms Method 1—Include the deducted costs in gross income for the tax year the mine reaches the producing stage. I need 2011 tax forms Your election must be clearly indicated on the return. I need 2011 tax forms Increase your adjusted basis in the mine by the amount included in income. I need 2011 tax forms Generally, you must elect this recapture method by the due date (including extensions) of your return. I need 2011 tax forms However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). I need 2011 tax forms Make the election on your amended return and write “Filed pursuant to section 301. I need 2011 tax forms 9100-2” on the form where you are including the income. I need 2011 tax forms File the amended return at the same address you filed the original return. I need 2011 tax forms Method 2—Do not claim any depletion deduction for the tax year the mine reaches the producing stage and any later tax years until the depletion you would have deducted equals the exploration costs you deducted. I need 2011 tax forms   You also must recapture deducted exploration costs if you receive a bonus or royalty from mine property before it reaches the producing stage. I need 2011 tax forms Do not claim any depletion deduction for the tax year you receive the bonus or royalty and any later tax years until the depletion you would have deducted equals the exploration costs you deducted. I need 2011 tax forms   Generally, if you dispose of the mine before you have fully recaptured the exploration costs you deducted, recapture the balance by treating all or part of your gain as ordinary income. I need 2011 tax forms Under these circumstances, you generally treat as ordinary income all of your gain if it is less than your adjusted exploration costs with respect to the mine. I need 2011 tax forms If your gain is more than your adjusted exploration costs, treat as ordinary income only a part of your gain, up to the amount of your adjusted exploration costs. I need 2011 tax forms Foreign exploration costs. I need 2011 tax forms   If you pay or incur exploration costs for a mine or other natural deposit located outside the United States, you cannot deduct all the costs in the current year. I need 2011 tax forms You can elect to include the costs (other than for an oil, gas, or geothermal well) in the adjusted basis of the mineral property to figure cost depletion. I need 2011 tax forms (Cost depletion is discussed in chapter 9 . I need 2011 tax forms ) If you do not make this election, you must deduct the costs over the 10-year period beginning with the tax year in which you pay or incur them. I need 2011 tax forms These rules also apply to foreign development costs. I need 2011 tax forms Development Costs You can deduct costs paid or incurred during the tax year for developing a mine or any other natural deposit (other than an oil or gas well) located in the United States. I need 2011 tax forms These costs must be paid or incurred after the discovery of ores or minerals in commercially marketable quantities. I need 2011 tax forms Development costs also include depreciation on improvements used in the development of ores or minerals and costs incurred for you by a contractor. I need 2011 tax forms Development costs do not include the costs for the acquisition or improvement of depreciable property. I need 2011 tax forms Instead of deducting development costs in the year paid or incurred, you can elect to treat the cost as deferred expenses and deduct them ratably as the units of produced ores or minerals benefited by the expenses are sold. I need 2011 tax forms This election applies each tax year to expenses paid or incurred in that year. I need 2011 tax forms Once made, the election is binding for the year and cannot be revoked for any reason. I need 2011 tax forms How to make the election. I need 2011 tax forms   The election to deduct development costs ratably as the ores or minerals are sold must be made for each mine or other natural deposit by a clear indication on your return or by a statement filed with the IRS office where you file your return. I need 2011 tax forms Generally, you must make the election by the due date of the return (including extensions). I need 2011 tax forms However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). I need 2011 tax forms Clearly indicate the election on your amended return and write “Filed pursuant to section 301. I need 2011 tax forms 9100-2. I need 2011 tax forms ” File the amended return at the same address you filed the original return. I need 2011 tax forms Foreign development costs. I need 2011 tax forms   The rules discussed earlier for foreign exploration costs apply to foreign development costs. I need 2011 tax forms Reduced corporate deductions for development costs. I need 2011 tax forms   The rules discussed earlier for reduced corporate deductions for exploration costs also apply to corporate deductions for development costs. I need 2011 tax forms Circulation Costs A publisher can deduct as a current business expense the costs of establishing, maintaining, or increasing the circulation of a newspaper, magazine, or other periodical. I need 2011 tax forms For example, a publisher can deduct the cost of hiring extra employees for a limited time to get new subscriptions through telephone calls. I need 2011 tax forms Circulation costs are deductible even if they normally would be capitalized. I need 2011 tax forms This rule does not apply to the following costs that must be capitalized. I need 2011 tax forms The purchase of land or depreciable property. I need 2011 tax forms The acquisition of circulation through the purchase of any part of the business of another publisher of a newspaper, magazine, or other periodical, including the purchase of another publisher's list of subscribers. I need 2011 tax forms Other treatment of circulation costs. I need 2011 tax forms   If you do not want to deduct circulation costs as a current business expense, you can elect one of the following ways to recover these costs. I need 2011 tax forms Capitalize all circulation costs that are properly chargeable to a capital account (see chapter 1 ). I need 2011 tax forms Amortize circulation costs over the 3-year period beginning with the tax year they were paid or incurred. I need 2011 tax forms How to make the election. I need 2011 tax forms   You elect to capitalize circulation costs by attaching a statement to your return for the first tax year the election applies. I need 2011 tax forms Your election is binding for the year it is made and for all later years, unless you get IRS approval to revoke it. I need 2011 tax forms Business Start-Up and Organizational Costs Business start-up and organizational costs are generally capital expenditures. I need 2011 tax forms However, you can elect to deduct up to $5,000 of business start-up and $5,000 of organizational costs paid or incurred after October 22, 2004. I need 2011 tax forms The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. I need 2011 tax forms Any remaining costs must be amortized. I need 2011 tax forms For information about amortizing start-up and organizational costs, see chapter 8 . I need 2011 tax forms Start-up costs include any amounts paid or incurred in connection with creating an active trade or business or investigating the creation or acquisition of an active trade or business. I need 2011 tax forms Organizational costs include the costs of creating a corporation. I need 2011 tax forms For more information on start-up and organizational costs, see chapter 8 . I need 2011 tax forms How to make the election. I need 2011 tax forms   You elect to deduct the start-up or organizational costs by claiming the deduction on your income tax return (filed by the due date including extensions) for the tax year in which the active trade or business begins. I need 2011 tax forms However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). I need 2011 tax forms Clearly indicate the election on your amended return and write “Filed pursuant to section 301. I need 2011 tax forms 9100-2. I need 2011 tax forms ” File the amended return at the same address you filed the original return. I need 2011 tax forms The election applies when computing taxable income for the current tax year and all subsequent years. I need 2011 tax forms Reforestation Costs Reforestation costs are generally capital expenditures. I need 2011 tax forms However, you can elect to deduct up to $10,000 ($5,000 if married filing separately; $0 for a trust) of qualifying reforestation costs paid or incurred after October 22, 2004, for each qualified timber property. I need 2011 tax forms The remaining costs can be amortized over an 84-month period. I need 2011 tax forms For information about amortizing reforestation costs, see chapter 8 . I need 2011 tax forms Qualifying reforestation costs are the direct costs of planting or seeding for forestation or reforestation. I need 2011 tax forms Qualified timber property is property that contains trees in significant commercial quantities. I need 2011 tax forms See chapter 8 for more information on qualifying reforestation costs and qualified timber property. I need 2011 tax forms If you elect to deduct qualified reforestation costs, create and maintain separate timber accounts for each qualified timber property and include all reforestation costs and the dates each was applied. I need 2011 tax forms Do not include this qualified timber property in any account (for example, depletion block) for which depletion is allowed. I need 2011 tax forms How to make the election. I need 2011 tax forms   You elect to deduct qualifying reforestation costs by claiming the deduction on your timely filed income tax return (including extensions) for the tax year the expenses were paid or incurred. I need 2011 tax forms If Form T (Timber), Forest Activities Schedule, is required, complete Part IV of Form T. I need 2011 tax forms If Form T is not required, attach a statement containing the following information for each qualified timber property for which an election is being made. I need 2011 tax forms The unique stand identification numbers. I need 2011 tax forms The total number of acres reforested during the tax year. I need 2011 tax forms The nature of the reforestation treatments. I need 2011 tax forms The total amounts of qualified reforestation expenditures eligible to be amortized or deducted. I need 2011 tax forms   If you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). I need 2011 tax forms Clearly indicate the election on your amended return and write “Filed pursuant to section 301. I need 2011 tax forms 9100-2. I need 2011 tax forms ” File the amended return at the same address you filed the original return. I need 2011 tax forms The election applies when computing taxable income for the current tax year and all subsequent years. I need 2011 tax forms   For additional information on reforestation costs, see chapter 8 . I need 2011 tax forms Recapture. I need 2011 tax forms   This deduction may have to be recaptured as ordinary income under section 1245 when you sell or otherwise dispose of the property that would have received an addition to basis if you had not elected to deduct the expenditure. I need 2011 tax forms For more information on recapturing the deduction, see Depreciation Recapture in Publication 544. I need 2011 tax forms Retired Asset Removal Costs If you retire and remove a depreciable asset in connection with the installation or production of a replacement asset, you can deduct the costs of removing the retired asset. I need 2011 tax forms However, if you replace a component (part) of a depreciable asset, capitalize the removal costs if the replacement is an improvement and deduct the costs if the replacement is a repair. I need 2011 tax forms Barrier Removal Costs The cost of an improvement to a business asset is normally a capital expense. I need 2011 tax forms However, you can elect to deduct the costs of making a facility or public transportation vehicle more accessible to and usable by those who are disabled or elderly. I need 2011 tax forms You must own or lease the facility or vehicle for use in connection with your trade or business. I need 2011 tax forms A facility is all or any part of buildings, structures, equipment, roads, walks, parking lots, or similar real or personal property. I need 2011 tax forms A public transportation vehicle is a vehicle, such as a bus or railroad car, that provides transportation service to the public (including service for your customers, even if you are not in the business of providing transportation services). I need 2011 tax forms You cannot deduct any costs that you paid or incurred to completely renovate or build a facility or public transportation vehicle or to replace depreciable property in the normal course of business. I need 2011 tax forms Deduction limit. I need 2011 tax forms   The most you can deduct as a cost of removing barriers to the disabled and the elderly for any tax year is $15,000. I need 2011 tax forms However, you can add any costs over this limit to the basis of the property and depreciate these excess costs. I need 2011 tax forms Partners and partnerships. I need 2011 tax forms   The $15,000 limit applies to a partnership and also to each partner in the partnership. I need 2011 tax forms A partner can allocate the $15,000 limit in any manner among the partner's individually incurred costs and the partner's distributive share of partnership costs. I need 2011 tax forms If the partner cannot deduct the entire share of partnership costs, the partnership can add any costs not deducted to the basis of the improved property. I need 2011 tax forms   A partnership must be able to show that any amount added to basis was not deducted by the partner and that it was over a partner's $15,000 limit (as determined by the partner). I need 2011 tax forms If the partnership cannot show this, it is presumed that the partner was able to deduct the distributive share of the partnership's costs in full. I need 2011 tax forms Example. I need 2011 tax forms Emilio Azul's distributive share of ABC partnership's deductible expenses for the removal of architectural barriers was $14,000. I need 2011 tax forms Emilio had $12,000 of similar expenses in his sole proprietorship. I need 2011 tax forms He elected to deduct $7,000 of them. I need 2011 tax forms Emilio allocated the remaining $8,000 of the $15,000 limit to his share of ABC's expenses. I need 2011 tax forms Emilio can add the excess $5,000 of his own expenses to the basis of the property used in his business. I need 2011 tax forms Also, if ABC can show that Emilio could not deduct $6,000 ($14,000 – $8,000) of his share of the partnership's expenses because of how Emilio applied the limit, ABC can add $6,000 to the basis of its property. I need 2011 tax forms Qualification standards. I need 2011 tax forms   You can deduct your costs as a current expense only if the barrier removal meets the guidelines and requirements issued by the Architectural and Transportation Barriers Compliance Board under the Americans with Disabilities Act (ADA) of 1990. I need 2011 tax forms You can view the Americans with Disabilities Act at www. I need 2011 tax forms ada. I need 2011 tax forms gov/pubs/ada. I need 2011 tax forms htm. I need 2011 tax forms   The following is a list of some architectural barrier removal costs that can be deducted. I need 2011 tax forms Ground and floor surfaces. I need 2011 tax forms Walks. I need 2011 tax forms Parking lots. I need 2011 tax forms Ramps. I need 2011 tax forms Entrances. I need 2011 tax forms Doors and doorways. I need 2011 tax forms Stairs. I need 2011 tax forms Floors. I need 2011 tax forms Toilet rooms. I need 2011 tax forms Water fountains. I need 2011 tax forms Public telephones. I need 2011 tax forms Elevators. I need 2011 tax forms Controls. I need 2011 tax forms Signage. I need 2011 tax forms Alarms. I need 2011 tax forms Protruding objects. I need 2011 tax forms Symbols of accessibility. I need 2011 tax forms You can find the ADA guidelines and requirements for architectural barrier removal at www. I need 2011 tax forms usdoj. I need 2011 tax forms gov/crt/ada/reg3a. I need 2011 tax forms html. I need 2011 tax forms   The costs for removal of transportation barriers from rail facilities, buses, and rapid and light rail vehicles are deductible. I need 2011 tax forms You can find the guidelines and requirements for transportation barrier removal at www. I need 2011 tax forms fta. I need 2011 tax forms dot. I need 2011 tax forms gov. I need 2011 tax forms   Also, you can access the ADA website at www. I need 2011 tax forms ada. I need 2011 tax forms gov for additional information. I need 2011 tax forms Other barrier removals. I need 2011 tax forms   To be deductible, expenses of removing any barrier not covered by the above standards must meet all three of the following tests. I need 2011 tax forms The removed barrier must be a substantial barrier to access or use of a facility or public transportation vehicle by persons who have a disability or are elderly. I need 2011 tax forms The removed barrier must have been a barrier for at least one major group of persons who have a disability or are elderly (such as people who are blind, deaf, or wheelchair users). I need 2011 tax forms The barrier must be removed without creating any new barrier that significantly impairs access to or use of the facility or vehicle by a major group of persons who have a disability or are elderly. I need 2011 tax forms How to make the election. I need 2011 tax forms   If you elect to deduct your costs for removing barriers to the disabled or the elderly, claim the deduction on your income tax return (partnership return for partnerships) for the tax year the expenses were paid or incurred. I need 2011 tax forms Identify the deduction as a separate item. I need 2011 tax forms The election applies to all the qualifying costs you have during the year, up to the $15,000 limit. I need 2011 tax forms If you make this election, you must maintain adequate records to support your deduction. I need 2011 tax forms   For your election to be valid, you generally must file your return by its due date, including extensions. I need 2011 tax forms However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). I need 2011 tax forms Clearly indicate the election on your amended return and write “Filed pursuant to section 301. I need 2011 tax forms 9100-2. I need 2011 tax forms ” File the amended return at the same address you filed the original return. I need 2011 tax forms Your election is irrevocable after the due date, including extensions, of your return. I need 2011 tax forms Disabled access credit. I need 2011 tax forms   If you make your business accessible to persons with disabilities and your business is an eligible small business, you may be able to claim the disabled access credit. I need 2011 tax forms If you choose to claim the credit, you must reduce the amount you deduct or capitalize by the amount of the credit. I need 2011 tax forms   For more information, see Form 8826, Disabled Access Credit. I need 2011 tax forms Film and Television Production Costs Film and television production costs are generally capital expenses. I need 2011 tax forms However, you can elect to deduct costs paid or incurred for certain productions commencing before January 1, 2014. I need 2011 tax forms For more information, see section 181 of the Internal Revenue Code and the related Treasury Regulations. I need 2011 tax forms Prev  Up  Next   Home   More Online Publications
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The I Need 2011 Tax Forms

I need 2011 tax forms 4. I need 2011 tax forms   Figuring Depreciation Under MACRS Table of Contents Introduction Useful Items - You may want to see: Which Depreciation System (GDS or ADS) Applies? Which Property Class Applies Under GDS?Rent-to-own dealer. I need 2011 tax forms Rent-to-own contract. I need 2011 tax forms What Is the Placed in Service Date? What Is the Basis for Depreciation? Which Recovery Period Applies?Recovery Periods Under GDS Recovery Periods Under ADS Additions and Improvements Which Convention Applies? Which Depreciation Method Applies?Depreciation Methods for Farm Property Electing a Different Method How Is the Depreciation Deduction Figured?Using the MACRS Percentage Tables Figuring the Deduction Without Using the Tables Figuring the Deduction for Property Acquired in a Nontaxable Exchange Figuring the Deduction for a Short Tax Year How Do You Use General Asset Accounts?Grouping Property Figuring Depreciation for a GAA Disposing of GAA Property Terminating GAA Treatment Electing To Use a GAA When Do You Recapture MACRS Depreciation? Introduction The Modified Accelerated Cost Recovery System (MACRS) is used to recover the basis of most business and investment property placed in service after 1986. I need 2011 tax forms MACRS consists of two depreciation systems, the General Depreciation System (GDS) and the Alternative Depreciation System (ADS). I need 2011 tax forms Generally, these systems provide different methods and recovery periods to use in figuring depreciation deductions. I need 2011 tax forms To be sure you can use MACRS to figure depreciation for your property, see What Method Can You Use To Depreciate Your Property in chapter 1. I need 2011 tax forms This chapter explains how to determine which MACRS depreciation system applies to your property. I need 2011 tax forms It also discusses other information you need to know before you can figure depreciation under MACRS. I need 2011 tax forms This information includes the property's recovery class, placed in service date, and basis, as well as the applicable recovery period, convention, and depreciation method. I need 2011 tax forms It explains how to use this information to figure your depreciation deduction and how to use a general asset account to depreciate a group of properties. I need 2011 tax forms Finally, it explains when and how to recapture MACRS depreciation. I need 2011 tax forms Useful Items - You may want to see: Publication 225 Farmer's Tax Guide 463 Travel, Entertainment, Gift, and Car  Expenses 544 Sales and Other Dispositions of Assets 551 Basis of Assets 587 Business Use of Your Home (Including Use by Daycare Providers) Form (and Instructions) 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses 4562 Depreciation and Amortization See chapter 6 for information about getting publications and forms. I need 2011 tax forms Which Depreciation System (GDS or ADS) Applies? Your use of either the General Depreciation System (GDS) or the Alternative Depreciation System (ADS) to depreciate property under MACRS determines what depreciation method and recovery period you use. I need 2011 tax forms You generally must use GDS unless you are specifically required by law to use ADS or you elect to use ADS. I need 2011 tax forms If you placed your property in service in 2013, complete Part III of Form 4562 to report depreciation using MACRS. I need 2011 tax forms Complete section B of Part III to report depreciation using GDS, and complete section C of Part III to report depreciation using ADS. I need 2011 tax forms If you placed your property in service before 2013 and are required to file Form 4562, report depreciation using either GDS or ADS on line 17 in Part III. I need 2011 tax forms Required use of ADS. I need 2011 tax forms   You must use ADS for the following property. I need 2011 tax forms Listed property used 50% or less in a qualified business use. I need 2011 tax forms See chapter 5 for information on listed property. I need 2011 tax forms Any tangible property used predominantly outside the United States during the year. I need 2011 tax forms Any tax-exempt use property. I need 2011 tax forms Any tax-exempt bond-financed property. I need 2011 tax forms All property used predominantly in a farming business and placed in service in any tax year during which an election not to apply the uniform capitalization rules to certain farming costs is in effect. I need 2011 tax forms Any property imported from a foreign country for which an Executive Order is in effect because the country maintains trade restrictions or engages in other discriminatory acts. I need 2011 tax forms If you are required to use ADS to depreciate your property, you cannot claim any special depreciation allowance (discussed in chapter 3) for the property. I need 2011 tax forms Electing ADS. I need 2011 tax forms   Although your property may qualify for GDS, you can elect to use ADS. I need 2011 tax forms The election generally must cover all property in the same property class that you placed in service during the year. I need 2011 tax forms However, the election for residential rental property and nonresidential real property can be made on a property-by-property basis. I need 2011 tax forms Once you make this election, you can never revoke it. I need 2011 tax forms   You make the election by completing line 20 in Part III of Form 4562. I need 2011 tax forms Which Property Class Applies Under GDS? The following is a list of the nine property classifications under GDS and examples of the types of property included in each class. I need 2011 tax forms These property classes are also listed under column (a) in section B, Part III, of Form 4562. I need 2011 tax forms For detailed information on property classes, see Appendix B, Table of Class Lives and Recovery Periods, in this publication. I need 2011 tax forms 3-year property. I need 2011 tax forms Tractor units for over-the-road use. I need 2011 tax forms Any race horse over 2 years old when placed in service. I need 2011 tax forms (All race horses placed in service after December 31, 2008, and before January 1, 2014, are deemed to be 3-year property, regardless of age. I need 2011 tax forms ) Any other horse (other than a race horse) over 12 years old when placed in service. I need 2011 tax forms Qualified rent-to-own property (defined later). I need 2011 tax forms 5-year property. I need 2011 tax forms Automobiles, taxis, buses, and trucks. I need 2011 tax forms Computers and peripheral equipment. I need 2011 tax forms Office machinery (such as typewriters, calculators, and copiers). I need 2011 tax forms Any property used in research and experimentation. I need 2011 tax forms Breeding cattle and dairy cattle. I need 2011 tax forms Appliances, carpets, furniture, etc. I need 2011 tax forms , used in a residential rental real estate activity. I need 2011 tax forms Certain geothermal, solar, and wind energy property. I need 2011 tax forms 7-year property. I need 2011 tax forms Office furniture and fixtures (such as desks, files, and safes). I need 2011 tax forms Agricultural machinery and equipment. I need 2011 tax forms Any property that does not have a class life and has not been designated by law as being in any other class. I need 2011 tax forms Certain motorsports entertainment complex property (defined later) placed in service before January 1, 2014. I need 2011 tax forms Any natural gas gathering line placed in service after April 11, 2005. I need 2011 tax forms See Natural gas gathering line and electric transmission property , later. I need 2011 tax forms 10-year property. I need 2011 tax forms Vessels, barges, tugs, and similar water transportation equipment. I need 2011 tax forms Any single purpose agricultural or horticultural structure. I need 2011 tax forms Any tree or vine bearing fruits or nuts. I need 2011 tax forms Qualified small electric meter and qualified smart electric grid system (defined later) placed in service on or after October 3, 2008. I need 2011 tax forms 15-year property. I need 2011 tax forms Certain improvements made directly to land or added to it (such as shrubbery, fences, roads, sidewalks, and bridges). I need 2011 tax forms Any retail motor fuels outlet (defined later), such as a convenience store. I need 2011 tax forms Any municipal wastewater treatment plant. I need 2011 tax forms Any qualified leasehold improvement property (defined later) placed in service before January 1, 2014. I need 2011 tax forms Any qualified restaurant property (defined later) placed in service before January 1, 2014. I need 2011 tax forms Initial clearing and grading land improvements for gas utility property. I need 2011 tax forms Electric transmission property (that is section 1245 property) used in the transmission at 69 or more kilovolts of electricity placed in service after April 11, 2005. I need 2011 tax forms See Natural gas gathering line and electric transmission property , later. I need 2011 tax forms Any natural gas distribution line placed in service after April 11, 2005 and before January 1, 2011. I need 2011 tax forms Any qualified retail improvement property placed in service before January 1, 2014. I need 2011 tax forms 20-year property. I need 2011 tax forms Farm buildings (other than single purpose agricultural or horticultural structures). I need 2011 tax forms Municipal sewers not classified as 25-year property. I need 2011 tax forms Initial clearing and grading land improvements for electric utility transmission and distribution plants. I need 2011 tax forms 25-year property. I need 2011 tax forms This class is water utility property, which is either of the following. I need 2011 tax forms Property that is an integral part of the gathering, treatment, or commercial distribution of water, and that, without regard to this provision, would be 20-year property. I need 2011 tax forms Municipal sewers other than property placed in service under a binding contract in effect at all times since June 9, 1996. I need 2011 tax forms Residential rental property. I need 2011 tax forms This is any building or structure, such as a rental home (including a mobile home), if 80% or more of its gross rental income for the tax year is from dwelling units. I need 2011 tax forms A dwelling unit is a house or apartment used to provide living accommodations in a building or structure. I need 2011 tax forms It does not include a unit in a hotel, motel, or other establishment where more than half the units are used on a transient basis. I need 2011 tax forms If you occupy any part of the building or structure for personal use, its gross rental income includes the fair rental value of the part you occupy. I need 2011 tax forms Nonresidential real property. I need 2011 tax forms This is section 1250 property, such as an office building, store, or warehouse, that is neither residential rental property nor property with a class life of less than 27. I need 2011 tax forms 5 years. I need 2011 tax forms Qualified rent-to-own property. I need 2011 tax forms   Qualified rent-to-own property is property held by a rent-to-own dealer for purposes of being subject to a rent-to-own contract. I need 2011 tax forms It is tangible personal property generally used in the home for personal use. I need 2011 tax forms It includes computers and peripheral equipment, televisions, videocassette recorders, stereos, camcorders, appliances, furniture, washing machines and dryers, refrigerators, and other similar consumer durable property. I need 2011 tax forms Consumer durable property does not include real property, aircraft, boats, motor vehicles, or trailers. I need 2011 tax forms   If some of the property you rent to others under a rent-to-own agreement is of a type that may be used by the renters for either personal or business purposes, you still can treat this property as qualified property as long as it does not represent a significant portion of your leasing property. I need 2011 tax forms However, if this dual-use property does represent a significant portion of your leasing property, you must prove that this property is qualified rent-to-own property. I need 2011 tax forms Rent-to-own dealer. I need 2011 tax forms   You are a rent-to-own dealer if you meet all the following requirements. I need 2011 tax forms You regularly enter into rent-to-own contracts (defined below) in the ordinary course of your business for the use of consumer property. I need 2011 tax forms A substantial portion of these contracts end with the customer returning the property before making all the payments required to transfer ownership. I need 2011 tax forms The property is tangible personal property of a type generally used within the home for personal use. I need 2011 tax forms Rent-to-own contract. I need 2011 tax forms   This is any lease for the use of consumer property between a rent-to-own dealer and a customer who is an individual which— Is titled “Rent-to-Own Agreement,” “Lease Agreement with Ownership Option,” or other similar language. I need 2011 tax forms Provides a beginning date and a maximum period of time, not to exceed 156 weeks or 36 months from the beginning date, for which the contract can be in effect (including renewals or options to extend). I need 2011 tax forms Provides for regular periodic (weekly or monthly) payments that can be either level or decreasing. I need 2011 tax forms If the payments are decreasing, no payment can be less than 40% of the largest payment. I need 2011 tax forms Provides for total payments that generally exceed the normal retail price of the property plus interest. I need 2011 tax forms Provides for total payments that do not exceed $10,000 for each item of property. I need 2011 tax forms Provides that the customer has no legal obligation to make all payments outlined in the contract and that, at the end of each weekly or monthly payment period, the customer can either continue to use the property by making the next payment or return the property in good working order with no further obligations and no entitlement to a return of any prior payments. I need 2011 tax forms Provides that legal title to the property remains with the rent-to-own dealer until the customer makes either all the required payments or the early purchase payments required under the contract to acquire legal title. I need 2011 tax forms Provides that the customer has no right to sell, sublease, mortgage, pawn, pledge, or otherwise dispose of the property until all contract payments have been made. I need 2011 tax forms Motorsports entertainment complex. I need 2011 tax forms   This is a racing track facility permanently situated on land that hosts one or more racing events for automobiles, trucks, or motorcycles during the 36-month period after the first day of the month in which the facility is placed in service. I need 2011 tax forms The events must be open to the public for the price of admission. I need 2011 tax forms Qualified smart electric grid system. I need 2011 tax forms   A qualified smart electric grid system means any smart grid property used as part of a system for electric distribution grid communications, monitoring, and management placed in service after October 3, 2008, by a taxpayer who is a supplier of electrical energy or a provider of electrical energy services. I need 2011 tax forms Smart grid property includes electronics and related equipment that is capable of: Sensing, collecting, and monitoring data of or from all portions of a utility's electric distribution grid, Providing real-time, two-way communications to monitor or to manage the grid, and Providing real-time analysis of an event prediction based on collected data that can be used to provide electric distribution system reliability, quality, and performance. I need 2011 tax forms Retail motor fuels outlet. I need 2011 tax forms   Real property is a retail motor fuels outlet if it is used to a substantial extent in the retail marketing of petroleum or petroleum products (whether or not it is also used to sell food or other convenience items) and meets any one of the following three tests. I need 2011 tax forms It is not larger than 1,400 square feet. I need 2011 tax forms 50% or more of the gross revenues generated from the property are derived from petroleum sales. I need 2011 tax forms 50% or more of the floor space in the property is devoted to petroleum marketing sales. I need 2011 tax forms A retail motor fuels outlet does not include any facility related to petroleum and natural gas trunk pipelines. I need 2011 tax forms Qualified leasehold improvement property. I need 2011 tax forms    Generally, this is any improvement to an interior part of a building (placed in service before January 1, 2014) that is nonresidential real property, provided all of the requirements discussed in chapter 3 under Qualified leasehold improvement property are met. I need 2011 tax forms   In addition, an improvement made by the lessor does not qualify as qualified leasehold improvement property to any subsequent owner unless it is acquired from the original lessor by reason of the lessor's death or in any of the following types of transactions. I need 2011 tax forms A transaction to which section 381(a) applies, A mere change in the form of conducting the trade or business so long as the property is retained in the trade or business as qualified leasehold improvement property and the taxpayer retains a substantial interest in the trade or business, A like-kind exchange, involuntary conversion, or reacquisition of real property to the extent that the basis in the property represents the carryover basis, or Certain nonrecognition transactions to the extent that your basis in the property is determined by reference to the transferor's or distributor's basis in the property. I need 2011 tax forms Examples include the following. I need 2011 tax forms A complete liquidation of a subsidiary. I need 2011 tax forms A transfer to a corporation controlled by the transferor. I need 2011 tax forms An exchange of property by a corporation solely for stock or securities in another corporation in a reorganization. I need 2011 tax forms Qualified restaurant property. I need 2011 tax forms   Qualified restaurant property is any section 1250 property that is a building placed in service after December 31, 2008, and before January 1, 2014. I need 2011 tax forms Also, more than 50% of the building's square footage must be devoted to preparation of meals and seating for on-premises consumption of prepared meals. I need 2011 tax forms Qualified smart electric meter. I need 2011 tax forms   A qualified smart electric meter is any time-based meter and related communication equipment which is placed in service by a supplier of electric energy or a provider of electric energy services and which is capable of being used by you as part of a system that: Measures and records electricity usage data on a time-differentiated basis in at least 24 separate time segments per day; Provides for the exchange of information between the supplier or provider and the customer's smart electric meter in support of time-based rates or other forms of demand response; Provides data to the supplier or provider so that the supplier or provider can provide energy usage information to customers electronically, and Provides all commercial and residential customers of such supplier or provider with net metering. I need 2011 tax forms Net metering means allowing a customer a credit, if any, as complies with applicable federal and state laws and regulations for providing electricity to the supplier or provider. I need 2011 tax forms Natural gas gathering line and electric transmission property. I need 2011 tax forms   Any natural gas gathering line placed in service after April 11, 2005, is treated as 7-year property, and electric transmission property (that is section 1245 property) used in the transmission at 69 or more kilovolts of electricity and any natural gas distribution line placed in service after April 11, 2005, are treated as 15-year property, if the following requirements are met. I need 2011 tax forms The original use of the property must have begun with you after April 11, 2005. I need 2011 tax forms Original use means the first use to which the property is put, whether or not by you. I need 2011 tax forms Therefore, property used by any person before April 12, 2005, is not original use. I need 2011 tax forms Original use includes additional capital expenditures you incurred to recondition or rebuild your property. I need 2011 tax forms However, original use does not include the cost of reconditioned or rebuilt property you acquired. I need 2011 tax forms Property containing used parts will not be treated as reconditioned or rebuilt if the cost of the used parts is not more than 20% of the total cost of the property. I need 2011 tax forms The property must not be placed in service under a binding contract in effect before April 12, 2005. I need 2011 tax forms The property must not be self-constructed property (property you manufacture, construct, or produce for your own use), if you began the manufacture, construction, or production of the property before April 12, 2005. I need 2011 tax forms Property that is manufactured, constructed, or produced for your use by another person under a written binding contract entered into by you or a related party before the manufacture, construction, or production of the property is considered to be manufactured, constructed, or produced by you. I need 2011 tax forms What Is the Placed in Service Date? You begin to claim depreciation when your property is placed in service for either use in a trade or business or the production of income. I need 2011 tax forms The placed in service date for your property is the date the property is ready and available for a specific use. I need 2011 tax forms It is therefore not necessarily the date it is first used. I need 2011 tax forms If you converted property held for personal use to use in a trade or business or for the production of income, treat the property as being placed in service on the conversion date. I need 2011 tax forms See Placed in Service under When Does Depreciation Begin and End in chapter 1 for examples illustrating when property is placed in service. I need 2011 tax forms What Is the Basis for Depreciation? The basis for depreciation of MACRS property is the property's cost or other basis multiplied by the percentage of business/investment use. I need 2011 tax forms For a discussion of business/investment use, see Partial business or investment use under Property Used in Your Business or Income-Producing Activity in chapter 1 . I need 2011 tax forms Reduce that amount by any credits and deductions allocable to the property. I need 2011 tax forms The following are examples of some credits and deductions that reduce basis. I need 2011 tax forms Any deduction for section 179 property. I need 2011 tax forms Any deduction under section 179B of the Internal Revenue Code for capital costs to comply with Environmental Protection Agency sulfur regulations. I need 2011 tax forms Any deduction under section 179C of the Internal Revenue Code for certain qualified refinery property placed in service after August 8, 2005, and before January 1, 2014. I need 2011 tax forms Any deduction under section 179D of the Internal Revenue Code for certain energy efficient commercial building property placed in service after December 31, 2005, and before January 1, 2014. I need 2011 tax forms Any deduction under section 179E of the Internal Revenue Code for qualified advanced mine safety equipment property placed in service after December 20, 2006, and before January 1, 2014 . I need 2011 tax forms Any deduction for removal of barriers to the disabled and the elderly. I need 2011 tax forms Any disabled access credit, enhanced oil recovery credit, and credit for employer-provided childcare facilities and services. I need 2011 tax forms Any special depreciation allowance. I need 2011 tax forms Basis adjustment for investment credit property under section 50(c) of the Internal Revenue Code. I need 2011 tax forms For additional credits and deductions that affect basis, see section 1016 of the Internal Revenue Code. I need 2011 tax forms Enter the basis for depreciation under column (c) in Part III of Form 4562. I need 2011 tax forms For information about how to determine the cost or other basis of property, see What Is the Basis of Your Depreciable Property in chapter 1 . I need 2011 tax forms Which Recovery Period Applies? The recovery period of property is the number of years over which you recover its cost or other basis. I need 2011 tax forms It is determined based on the depreciation system (GDS or ADS) used. I need 2011 tax forms Recovery Periods Under GDS Under GDS, property that is not qualified Indian reservation property is depreciated over one of the following recovery periods. I need 2011 tax forms Property Class Recovery Period 3-year property   3 years 1   5-year property   5 years     7-year property   7 years     10-year property   10 years     15-year property   15 years 2   20-year property   20 years     25-year property   25 years 3   Residential rental property   27. I need 2011 tax forms 5 years     Nonresidential real property   39 years 4   15 years for qualified rent-to-own property placed in service before August 6, 1997. I need 2011 tax forms 239 years for property that is a retail motor fuels outlet placed in service before August 20, 1996 (31. I need 2011 tax forms 5 years if placed in service before May 13, 1993), unless you elected to depreciate it over 15 years. I need 2011 tax forms 320 years for property placed in service before June 13, 1996, or under a binding contract in effect before June 10, 1996. I need 2011 tax forms 431. I need 2011 tax forms 5 years for property placed in service before May 13, 1993 (or before January 1, 1994, if the purchase or construction of the property is under a binding contract in effect before May 13, 1993, or if construction began before May 13, 1993). I need 2011 tax forms The GDS recovery periods for property not listed above can be found in Appendix B, Table of Class Lives and Recovery Periods. I need 2011 tax forms Residential rental property and nonresidential real property are defined earlier under Which Depreciation System (GDS or ADS) Applies. I need 2011 tax forms Enter the appropriate recovery period on Form 4562 under column (d) in section B of Part III, unless already shown (for 25-year property, residential rental property, and nonresidential real property). I need 2011 tax forms Office in the home. I need 2011 tax forms   If your home is a personal-use single family residence and you begin to use part of your home as an office, depreciate that part of your home as nonresidential real property over 39 years (31. I need 2011 tax forms 5 years if you began using it for business before May 13, 1993). I need 2011 tax forms However, if your home is an apartment in an apartment building that you own and the building is residential rental property as defined earlier under Which Depreciation System (GDS or ADS) Applies , depreciate the part used as an office as residential rental property over 27. I need 2011 tax forms 5 years. I need 2011 tax forms See Publication 587 for a discussion of the tests you must meet to claim expenses, including depreciation, for the business use of your home. I need 2011 tax forms Home changed to rental use. I need 2011 tax forms   If you begin to rent a home that was your personal home before 1987, you depreciate it as residential rental property over 27. I need 2011 tax forms 5 years. I need 2011 tax forms Indian Reservation Property The recovery periods for qualified property you placed in service on an Indian reservation after 1993 and before 2014 are shorter than those listed earlier. I need 2011 tax forms The following table shows these shorter recovery periods. I need 2011 tax forms Property Class Recovery  Period 3-year property 2 years 5-year property 3 years 7-year property 4 years 10-year property 6 years 15-year property 9 years 20-year property 12 years Nonresidential real property 22 years Nonresidential real property is defined earlier under Which Property Class Applies Under GDS . I need 2011 tax forms Use this chart to find the correct percentage table to use for qualified Indian reservation property. I need 2011 tax forms IF your recovery period is: THEN use the following table in Appendix A: 2 years A-21 3 years A-1, A-2, A-3, A-4, or A-5 4 years A-22 6 years A-23 9 years A-14, A-15, A-16, A-17, or A-18 12 years A-14, A-15, A-16, A-17, or A-18 22 years A-24 Qualified property. I need 2011 tax forms   Property eligible for the shorter recovery periods are 3-, 5-, 7-, 10-, 15-, and 20-year property and nonresidential real property. I need 2011 tax forms You must use this property predominantly in the active conduct of a trade or business within an Indian reservation. I need 2011 tax forms The rental of real property that is located on an Indian reservation is treated as the active conduct of a trade or business within an Indian reservation. I need 2011 tax forms   The following property is not qualified property. I need 2011 tax forms Property used or located outside an Indian reservation on a regular basis, other than qualified infrastructure property. I need 2011 tax forms Property acquired directly or indirectly from a related person. I need 2011 tax forms Property placed in service for purposes of conducting or housing class I, II, or III gaming activities. I need 2011 tax forms These activities are defined in section 4 of the Indian Regulatory Act (25 U. I need 2011 tax forms S. I need 2011 tax forms C. I need 2011 tax forms 2703). I need 2011 tax forms Any property you must depreciate under ADS. I need 2011 tax forms Determine whether property is qualified without regard to the election to use ADS and after applying the special rules for listed property not used predominantly for qualified business use (discussed in chapter 5). I need 2011 tax forms Qualified infrastructure property. I need 2011 tax forms   Item (1) above does not apply to qualified infrastructure property located outside the reservation that is used to connect with qualified infrastructure property within the reservation. I need 2011 tax forms Qualified infrastructure property is property that meets all the following rules. I need 2011 tax forms It is qualified property, as defined earlier, except that it is outside the reservation. I need 2011 tax forms It benefits the tribal infrastructure. I need 2011 tax forms It is available to the general public. I need 2011 tax forms It is placed in service in connection with the active conduct of a trade or business within a reservation. I need 2011 tax forms Infrastructure property includes, but is not limited to, roads, power lines, water systems, railroad spurs, and communications facilities. I need 2011 tax forms Related person. I need 2011 tax forms   For purposes of item (2) above, see Related persons in the discussion on property owned or used in 1986 under What Method Can You Use To Depreciate Your Property in chapter 1 for a description of related persons. I need 2011 tax forms Indian reservation. I need 2011 tax forms   The term Indian reservation means a reservation as defined in section 3(d) of the Indian Financing Act of 1974 (25 U. I need 2011 tax forms S. I need 2011 tax forms C. I need 2011 tax forms 1452(d)) or section 4(10) of the Indian Child Welfare Act of 1978 (25 U. I need 2011 tax forms S. I need 2011 tax forms C. I need 2011 tax forms 1903(10)). I need 2011 tax forms Section 3(d) of the Indian Financing Act of 1974 defines reservation to include former Indian reservations in Oklahoma. I need 2011 tax forms For a definition of the term “former Indian reservations in Oklahoma,” see Notice 98-45 in Internal Revenue Bulletin 1998-35. I need 2011 tax forms Recovery Periods Under ADS The recovery periods for most property generally are longer under ADS than they are under GDS. I need 2011 tax forms The following table shows some of the ADS recovery periods. I need 2011 tax forms Property Recovery  Period Rent-to-own property 4 years Automobiles and light duty trucks 5 years Computers and peripheral equipment 5 years High technology telephone station equipment installed on customer premises 5 years High technology medical equipment 5 years Personal property with no class life 12 years Natural gas gathering lines 14 years Single purpose agricultural and horticultural structures 15 years Any tree or vine bearing fruit or nuts 20 years Initial clearing and grading land  improvements for gas utility property 20 years Initial clearing and grading land  improvements for electric utility  transmission and distribution plants 25 years Electric transmission property used in the transmission at 69 or more kilovolts of electricity 30 years Natural gas distribution lines 35 years Any qualified leasehold improvement property 39 years Any qualified restaurant property 39 years Nonresidential real property 40 years Residential rental property 40 years Section 1245 real property not listed in Appendix B 40 years Railroad grading and tunnel bore 50 years The ADS recovery periods for property not listed above can be found in the tables in Appendix B. I need 2011 tax forms Rent-to-own property, qualified leasehold improvement property, qualified restaurant property, residential rental property, and nonresidential real property are defined earlier under Which Property Class Applies Under GDS . I need 2011 tax forms Tax-exempt use property subject to a lease. I need 2011 tax forms   The ADS recovery period for any property leased under a lease agreement to a tax-exempt organization, governmental unit, or foreign person or entity (other than a partnership) cannot be less than 125% of the lease term. I need 2011 tax forms Additions and Improvements An addition or improvement you make to depreciable property is treated as separate depreciable property. I need 2011 tax forms See How Do You Treat Repairs and Improvements in chapter 1 for a definition of improvements. I need 2011 tax forms Its property class and recovery period are the same as those that would apply to the original property if you had placed it in service at the same time you placed the addition or improvement in service. I need 2011 tax forms The recovery period begins on the later of the following dates. I need 2011 tax forms The date you place the addition or improvement in service. I need 2011 tax forms The date you place in service the property to which you made the addition or improvement. I need 2011 tax forms If the improvement you make is qualified leasehold improvement property, qualified restaurant property, or qualified retail improvement property, the GDS recovery period is 15 years (39 years under ADS). I need 2011 tax forms Example. I need 2011 tax forms You own a rental home that you have been renting out since 1981. I need 2011 tax forms If you put an addition on the home and place the addition in service this year, you would use MACRS to figure your depreciation deduction for the addition. I need 2011 tax forms Under GDS, the property class for the addition is residential rental property and its recovery period is 27. I need 2011 tax forms 5 years because the home to which the addition is made would be residential rental property if you had placed it in service this year. I need 2011 tax forms Which Convention Applies? Under MACRS, averaging conventions establish when the recovery period begins and ends. I need 2011 tax forms The convention you use determines the number of months for which you can claim depreciation in the year you place property in service and in the year you dispose of the property. I need 2011 tax forms The mid-month convention. I need 2011 tax forms   Use this convention for nonresidential real property, residential rental property, and any railroad grading or tunnel bore. I need 2011 tax forms   Under this convention, you treat all property placed in service or disposed of during a month as placed in service or disposed of at the midpoint of the month. I need 2011 tax forms This means that a one-half month of depreciation is allowed for the month the property is placed in service or disposed of. I need 2011 tax forms   Your use of the mid-month convention is indicated by the “MM” already shown under column (e) in Part III of Form 4562. I need 2011 tax forms The mid-quarter convention. I need 2011 tax forms   Use this convention if the mid-month convention does not apply and the total depreciable bases of MACRS property you placed in service during the last 3 months of the tax year (excluding nonresidential real property, residential rental property, any railroad grading or tunnel bore, property placed in service and disposed of in the same year, and property that is being depreciated under a method other than MACRS) are more than 40% of the total depreciable bases of all MACRS property you placed in service during the entire year. I need 2011 tax forms   Under this convention, you treat all property placed in service or disposed of during any quarter of the tax year as placed in service or disposed of at the midpoint of that quarter. I need 2011 tax forms This means that 1½ months of depreciation is allowed for the quarter the property is placed in service or disposed of. I need 2011 tax forms   If you use this convention, enter “MQ” under column (e) in Part III of Form 4562. I need 2011 tax forms    For purposes of determining whether the mid-quarter convention applies, the depreciable basis of property you placed in service during the tax year reflects the reduction in basis for amounts expensed under section 179 and the part of the basis of property attributable to personal use. I need 2011 tax forms However, it does not reflect any reduction in basis for any special depreciation allowance. I need 2011 tax forms The half-year convention. I need 2011 tax forms   Use this convention if neither the mid-quarter convention nor the mid-month convention applies. I need 2011 tax forms   Under this convention, you treat all property placed in service or disposed of during a tax year as placed in service or disposed of at the midpoint of the year. I need 2011 tax forms This means that a one-half year of depreciation is allowed for the year the property is placed in service or disposed of. I need 2011 tax forms   If you use this convention, enter “HY” under column (e) in Part III of Form 4562. I need 2011 tax forms Which Depreciation Method Applies? MACRS provides three depreciation methods under GDS and one depreciation method under ADS. I need 2011 tax forms The 200% declining balance method over a GDS recovery period. I need 2011 tax forms The 150% declining balance method over a GDS recovery period. I need 2011 tax forms The straight line method over a GDS recovery period. I need 2011 tax forms The straight line method over an ADS recovery period. I need 2011 tax forms For property placed in service before 1999, you could have elected the 150% declining balance method using the ADS recovery periods for certain property classes. I need 2011 tax forms If you made this election, continue to use the same method and recovery period for that property. I need 2011 tax forms Table 4–1 lists the types of property you can depreciate under each method. I need 2011 tax forms It also gives a brief explanation of the method, including any benefits that may apply. I need 2011 tax forms Depreciation Methods for Farm Property If you place personal property in service in a farming business after 1988, you generally must depreciate it under GDS using the 150% declining balance method unless you are a farmer who must depreciate the property under ADS using the straight line method or you elect to depreciate the property under GDS or ADS using the straight line method. I need 2011 tax forms You can depreciate real property using the straight line method under either GDS or ADS. I need 2011 tax forms Fruit or nut trees and vines. I need 2011 tax forms   Depreciate trees and vines bearing fruit or nuts under GDS using the straight line method over a recovery period of 10 years. I need 2011 tax forms ADS required for some farmers. I need 2011 tax forms   If you elect not to apply the uniform capitalization rules to any plant produced in your farming business, you must use ADS. I need 2011 tax forms You must use ADS for all property you place in service in any year the election is in effect. I need 2011 tax forms See the regulations under section 263A of the Internal Revenue Code for information on the uniform capitalization rules that apply to farm property. I need 2011 tax forms Electing a Different Method As shown in Table 4–1 , you can elect a different method for depreciation for certain types of property. I need 2011 tax forms You must make the election by the due date of the return (including extensions) for the year you placed the property in service. I need 2011 tax forms However, if you timely filed your return for the year without making the election, you still can make the election by filing an amended return within 6 months of the due date of the return (excluding extensions). I need 2011 tax forms Attach the election to the amended return and write “Filed pursuant to section 301. I need 2011 tax forms 9100-2” on the election statement. I need 2011 tax forms File the amended return at the same address you filed the original return. I need 2011 tax forms Once you make the election, you cannot change it. I need 2011 tax forms If you elect to use a different method for one item in a property class, you must apply the same method to all property in that class placed in service during the year of the election. I need 2011 tax forms However, you can make the election on a property-by-property basis for nonresidential real and residential rental property. I need 2011 tax forms 150% election. I need 2011 tax forms   Instead of using the 200% declining balance method over the GDS recovery period for nonfarm property in the 3-, 5-, 7-, and 10-year property classes, you can elect to use the 150% declining balance method. I need 2011 tax forms Make the election by entering “150 DB” under column (f) in Part III of Form 4562. I need 2011 tax forms Straight line election. I need 2011 tax forms   Instead of using either the 200% or 150% declining balance methods over the GDS recovery period, you can elect to use the straight line method over the GDS recovery period. I need 2011 tax forms Make the election by entering  “S/L” under column (f) in Part III of Form 4562. I need 2011 tax forms Election of ADS. I need 2011 tax forms   As explained earlier under Which Depreciation System (GDS or ADS) Applies , you can elect to use ADS even though your property may come under GDS. I need 2011 tax forms ADS uses the straight line method of depreciation over fixed ADS recovery periods. I need 2011 tax forms Most ADS recovery periods are listed in Appendix B, or see the table under Recovery Periods Under ADS , earlier. I need 2011 tax forms   Make the election by completing line 20 in Part III of Form 4562. I need 2011 tax forms Farm property. I need 2011 tax forms   Instead of using the 150% declining balance method over a GDS recovery period for property you use in a farming business (other than real property), you can elect to depreciate it using either of the following methods. I need 2011 tax forms The straight line method over a GDS recovery period. I need 2011 tax forms The straight line method over an ADS recovery period. I need 2011 tax forms Table 4-1. I need 2011 tax forms Depreciation Methods Note. I need 2011 tax forms The declining balance method is abbreviated as DB and the straight line method is abbreviated as SL. I need 2011 tax forms Method Type of Property Benefit GDS using 200% DB • Nonfarm 3-, 5-, 7-, and 10-year property • Provides a greater deduction during the earlier recovery years • Changes to SL when that method provides an equal or greater deduction GDS using 150% DB • All farm property (except real property) • All 15- and 20-year property (except qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property placed in service before January 1, 2014) • Nonfarm 3-, 5-, 7-, and 10-year property • Provides a greater deduction during the earlier recovery years • Changes to SL when that method provides an equal or greater deduction1 GDS using SL • Nonresidential real property • Qualified leasehold improvement property placed in service before January 1, 2014 • Qualified restaurant property placed in service before January 1, 2014 • Qualified retail improvement property placed in service before January 1, 2014 • Residential rental property • Trees or vines bearing fruit or nuts • Water utility property • All 3-, 5-, 7-, 10-, 15-, and 20-year property2 • Property for which you elected section 168(k)(4) • Provides for equal yearly deductions (except for the first and last years) ADS using SL • Listed property used 50% or less for business • Property used predominantly outside the U. I need 2011 tax forms S. I need 2011 tax forms  • Tax-exempt property • Tax-exempt bond-financed property • Farm property used when an election not to apply the uniform capitalization rules is in effect • Imported property3 • Any property for which you elect to use this method4 • Provides for equal yearly deductions (except for the first and last years) 1The MACRS percentage tables in Appendix A have the switch to the straight line method built into their rates 2See section 168(b)(5) of the Internal Revenue Code. I need 2011 tax forms 3See section 168(g)(6) of the Internal Revenue Code 4See section 168(g)(7) of the Internal Revenue Code How Is the Depreciation Deduction Figured? To figure your depreciation deduction under MACRS, you first determine the depreciation system, property class, placed in service date, basis amount, recovery period, convention, and depreciation method that applies to your property. I need 2011 tax forms Then, you are ready to figure your depreciation deduction. I need 2011 tax forms You can figure it using a percentage table provided by the IRS, or you can figure it yourself without using the table. I need 2011 tax forms Using the MACRS Percentage Tables To help you figure your deduction under MACRS, the IRS has established percentage tables that incorporate the applicable convention and depreciation method. I need 2011 tax forms These percentage tables are in Appendix A near the end of this publication. I need 2011 tax forms Which table to use. I need 2011 tax forms    Appendix A contains the MACRS Percentage Table Guide, which is designed to help you locate the correct percentage table to use for depreciating your property. I need 2011 tax forms The percentage tables immediately follow the guide. I need 2011 tax forms Rules Covering the Use of the Tables The following rules cover the use of the percentage tables. I need 2011 tax forms You must apply the rates in the percentage tables to your property's unadjusted basis. I need 2011 tax forms You cannot use the percentage tables for a short tax year. I need 2011 tax forms See Figuring the Deduction for a Short Tax Year, later, for information on the short tax year rules. I need 2011 tax forms Once you start using the percentage tables for any item of property, you generally must continue to use them for the entire recovery period of the property. I need 2011 tax forms You must stop using the tables if you adjust the basis of the property for any reason other than— Depreciation allowed or allowable, or An addition or improvement to that property that is depreciated as a separate item of property. I need 2011 tax forms Basis adjustments other than those made due to the items listed in (4) include an increase in basis for the recapture of a clean-fuel deduction or credit and a reduction in basis for a casualty loss. I need 2011 tax forms Basis adjustment due to recapture of clean-fuel vehicle deduction or credit. I need 2011 tax forms   If you increase the basis of your property because of the recapture of part or all of a deduction for clean-fuel vehicles or the credit for clean-fuel vehicle refueling property placed in service before January 1, 2006, you cannot continue to use the percentage tables. I need 2011 tax forms For the year of the adjustment and the remaining recovery period, you must figure the depreciation deduction yourself using the property's adjusted basis at the end of the year. I need 2011 tax forms See Figuring the Deduction Without Using the Tables, later. I need 2011 tax forms Basis adjustment due to casualty loss. I need 2011 tax forms   If you reduce the basis of your property because of a casualty, you cannot continue to use the percentage tables. I need 2011 tax forms For the year of the adjustment and the remaining recovery period, you must figure the depreciation yourself using the property's adjusted basis at the end of the year. I need 2011 tax forms See Figuring the Deduction Without Using the Tables, later. I need 2011 tax forms Example. I need 2011 tax forms On October 26, 2012, Sandra Elm, a calendar year taxpayer, bought and placed in service in her business a new item of 7-year property. I need 2011 tax forms It cost $39,000 and she elected a section 179 deduction of $24,000. I need 2011 tax forms She also took a special depreciation allowance of $7,500 [50% of $15,000 ($39,000 − $24,000)]. I need 2011 tax forms Her unadjusted basis after the section 179 deduction and special depreciation allowance was $7,500 ($15,000 − $7,500). I need 2011 tax forms She figured her MACRS depreciation deduction using the percentage tables. I need 2011 tax forms For 2012, her MACRS depreciation deduction was $268. I need 2011 tax forms In July 2013, the property was vandalized and Sandra had a deductible casualty loss of $3,000. I need 2011 tax forms She must adjust the property's basis for the casualty loss, so she can no longer use the percentage tables. I need 2011 tax forms Her adjusted basis at the end of 2013, before figuring her 2013 depreciation, is $4,232. I need 2011 tax forms She figures that amount by subtracting the 2012 MACRS depreciation of $268 and the casualty loss of $3,000 from the unadjusted basis of $7,500. I need 2011 tax forms She must now figure her depreciation for 2013 without using the percentage tables. I need 2011 tax forms Figuring the Unadjusted Basis of Your Property You must apply the table rates to your property's unadjusted basis each year of the recovery period. I need 2011 tax forms Unadjusted basis is the same basis amount you would use to figure gain on a sale, but you figure it without reducing your original basis by any MACRS depreciation taken in earlier years. I need 2011 tax forms However, you do reduce your original basis by other amounts, including the following. I need 2011 tax forms Any amortization taken on the property. I need 2011 tax forms Any section 179 deduction claimed. I need 2011 tax forms Any special depreciation allowance taken on the property. I need 2011 tax forms For business property you purchase during the year, the unadjusted basis is its cost minus these and other applicable adjustments. I need 2011 tax forms If you trade property, your unadjusted basis in the property received is the cash paid plus the adjusted basis of the property traded minus these adjustments. I need 2011 tax forms MACRS Worksheet You can use this worksheet to help you figure your depreciation deduction using the percentage tables. I need 2011 tax forms Use a separate worksheet for each item of property. I need 2011 tax forms Then, use the information from this worksheet to prepare Form 4562. I need 2011 tax forms Do not use this worksheet for automobiles. I need 2011 tax forms Use the Depreciation Worksheet for Passenger Automobiles in chapter 5. I need 2011 tax forms MACRS Worksheet Part I   1. I need 2011 tax forms MACRS system (GDS or ADS)   2. I need 2011 tax forms Property class   3. I need 2011 tax forms Date placed in service   4. I need 2011 tax forms Recovery period   5. I need 2011 tax forms Method and convention   6. I need 2011 tax forms Depreciation rate (from tables)   Part II   7. I need 2011 tax forms Cost or other basis* $     8. I need 2011 tax forms Business/investment use   %   9. I need 2011 tax forms Multiply line 7 by line 8   $ 10. I need 2011 tax forms Total claimed for section 179 deduction and other items   $ 11. I need 2011 tax forms Subtract line 10 from line 9. I need 2011 tax forms This is your tentative basis for depreciation   $ 12. I need 2011 tax forms Multiply line 11 by . I need 2011 tax forms 50 if the 50% special depreciation allowance applies. I need 2011 tax forms This is your special depreciation allowance. I need 2011 tax forms Enter -0- if this is not the year you placed the property in service, the property is not qualified property, or you elected not to claim a special allowance   $ 13. I need 2011 tax forms Subtract line 12 from line 11. I need 2011 tax forms This is your basis for depreciation     14. I need 2011 tax forms Depreciation rate (from line 6)     15. I need 2011 tax forms Multiply line 13 by line 14. I need 2011 tax forms This is your MACRS depreciation deduction   $ *If real estate, do not include cost (basis) of land. I need 2011 tax forms The following example shows how to figure your MACRS depreciation deduction using the percentage tables and the MACRS worksheet. I need 2011 tax forms Example. I need 2011 tax forms You bought office furniture (7-year property) for $10,000 and placed it in service on August 11, 2013. I need 2011 tax forms You use the furniture only for business. I need 2011 tax forms This is the only property you placed in service this year. I need 2011 tax forms You did not elect a section 179 deduction and the property is not qualified property for purposes of claiming a special depreciation allowance so your property's unadjusted basis is its cost, $10,000. I need 2011 tax forms You use GDS and the half-year convention to figure your depreciation. I need 2011 tax forms You refer to the MACRS Percentage Table Guide in Appendix A and find that you should use Table A-1. I need 2011 tax forms Multiply your property's unadjusted basis each year by the percentage for 7-year property given in Table A-1. I need 2011 tax forms You figure your depreciation deduction using the MACRS worksheet as follows. I need 2011 tax forms MACRS Worksheet Part I 1. I need 2011 tax forms MACRS system (GDS or ADS) GDS 2. I need 2011 tax forms Property class 7-year 3. I need 2011 tax forms Date placed in service 8/11/13 4. I need 2011 tax forms Recovery period 7-Year 5. I need 2011 tax forms Method and convention 200%DB/Half-Year 6. I need 2011 tax forms Depreciation rate (from tables) . I need 2011 tax forms 1429 Part II 7. I need 2011 tax forms Cost or other basis* $10,000     8. I need 2011 tax forms Business/investment use 100 %   9. I need 2011 tax forms Multiply line 7 by line 8   $10,000 10. I need 2011 tax forms Total claimed for section 179 deduction and other items   -0- 11. I need 2011 tax forms Subtract line 10 from line 9. I need 2011 tax forms This is your tentative basis for depreciation   $10,000 12. I need 2011 tax forms Multiply line 11 by . I need 2011 tax forms 50 if the 50% special depreciation allowance applies. I need 2011 tax forms This is your special depreciation allowance. I need 2011 tax forms Enter -0- if this is not the year you placed the property in service, the property is not qualified property, or you elected not to claim a special allowance   -0- 13. I need 2011 tax forms Subtract line 12 from line 11. I need 2011 tax forms This is your basis for depreciation   $10,000 14. I need 2011 tax forms Depreciation rate (from line 6)   . I need 2011 tax forms 1429 15. I need 2011 tax forms Multiply line 13 by line 14. I need 2011 tax forms This is your MACRS depreciation deduction   $1,429 *If real estate, do not include cost (basis) of land. I need 2011 tax forms If there are no adjustments to the basis of the property other than depreciation, your depreciation deduction for each subsequent year of the recovery period will be as follows. I need 2011 tax forms Year   Basis Percentage Deduction 2014 $ 10,000 24. I need 2011 tax forms 49%   $2,449   2015   10,000 17. I need 2011 tax forms 49   1,749   2016   10,000 12. I need 2011 tax forms 49   1,249   2017   10,000 8. I need 2011 tax forms 93   893   2018   10,000 8. I need 2011 tax forms 92   892   2019   10,000 8. I need 2011 tax forms 93   893   2020   10,000 4. I need 2011 tax forms 46   446   Examples The following examples are provided to show you how to use the percentage tables. I need 2011 tax forms In both examples, assume the following. I need 2011 tax forms You use the property only for business. I need 2011 tax forms You use the calendar year as your tax year. I need 2011 tax forms You use GDS for all the properties. I need 2011 tax forms Example 1. I need 2011 tax forms You bought a building and land for $120,000 and placed it in service on March 8. I need 2011 tax forms The sales contract showed that the building cost $100,000 and the land cost $20,000. I need 2011 tax forms It is nonresidential real property. I need 2011 tax forms The building's unadjusted basis is its original cost, $100,000. I need 2011 tax forms You refer to the MACRS Percentage Table Guide in Appendix A and find that you should use Table A-7a. I need 2011 tax forms March is the third month of your tax year, so multiply the building's unadjusted basis, $100,000, by the percentages for the third month in Table A-7a. I need 2011 tax forms Your depreciation deduction for each of the first 3 years is as follows: Year   Basis Percentage Deduction 1st $ 100,000 2. I need 2011 tax forms 033%   $2,033   2nd   100,000 2. I need 2011 tax forms 564   2,564   3rd   100,000 2. I need 2011 tax forms 564   2,564   Example 2. I need 2011 tax forms During the year, you bought a machine (7-year property) for $4,000, office furniture (7-year property) for $1,000, and a computer (5-year property) for $5,000. I need 2011 tax forms You placed the machine in service in January, the furniture in September, and the computer in October. I need 2011 tax forms You do not elect a section 179 deduction and none of these items is qualified property for purposes of claiming a special depreciation allowance. I need 2011 tax forms You placed property in service during the last 3 months of the year, so you must first determine if you have to use the mid-quarter convention. I need 2011 tax forms The total bases of all property you placed in service during the year is $10,000. I need 2011 tax forms The $5,000 basis of the computer, which you placed in service during the last 3 months (the fourth quarter) of your tax year, is more than 40% of the total bases of all property ($10,000) you placed in service during the year. I need 2011 tax forms Therefore, you must use the mid-quarter convention for all three items. I need 2011 tax forms You refer to the MACRS Percentage Table Guide in Appendix A to determine which table you should use under the mid-quarter convention. I need 2011 tax forms The machine is 7-year property placed in service in the first quarter, so you use Table A-2. I need 2011 tax forms The furniture is 7-year property placed in service in the third quarter, so you use Table A-4. I need 2011 tax forms Finally, because the computer is 5-year property placed in service in the fourth quarter, you use Table A-6. I need 2011 tax forms Knowing what table to use for each property, you figure the depreciation for the first 2 years as follows. I need 2011 tax forms Year Property Basis Percentage Deduction 1st Machine $4,000 25. I need 2011 tax forms 00 $1,000   2nd Machine 4,000 21. I need 2011 tax forms 43 857   1st Furniture 1,000 10. I need 2011 tax forms 71 107   2nd Furniture 1,000 25. I need 2011 tax forms 51 255   1st Computer 5,000 5. I need 2011 tax forms 00 250   2nd Computer 5,000 38. I need 2011 tax forms 00 1,900   Sale or Other Disposition Before the Recovery Period Ends If you sell or otherwise dispose of your property before the end of its recovery period, your depreciation deduction for the year of the disposition will be only part of the depreciation amount for the full year. I need 2011 tax forms You have disposed of your property if you have permanently withdrawn it from use in your business or income-producing activity because of its sale, exchange, retirement, abandonment, involuntary conversion, or destruction. I need 2011 tax forms After you figure the full-year depreciation amount, figure the deductible part using the convention that applies to the property. I need 2011 tax forms Half-year convention used. I need 2011 tax forms   For property for which you used a half-year convention, the depreciation deduction for the year of the disposition is half the depreciation determined for the full year. I need 2011 tax forms Mid-quarter convention used. I need 2011 tax forms   For property for which you used the mid-quarter convention, figure your depreciation deduction for the year of the disposition by multiplying a full year of depreciation by the percentage listed below for the quarter in which you disposed of the property. I need 2011 tax forms Quarter Percentage First 12. I need 2011 tax forms 5% Second 37. I need 2011 tax forms 5 Third 62. I need 2011 tax forms 5 Fourth 87. I need 2011 tax forms 5 Example. I need 2011 tax forms On December 2, 2010, you placed in service an item of 5-year property costing $10,000. I need 2011 tax forms You did not claim a section 179 deduction and the property does not qualify for a special depreciation allowance. I need 2011 tax forms Your unadjusted basis for the property was $10,000. I need 2011 tax forms You used the mid-quarter convention because this was the only item of business property you placed in service in 2010 and it was placed in service during the last 3 months of your tax year. I need 2011 tax forms Your property is in the 5-year property class, so you used Table A-5 to figure your depreciation deduction. I need 2011 tax forms Your deductions for 2010, 2011, and 2012 were $500 (5% of $10,000), $3,800 (38% of $10,000), and $2,280 (22. I need 2011 tax forms 80% of $10,000). I need 2011 tax forms You disposed of the property on April 6, 2013. I need 2011 tax forms To determine your depreciation deduction for 2013, first figure the deduction for the full year. I need 2011 tax forms This is $1,368 (13. I need 2011 tax forms 68% of $10,000). I need 2011 tax forms April is in the second quarter of the year, so you multiply $1,368 by 37. I need 2011 tax forms 5% to get your depreciation deduction of $513 for 2013. I need 2011 tax forms Mid-month convention used. I need 2011 tax forms   If you dispose of residential rental or nonresidential real property, figure your depreciation deduction for the year of the disposition by multiplying a full year of depreciation by a fraction. I need 2011 tax forms The numerator of the fraction is the number of months (including partial months) in the year that the property is considered in service. I need 2011 tax forms The denominator is 12. I need 2011 tax forms Example. I need 2011 tax forms On July 2, 2011, you purchased and placed in service residential rental property. I need 2011 tax forms The property cost $100,000, not including the cost of land. I need 2011 tax forms You used Table A-6 to figure your MACRS depreciation for this property. I need 2011 tax forms You sold the property on March 2, 2013. I need 2011 tax forms You file your tax return based on the calendar year. I need 2011 tax forms A full year of depreciation for 2013 is $3,636. I need 2011 tax forms This is $100,000 multiplied by . I need 2011 tax forms 03636 (the percentage for the seventh month of the third recovery year) from Table A-6 . I need 2011 tax forms You then apply the mid-month convention for the 2½ months of use in 2013. I need 2011 tax forms Treat the month of disposition as one-half month of use. I need 2011 tax forms Multiply $3,636 by the fraction, 2. I need 2011 tax forms 5 over 12, to get your 2013 depreciation deduction of $757. I need 2011 tax forms 50. I need 2011 tax forms Figuring the Deduction Without Using the Tables Instead of using the rates in the percentage tables to figure your depreciation deduction, you can figure it yourself. I need 2011 tax forms Before making the computation each year, you must reduce your adjusted basis in the property by the depreciation claimed the previous year. I need 2011 tax forms Figuring MACRS deductions without using the tables generally will result in a slightly different amount than using the tables. I need 2011 tax forms Declining Balance Method When using a declining balance method, you apply the same depreciation rate each year to the adjusted basis of your property. I need 2011 tax forms You must use the applicable convention for the first tax year and you must switch to the straight line method beginning in the first year for which it will give an equal or greater deduction. I need 2011 tax forms The straight line method is explained later. I need 2011 tax forms You figure depreciation for the year you place property in service as follows. I need 2011 tax forms Multiply your adjusted basis in the property by the declining balance rate. I need 2011 tax forms Apply the applicable convention. I need 2011 tax forms You figure depreciation for all other years (before the year you switch to the straight line method) as follows. I need 2011 tax forms Reduce your adjusted basis in the property by the depreciation allowed or allowable in earlier years. I need 2011 tax forms Multiply this new adjusted basis by the same declining balance rate used in earlier years. I need 2011 tax forms If you dispose of property before the end of its recovery period, see Using the Applicable Convention, later, for information on how to figure depreciation for the year you dispose of it. I need 2011 tax forms Figuring depreciation under the declining balance method and switching to the straight line method is illustrated in Example 1 , later, under Examples. I need 2011 tax forms Declining balance rate. I need 2011 tax forms   You figure your declining balance rate by dividing the specified declining balance percentage (150% or 200% changed to a decimal) by the number of years in the property's recovery period. I need 2011 tax forms For example, for 3-year property depreciated using the 200% declining balance method, divide 2. I need 2011 tax forms 00 (200%) by 3 to get 0. I need 2011 tax forms 6667, or a 66. I need 2011 tax forms 67% declining balance rate. I need 2011 tax forms For 15-year property depreciated using the 150% declining balance method, divide 1. I need 2011 tax forms 50 (150%) by 15 to get 0. I need 2011 tax forms 10, or a 10% declining balance rate. I need 2011 tax forms   The following table shows the declining balance rate for each property class and the first year for which the straight line method gives an equal or greater deduction. I need 2011 tax forms Property Class Method Declining Balance Rate Year 3-year 200% DB 66. I need 2011 tax forms 667% 3rd 5-year 200% DB 40. I need 2011 tax forms 0 4th 7-year 200% DB 28. I need 2011 tax forms 571 5th 10-year 200% DB 20. I need 2011 tax forms 0 7th 15-year 150% DB 10. I need 2011 tax forms 0 7th 20-year 150% DB 7. I need 2011 tax forms 5 9th Straight Line Method When using the straight line method, you apply a different depreciation rate each year to the adjusted basis of your property. I need 2011 tax forms You must use the applicable convention in the year you place the property in service and the year you dispose of the property. I need 2011 tax forms You figure depreciation for the year you place property in service as follows. I need 2011 tax forms Multiply your adjusted basis in the property by the straight line rate. I need 2011 tax forms Apply the applicable convention. I need 2011 tax forms You figure depreciation for all other years (including the year you switch from the declining balance method to the straight line method) as follows. I need 2011 tax forms Reduce your adjusted basis in the property by the depreciation allowed or allowable in earlier years (under any method). I need 2011 tax forms Determine the depreciation rate for the year. I need 2011 tax forms Multiply the adjusted basis figured in (1) by the depreciation rate figured in (2). I need 2011 tax forms If you dispose of property before the end of its recovery period, see Using the Applicable Convention , later, for information on how to figure depreciation for the year you dispose of it. I need 2011 tax forms Straight line rate. I need 2011 tax forms   You determine the straight line depreciation rate for any tax year by dividing the number 1 by the years remaining in the recovery period at the beginning of that year. I need 2011 tax forms When figuring the number of years remaining, you must take into account the convention used in the year you placed the property in service. I need 2011 tax forms If the number of years remaining is less than 1, the depreciation rate for that tax year is 1. I need 2011 tax forms 0 (100%). I need 2011 tax forms Using the Applicable Convention The applicable convention (discussed earlier under Which Convention Applies ) affects how you figure your depreciation deduction for the year you place your property in service and for the year you dispose of it. I need 2011 tax forms It determines how much of the recovery period remains at the beginning of each year, so it also affects the depreciation rate for property you depreciate under the straight line method. I need 2011 tax forms See Straight line rate in the previous discussion. I need 2011 tax forms Use the applicable convention as explained in the following discussions. I need 2011 tax forms Half-year convention. I need 2011 tax forms   If this convention applies, you deduct a half-year of depreciation for the first year and the last year that you depreciate the property. I need 2011 tax forms You deduct a full year of depreciation for any other year during the recovery period. I need 2011 tax forms   Figure your depreciation deduction for the year you place the property in service by dividing the depreciation for a full year by 2. I need 2011 tax forms If you dispose of the property before the end of the recovery period, figure your depreciation deduction for the year of the disposition the same way. I need 2011 tax forms If you hold the property for the entire recovery period, your depreciation deduction for the year that includes the final 6 months of the recovery period is the amount of your unrecovered basis in the property. I need 2011 tax forms Mid-quarter convention. I need 2011 tax forms   If this convention applies, the depreciation you can deduct for the first year you depreciate the property depends on the quarter in which you place the property in service. I need 2011 tax forms   A quarter of a full 12-month tax year is a period of 3 months. I need 2011 tax forms The first quarter in a year begins on the first day of the tax year. I need 2011 tax forms The second quarter begins on the first day of the fourth month of the tax year. I need 2011 tax forms The third quarter begins on the first day of the seventh month of the tax year. I need 2011 tax forms The fourth quarter begins on the first day of the tenth month of the tax year. I need 2011 tax forms A calendar year is divided into the following quarters. I need 2011 tax forms Quarter Months First January, February, March Second April, May, June Third July, August, September Fourth October, November, December   Figure your depreciation deduction for the year you place the property in service by multiplying the depreciation for a full year by the percentage listed below for the quarter you place the property in service. I need 2011 tax forms Quarter Percentage First 87. I need 2011 tax forms 5% Second 62. I need 2011 tax forms 5 Third 37. I need 2011 tax forms 5 Fourth 12. I need 2011 tax forms 5   If you dispose of the property before the end of the recovery period, figure your depreciation deduction for the year of the disposition by multiplying a full year of depreciation by the percentage listed below for the quarter you dispose of the property. I need 2011 tax forms Quarter Percentage First 12. I need 2011 tax forms 5% Second 37. I need 2011 tax forms 5 Third 62. I need 2011 tax forms 5 Fourth 87. I need 2011 tax forms 5   If you hold the property for the entire recovery period, your depreciation deduction for the year that includes the final quarter of the recovery period is the amount of your unrecovered basis in the property. I need 2011 tax forms Mid-month convention. I need 2011 tax forms   If this convention applies, the depreciation you can deduct for the first year that you depreciate the property depends on the month in which you place the property in service. I need 2011 tax forms Figure your depreciation deduction for the year you place the property in service by multiplying the depreciation for a full year by a fraction. I need 2011 tax forms The numerator of the fraction is the number of full months in the year that the property is in service plus ½ (or 0. I need 2011 tax forms 5). I need 2011 tax forms The denominator is 12. I need 2011 tax forms   If you dispose of the property before the end of the recovery period, figure your depreciation deduction for the year of the disposition the same way. I need 2011 tax forms If you hold the property for the entire recovery period, your depreciation deduction for the year that includes the final month of the recovery period is the amount of your unrecovered basis in the property. I need 2011 tax forms Example. I need 2011 tax forms You use the calendar year and place nonresidential real property in service in August. I need 2011 tax forms The property is in service 4 full months (September, October, November, and December). I need 2011 tax forms Your numerator is 4. I need 2011 tax forms 5 (4 full months plus 0. I need 2011 tax forms 5). I need 2011 tax forms You multiply the depreciation for a full year by 4. I need 2011 tax forms 5/12, or 0. I need 2011 tax forms 375. I need 2011 tax forms Examples The following examples show how to figure depreciation under MACRS without using the percentage tables. I need 2011 tax forms Figures are rounded for purposes of the examples. I need 2011 tax forms Assume for all the examples that you use a calendar year as your tax year. I need 2011 tax forms Example 1—200% DB method and half-year convention. I need 2011 tax forms In February, you placed in service depreciable property with a 5-year recovery period and a basis of $1,000. I need 2011 tax forms You do not elect to take the section 179 deduction and the property does not qualify for a special depreciation allowance. I need 2011 tax forms You use GDS and the 200% declining balance (DB) method to figure your depreciation. I need 2011 tax forms When the straight line (SL) method results in an equal or larger deduction, you switch to the SL method. I need 2011 tax forms You did not place any property in service in the last 3 months of the year, so you must use the half-year convention. I need 2011 tax forms First year. I need 2011 tax forms You figure the depreciation rate under the 200% DB method by dividing 2 (200%) by 5 (the number of years in the recovery period). I need 2011 tax forms The result is 40%. I need 2011 tax forms You multiply the adjusted basis of the property ($1,000) by the 40% DB rate. I need 2011 tax forms You apply the half-year convention by dividing the result ($400) by 2. I need 2011 tax forms Depreciation for the first year under the 200% DB method is $200. I need 2011 tax forms You figure the depreciation rate under the straight line (SL) method by dividing 1 by 5, the number of years in the recovery period. I need 2011 tax forms The result is 20%. I need 2011 tax forms You multiply the adjusted basis of the property ($1,000) by the 20% SL rate. I need 2011 tax forms You apply the half-year convention by dividing the result ($200) by 2. I need 2011 tax forms Depreciation for the first year under the SL method is $100. I need 2011 tax forms The DB method provides a larger deduction, so you deduct the $200 figured under the 200% DB method. I need 2011 tax forms Second year. I need 2011 tax forms You reduce the adjusted basis ($1,000) by the depreciation claimed in the first year ($200). I need 2011 tax forms You multiply the result ($800) by the DB rate (40%). I need 2011 tax forms Depreciation for the second year under the 200% DB method is $320. I need 2011 tax forms You figure the SL depreciation rate by dividing 1 by 4. I need 2011 tax forms 5, the number of years remaining in the recovery period. I need 2011 tax forms (Based on the half-year convention, you used only half a year of the recovery period in the first year. I need 2011 tax forms ) You multiply the reduced adjusted basis ($800) by the result (22. I need 2011 tax forms 22%). I need 2011 tax forms Depreciation under the SL method for the second year is $178. I need 2011 tax forms The DB method provides a larger deduction, so you deduct the $320 figured under the 200% DB method. I need 2011 tax forms Third year. I need 2011 tax forms You reduce the adjusted basis ($800) by the depreciation claimed in the second year ($320). I need 2011 tax forms You multiply the result ($480) by the DB rate (40%). I need 2011 tax forms Depreciation for the third year under the 200% DB method is $192. I need 2011 tax forms You figure the SL depreciation rate by dividing 1 by 3. I need 2011 tax forms 5. I need 2011 tax forms You multiply the reduced adjusted basis ($480) by the result (28. I need 2011 tax forms 57%). I need 2011 tax forms Depreciation under the SL method for the third year is $137. I need 2011 tax forms The DB method provides a larger deduction, so you deduct the $192 figured under the 200% DB method. I need 2011 tax forms Fourth year. I need 2011 tax forms You reduce the adjusted basis ($480) by the de