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Irs 2012 Form 1040a

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Irs 2012 Form 1040a

Irs 2012 form 1040a 3. Irs 2012 form 1040a   Filing Information for Individuals in Certain U. Irs 2012 form 1040a S. Irs 2012 form 1040a Possessions Table of Contents American SamoaWhere To Get Forms and Information Which Returns To File Special Rules for American Samoa Double Taxation The Commonwealth of Puerto RicoWhere To Get Forms and Information Which Returns To File Special Rules for Puerto Rico Double Taxation The Commonwealth of the Northern Mariana IslandsWhere To Get Forms and Information Which Return To File Special Rules for the CNMI Double Taxation GuamWhere To Get Forms and Information Which Return To File Special Rules for Guam Double Taxation The U. Irs 2012 form 1040a S. Irs 2012 form 1040a Virgin IslandsWhere To Get Forms and Information Which Return To File Special Rules for the USVI Double Taxation If you have income from American Samoa, the CNMI, Guam, Puerto Rico, or the USVI, you may have to file a tax return with the tax department of that possession. Irs 2012 form 1040a Or, you may have to file two annual tax returns, one with the possession's tax department and the other with the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Internal Revenue Service. Irs 2012 form 1040a This chapter covers the general rules for filing returns in the five possessions. Irs 2012 form 1040a You must first determine if you are a bona fide resident of the relevant possession. Irs 2012 form 1040a See chapter 1 for a discussion of the requirements you must meet. Irs 2012 form 1040a You should ask for forms and advice about the filing of possession tax returns from that possession's tax department, not the Internal Revenue Service. Irs 2012 form 1040a Contact information is listed in this chapter under the heading for each possession. Irs 2012 form 1040a American Samoa American Samoa has its own separate and independent tax system. Irs 2012 form 1040a Although its tax laws are modeled on the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Internal Revenue Code, there are certain differences. Irs 2012 form 1040a Where To Get Forms and Information Requests for advice about matters connected with Samoan taxation should be sent to: American Samoa Government Tax Office  Executive Office Building First Floor Pago Pago, AS 96799 The phone number is (684) 633-4181. Irs 2012 form 1040a The fax number is (684) 633-1513. Irs 2012 form 1040a You can get forms and publications at www. Irs 2012 form 1040a americansamoa. Irs 2012 form 1040a gov. Irs 2012 form 1040a The addresses and phone numbers listed above are subject to change. Irs 2012 form 1040a Which Returns To File Your residency status and your source of income with regard to American Samoa determine whether you file your return and pay your tax to American Samoa, to the United States, or to both. Irs 2012 form 1040a In addition to the information below that is categorized by residency status, the Special Rules for American Samoa section (later) contains important information for determining the correct forms to file. Irs 2012 form 1040a Bona Fide Resident of American Samoa Bona fide residents of American Samoa are generally exempt from U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax on their American Samoa source income. Irs 2012 form 1040a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen or resident alien. Irs 2012 form 1040a   If you are a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen or resident alien and a bona fide resident of American Samoa during the entire tax year, you generally must file the following returns. Irs 2012 form 1040a An American Samoa tax return reporting your gross income from worldwide sources. Irs 2012 form 1040a If you report non-American Samoa source income on your American Samoa tax return, you can claim a credit against your American Samoa tax liability for income taxes paid on that income to the United States, a foreign country, or another possession. Irs 2012 form 1040a A U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return reporting income from worldwide sources, but excluding income from sources within American Samoa. Irs 2012 form 1040a However, amounts received for services performed as an employee of the United States or any of its agencies cannot be excluded (see U. Irs 2012 form 1040a S. Irs 2012 form 1040a Government employees under Special Rules for American Samoa, later). Irs 2012 form 1040a To exclude American Samoa source income, attach a completed Form 4563 to your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return (see Form 4563 for more information). Irs 2012 form 1040a If you are excluding American Samoa source income on your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return, you will not be allowed any deductions from gross income or credits against tax that are directly or indirectly allocable to the exempt income. Irs 2012 form 1040a For more information, see Special Rules for Completing Your U. Irs 2012 form 1040a S. Irs 2012 form 1040a Tax Return in chapter 4. Irs 2012 form 1040a Nonresident alien. Irs 2012 form 1040a   If you are a bona fide resident of American Samoa during the entire tax year, but a nonresident alien of the United States, you generally must file the following returns. Irs 2012 form 1040a An American Samoa tax return reporting worldwide income. Irs 2012 form 1040a A U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return (Form 1040, U. Irs 2012 form 1040a S. Irs 2012 form 1040a Individual Income Tax Return) reporting income from worldwide sources, but excluding American Samoa source income other than amounts for services performed as an employee of the United States or any of its agencies. Irs 2012 form 1040a For more information, see U. Irs 2012 form 1040a S. Irs 2012 form 1040a Government employees under Special Rules for American Samoa, later. Irs 2012 form 1040a To exclude income from sources within American Samoa, attach a completed Form 4563 to your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return (see Form 4563 , below, for more information). Irs 2012 form 1040a For all other tax purposes, however, you will be treated as a nonresident alien individual. Irs 2012 form 1040a For example, you are not allowed the standard deduction, you cannot file a joint return, and you are not allowed a deduction for a dependent unless that person is a citizen or national of the United States. Irs 2012 form 1040a There are also limitations on what deductions and credits are allowed. Irs 2012 form 1040a See Publication 519 for more information. Irs 2012 form 1040a Form 4563. Irs 2012 form 1040a   If you must file a U. Irs 2012 form 1040a S. Irs 2012 form 1040a income tax return and you qualify to exclude any of your income from American Samoa, claim the exclusion by completing Form 4563 and attaching it to your Form 1040. Irs 2012 form 1040a Form 4563 cannot be filed by itself. Irs 2012 form 1040a There is an example of a filled-in Form 4563 in chapter 5. Irs 2012 form 1040a   If you are a bona fide resident of American Samoa during the entire tax year and you are not including a check or a money order, send your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return and all attachments (including Form 4563) to: Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return and all attachments (including Form 4563) to: Internal Revenue Service P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 1303 Charlotte, NC 28201-1303 USA   Send your American Samoa tax return and all attachments to the address given under Where To Get Forms and Information , earlier. Irs 2012 form 1040a Self-employment tax. Irs 2012 form 1040a   If you are not required to file a U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return but have income that is effectively connected with a trade or business in American Samoa, you must file Form 1040-SS with the United States. Irs 2012 form 1040a On this form you will report your self-employment income to the United States and, if necessary, pay self-employment tax on that income. Irs 2012 form 1040a Additional Medicare Tax. Irs 2012 form 1040a   Beginning in 2013, you may be required to pay Additional Medicare Tax. Irs 2012 form 1040a Also, you may need to report Additional Medicare Tax withheld by your employer. Irs 2012 form 1040a For more information see Additional Medicare Tax under Special Rules for Completing Your U. Irs 2012 form 1040a S. Irs 2012 form 1040a Tax Return in chapter 4. Irs 2012 form 1040a Net Investment Income Tax. Irs 2012 form 1040a   Beginning in 2013, the Net Investment Income Tax (NIIT) is 3. Irs 2012 form 1040a 8 percent of the lesser of an individual’s net investment income or the excess of the individual’s modified adjusted gross income over a specified threshold amount. Irs 2012 form 1040a The NIIT will apply to a bona fide resident of American Samoa if a taxpayer has modified adjusted gross income from sources outside of American Samoa that exceeds a specified threshold amount, e. Irs 2012 form 1040a g. Irs 2012 form 1040a , $200,000 for single filers. Irs 2012 form 1040a The NIIT does not apply to any individual who is a nonresident alien with respect to the United States. Irs 2012 form 1040a See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information on the NIIT. Irs 2012 form 1040a Estimated tax payments. Irs 2012 form 1040a   To see if you are required to make payments of estimated income tax, self-employment tax, Additional Medicare Tax, and/or Net Investment Income Tax to the IRS, get Form 1040-ES, Estimated Tax for Individuals. Irs 2012 form 1040a   To pay by check or money order, send your payment with the Form 1040-ES payment voucher to: Internal Revenue Service P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 1300 Charlotte, NC 28201-1300 USA   To get information on paying electronically (by credit or debit card, or through the Electronic Federal Tax Payment System (EFTPS)), go to www. Irs 2012 form 1040a irs. Irs 2012 form 1040a gov/e-pay. Irs 2012 form 1040a   For information on making estimated income tax payments to American Samoa, see Where To Get Forms and Information , earlier. Irs 2012 form 1040a Not a Bona Fide Resident of American Samoa An individual who is not a bona fide resident of American Samoa for the tax year generally files both U. Irs 2012 form 1040a S. Irs 2012 form 1040a and American Samoa tax returns, and claims a foreign tax credit on the U. Irs 2012 form 1040a S. Irs 2012 form 1040a return for taxes paid to American Samoa. Irs 2012 form 1040a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen or resident alien. Irs 2012 form 1040a   If you are a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen or resident alien but not a bona fide resident of American Samoa during the entire tax year, you generally must file the following returns. Irs 2012 form 1040a An American Samoa tax return reporting only your income from sources within American Samoa. Irs 2012 form 1040a Wages for services performed in American Samoa, whether for a private employer, the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Government, or otherwise, is income from sources within American Samoa. Irs 2012 form 1040a A U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return reporting your income from worldwide sources. Irs 2012 form 1040a You can take a credit against your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax liability if you paid income taxes to American Samoa (or other possession or foreign country) and reported income from those sources on your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return. Irs 2012 form 1040a De minimis exception to determining source of income. Irs 2012 form 1040a   In certain situations you will not have income from a possession. Irs 2012 form 1040a See De minimis exception under Compensation for Labor or Personal Services in chapter 2. Irs 2012 form 1040a Nonresident alien. Irs 2012 form 1040a   If you are a nonresident alien of the United States who does not qualify as a bona fide resident of American Samoa for the entire tax year, you generally must file the following returns. Irs 2012 form 1040a An American Samoa tax return reporting only your income from sources within American Samoa. Irs 2012 form 1040a In this situation, wages for services performed in American Samoa, whether for a private employer, the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Government, or otherwise, is income from sources within American Samoa. Irs 2012 form 1040a A U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return (Form 1040NR, U. Irs 2012 form 1040a S. Irs 2012 form 1040a Nonresident Alien Income Tax Return) reporting U. Irs 2012 form 1040a S. Irs 2012 form 1040a source income according to the rules for a nonresident alien. Irs 2012 form 1040a See the Instructions for Form 1040NR. Irs 2012 form 1040a   If you are not a bona fide resident of American Samoa during the entire tax year, and you are not including a check or a money order, send your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return and all attachments to: Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return and all attachments to: Internal Revenue Service P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 1303 Charlotte, NC 28201-1303 USA   Send your American Samoa tax return and all attachments to the address given under Where To Get Forms and Information , earlier. Irs 2012 form 1040a Special Rules for American Samoa Some special rules apply to certain types of income and employment connected with American Samoa. Irs 2012 form 1040a U. Irs 2012 form 1040a S. Irs 2012 form 1040a Armed Forces. Irs 2012 form 1040a   Bona fide residents of American Samoa include military personnel whose official home of record is American Samoa. Irs 2012 form 1040a Civilian spouse of active duty member of the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Armed Forces. Irs 2012 form 1040a   If, under the rule discussed at the beginning of chapter 1 (see Special rule for civilian spouse of active duty member of the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Armed Forces ), your tax residence is American Samoa, follow the guidance in the section for bona fide residents under Which Returns To File, earlier. Irs 2012 form 1040a However, if your tax residence is one of the 50 states or the District of Columbia and your only income from American Samoa is from wages, salaries, tips, or self-employment, you will be taxed on your worldwide income and file only a U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return (Form 1040) and a state and/or local tax return, if required. Irs 2012 form 1040a If you have income from American Samoa other than wages, salaries, tips, or self-employment that is considered to be sourced in that possession (see Table 2-1), contact the local tax administration for guidance. Irs 2012 form 1040a U. Irs 2012 form 1040a S. Irs 2012 form 1040a Government employees. Irs 2012 form 1040a   If you are employed in American Samoa by the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Government or any of its agencies, you are subject to tax by American Samoa on your pay from the government. Irs 2012 form 1040a Whether you are subject to tax by American Samoa on your non-American Samoa source income depends on your status in American Samoa as a bona fide resident. Irs 2012 form 1040a   Wages and salaries paid to employees of the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Government and its agencies are also subject to U. Irs 2012 form 1040a S. Irs 2012 form 1040a federal income tax. Irs 2012 form 1040a These payments do not qualify for the exclusion of income from sources within American Samoa, discussed earlier. Irs 2012 form 1040a   For tax years ending after April 9, 2008, wages and salaries paid to bona fide residents by the Government of American Samoa can be excluded on the U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return. Irs 2012 form 1040a   If you report government wages on both your U. Irs 2012 form 1040a S. Irs 2012 form 1040a and American Samoa tax returns, you can take a credit on your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return for income taxes paid or accrued to American Samoa. Irs 2012 form 1040a Figure the credit on Form 1116, and attach that form to your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return, Form 1040. Irs 2012 form 1040a Show your wages paid for services performed in American Samoa on Form 1116, line 1a, enter “American Samoa” on line g, and check box b above Part I. Irs 2012 form 1040a Moving expense deduction. Irs 2012 form 1040a   Generally, expenses of a move to American Samoa are directly attributable to American Samoa wages, salaries, and other earned income. Irs 2012 form 1040a Likewise, the expenses of a move back to the United States are generally attributable to U. Irs 2012 form 1040a S. Irs 2012 form 1040a earned income. Irs 2012 form 1040a   If your move was to American Samoa, report your deduction for moving expenses as follows. Irs 2012 form 1040a If you are a bona fide resident in the tax year of your move, enter your deductible expenses on your American Samoa tax return. Irs 2012 form 1040a If you are not a bona fide resident, enter your deductible expenses on both your American Samoa and U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax returns. Irs 2012 form 1040a Also, for purposes of a tax credit against your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax liability, reduce your American Samoa “general category income” on Form 1116, line 1a, by entering the deductible moving expenses on line 2. Irs 2012 form 1040a   If your move was to the United States, complete Form 3903, Moving Expenses, and enter the deductible amount on Form 1040, line 26. Irs 2012 form 1040a Double Taxation A mutual agreement procedure exists to settle cases of double taxation between the United States and American Samoa. Irs 2012 form 1040a See Double Taxation in chapter 4. Irs 2012 form 1040a The Commonwealth of Puerto Rico The Commonwealth of Puerto Rico has its own separate and independent tax system. Irs 2012 form 1040a Although it is modeled after the U. Irs 2012 form 1040a S. Irs 2012 form 1040a system, there are differences in law and tax rates. Irs 2012 form 1040a Where To Get Forms and Information Requests for information about the filing of Puerto Rico tax returns should be addressed to: Departamento de Hacienda Negociado de Asistencia Contributiva  P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 9024140 San Juan, Puerto Rico 00902-4140 The phone numbers are (787) 721-8051 and (787) 721-7198. Irs 2012 form 1040a    To obtain Puerto Rico tax forms, contact the Forms and Publications Division Office at the above address or call (787) 722-0216, option #7. Irs 2012 form 1040a You can access the Hacienda website at www. Irs 2012 form 1040a hacienda. Irs 2012 form 1040a gobierno. Irs 2012 form 1040a pr or email your questions about Puerto Rico taxes to InfoServ@hacienda. Irs 2012 form 1040a gobierno. Irs 2012 form 1040a pr. Irs 2012 form 1040a The addresses and phone numbers listed above are subject to change. Irs 2012 form 1040a Which Returns To File Generally, you will file returns with both Puerto Rico and the United States. Irs 2012 form 1040a The income reported on each return depends on your residency status in Puerto Rico. Irs 2012 form 1040a To determine if you are a bona fide resident of Puerto Rico, see the information in chapter 1. Irs 2012 form 1040a Bona Fide Resident of Puerto Rico Bona fide residents of Puerto Rico will generally pay tax to Puerto Rico on their worldwide income. Irs 2012 form 1040a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen or resident alien. Irs 2012 form 1040a   If you are a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen or resident alien and also a bona fide resident of Puerto Rico during the entire tax year, you generally must file the following returns. Irs 2012 form 1040a A Puerto Rico tax return reporting income from worldwide sources. Irs 2012 form 1040a If you report U. Irs 2012 form 1040a S. Irs 2012 form 1040a source income on your Puerto Rico tax return, you can claim a credit against your Puerto Rico tax, up to the amount allowable, for income taxes paid to the United States. Irs 2012 form 1040a A U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return reporting income from worldwide sources, but excluding Puerto Rico source income. Irs 2012 form 1040a However, see U. Irs 2012 form 1040a S. Irs 2012 form 1040a Government employees under Special Rules for Puerto Rico, later, for an exception. Irs 2012 form 1040a If you are excluding Puerto Rico income on your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return, you will not be allowed any deductions or credits that are directly or indirectly allocable to exempt income. Irs 2012 form 1040a For more information, see Special Rules for Completing Your U. Irs 2012 form 1040a S. Irs 2012 form 1040a Tax Return in chapter 4. Irs 2012 form 1040a If all of your income is from Puerto Rico sources, you are not required to file a U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return. Irs 2012 form 1040a However, if you have self-employment income, see Self-employment tax , later. Irs 2012 form 1040a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen only. Irs 2012 form 1040a   If you are a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen, you may also qualify under these rules if you have been a bona fide resident of Puerto Rico for at least 2 years before moving from Puerto Rico. Irs 2012 form 1040a In this case, you can exclude your income derived from sources within Puerto Rico (but not wages and salaries received as an employee of the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Government or its agencies) that you earned before the date you changed your residence. Irs 2012 form 1040a For more information, see Puerto Rico under Year of Moving From a Possession in chapter 1. Irs 2012 form 1040a Nonresident alien. Irs 2012 form 1040a   If you are a bona fide resident of Puerto Rico during the entire tax year, but a nonresident alien of the United States, you generally must file the following returns. Irs 2012 form 1040a A Puerto Rico tax return reporting income from worldwide sources. Irs 2012 form 1040a If you report U. Irs 2012 form 1040a S. Irs 2012 form 1040a source income on your Puerto Rico tax return, you can claim a credit against your Puerto Rico tax, up to the amount allowable, for income taxes paid to the United States. Irs 2012 form 1040a A U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return (Form 1040) reporting income from worldwide sources, but excluding Puerto Rico source income (other than amounts for services performed as an employee of the United States or any of its agencies). Irs 2012 form 1040a For tax purposes other than reporting income, however, you will be treated as a nonresident alien individual. Irs 2012 form 1040a For example, you are not allowed the standard deduction, you cannot file a joint return, and you are not allowed a deduction for a dependent unless that person is a citizen or national of the United States. Irs 2012 form 1040a There are also limitations on what deductions and credits are allowed. Irs 2012 form 1040a See Publication 519 for more information. Irs 2012 form 1040a Self-employment tax. Irs 2012 form 1040a   If you have no U. Irs 2012 form 1040a S. Irs 2012 form 1040a filing requirement but have income that is effectively connected with a trade or business in Puerto Rico, you must file Form 1040-SS or Form 1040-PR with the United States to report your self-employment income and, if necessary, pay self-employment tax. Irs 2012 form 1040a Additional Medicare Tax. Irs 2012 form 1040a   Beginning in 2013, you may be required to pay Additional Medicare Tax. Irs 2012 form 1040a Also, you may need to report Additional Medicare Tax withheld by your employer. Irs 2012 form 1040a For more information see Additional Medicare Tax under Special Rules for Completing Your U. Irs 2012 form 1040a S. Irs 2012 form 1040a Tax Return in chapter 4. Irs 2012 form 1040a Net Investment Income Tax. Irs 2012 form 1040a   Beginning in 2013, the Net Investment Income Tax (NIIT) is 3. Irs 2012 form 1040a 8 percent of the lesser of an individual’s net investment income or the excess of the individual’s modified adjusted gross income over a specified threshold amount. Irs 2012 form 1040a The NIIT will apply to a bona fide resident of Puerto Rico if a taxpayer has modified adjusted gross income from sources outside of Puerto Rico that exceeds a specified threshold amount, e. Irs 2012 form 1040a g. Irs 2012 form 1040a , $200,000 for single filers. Irs 2012 form 1040a The NIIT does not apply to any individual who is a nonresident alien with respect to the United States. Irs 2012 form 1040a See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information on the NIIT. Irs 2012 form 1040a Estimated tax payments. Irs 2012 form 1040a   To see if you are required to make payments of estimated income tax, self-employment tax, Additional Medicare Tax, and/or Net Investment Income Tax to the IRS, get Form 1040-ES (or Form 1040-ES(PR)). Irs 2012 form 1040a   To pay by check or money order, send your payment with the Form 1040-ES (or Form 1040-ES(PR)) payment voucher to: Internal Revenue Service P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 1300 Charlotte, NC 28201-1300 USA   To get information on paying electronically (by credit or debit card, or through the Electronic Federal Tax Payment System (EFTPS)), go to www. Irs 2012 form 1040a irs. Irs 2012 form 1040a gov/e-pay. Irs 2012 form 1040a   For information on making estimated income tax payments to Hacienda, see Where To Get Forms and Information , earlier. Irs 2012 form 1040a Not a Bona Fide Resident of Puerto Rico An individual who is not a bona fide resident of Puerto Rico for the tax year generally files tax returns with both Puerto Rico and the United States. Irs 2012 form 1040a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen or resident alien. Irs 2012 form 1040a   If you are a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen or resident alien but not a bona fide resident of Puerto Rico during the entire tax year, you generally must file the following returns. Irs 2012 form 1040a A Puerto Rico tax return reporting only your income from Puerto Rico sources. Irs 2012 form 1040a Wages for services performed in Puerto Rico, whether for a private employer, the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Government, or otherwise, is income from Puerto Rico sources. Irs 2012 form 1040a A U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return reporting income from worldwide sources. Irs 2012 form 1040a Generally, you can claim a foreign tax credit for income taxes paid to Puerto Rico on the Puerto Rico income that is not exempt from U. Irs 2012 form 1040a S. Irs 2012 form 1040a taxes (see chapter 4 for more information). Irs 2012 form 1040a Nonresident alien. Irs 2012 form 1040a   If you are a nonresident alien of the United States who does not qualify as a bona fide resident of Puerto Rico for the entire tax year, you generally must file the following returns. Irs 2012 form 1040a A Puerto Rico tax return reporting only your income from Puerto Rico sources. Irs 2012 form 1040a Wages for services performed in Puerto Rico, whether for a private employer, the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Government, or otherwise, is income from Puerto Rico sources. Irs 2012 form 1040a A U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return (Form 1040NR) according to the rules for a nonresident alien. Irs 2012 form 1040a See the Instructions for Form 1040NR. Irs 2012 form 1040a De minimis exception to determining source of income. Irs 2012 form 1040a   In certain situations you will not have income from a possession. Irs 2012 form 1040a See De minimis exception under Compensation for Labor or Personal Services in chapter 2. Irs 2012 form 1040a Use the addresses listed below to file your U. Irs 2012 form 1040a S. Irs 2012 form 1040a and Puerto Rico income tax returns. Irs 2012 form 1040a If you are not including a check or a money order, send your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return and all attachments to: Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA If you are including a check or a money order, send your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return and all attachments to: Internal Revenue Service P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 1303 Charlotte, NC 28201-1303 USA If you request a refund on your Puerto Rico return, send your Puerto Rico tax return and all attachments to: Departamento de Hacienda P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 50072 San Juan, PR 00902-6272 Send all other Puerto Rico tax returns, with all attachments, to: Departamento de Hacienda P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 9022501 San Juan, PR 00902-2501 Special Rules for Puerto Rico In addition to the general rules given earlier for filing U. Irs 2012 form 1040a S. Irs 2012 form 1040a and Puerto Rico tax returns, there are some special rules that apply to certain individuals and types of income. Irs 2012 form 1040a U. Irs 2012 form 1040a S. Irs 2012 form 1040a Government employees. Irs 2012 form 1040a   Wages and cost-of-living allowances paid by the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Government (or one of its agencies) for working in Puerto Rico are subject to Puerto Rico tax. Irs 2012 form 1040a However, the cost-of-living allowances are excluded from Puerto Rico gross income up to the amount exempt from U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax. Irs 2012 form 1040a In order to claim this exclusion, you must: Include with your Puerto Rico tax return evidence to show the amount received during the year, and Be in full compliance with your Puerto Rico tax responsibilities. Irs 2012 form 1040a   These wages are also subject to U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax, but the cost-of-living allowances are excludable. Irs 2012 form 1040a A foreign tax credit is available in order to avoid double taxation. Irs 2012 form 1040a U. Irs 2012 form 1040a S. Irs 2012 form 1040a Armed Forces. Irs 2012 form 1040a   Bona fide residents of Puerto Rico include military personnel whose official home of record is Puerto Rico. Irs 2012 form 1040a Civilian spouse of active duty member of the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Armed Forces. Irs 2012 form 1040a   If, under the rule discussed at the beginning of chapter 1 (see Special rule for civilian spouse of active duty member of the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Armed Forces ), your tax residence is Puerto Rico, follow the guidance in the section for bona fide residents under Which Returns To File, earlier. Irs 2012 form 1040a However, if your tax residence is one of the 50 states or the District of Columbia and your only income from Puerto Rico is from wages, salaries, tips, or self-employment, you will be taxed on your worldwide income and file only a U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return (Form 1040) and a state and/or local tax return, if required. Irs 2012 form 1040a If you have income from Puerto Rico other than wages, salaries, tips, or self-employment that is considered to be sourced in that possession (see Table 2-1 ), contact the Hacienda for guidance. Irs 2012 form 1040a Income from sources outside Puerto Rico and the United States. Irs 2012 form 1040a   If you are a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen and bona fide resident of Puerto Rico and you have income from sources outside both Puerto Rico and the United States, that income is treated as foreign source income under both tax systems. Irs 2012 form 1040a In addition to your Puerto Rico and U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax returns, you may also have to file a return with the country or possession from which your outside income was derived. Irs 2012 form 1040a To avoid double taxation, a foreign tax credit is generally available for either the U. Irs 2012 form 1040a S. Irs 2012 form 1040a or Puerto Rico return. Irs 2012 form 1040a Example. Irs 2012 form 1040a Thomas Red is a bona fide resident of Puerto Rico and a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen. Irs 2012 form 1040a He traveled to the Dominican Republic and worked in the construction industry for 1 month. Irs 2012 form 1040a His wages were $20,000. Irs 2012 form 1040a Because the wages were earned outside Puerto Rico and outside the United States, Thomas must file a tax return with Puerto Rico and the United States. Irs 2012 form 1040a He may also have to file a tax return with the Dominican Republic. Irs 2012 form 1040a Moving expense deduction. Irs 2012 form 1040a   Generally, expenses of a move to Puerto Rico are directly attributable to wages, salaries, and other earned income from Puerto Rico. Irs 2012 form 1040a Likewise, the expenses of a move back to the United States are generally attributable to U. Irs 2012 form 1040a S. Irs 2012 form 1040a earned income. Irs 2012 form 1040a   If your move was to Puerto Rico, report your deduction for moving expenses as follows. Irs 2012 form 1040a If you are a bona fide resident in the tax year of your move, enter your deductible expenses on your Puerto Rico tax return. Irs 2012 form 1040a If you are not a bona fide resident, enter your deductible expenses on both your Puerto Rico and U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax returns. Irs 2012 form 1040a Also, for purposes of a tax credit against your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax liability, reduce your Puerto Rico “general category income” on Form 1116, line 1a, by entering the deductible moving expenses on line 2. Irs 2012 form 1040a   If your move was to the United States, complete Form 3903 and enter the deductible amount on Form 1040, line 26. Irs 2012 form 1040a Additional child tax credit. Irs 2012 form 1040a   If you are not required to file a U. Irs 2012 form 1040a S. Irs 2012 form 1040a income tax return, this credit is available only if you meet all three of the following conditions. Irs 2012 form 1040a You were a bona fide resident of Puerto Rico during the entire tax year. Irs 2012 form 1040a Social security and Medicare taxes were withheld from your wages or you paid self-employment tax. Irs 2012 form 1040a You had three or more qualifying children. Irs 2012 form 1040a (For the definition of a qualifying child, see the instructions for Form 1040-PR or Form 1040-SS. Irs 2012 form 1040a ) If your income exceeds certain levels, you may be disqualified from receiving this credit. Irs 2012 form 1040a Use Form 1040-PR or Form 1040-SS to claim the additional child tax credit. Irs 2012 form 1040a Advice about possible tax benefits under the Puerto Rico investment incentive programs is available from the Puerto Rico tax authorities. Irs 2012 form 1040a Double Taxation A mutual agreement procedure exists to settle cases of double taxation between the United States and the Commonwealth of Puerto Rico. Irs 2012 form 1040a See Double Taxation in chapter 4. Irs 2012 form 1040a The Commonwealth of the Northern Mariana Islands The Commonwealth of the Northern Mariana Islands (CNMI) has its own tax system based partly on the same tax laws and tax rates that apply to the United States and partly on local taxes imposed by the CNMI government. Irs 2012 form 1040a Where To Get Forms and Information Requests for advice about CNMI residency and tax matters should be addressed to: Commonwealth of the Northern Mariana Islands  Division of Revenue and Taxation P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 5234 CHRB Dandan Commercial Center First Floor Rm #8  Saipan, MP 96950 You can order forms and publications by calling (670) 664-1000. Irs 2012 form 1040a You can order forms and publications through the fax at (670) 664-1015. Irs 2012 form 1040a You can get forms and publications at www. Irs 2012 form 1040a cnmidof. Irs 2012 form 1040a net. Irs 2012 form 1040a The addresses and phone numbers listed above are subject to change. Irs 2012 form 1040a Which Return To File In general, all individuals with income from the CNMI will file only one return, either to the CNMI or to the United States. Irs 2012 form 1040a Your residency status with regard to the CNMI determines which return you will file. Irs 2012 form 1040a Be sure to check the Special Rules for the CNMI , later, for additional information about filing your tax return. Irs 2012 form 1040a Bona Fide Resident of the CNMI If you are a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen, resident alien, or nonresident alien and a bona fide resident of the CNMI during the entire tax year, file your income tax return with the CNMI. Irs 2012 form 1040a Include income from worldwide sources on your CNMI return. Irs 2012 form 1040a In determining your total tax payments, include all income tax withheld by either the CNMI or the United States, any credit for an overpayment of income tax to either the CNMI or the United States, and any payments of estimated tax to either the CNMI or the United States. Irs 2012 form 1040a Pay any balance of tax due with your tax return. Irs 2012 form 1040a Generally, if you properly file your return with, and fully pay your income tax to, the CNMI, then you are not liable for filing an income tax return with, or for paying tax to, the United States for the tax year. Irs 2012 form 1040a However, if you were self-employed in 2013, see Self-employment tax , later. Irs 2012 form 1040a Example. Irs 2012 form 1040a David Gold was a bona fide resident of the CNMI for 2013. Irs 2012 form 1040a He received wages of $30,000 paid by a private employer in the CNMI and dividends of $4,000 from U. Irs 2012 form 1040a S. Irs 2012 form 1040a corporations that carry on business mainly in the United States. Irs 2012 form 1040a He must file a 2013 income tax return with the CNMI Division of Revenue and Taxation. Irs 2012 form 1040a He reports his total income of $34,000 on the CNMI return. Irs 2012 form 1040a   If you are a bona fide resident of the CNMI for the entire tax year, send your return and all attachments to the Division of Revenue and Taxation at the address given earlier. Irs 2012 form 1040a U. Irs 2012 form 1040a S. Irs 2012 form 1040a Citizen or Resident Alien (Other Than a Bona Fide Resident of the CNMI) If you have income from sources within the CNMI and are a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen or resident alien, but you are not a bona fide resident of the CNMI during the entire tax year, file your income tax return with the United States. Irs 2012 form 1040a Include income from worldwide sources on your U. Irs 2012 form 1040a S. Irs 2012 form 1040a return. Irs 2012 form 1040a In determining your total tax payments, include all income tax withheld by either the United States or the CNMI, any credit for an overpayment of income tax to either the United States or the CNMI, and any payments of estimated tax to either the United States or the CNMI. Irs 2012 form 1040a Pay any balance of tax due with your tax return. Irs 2012 form 1040a Note. Irs 2012 form 1040a You may also need to complete Form 5074. Irs 2012 form 1040a You are not liable for filing an income tax return with, or for paying tax to, the CNMI for the tax year. Irs 2012 form 1040a Form 5074. Irs 2012 form 1040a   If you file a U. Irs 2012 form 1040a S. Irs 2012 form 1040a income tax return, attach a completed Form 5074 if you (and your spouse if filing a joint return) have: Adjusted gross income of $50,000 or more for the tax year, and Gross income of $5,000 or more from sources within the CNMI. Irs 2012 form 1040a   The United States and the CNMI use this form to divide your income taxes. Irs 2012 form 1040a   There is an example of a filled-in Form 5074 in chapter 5. Irs 2012 form 1040a De minimis exception to determining source of income. Irs 2012 form 1040a   In certain situations you will not have income from a possession. Irs 2012 form 1040a See De minimis exception under Compensation for Labor or Personal Services in chapter 2. Irs 2012 form 1040a Citizen or resident alien of the United States but not a bona fide resident of the CNMI. Irs 2012 form 1040a   If you are a citizen or resident alien of the United States but not a bona fide resident of the CNMI during the entire tax year and you are not including a check or a money order, send your return and all attachments to: Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return and all attachments to: Internal Revenue Service P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 1303 Charlotte, NC 28201-1303 USA Nonresident Alien (Other Than a Bona Fide Resident of the CNMI) If you are a nonresident alien of the United States who does not qualify as a bona fide resident of the CNMI for the entire tax year, you generally must file the following returns. Irs 2012 form 1040a A CNMI tax return reporting only your income from sources within the CNMI. Irs 2012 form 1040a In this situation, wages for services performed in the CNMI, whether for a private employer, the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Government, or otherwise, is income from sources within the CNMI. Irs 2012 form 1040a A U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return (Form 1040NR) reporting U. Irs 2012 form 1040a S. Irs 2012 form 1040a source income according to the rules for a nonresident alien. Irs 2012 form 1040a See the instructions for Form 1040NR. Irs 2012 form 1040a If you are not a bona fide resident of the CNMI during the entire tax year and you are not including a check or a money order, send your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return and all attachments to: Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA If you are including a check or a money order, send your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return and all attachments to:  Internal Revenue Service P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 1303 Charlotte, NC 28201-1303 USA Send your CNMI tax return and all attachments to:  Department of Finance Division of Revenue and Taxation Commonwealth of the Northern Mariana Islands P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 5234 CHRB Saipan, MP 96950 Citizen of the CNMI If you are a citizen of the CNMI (meaning that you were born or naturalized in the CNMI) but not otherwise a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen or a U. Irs 2012 form 1040a S. Irs 2012 form 1040a resident alien during the tax year, file your income tax return with the CNMI. Irs 2012 form 1040a Include income from worldwide sources on your CNMI return. Irs 2012 form 1040a Take into account tax withheld by both jurisdictions in determining if there is tax overdue or an overpayment. Irs 2012 form 1040a Pay any balance of tax due with your tax return. Irs 2012 form 1040a Send your return and all attachments to:   Department of Finance Division of Revenue and Taxation Commonwealth of the Northern Mariana Islands P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 5234 CHRB Saipan, MP 96950 Special Rules for the CNMI Special rules apply to certain types of income, employment, and filing status. Irs 2012 form 1040a Joint return. Irs 2012 form 1040a   If you file a joint return, file your return (and pay the tax) with the jurisdiction where the spouse who has the greater adjusted gross income (AGI) would have to file if you were filing separately. Irs 2012 form 1040a If the spouse with the greater AGI is a bona fide resident of the CNMI during the entire tax year, file the joint return with the CNMI. Irs 2012 form 1040a If the spouse with the greater AGI is a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen or resident alien but not a bona fide resident of the CNMI during the entire tax year, file your joint return with the United States. Irs 2012 form 1040a For this purpose, income is determined without regard to community property laws. Irs 2012 form 1040a Example. Irs 2012 form 1040a Marsha Blue, a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen, was a resident of the United States, and her spouse, a citizen of the CNMI, was a bona fide resident of the CNMI during the entire tax year. Irs 2012 form 1040a Marsha earned $65,000 as a computer programmer in the United States. Irs 2012 form 1040a Her spouse earned $20,000 as an artist in the CNMI. Irs 2012 form 1040a Marsha and her spouse will file a joint return. Irs 2012 form 1040a Because Marsha has the greater AGI, she and her spouse must file their return with the United States and report the entire $85,000 on that return. Irs 2012 form 1040a U. Irs 2012 form 1040a S. Irs 2012 form 1040a Armed Forces. Irs 2012 form 1040a   If you are a member of the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Armed Forces who qualified as a bona fide resident of the CNMI in a prior tax year, your absence from the CNMI solely in compliance with military orders will not change your bona fide residency. Irs 2012 form 1040a If you did not qualify as a bona fide resident of the CNMI in a prior tax year, your presence in the CNMI solely in compliance with military orders will not qualify you as a bona fide resident of the CNMI. Irs 2012 form 1040a Civilian spouse of active duty member of the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Armed Forces. Irs 2012 form 1040a   If, under the rule discussed at the beginning of chapter 1 (see Special rule for civilian spouse of active duty member of the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Armed Forces ), your tax residence is the CNMI, follow the guidance in the section for bona fide residents under Which Return To File, earlier. Irs 2012 form 1040a However, if your tax residence is one of the 50 states or the District of Columbia and your only income from the CNMI is from wages, salaries, tips, or self-employment, you will be taxed on your worldwide income and file only a U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return (Form 1040) and a state and/or local tax return, if required. Irs 2012 form 1040a If you have income from the CNMI other than wages, salaries, tips, or self-employment that is considered to be sourced in that possession (see Table 2-1), you may need to file Form 5074 with your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return. Irs 2012 form 1040a Moving expense deduction. Irs 2012 form 1040a   Generally, expenses of a move to the CNMI are directly attributable to wages, salaries, and other earned income from the CNMI. Irs 2012 form 1040a Likewise, the expenses of a move back to the United States are generally attributable to U. Irs 2012 form 1040a S. Irs 2012 form 1040a earned income. Irs 2012 form 1040a   If your move was to the CNMI, report your deduction for moving expenses as follows. Irs 2012 form 1040a If you are a bona fide resident in the tax year of your move, enter your deductible expenses on your CNMI tax return. Irs 2012 form 1040a If you are not a bona fide resident, enter your deductible expenses on Form 3903 and enter the deductible amount on Form 1040, line 26, and on Form 5074, line 20. Irs 2012 form 1040a   If your move was to the United States, complete Form 3903 and enter the deductible amount on Form 1040, line 26. Irs 2012 form 1040a Foreign tax credit. Irs 2012 form 1040a   Under the filing rules explained earlier, individuals with CNMI source income normally will not claim a foreign tax credit on a U. Irs 2012 form 1040a S. Irs 2012 form 1040a income tax return for tax paid to the CNMI. Irs 2012 form 1040a Self-employment tax. Irs 2012 form 1040a   If you have no U. Irs 2012 form 1040a S. Irs 2012 form 1040a filing requirement, but have income that is effectively connected with a trade or business in the CNMI, you must file Form 1040-SS with the United States to report your self-employment income and, if necessary, pay self-employment tax. Irs 2012 form 1040a Additional Medicare Tax. Irs 2012 form 1040a   Beginning in 2013, you may be required to pay Additional Medicare Tax. Irs 2012 form 1040a Also, you may need to report Additional Medicare Tax withheld by your employer. Irs 2012 form 1040a For more information see Additional Medicare Tax under Special Rules for Completing Your U. Irs 2012 form 1040a S. Irs 2012 form 1040a Tax Return in chapter 4. Irs 2012 form 1040a Estimated tax payments. Irs 2012 form 1040a   To see if you are required to make payments of estimated income tax, self-employment tax, and/or Additional Medicare Tax to the IRS, get Form 1040-ES. Irs 2012 form 1040a Payment of estimated tax. Irs 2012 form 1040a   If you must pay estimated tax, make your payment to the jurisdiction where you would file your income tax return if your tax year were to end on the date your first estimated tax payment is due. Irs 2012 form 1040a Generally, you should make the rest of your quarterly payments of estimated tax to the jurisdiction where you made your first payment of estimated tax. Irs 2012 form 1040a However, estimated tax payments to either jurisdiction will be treated as payments to the jurisdiction with which you file the tax return. Irs 2012 form 1040a   If you make a joint payment of estimated tax, make your payment to the jurisdiction where the spouse who has the greater estimated AGI would have to pay (if a separate payment were made). Irs 2012 form 1040a For this purpose, income is determined without regard to community property laws. Irs 2012 form 1040a Early payment. Irs 2012 form 1040a   If you make your first payment of estimated tax early, follow the rules given earlier to determine where to send it. Irs 2012 form 1040a If you send it to the wrong jurisdiction, make all later payments to the jurisdiction to which the first payment should have been sent. Irs 2012 form 1040a   To pay by check or money order, send your payment with the Form 1040-ES payment voucher to:  Internal Revenue Service P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 1300 Charlotte, NC 28201-1300 USA   To get information on paying electronically (by credit or debit card, or through the Electronic Federal Tax Payment System (EFTPS)), go to www. Irs 2012 form 1040a irs. Irs 2012 form 1040a gov/e-pay. Irs 2012 form 1040a   For information on making estimated income tax payments to the CNMI, see Where To Get Forms and Information , earlier. Irs 2012 form 1040a Double Taxation A mutual agreement procedure exists to settle cases of double taxation between the United States and the CNMI. Irs 2012 form 1040a See Double Taxation in chapter 4. Irs 2012 form 1040a Guam Guam has its own tax system based on the same tax laws and tax rates that apply in the United States. Irs 2012 form 1040a Where To Get Forms and Information Requests for advice about Guam residency and tax matters should be addressed to: Department of Revenue and Taxation Government of Guam P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 23607 GMF, GU 96921 You can order forms and publications by calling (671) 635-1840 or (671) 635-1841. Irs 2012 form 1040a You can order forms and publications through the fax at (671) 633-2643. Irs 2012 form 1040a You can get forms and publications at www. Irs 2012 form 1040a guamtax. Irs 2012 form 1040a com. Irs 2012 form 1040a The addresses and phone numbers listed above are subject to change. Irs 2012 form 1040a Which Return To File Bona fide residents of Guam are subject to special U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax rules. Irs 2012 form 1040a In general, all individuals with income from Guam will file only one return—either to Guam or the United States. Irs 2012 form 1040a Bona Fide Resident of Guam If you are a bona fide resident of Guam during the entire tax year, file your return with Guam. Irs 2012 form 1040a This applies to all bona fide residents who are citizens, resident aliens, or nonresident aliens of the United States. Irs 2012 form 1040a Include income from worldwide sources on your Guam return. Irs 2012 form 1040a In determining your total tax payments, include all income tax withheld by either Guam or the United States, any credit for an overpayment of income tax to either Guam or the United States, and any payments of estimated tax to either Guam or the United States. Irs 2012 form 1040a Pay any balance of tax due with your tax return. Irs 2012 form 1040a Generally, if you properly file your return with, and fully pay your income tax to, Guam, then you are not liable for filing an income tax return with, or for paying tax to, the United States. Irs 2012 form 1040a However, if you were self-employed in 2013, see Self-employment tax , later. Irs 2012 form 1040a Example. Irs 2012 form 1040a Gary Barker was a bona fide resident of Guam for 2013. Irs 2012 form 1040a He received wages of $25,000 paid by a private employer in Guam and dividends of $2,000 from U. Irs 2012 form 1040a S. Irs 2012 form 1040a corporations that carry on business mainly in the United States. Irs 2012 form 1040a He must file a 2013 income tax return with the Government of Guam. Irs 2012 form 1040a He reports his total income of $27,000 on the Guam return. Irs 2012 form 1040a If you are a bona fide resident of Guam for the entire tax year, send your return and all attachments to:  Department of Revenue and Taxation Government of Guam P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 23607 GMF, GU 96921 U. Irs 2012 form 1040a S. Irs 2012 form 1040a Citizen or Resident Alien (Other Than a Bona Fide Resident of Guam) If you have income from sources within Guam and are a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen or resident alien, but you are not a bona fide resident of Guam during the entire tax year, file your income tax return with the United States. Irs 2012 form 1040a Include income from worldwide sources on your U. Irs 2012 form 1040a S. Irs 2012 form 1040a return. Irs 2012 form 1040a In determining your total tax payments, include all income tax withheld by either the United States or Guam, any credit for an overpayment of income tax to either the United States or Guam, and any payments of estimated tax to either the United States or Guam. Irs 2012 form 1040a Pay any balance of tax due with your tax return. Irs 2012 form 1040a You may also need to complete Form 5074. Irs 2012 form 1040a You are not liable for filing an income tax return with, or for paying tax to, Guam for the tax year. Irs 2012 form 1040a Form 5074. Irs 2012 form 1040a   If you file a U. Irs 2012 form 1040a S. Irs 2012 form 1040a income tax return, attach a completed Form 5074 if you (and your spouse if filing a joint return) have: Adjusted gross income of $50,000 or more for the tax year, and Gross income of $5,000 or more from sources within Guam. Irs 2012 form 1040a   The United States and Guam use this form to divide your income taxes. Irs 2012 form 1040a   See the Illustrated Example of Form 5074 in chapter 5. Irs 2012 form 1040a De minimis exception to determining source of income. Irs 2012 form 1040a   In certain situations you will not have income from a possession. Irs 2012 form 1040a See De minimis exception under Compensation for Labor or Personal Services in chapter 2. Irs 2012 form 1040a   If you are a citizen or resident alien of the United States but not a bona fide resident of Guam during the entire tax year and you are not including a check or money order, send your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return and all attachments (including Form 5074) to:  Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return and all attachments (including Form 5074) to:  Internal Revenue Service P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 1303 Charlotte, NC 28201-1303 USA Nonresident Alien (Other Than a Bona Fide Resident of Guam) If you are a nonresident alien of the United States who does not qualify as a bona fide resident of Guam for the entire tax year, you generally must file the following returns. Irs 2012 form 1040a A Guam tax return reporting only your income from sources within Guam. Irs 2012 form 1040a In this situation, wages for services performed in Guam, whether for a private employer, the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Government, or otherwise, is income from sources within Guam. Irs 2012 form 1040a A U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return (Form 1040NR) reporting U. Irs 2012 form 1040a S. Irs 2012 form 1040a source income according to the rules for a nonresident alien. Irs 2012 form 1040a See the instructions for Form 1040NR. Irs 2012 form 1040a If you are not a bona fide resident of Guam during the entire tax year and you are not including a check or money order, send your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return and all attachments to:  Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA If you are including a check or a money order, send your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return and all attachments to:  Internal Revenue Service P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 1303 Charlotte, NC 28201-1303 USA Send your Guam tax return and all attachments to:   Department of Revenue and Taxation P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 23607 GMF, GU 96921 Citizen of Guam If you are a citizen of Guam (meaning that you were born or naturalized in Guam) but not otherwise a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen or a U. Irs 2012 form 1040a S. Irs 2012 form 1040a resident alien during the tax year, file your income tax return with Guam. Irs 2012 form 1040a Include income from worldwide sources on your Guam return. Irs 2012 form 1040a Take into account tax withheld by both jurisdictions in determining if there is tax overdue or an overpayment. Irs 2012 form 1040a Pay any balance of tax due with your tax return. Irs 2012 form 1040a If you are a citizen of Guam, send your return and all attachments to:  Department of Revenue and Taxation Government of Guam P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 23607 GMF, GU 96921 Special Rules for Guam Special rules apply to certain types of income, employment, and filing status. Irs 2012 form 1040a Joint return. Irs 2012 form 1040a   If you file a joint return, you should file your return (and pay the tax) with the jurisdiction where the spouse who has the greater adjusted gross income (AGI) would have to file if you were filing separately. Irs 2012 form 1040a If the spouse with the greater AGI is a bona fide resident of Guam during the entire tax year, file the joint return with Guam. Irs 2012 form 1040a If the spouse with the greater AGI is a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen or resident alien but not a bona fide resident of Guam during the entire tax year, file the joint return with the United States. Irs 2012 form 1040a For this purpose, income is determined without regard to community property laws. Irs 2012 form 1040a Example. Irs 2012 form 1040a Bill Whiting, a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen, was a resident of the United States, and his spouse, a citizen of Guam, was a bona fide resident of Guam during the entire tax year. Irs 2012 form 1040a Bill earned $45,000 as an engineer in the United States. Irs 2012 form 1040a His spouse earned $15,000 as a teacher in Guam. Irs 2012 form 1040a Bill and his spouse will file a joint return. Irs 2012 form 1040a Because Bill has the greater AGI, he and his spouse must file their return with the United States and report the entire $60,000 on that return. Irs 2012 form 1040a U. Irs 2012 form 1040a S. Irs 2012 form 1040a Armed Forces. Irs 2012 form 1040a   If you are a member of the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Armed Forces who qualified as a bona fide resident of Guam in a prior tax year, your absence from Guam solely in compliance with military orders will not change your bona fide residency. Irs 2012 form 1040a If you did not qualify as a bona fide resident of Guam in a prior tax year, your presence in Guam solely in compliance with military orders will not qualify you as a bona fide resident of Guam. Irs 2012 form 1040a Civilian spouse of active duty member of the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Armed Forces. Irs 2012 form 1040a   If, under the rule discussed at the beginning of chapter 1 (see Special rule for civilian spouse of active duty member of the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Armed Forces ), your tax residence is Guam, follow the guidance in the section for bona fide residents under Which Return To File, earlier. Irs 2012 form 1040a However, if your tax residence is one of the 50 states or the District of Columbia and your only income from Guam is from wages, salaries, tips, or self-employment, you will be taxed on your worldwide income and file only a U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return (Form 1040) and a state and/or local tax return, if required. Irs 2012 form 1040a If you have income from Guam other than wages, salaries, tips, or self-employment that is considered to be sourced in that possession (see Table 2-1), you may need to file Form 5074 with your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return. Irs 2012 form 1040a Moving expense deduction. Irs 2012 form 1040a   Generally, expenses of a move to Guam are directly attributable to wages, salaries, and other earned income from Guam. Irs 2012 form 1040a Likewise, the expenses of a move back to the United States are generally attributable to U. Irs 2012 form 1040a S. Irs 2012 form 1040a earned income. Irs 2012 form 1040a   If your move was to Guam, report your deduction for moving expenses as follows. Irs 2012 form 1040a If you are a bona fide resident in the tax year of your move, enter your deductible expenses on your Guam tax return. Irs 2012 form 1040a If you are not a bona fide resident, enter your deductible expenses on Form 3903 and enter the deductible amount on Form 1040, line 26, and on Form 5074, line 20. Irs 2012 form 1040a   If your move was to the United States, complete Form 3903 and enter the deductible amount on Form 1040, line 26. Irs 2012 form 1040a Foreign tax credit. Irs 2012 form 1040a   Under the filing rules explained earlier, individuals with Guam source income normally will not claim a foreign tax credit on a U. Irs 2012 form 1040a S. Irs 2012 form 1040a income tax return for tax paid to Guam. Irs 2012 form 1040a Self-employment tax. Irs 2012 form 1040a   If you have no U. Irs 2012 form 1040a S. Irs 2012 form 1040a filing requirement, but have income that is effectively connected with a trade or business in Guam, you must file Form 1040-SS with the United States to report your self-employment income and, if necessary, pay self-employment tax. Irs 2012 form 1040a Additional Medicare Tax. Irs 2012 form 1040a   Beginning in 2013, you may be required to pay Additional Medicare Tax. Irs 2012 form 1040a Also, you may need to report Additional Medicare Tax withheld by your employer. Irs 2012 form 1040a For more information see Additional Medicare Tax under Special Rules for Completing Your U. Irs 2012 form 1040a S. Irs 2012 form 1040a Tax Return in chapter 4. Irs 2012 form 1040a Estimated tax payments. Irs 2012 form 1040a   To see if you are required to make payments of estimated income tax, self-employment tax, and/or Additional Medicare Tax, to the IRS, get Form 1040-ES. Irs 2012 form 1040a Payment of estimated tax. Irs 2012 form 1040a   If you must pay estimated tax, make your payment to the jurisdiction where you would file your income tax return if your tax year were to end on the date your first estimated tax payment is due. Irs 2012 form 1040a Generally, you should make the rest of your quarterly payments of estimated tax to the jurisdiction where you made your first payment of estimated tax. Irs 2012 form 1040a However, estimated tax payments to either jurisdiction will be treated as payments to the jurisdiction with which you file the tax return. Irs 2012 form 1040a   If you make a joint payment of estimated tax, make your payment to the jurisdiction where the spouse who has the greater estimated AGI would have to pay (if a separate payment were made). Irs 2012 form 1040a For this purpose, income is determined without regard to community property laws. Irs 2012 form 1040a Early payment. Irs 2012 form 1040a   If you make your first payment of estimated tax early, follow the rules given earlier to determine where to send it. Irs 2012 form 1040a If you send it to the wrong jurisdiction, make all later payments to the jurisdiction to which the first payment should have been sent. Irs 2012 form 1040a   To pay by check or money order, send your payment with the Form 1040-ES payment voucher to:  Department of Revenue and Taxation Government of Guam P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 23607 GMF, GU 96921   To get information on paying electronically (by credit or debit card, or through the Electronic Federal Tax Payment System (EFTPS)), go to www. Irs 2012 form 1040a irs. Irs 2012 form 1040a gov/e-pay. Irs 2012 form 1040a   For information on making estimated income tax payments to the Department of Revenue and Taxation, see Where To Get Forms and Information , earlier. Irs 2012 form 1040a Double Taxation A mutual agreement procedure exists to settle cases of double taxation between the United States and Guam. Irs 2012 form 1040a See Double Taxation in chapter 4. Irs 2012 form 1040a The U. Irs 2012 form 1040a S. Irs 2012 form 1040a Virgin Islands The U. Irs 2012 form 1040a S. Irs 2012 form 1040a Virgin Islands has its own tax system based on the same tax laws and tax rates that apply in the United States. Irs 2012 form 1040a An important factor in USVI taxation is whether, during the entire tax year, you are a bona fide resident of the USVI. Irs 2012 form 1040a Where To Get Forms and Information For information about filing your U. Irs 2012 form 1040a S. Irs 2012 form 1040a Virgin Islands tax return or about Form 1040INFO, in St. Irs 2012 form 1040a Thomas contact : Bureau of Internal Revenue  6115 Estate Smith Bay  St. Irs 2012 form 1040a Thomas, VI 00802 You can order forms and publications by calling (340) 715-1040. Irs 2012 form 1040a You can order forms and publications through the fax at (340) 774-2672. Irs 2012 form 1040a For information about filing your U. Irs 2012 form 1040a S. Irs 2012 form 1040a Virgin Islands tax return or about Form 1040INFO, in St. Irs 2012 form 1040a Croix contact : Bureau of Internal Revenue  4008 Estate Diamond- Plot 7B Christiansted, V. Irs 2012 form 1040a I. Irs 2012 form 1040a 00820–4421 You can order forms and publications by calling (340) 773-1040. Irs 2012 form 1040a You can order forms and publications through the fax at (340) 773-1006. Irs 2012 form 1040a You can access the USVI website at www. Irs 2012 form 1040a viirb. Irs 2012 form 1040a com. Irs 2012 form 1040a The addresses and phone numbers listed above are subject to change. Irs 2012 form 1040a Which Return To File In general, bona fide residents of the USVI pay taxes only to the USVI. Irs 2012 form 1040a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizens or resident aliens (but not bona fide residents of the USVI) with USVI source income pay a portion of the tax to each jurisdiction. Irs 2012 form 1040a Bona Fide Resident of the USVI File your tax return with the USVI if you are a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen, resident alien, or nonresident alien and a bona fide resident of the USVI during the entire tax year. Irs 2012 form 1040a Include your worldwide income on your USVI return. Irs 2012 form 1040a In determining your total tax payments, take into account all income tax withheld by either the USVI or the United States, any credit for an overpayment of income tax to either the USVI or the United States, and any payments of estimated tax to either the USVI or the United States. Irs 2012 form 1040a Pay any balance of tax due with your tax return. Irs 2012 form 1040a Filing this return with the USVI generally also starts the statute of limitations on assessment of your U. Irs 2012 form 1040a S. Irs 2012 form 1040a income tax. Irs 2012 form 1040a You generally do not have to file with the United States for any tax year in which you are a bona fide resident of the USVI during the entire tax year, provided you report and pay tax on your income from all sources to the USVI and identify the source(s) of the income on the return. Irs 2012 form 1040a However, if you have self-employment income, you may be required to file Form 1040-SS with the United States. Irs 2012 form 1040a For more information, see Self-employment tax under Special Rules for the USVI, later. Irs 2012 form 1040a Form 1040INFO. Irs 2012 form 1040a   If you are a bona fide resident of the USVI and have non-USVI source income, you must also file Virgin Islands Form 1040INFO, Non-Virgin Islands Source Income of Virgin Islands Residents, with the Virgin Islands Bureau of Internal Revenue. Irs 2012 form 1040a Attach Form 1040INFO to your USVI tax return before filing. Irs 2012 form 1040a You can get Form 1040INFO by contacting the address or website given earlier. Irs 2012 form 1040a   If you are a bona fide resident of the USVI for the entire tax year, file your return and all attachments with the Virgin Islands Bureau of Internal Revenue at:  USVI Bureau of Internal Revenue 6115 Estate Smith Bay St. Irs 2012 form 1040a Thomas, VI 00802 U. Irs 2012 form 1040a S. Irs 2012 form 1040a Citizen or Resident Alien (Other Than a Bona Fide Resident of the USVI) If you are a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen or resident alien but not a bona fide resident of the USVI during the entire tax year, you must file your original Form 1040 with the United States and an identical copy of that return with the USVI if you have: Income from sources in the USVI, or Income effectively connected with the conduct of a trade or business in the USVI. Irs 2012 form 1040a File your original Form 1040 with the United States and file a signed copy of the U. Irs 2012 form 1040a S. Irs 2012 form 1040a return (including all attachments, forms, and schedules) with the Virgin Islands Bureau of Internal Revenue by the due date for filing Form 1040. Irs 2012 form 1040a Use Form 8689 to figure the amount of tax you must pay to the USVI. Irs 2012 form 1040a Form 8689. Irs 2012 form 1040a   Complete this form and attach it to both the return you file with the United States and the copy you file with the USVI. Irs 2012 form 1040a Figure the amount of tax you must pay to the USVI as follows:      Total tax on  U. Irs 2012 form 1040a S. Irs 2012 form 1040a return (after certain adjustments) × USVI AGI Worldwide AGI     Pay any tax due to the USVI when you file your return with the Virgin Islands Bureau of Internal Revenue. Irs 2012 form 1040a To receive credit on your U. Irs 2012 form 1040a S. Irs 2012 form 1040a return for taxes paid to the USVI, include the amounts from Form 8689, lines 40 and 45, in the total on Form 1040, line 72. Irs 2012 form 1040a On the dotted line next to line 72, enter “Form 8689” and show the amounts. Irs 2012 form 1040a   See the illustrated example in chapter 5. Irs 2012 form 1040a De minimis exception to determining source of income. Irs 2012 form 1040a   In certain situations you will not have income from a possession. Irs 2012 form 1040a See De minimis exception under Compensation for Labor or Personal Services in chapter 2. Irs 2012 form 1040a   If you are not a bona fide resident of the USVI during the entire tax year, but you have USVI source income, and you are not including a check or a money order, file Form 1040 and all attachments (including Form 8689) with the:  Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return and all attachments (including Form 8689) to:  Internal Revenue Service P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 1303 Charlotte, NC 28201-1303 USA   File a copy of your U. Irs 2012 form 1040a S. Irs 2012 form 1040a Form 1040 with the Virgin Islands Bureau of Internal Revenue at:  USVI Bureau of Internal Revenue 6115 Estate Smith Bay St. Irs 2012 form 1040a Thomas, VI 00802 Nonresident Alien (Other Than a Bona Fide Resident of the USVI) If you are a nonresident alien of the United States who does not qualify as a bona fide resident of the USVI for the entire tax year, you generally must file the following returns. Irs 2012 form 1040a A USVI tax return reporting only your income from sources within the USVI. Irs 2012 form 1040a In this situation, wages for services performed in the USVI, whether for a private employer, the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Government, or otherwise, is income from sources within the USVI. Irs 2012 form 1040a A U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return (Form 1040NR) reporting U. Irs 2012 form 1040a S. Irs 2012 form 1040a source income according to the rules for a nonresident alien. Irs 2012 form 1040a See the instructions for Form 1040NR. Irs 2012 form 1040a   If you are not a bona fide resident of the USVI during the entire tax year, and you are not including a check or a money order, send your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return and all attachments (including Form 8689) to:  Department of the Treasury Internal Revenue Service Austin, TX 73301-0215 USA   If you are including a check or a money order, send your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return and all attachments (including Form 8689) to:  Internal Revenue Service P. Irs 2012 form 1040a O. Irs 2012 form 1040a Box 1303 Charlotte, NC 28201-1303  USA   Send your USVI tax return and all attachments to:  Bureau of Internal Revenue 6115 Estate Smith Bay St. Irs 2012 form 1040a Thomas, VI 00802 Special Rules for the USVI There are some special rules for certain types of income, employment, and filing status. Irs 2012 form 1040a Joint return. Irs 2012 form 1040a   If you file a joint return, you should file your return (and pay the tax) with the jurisdiction where the spouse who has the greater adjusted gross income (AGI) would have to file if you were filing separately. Irs 2012 form 1040a If the spouse with the greater AGI is a bona fide resident of the USVI during the entire tax year, file the joint return with the USVI. Irs 2012 form 1040a If the spouse with the greater AGI is a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen or resident alien of the United States but not a bona fide resident of the USVI during the entire tax year, file the joint return with the United States. Irs 2012 form 1040a For this purpose, income is determined without regard to community property laws. Irs 2012 form 1040a Example. Irs 2012 form 1040a Marge Birch, a U. Irs 2012 form 1040a S. Irs 2012 form 1040a citizen, was a resident of the United States, and her spouse, a citizen of the USVI, was a bona fide resident of the USVI during the entire tax year. Irs 2012 form 1040a Marge earned $55,000 as an architect in the United States. Irs 2012 form 1040a Her spouse earned $30,000 as a librarian in the USVI. Irs 2012 form 1040a Marge and her spouse will file a joint return. Irs 2012 form 1040a Because Marge has the greater AGI, she and her spouse must file their return with the United States and report the entire $85,000 on that return. Irs 2012 form 1040a U. Irs 2012 form 1040a S. Irs 2012 form 1040a Armed Forces. Irs 2012 form 1040a   If you are a member of the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Armed Forces who qualified as a bona fide resident of the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Virgin Islands in a prior tax year, your absence from the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Virgin Islands solely in compliance with military orders will not change your bona fide residency. Irs 2012 form 1040a If you did not qualify as a bona fide resident of the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Virgin Islands in a prior tax year, your presence in the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Virgin Islands solely in compliance with military orders will not qualify you as a bona fide resident of the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Virgin Islands. Irs 2012 form 1040a Civilian spouse of active duty member of the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Armed Forces. Irs 2012 form 1040a   If, under the rule discussed at the beginning of chapter 1 (see Special rule for civilian spouse of active duty member of the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Armed Forces ), your tax residence is the USVI, follow the guidance in the section for bona fide residents under Which Return To File, earlier. Irs 2012 form 1040a However, if your tax residence is one of the 50 states or the District of Columbia and your only income from the USVI is from wages, salaries, tips, or self-employment, you will be taxed on your worldwide income and file only a U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return (Form 1040) and a state and/or local tax return, if required. Irs 2012 form 1040a If you have income from the USVI other than wages, salaries, tips, or self-employment that is considered to be sourced in that possession (see Table 2-1), you may need to file Form 8689 with your U. Irs 2012 form 1040a S. Irs 2012 form 1040a tax return. Irs 2012 form 1040a In this case, follow the guidance under U. Irs 2012 form 1040a S. Irs 2012 form 1040a Citizen or Resident Alien (Other Than a Bona Fide Resident of the USVI ), earlier. Irs 2012 form 1040a Moving expense deduction. Irs 2012 form 1040a   Generally, expenses of a move to the USVI are directly attributable to wages, salaries, and other earned income from the USVI. Irs 2012 form 1040a Likewise, the expenses of a move back to the United States are generally attributable to U. Irs 2012 form 1040a S. Irs 2012 form 1040a earned income. Irs 2012 form 1040a   If your move was to the USVI, report your deduction for moving expenses as follows. Irs 2012 form 1040a If you are a bona fide resident in the tax year of your move, enter your deductible expenses on your USVI tax return. Irs 2012 form 1040a If you are not a bona fide resident, enter your deductible expenses on Form 3903 and enter the deductible amount on Form 1040, line 26, and on Form 8689, line 20. Irs 2012 form 1040a   If your move was to the United States, complete Form 3903 and enter the deductible amount on Form 1040, line 26. Irs 2012 form 1040a Foreign tax credit. Irs 2012 form 1040a   Under the filing rules explained earlier, individuals with USVI source income normally will not claim a foreign tax credit on a U. Irs 2012 form 1040a S. Irs 2012 form 1040a income tax return for tax paid to the USVI. Irs 2012 form 1040a However, individuals other than bona fide residents of the USVI may claim a direct credit for such tax (see Form 8689 earlier in this section). Irs 2012 form 1040a Self-employment tax. Irs 2012 form 1040a   If you have no U. Irs 2012 form 1040a S. Irs 2012 form 1040a filing requirement, but have income that is effectively connected with a trade or business in the USVI, you must file Form 1040-SS with the United States to report your self-employment income and, if necessary, pay self-employment tax. Irs 2012 form 1040a Additional Medicare Tax. Irs 2012 form 1040a   Beginning in 2013, you may be required to pay Additional Medicare Tax. Irs 2012 form 1040a Also, you may need to report Additional Medicare Tax withheld by your employer. Irs 2012 form 1040a For more information see Additional Medicare Tax under Special Rules for Completing Your U. Irs 2012 form 1040a S. Irs 2012 form 1040a Tax Return in chapter 4. Irs 2012 form 1040a Estimated tax payments. Irs 2012 form 1040a   To see if you are required to make payments of estimated income tax, self-employment tax, and/or Additional Medicare Tax, to the IRS, get Form 1040-ES. Irs 2012 form 1040a   To pay by check or money order, send your payment with the Form 1040-ES payment voucher to:  Virgin Islands Bureau of Internal Revenue 6115 Estate Smith Bay St. Irs 2012 form 1040a Thomas, VI 00802   To get information on paying electronically (by credit or debit card, or through the Electronic Federal Tax Payment System (EFTPS)), go to www. Irs 2012 form 1040a irs. Irs 2012 form 1040a gov/e-pay. Irs 2012 form 1040a   For information on making estimated income tax payments to the Bureau of Internal Revenue, see Where To Get Forms and Information , earlier. Irs 2012 form 1040a Extension of time to file. Irs 2012 form 1040a   You can get an automatic 6-month extension of time to file your tax return. Irs 2012 form 1040a See Extension of Time To File in chapter 4. Irs 2012 form 1040a Bona fide residents of the USVI during the entire tax year must file a paper Form 4868 with the Virgin Islands Bureau of Internal Revenue. Irs 2012 form 1040a Nonresidents of the USVI should file separate extension requests with the IRS and the Virgin Islands Bureau of Internal Revenue and make any payments due to the respective jurisdictions. Irs 2012 form 1040a However, the Virgin Islands Bureau of Internal Revenue will honor an extension request that is timely filed with the IRS. Irs 2012 form 1040a Double Taxation A mutual agreement procedure exists to settle cases of double taxation between the United States and the U. Irs 2012 form 1040a S. Irs 2012 form 1040a Virgin Islands. Irs 2012 form 1040a See Double Taxation in chapter 4. Irs 2012 form 1040a Prev  Up  Next   Home   More Online Publications
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The Irs 2012 Form 1040a

Irs 2012 form 1040a 8. Irs 2012 form 1040a   Amortization Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: How To Deduct Amortization Starting a BusinessBusiness Start-Up Costs Costs of Organizing a Corporation Costs of Organizing a Partnership How To Amortize Getting a Lease Section 197 IntangiblesSection 197 Intangibles Defined Assets That Are Not Section 197 Intangibles Safe Harbor for Creative Property Costs Anti-Churning Rules Incorrect Amount of Amortization Deducted Disposition of Section 197 Intangibles Reforestation Costs Geological and Geophysical Costs Pollution Control FacilitiesNew identifiable treatment facility. Irs 2012 form 1040a Research and Experimental Costs Optional Write-off of Certain Tax Preferences Introduction Amortization is a method of recovering (deducting) certain capital costs over a fixed period of time. Irs 2012 form 1040a It is similar to the straight line method of depreciation. Irs 2012 form 1040a The various amortizable costs covered in this chapter are included in the list below. Irs 2012 form 1040a However, this chapter does not discuss amortization of bond premium. Irs 2012 form 1040a For information on that topic, see chapter 3 of Publication 550, Investment Income and Expenses. Irs 2012 form 1040a Topics - This chapter discusses: Deducting amortization Amortizing costs of starting a business Amortizing costs of getting a lease Amortizing costs of section 197 intangibles Amortizing reforestation costs Amortizing costs of geological and geophysical costs Amortizing costs of pollution control facilities Amortizing costs of research and experimentation Amortizing costs of certain tax preferences Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets 550 Investment Income and Expenses 946 How To Depreciate Property Form (and Instructions) 4562 Depreciation and Amortization 4626 Alternative Minimum Tax—Corporations 6251 Alternative Minimum Tax—Individuals See chapter 12 for information about getting publications and forms. Irs 2012 form 1040a How To Deduct Amortization To deduct amortization that begins during the current tax year, complete Part VI of Form 4562 and attach it to your income tax return. Irs 2012 form 1040a To report amortization from previous years, in addition to amortization that begins in the current year, list on Form 4562 each item separately. Irs 2012 form 1040a For example, in 2012, you began to amortize a lease. Irs 2012 form 1040a In 2013, you began to amortize a second lease. Irs 2012 form 1040a Report amortization from the new lease on line 42 of your 2013 Form 4562. Irs 2012 form 1040a Report amortization from the 2012 lease on line 43 of your 2013 Form 4562. Irs 2012 form 1040a If you do not have any new amortizable expenses for the current year, you are not required to complete Form 4562 (unless you are claiming depreciation). Irs 2012 form 1040a Report the current year's deduction for amortization that began in a prior year directly on the “Other deduction” or “Other expense line” of your return. Irs 2012 form 1040a Starting a Business When you start a business, treat all eligible costs you incur before you begin operating the business as capital expenditures which are part of your basis in the business. Irs 2012 form 1040a Generally, you recover costs for particular assets through depreciation deductions. Irs 2012 form 1040a However, you generally cannot recover other costs until you sell the business or otherwise go out of business. Irs 2012 form 1040a For a discussion on how to treat these costs, see If your attempt to go into business is unsuccessful under Capital Expenses in chapter 1. Irs 2012 form 1040a For costs paid or incurred after September 8, 2008, you can deduct a limited amount of start-up and organizational costs. Irs 2012 form 1040a The costs that are not deducted currently can be amortized ratably over a 180-month period. Irs 2012 form 1040a The amortization period starts with the month you begin operating your active trade or business. Irs 2012 form 1040a You are not required to attach a statement to make this election. Irs 2012 form 1040a You can choose to forgo this election by affirmatively electing to capitalize your start-up costs on your income tax return filed by the due date (including extensions) for the tax year in which the active trade or business begins. Irs 2012 form 1040a Once made, the election to either amortize or capitalize start-up costs is irrevocable and applies to all start-up costs that are related to your trade or business. Irs 2012 form 1040a See Regulations sections 1. Irs 2012 form 1040a 195-1, 1. Irs 2012 form 1040a 248-1, and 1. Irs 2012 form 1040a 709-1. Irs 2012 form 1040a For costs paid or incurred after October 22, 2004, and before September 9, 2008, you can elect to deduct a limited amount of business start-up and organizational costs in the year your active trade or business begins. Irs 2012 form 1040a Any costs not deducted can be amortized ratably over a 180-month period, beginning with the month you begin business. Irs 2012 form 1040a If the election is made, you must attach any statement required by Regulations sections 1. Irs 2012 form 1040a 195-1(b), 1. Irs 2012 form 1040a 248-1(c), and 1. Irs 2012 form 1040a 709-1(c), as in effect before September 9, 2008. Irs 2012 form 1040a Note. Irs 2012 form 1040a You can apply the provisions of Regulations sections 1. Irs 2012 form 1040a 195-1, 1. Irs 2012 form 1040a 248-1, and 1. Irs 2012 form 1040a 709-1 to all business start-up and organizational costs paid or incurred after October 22, 2004, provided the period of limitations on assessment has not expired for the year of the election. Irs 2012 form 1040a Otherwise, the provisions under Regulations sections 1. Irs 2012 form 1040a 195-1(b), 1. Irs 2012 form 1040a 248-1(c), and 1. Irs 2012 form 1040a 709-1(c), as in effect before September 9, 2008, will apply. Irs 2012 form 1040a For costs paid or incurred before October 23, 2004, you can elect to amortize business start-up and organization costs over an amortization period of 60 months or more. Irs 2012 form 1040a See How To Make the Election , later. Irs 2012 form 1040a The cost must qualify as one of the following. Irs 2012 form 1040a A business start-up cost. Irs 2012 form 1040a An organizational cost for a corporation. Irs 2012 form 1040a An organizational cost for a partnership. Irs 2012 form 1040a Business Start-Up Costs Start-up costs are amounts paid or incurred for: (a) creating an active trade or business; or (b) investigating the creation or acquisition of an active trade or business. Irs 2012 form 1040a Start-up costs include amounts paid or incurred in connection with an existing activity engaged in for profit; and for the production of income in anticipation of the activity becoming an active trade or business. Irs 2012 form 1040a Qualifying costs. Irs 2012 form 1040a   A start-up cost is amortizable if it meets both of the following tests. Irs 2012 form 1040a It is a cost you could deduct if you paid or incurred it to operate an existing active trade or business (in the same field as the one you entered into). Irs 2012 form 1040a It is a cost you pay or incur before the day your active trade or business begins. Irs 2012 form 1040a   Start-up costs include amounts paid for the following: An analysis or survey of potential markets, products, labor supply, transportation facilities, etc. Irs 2012 form 1040a Advertisements for the opening of the business. Irs 2012 form 1040a Salaries and wages for employees who are being trained and their instructors. Irs 2012 form 1040a Travel and other necessary costs for securing prospective distributors, suppliers, or customers. Irs 2012 form 1040a Salaries and fees for executives and consultants, or for similar professional services. Irs 2012 form 1040a Nonqualifying costs. Irs 2012 form 1040a   Start-up costs do not include deductible interest, taxes, or research and experimental costs. Irs 2012 form 1040a See Research and Experimental Costs , later. Irs 2012 form 1040a Purchasing an active trade or business. Irs 2012 form 1040a   Amortizable start-up costs for purchasing an active trade or business include only investigative costs incurred in the course of a general search for or preliminary investigation of the business. Irs 2012 form 1040a These are costs that help you decide whether to purchase a business. Irs 2012 form 1040a Costs you incur in an attempt to purchase a specific business are capital expenses that you cannot amortize. Irs 2012 form 1040a Example. Irs 2012 form 1040a On June 1st, you hired an accounting firm and a law firm to assist you in the potential purchase of XYZ, Inc. Irs 2012 form 1040a They researched XYZ's industry and analyzed the financial projections of XYZ, Inc. Irs 2012 form 1040a In September, the law firm prepared and submitted a letter of intent to XYZ, Inc. Irs 2012 form 1040a The letter stated that a binding commitment would result only after a purchase agreement was signed. Irs 2012 form 1040a The law firm and accounting firm continued to provide services including a review of XYZ's books and records and the preparation of a purchase agreement. Irs 2012 form 1040a On October 22nd, you signed a purchase agreement with XYZ, Inc. Irs 2012 form 1040a All amounts paid or incurred to investigate the business before October 22nd are amortizable investigative costs. Irs 2012 form 1040a Amounts paid on or after that date relate to the attempt to purchase the business and therefore must be capitalized. Irs 2012 form 1040a Disposition of business. Irs 2012 form 1040a   If you completely dispose of your business before the end of the amortization period, you can deduct any remaining deferred start-up costs. Irs 2012 form 1040a However, you can deduct these deferred start-up costs only to the extent they qualify as a loss from a business. Irs 2012 form 1040a Costs of Organizing a Corporation Amounts paid to organize a corporation are the direct costs of creating the corporation. Irs 2012 form 1040a Qualifying costs. Irs 2012 form 1040a   To qualify as an organizational cost, it must be: For the creation of the corporation, Chargeable to a capital account (see chapter 1), Amortized over the life of the corporation if the corporation had a fixed life, and Incurred before the end of the first tax year in which the corporation is in business. Irs 2012 form 1040a   A corporation using the cash method of accounting can amortize organizational costs incurred within the first tax year, even if it does not pay them in that year. Irs 2012 form 1040a   Examples of organizational costs include: The cost of temporary directors. Irs 2012 form 1040a The cost of organizational meetings. Irs 2012 form 1040a State incorporation fees. Irs 2012 form 1040a The cost of legal services. Irs 2012 form 1040a Nonqualifying costs. Irs 2012 form 1040a   The following items are capital expenses that cannot be amortized: Costs for issuing and selling stock or securities, such as commissions, professional fees, and printing costs. Irs 2012 form 1040a Costs associated with the transfer of assets to the corporation. Irs 2012 form 1040a Costs of Organizing a Partnership The costs to organize a partnership are the direct costs of creating the partnership. Irs 2012 form 1040a Qualifying costs. Irs 2012 form 1040a   A partnership can amortize an organizational cost only if it meets all the following tests. Irs 2012 form 1040a It is for the creation of the partnership and not for starting or operating the partnership trade or business. Irs 2012 form 1040a It is chargeable to a capital account (see chapter 1). Irs 2012 form 1040a It could be amortized over the life of the partnership if the partnership had a fixed life. Irs 2012 form 1040a It is incurred by the due date of the partnership return (excluding extensions) for the first tax year in which the partnership is in business. Irs 2012 form 1040a However, if the partnership uses the cash method of accounting and pays the cost after the end of its first tax year, see Cash method partnership under How To Amortize, later. Irs 2012 form 1040a It is for a type of item normally expected to benefit the partnership throughout its entire life. Irs 2012 form 1040a   Organizational costs include the following fees. Irs 2012 form 1040a Legal fees for services incident to the organization of the partnership, such as negotiation and preparation of the partnership agreement. Irs 2012 form 1040a Accounting fees for services incident to the organization of the partnership. Irs 2012 form 1040a Filing fees. Irs 2012 form 1040a Nonqualifying costs. Irs 2012 form 1040a   The following costs cannot be amortized. Irs 2012 form 1040a The cost of acquiring assets for the partnership or transferring assets to the partnership. Irs 2012 form 1040a The cost of admitting or removing partners, other than at the time the partnership is first organized. Irs 2012 form 1040a The cost of making a contract concerning the operation of the partnership trade or business including a contract between a partner and the partnership. Irs 2012 form 1040a The costs for issuing and marketing interests in the partnership such as brokerage, registration, and legal fees and printing costs. Irs 2012 form 1040a These “syndication fees” are capital expenses that cannot be depreciated or amortized. Irs 2012 form 1040a Liquidation of partnership. Irs 2012 form 1040a   If a partnership is liquidated before the end of the amortization period, the unamortized amount of qualifying organizational costs can be deducted in the partnership's final tax year. Irs 2012 form 1040a However, these costs can be deducted only to the extent they qualify as a loss from a business. Irs 2012 form 1040a How To Amortize Deduct start-up and organizational costs in equal amounts over the applicable amortization period (discussed earlier). Irs 2012 form 1040a You can choose an amortization period for start-up costs that is different from the period you choose for organizational costs, as long as both are not less than the applicable amortization period. Irs 2012 form 1040a Once you choose an amortization period, you cannot change it. Irs 2012 form 1040a To figure your deduction, divide your total start-up or organizational costs by the months in the amortization period. Irs 2012 form 1040a The result is the amount you can deduct for each month. Irs 2012 form 1040a Cash method partnership. Irs 2012 form 1040a   A partnership using the cash method of accounting can deduct an organizational cost only if it has been paid by the end of the tax year. Irs 2012 form 1040a However, any cost the partnership could have deducted as an organizational cost in an earlier tax year (if it had been paid that year) can be deducted in the tax year of payment. Irs 2012 form 1040a How To Make the Election To elect to amortize start-up or organizational costs, you must complete and attach Form 4562 to your return for the first tax year you are in business. Irs 2012 form 1040a You may also be required to attach an accompanying statement (described later) to your return. Irs 2012 form 1040a For start-up or organizational costs paid or incurred after September 8, 2008, an accompanying statement is not required. Irs 2012 form 1040a Generally, for start-up or organizational costs paid or incurred before September 9, 2008, and after October 22, 2004, unless you choose to apply Regulations sections 1. Irs 2012 form 1040a 195-1, 1. Irs 2012 form 1040a 248-1, and 1. Irs 2012 form 1040a 709-1, you must also attach an accompanying statement to elect to amortize the costs. Irs 2012 form 1040a If you have both start-up and organizational costs, attach a separate statement (if required) to your return for each type of cost. Irs 2012 form 1040a See Starting a Business , earlier, for more information. Irs 2012 form 1040a Generally, you must file the return by the due date (including any extensions). Irs 2012 form 1040a 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). Irs 2012 form 1040a For more information, see the instructions for Part VI of Form 4562. Irs 2012 form 1040a You can choose to forgo the election to amortize by affirmatively electing to capitalize your start-up or organizational costs on your income tax return filed by the due date (including extensions) for the tax year in which the active trade or business begins. Irs 2012 form 1040a Note. Irs 2012 form 1040a The election to either amortize or capitalize start-up or organizational costs is irrevocable and applies to all start-up and organizational costs that are related to the trade or business. Irs 2012 form 1040a If your business is organized as a corporation or partnership, only the corporation or partnership can elect to amortize its start-up or organizational costs. Irs 2012 form 1040a A shareholder or partner cannot make this election. Irs 2012 form 1040a You, as a shareholder or partner, cannot amortize any costs you incur in setting up your corporation or partnership. Irs 2012 form 1040a Only the corporation or partnership can amortize these costs. Irs 2012 form 1040a However, you, as an individual, can elect to amortize costs you incur to investigate an interest in an existing partnership. Irs 2012 form 1040a These costs qualify as business start-up costs if you acquire the partnership interest. Irs 2012 form 1040a Start-up costs election statement. Irs 2012 form 1040a   If you elect to amortize your start-up costs, attach a separate statement (if required) that contains the following information. Irs 2012 form 1040a A description of the business to which the start-up costs relate. Irs 2012 form 1040a A description of each start-up cost incurred. Irs 2012 form 1040a The month your active business began (or was acquired). Irs 2012 form 1040a The number of months in your amortization period (which is generally 180 months). Irs 2012 form 1040a Filing the statement early. Irs 2012 form 1040a   You can elect to amortize your start-up costs by filing the statement with a return for any tax year before the year your active business begins. Irs 2012 form 1040a If you file the statement early, the election becomes effective in the month of the tax year your active business begins. Irs 2012 form 1040a Revised statement. Irs 2012 form 1040a   You can file a revised statement to include any start-up costs not included in your original statement. Irs 2012 form 1040a However, you cannot include on the revised statement any cost you previously treated on your return as a cost other than a start-up cost. Irs 2012 form 1040a You can file the revised statement with a return filed after the return on which you elected to amortize your start-up costs. Irs 2012 form 1040a Organizational costs election statement. Irs 2012 form 1040a   If you elect to amortize your corporation's or partnership's organizational costs, attach a separate statement (if required) that contains the following information. Irs 2012 form 1040a A description of each cost. Irs 2012 form 1040a The amount of each cost. Irs 2012 form 1040a The date each cost was incurred. Irs 2012 form 1040a The month your corporation or partnership began active business (or acquired the business). Irs 2012 form 1040a The number of months in your amortization period (which is generally 180 months). Irs 2012 form 1040a Partnerships. Irs 2012 form 1040a   The statement prepared for a cash basis partnership must also indicate the amount paid before the end of the year for each cost. Irs 2012 form 1040a   You do not need to separately list any partnership organizational cost that is less than $10. Irs 2012 form 1040a Instead, you can list the total amount of these costs with the dates the first and last costs were incurred. Irs 2012 form 1040a   After a partnership makes the election to amortize organizational costs, it can later file an amended return to include additional organizational costs not included in the partnership's original return and statement. Irs 2012 form 1040a Getting a Lease If you get a lease for business property, you may recover the cost of acquiring the lease by amortizing it over the term of the lease. Irs 2012 form 1040a The term of the lease for amortization purposes generally includes all renewal options (and any other period for which you and the lessor reasonably expect the lease to be renewed). Irs 2012 form 1040a However, renewal periods are not included if 75% or more of the cost of acquiring the lease is for the term of the lease remaining on the acquisition date (not including any period for which you may choose to renew, extend, or continue the lease). Irs 2012 form 1040a For more information on the costs of getting a lease, see Cost of Getting a Lease in  chapter 3. Irs 2012 form 1040a How to amortize. Irs 2012 form 1040a   Enter your deduction in Part VI of Form 4562 if you are deducting amortization that begins during the current year, or on the appropriate line of your tax return if you are not otherwise required to file Form 4562. Irs 2012 form 1040a Section 197 Intangibles Generally, you may amortize the capitalized costs of “section 197 intangibles” (defined later) ratably over a 15-year period. Irs 2012 form 1040a You must amortize these costs if you hold the section 197 intangibles in connection with your trade or business or in an activity engaged in for the production of income. Irs 2012 form 1040a You may not be able to amortize section 197 intangibles acquired in a transaction that did not result in a significant change in ownership or use. Irs 2012 form 1040a See Anti-Churning Rules, later. Irs 2012 form 1040a Your amortization deduction each year is the applicable part of the intangible's adjusted basis (for purposes of determining gain), figured by amortizing it ratably over 15 years (180 months). Irs 2012 form 1040a The 15-year period begins with the later of: The month the intangible is acquired, or The month the trade or business or activity engaged in for the production of income begins. Irs 2012 form 1040a You cannot deduct amortization for the month you dispose of the intangible. Irs 2012 form 1040a If you pay or incur an amount that increases the basis of an amortizable section 197 intangible after the 15-year period begins, amortize it over the remainder of the 15-year period beginning with the month the basis increase occurs. Irs 2012 form 1040a You are not allowed any other depreciation or amortization deduction for an amortizable section 197 intangible. Irs 2012 form 1040a Tax-exempt use property subject to a lease. Irs 2012 form 1040a   The amortization period for any section 197 intangible leased under a lease agreement entered into after March 12, 2004, to a tax-exempt organization, governmental unit, or foreign person or entity (other than a partnership), shall not be less than 125 percent of the lease term. Irs 2012 form 1040a Cost attributable to other property. Irs 2012 form 1040a   The rules for section 197 intangibles do not apply to any amount that is included in determining the cost of property that is not a section 197 intangible. Irs 2012 form 1040a For example, if the cost of computer software is not separately stated from the cost of hardware or other tangible property and you consistently treat it as part of the cost of the hardware or other tangible property, these rules do not apply. Irs 2012 form 1040a Similarly, none of the cost of acquiring real property held for the production of rental income is considered the cost of goodwill, going concern value, or any other section 197 intangible. Irs 2012 form 1040a Section 197 Intangibles Defined The following assets are section 197 intangibles and must be amortized over 180 months: Goodwill; Going concern value; Workforce in place; Business books and records, operating systems, or any other information base, including lists or other information concerning current or prospective customers; A patent, copyright, formula, process, design, pattern, know-how, format, or similar item; A customer-based intangible; A supplier-based intangible; Any item similar to items (3) through (7); A license, permit, or other right granted by a governmental unit or agency (including issuances and renewals); A covenant not to compete entered into in connection with the acquisition of an interest in a trade or business; Any franchise, trademark, or trade name; and A contract for the use of, or a term interest in, any item in this list. Irs 2012 form 1040a You cannot amortize any of the intangibles listed in items (1) through (8) that you created rather than acquired unless you created them in acquiring assets that make up a trade or business or a substantial part of a trade or business. Irs 2012 form 1040a Goodwill. Irs 2012 form 1040a   This is the value of a trade or business based on expected continued customer patronage due to its name, reputation, or any other factor. Irs 2012 form 1040a Going concern value. Irs 2012 form 1040a   This is the additional value of a trade or business that attaches to property because the property is an integral part of an ongoing business activity. Irs 2012 form 1040a It includes value based on the ability of a business to continue to function and generate income even though there is a change in ownership (but does not include any other section 197 intangible). Irs 2012 form 1040a It also includes value based on the immediate use or availability of an acquired trade or business, such as the use of earnings during any period in which the business would not otherwise be available or operational. Irs 2012 form 1040a Workforce in place, etc. Irs 2012 form 1040a   This includes the composition of a workforce (for example, its experience, education, or training). Irs 2012 form 1040a It also includes the terms and conditions of employment, whether contractual or otherwise, and any other value placed on employees or any of their attributes. Irs 2012 form 1040a   For example, you must amortize the part of the purchase price of a business that is for the existence of a highly skilled workforce. Irs 2012 form 1040a Also, you must amortize the cost of acquiring an existing employment contract or relationship with employees or consultants. Irs 2012 form 1040a Business books and records, etc. Irs 2012 form 1040a   This includes the intangible value of technical manuals, training manuals or programs, data files, and accounting or inventory control systems. Irs 2012 form 1040a It also includes the cost of customer lists, subscription lists, insurance expirations, patient or client files, and lists of newspaper, magazine, radio, and television advertisers. Irs 2012 form 1040a Patents, copyrights, etc. Irs 2012 form 1040a   This includes package design, computer software, and any interest in a film, sound recording, videotape, book, or other similar property, except as discussed later under Assets That Are Not Section 197 Intangibles . Irs 2012 form 1040a Customer-based intangible. Irs 2012 form 1040a   This is the composition of market, market share, and any other value resulting from the future provision of goods or services because of relationships with customers in the ordinary course of business. Irs 2012 form 1040a For example, you must amortize the part of the purchase price of a business that is for the existence of the following intangibles. Irs 2012 form 1040a A customer base. Irs 2012 form 1040a A circulation base. Irs 2012 form 1040a An undeveloped market or market growth. Irs 2012 form 1040a Insurance in force. Irs 2012 form 1040a A mortgage servicing contract. Irs 2012 form 1040a An investment management contract. Irs 2012 form 1040a Any other relationship with customers involving the future provision of goods or services. Irs 2012 form 1040a   Accounts receivable or other similar rights to income for goods or services provided to customers before the acquisition of a trade or business are not section 197 intangibles. Irs 2012 form 1040a Supplier-based intangible. Irs 2012 form 1040a   A supplier-based intangible is the value resulting from the future acquisitions, (through contract or other relationships with suppliers in the ordinary course of business) of goods or services that you will sell or use. Irs 2012 form 1040a The amount you pay or incur for supplier-based intangibles includes, for example, any portion of the purchase price of an acquired trade or business that is attributable to the existence of a favorable relationship with persons providing distribution services (such as a favorable shelf or display space or a retail outlet), or the existence of favorable supply contracts. Irs 2012 form 1040a Do not include any amount required to be paid for the goods or services to honor the terms of the agreement or other relationship. Irs 2012 form 1040a Also, see Assets That Are Not Section 197 Intangibles below. Irs 2012 form 1040a Government-granted license, permit, etc. Irs 2012 form 1040a   This is any right granted by a governmental unit or an agency or instrumentality of a governmental unit. Irs 2012 form 1040a For example, you must amortize the capitalized costs of acquiring (including issuing or renewing) a liquor license, a taxicab medallion or license, or a television or radio broadcasting license. Irs 2012 form 1040a Covenant not to compete. Irs 2012 form 1040a   Section 197 intangibles include a covenant not to compete (or similar arrangement) entered into in connection with the acquisition of an interest in a trade or business, or a substantial portion of a trade or business. Irs 2012 form 1040a An interest in a trade or business includes an interest in a partnership or a corporation engaged in a trade or business. Irs 2012 form 1040a   An arrangement that requires the former owner to perform services (or to provide property or the use of property) is not similar to a covenant not to compete to the extent the amount paid under the arrangement represents reasonable compensation for those services or for that property or its use. Irs 2012 form 1040a Franchise, trademark, or trade name. Irs 2012 form 1040a   A franchise, trademark, or trade name is a section 197 intangible. Irs 2012 form 1040a You must amortize its purchase or renewal costs, other than certain contingent payments that you can deduct currently. Irs 2012 form 1040a For information on currently deductible contingent payments, see chapter 11. Irs 2012 form 1040a Professional sports franchise. Irs 2012 form 1040a   A franchise engaged in professional sports and any intangible assets acquired in connection with acquiring the franchise (including player contracts) is a section 197 intangible amortizable over a 15-year period. Irs 2012 form 1040a Contract for the use of, or a term interest in, a section 197 intangible. Irs 2012 form 1040a   Section 197 intangibles include any right under a license, contract, or other arrangement providing for the use of any section 197 intangible. Irs 2012 form 1040a It also includes any term interest in any section 197 intangible, whether the interest is outright or in trust. Irs 2012 form 1040a Assets That Are Not Section 197 Intangibles The following assets are not section 197 intangibles. Irs 2012 form 1040a Any interest in a corporation, partnership, trust, or estate. Irs 2012 form 1040a Any interest under an existing futures contract, foreign currency contract, notional principal contract, interest rate swap, or similar financial contract. Irs 2012 form 1040a Any interest in land. Irs 2012 form 1040a Most computer software. Irs 2012 form 1040a (See Computer software , later. Irs 2012 form 1040a ) Any of the following assets not acquired in connection with the acquisition of a trade or business or a substantial part of a trade or business. Irs 2012 form 1040a An interest in a film, sound recording, video tape, book, or similar property. Irs 2012 form 1040a A right to receive tangible property or services under a contract or from a governmental agency. Irs 2012 form 1040a An interest in a patent or copyright. Irs 2012 form 1040a Certain rights that have a fixed duration or amount. Irs 2012 form 1040a (See Rights of fixed duration or amount , later. Irs 2012 form 1040a ) An interest under either of the following. Irs 2012 form 1040a An existing lease or sublease of tangible property. Irs 2012 form 1040a A debt that was in existence when the interest was acquired. Irs 2012 form 1040a A right to service residential mortgages unless the right is acquired in connection with the acquisition of a trade or business or a substantial part of a trade or business. Irs 2012 form 1040a Certain transaction costs incurred by parties to a corporate organization or reorganization in which any part of a gain or loss is not recognized. Irs 2012 form 1040a Intangible property that is not amortizable under the rules for section 197 intangibles can be depreciated if it meets certain requirements. Irs 2012 form 1040a You generally must use the straight line method over its useful life. Irs 2012 form 1040a For certain intangibles, the depreciation period is specified in the law and regulations. Irs 2012 form 1040a For example, the depreciation period for computer software that is not a section 197 intangible is generally 36 months. Irs 2012 form 1040a For more information on depreciating intangible property, see Intangible Property under What Method Can You Use To Depreciate Your Property? in chapter 1 of Publication 946. Irs 2012 form 1040a Computer software. Irs 2012 form 1040a   Section 197 intangibles do not include the following types of computer software. Irs 2012 form 1040a Software that meets all the following requirements. Irs 2012 form 1040a It is, or has been, readily available for purchase by the general public. Irs 2012 form 1040a It is subject to a nonexclusive license. Irs 2012 form 1040a It has not been substantially modified. Irs 2012 form 1040a This requirement is considered met if the cost of all modifications is not more than the greater of 25% of the price of the publicly available unmodified software or $2,000. Irs 2012 form 1040a Software that is not acquired in connection with the acquisition of a trade or business or a substantial part of a trade or business. Irs 2012 form 1040a Computer software defined. Irs 2012 form 1040a   Computer software includes all programs designed to cause a computer to perform a desired function. Irs 2012 form 1040a It also includes any database or similar item that is in the public domain and is incidental to the operation of qualifying software. Irs 2012 form 1040a Rights of fixed duration or amount. Irs 2012 form 1040a   Section 197 intangibles do not include any right under a contract or from a governmental agency if the right is acquired in the ordinary course of a trade or business (or in an activity engaged in for the production of income) but not as part of a purchase of a trade or business and either: Has a fixed life of less than 15 years, or Is of a fixed amount that, except for the rules for section 197 intangibles, would be recovered under a method similar to the unit-of-production method of cost recovery. Irs 2012 form 1040a However, this does not apply to the following intangibles. Irs 2012 form 1040a Goodwill. Irs 2012 form 1040a Going concern value. Irs 2012 form 1040a A covenant not to compete. Irs 2012 form 1040a A franchise, trademark, or trade name. Irs 2012 form 1040a A customer-related information base, customer-based intangible, or similar item. Irs 2012 form 1040a Safe Harbor for Creative Property Costs If you are engaged in the trade or business of film production, you may be able to amortize the creative property costs for properties not set for production within 3 years of the first capitalized transaction. Irs 2012 form 1040a You may amortize these costs ratably over a 15-year period beginning on the first day of the second half of the tax year in which you properly write off the costs for financial accounting purposes. Irs 2012 form 1040a If, during the 15-year period, you dispose of the creative property rights, you must continue to amortize the costs over the remainder of the 15-year period. Irs 2012 form 1040a Creative property costs include costs paid or incurred to acquire and develop screenplays, scripts, story outlines, motion picture production rights to books and plays, and other similar properties for purposes of potential future film development, production, and exploitation. Irs 2012 form 1040a Amortize these costs using the rules of Revenue Procedure 2004-36. Irs 2012 form 1040a For more information, see Revenue Procedure 2004-36, 2004-24 I. Irs 2012 form 1040a R. Irs 2012 form 1040a B. Irs 2012 form 1040a 1063, available at  www. Irs 2012 form 1040a irs. Irs 2012 form 1040a gov/irb/2004-24_IRB/ar16. Irs 2012 form 1040a html. Irs 2012 form 1040a A change in the treatment of creative property costs is a change in method of accounting. Irs 2012 form 1040a Anti-Churning Rules Anti-churning rules prevent you from amortizing most section 197 intangibles if the transaction in which you acquired them did not result in a significant change in ownership or use. Irs 2012 form 1040a These rules apply to goodwill and going concern value, and to any other section 197 intangible that is not otherwise depreciable or amortizable. Irs 2012 form 1040a Under the anti-churning rules, you cannot use 15-year amortization for the intangible if any of the following conditions apply. Irs 2012 form 1040a You or a related person (defined later) held or used the intangible at any time from July 25, 1991, through August 10, 1993. Irs 2012 form 1040a You acquired the intangible from a person who held it at any time during the period in (1) and, as part of the transaction, the user did not change. Irs 2012 form 1040a You granted the right to use the intangible to a person (or a person related to that person) who held or used it at any time during the period in (1). Irs 2012 form 1040a This applies only if the transaction in which you granted the right and the transaction in which you acquired the intangible are part of a series of related transactions. Irs 2012 form 1040a See Related person , later, for more information. Irs 2012 form 1040a Exceptions. Irs 2012 form 1040a   The anti-churning rules do not apply in the following situations. Irs 2012 form 1040a You acquired the intangible from a decedent and its basis was stepped up to its fair market value. Irs 2012 form 1040a The intangible was amortizable as a section 197 intangible by the seller or transferor you acquired it from. Irs 2012 form 1040a This exception does not apply if the transaction in which you acquired the intangible and the transaction in which the seller or transferor acquired it are part of a series of related transactions. Irs 2012 form 1040a The gain-recognition exception, discussed later, applies. Irs 2012 form 1040a Related person. Irs 2012 form 1040a   For purposes of the anti-churning rules, the following are related persons. Irs 2012 form 1040a An individual and his or her brothers, sisters, half-brothers, half-sisters, spouse, ancestors (parents, grandparents, etc. Irs 2012 form 1040a ), and lineal descendants (children, grandchildren, etc. Irs 2012 form 1040a ). Irs 2012 form 1040a A corporation and an individual who owns, directly or indirectly, more than 20% of the value of the corporation's outstanding stock. Irs 2012 form 1040a Two corporations that are members of the same controlled group as defined in section 1563(a) of the Internal Revenue Code, except that “more than 20%” is substituted for “at least 80%” in that definition and the determination is made without regard to subsections (a)(4) and (e)(3)(C) of section 1563. Irs 2012 form 1040a (For an exception, see section 1. Irs 2012 form 1040a 197-2(h)(6)(iv) of the regulations. Irs 2012 form 1040a ) A trust fiduciary and a corporation if more than 20% of the value of the corporation's outstanding stock is owned, directly or indirectly, by or for the trust or grantor of the trust. Irs 2012 form 1040a The grantor and fiduciary, and the fiduciary and beneficiary, of any trust. Irs 2012 form 1040a The fiduciaries of two different trusts, and the fiduciaries and beneficiaries of two different trusts, if the same person is the grantor of both trusts. Irs 2012 form 1040a The executor and beneficiary of an estate. Irs 2012 form 1040a A tax-exempt educational or charitable organization and a person who directly or indirectly controls the organization (or whose family members control it). Irs 2012 form 1040a A corporation and a partnership if the same persons own more than 20% of the value of the outstanding stock of the corporation and more than 20% of the capital or profits interest in the partnership. Irs 2012 form 1040a Two S corporations, and an S corporation and a regular corporation, if the same persons own more than 20% of the value of the outstanding stock of each corporation. Irs 2012 form 1040a Two partnerships if the same persons own, directly or indirectly, more than 20% of the capital or profits interests in both partnerships. Irs 2012 form 1040a A partnership and a person who owns, directly or indirectly, more than 20% of the capital or profits interests in the partnership. Irs 2012 form 1040a Two persons who are engaged in trades or businesses under common control (as described in section 41(f)(1) of the Internal Revenue Code). Irs 2012 form 1040a When to determine relationship. Irs 2012 form 1040a   Persons are treated as related if the relationship existed at the following time. Irs 2012 form 1040a In the case of a single transaction, immediately before or immediately after the transaction in which the intangible was acquired. Irs 2012 form 1040a In the case of a series of related transactions (or a series of transactions that comprise a qualified stock purchase under section 338(d)(3) of the Internal Revenue Code), immediately before the earliest transaction or immediately after the last transaction. Irs 2012 form 1040a Ownership of stock. Irs 2012 form 1040a   In determining whether an individual directly or indirectly owns any of the outstanding stock of a corporation, the following rules apply. Irs 2012 form 1040a Rule 1. Irs 2012 form 1040a   Stock directly or indirectly owned by or for a corporation, partnership, estate, or trust is considered owned proportionately by or for its shareholders, partners, or beneficiaries. Irs 2012 form 1040a Rule 2. Irs 2012 form 1040a   An individual is considered to own the stock directly or indirectly owned by or for his or her family. Irs 2012 form 1040a Family includes only brothers and sisters, half-brothers and half-sisters, spouse, ancestors, and lineal descendants. Irs 2012 form 1040a Rule 3. Irs 2012 form 1040a   An individual owning (other than by applying Rule 2) any stock in a corporation is considered to own the stock directly or indirectly owned by or for his or her partner. Irs 2012 form 1040a Rule 4. Irs 2012 form 1040a   For purposes of applying Rule 1, 2, or 3, treat stock constructively owned by a person under Rule 1 as actually owned by that person. Irs 2012 form 1040a Do not treat stock constructively owned by an individual under Rule 2 or 3 as owned by the individual for reapplying Rule 2 or 3 to make another person the constructive owner of the stock. Irs 2012 form 1040a Gain-recognition exception. Irs 2012 form 1040a   This exception to the anti-churning rules applies if the person you acquired the intangible from (the transferor) meets both of the following requirements. Irs 2012 form 1040a That person would not be related to you (as described under Related person , earlier) if the 20% test for ownership of stock and partnership interests were replaced by a 50% test. Irs 2012 form 1040a That person chose to recognize gain on the disposition of the intangible and pay income tax on the gain at the highest tax rate. Irs 2012 form 1040a See chapter 2 in Publication 544 for information on making this choice. Irs 2012 form 1040a   If this exception applies, the anti-churning rules apply only to the amount of your adjusted basis in the intangible that is more than the gain recognized by the transferor. Irs 2012 form 1040a Notification. Irs 2012 form 1040a   If the person you acquired the intangible from chooses to recognize gain under the rules for this exception, that person must notify you in writing by the due date of the return on which the choice is made. Irs 2012 form 1040a Anti-abuse rule. Irs 2012 form 1040a   You cannot amortize any section 197 intangible acquired in a transaction for which the principal purpose was either of the following. Irs 2012 form 1040a To avoid the requirement that the intangible be acquired after August 10, 1993. Irs 2012 form 1040a To avoid any of the anti-churning rules. Irs 2012 form 1040a More information. Irs 2012 form 1040a   For more information about the anti-churning rules, including additional rules for partnerships, see Regulations section 1. Irs 2012 form 1040a 197-2(h). Irs 2012 form 1040a Incorrect Amount of Amortization Deducted If you later discover that you deducted an incorrect amount for amortization for a section 197 intangible in any year, you may be able to make a correction for that year by filing an amended return. Irs 2012 form 1040a See Amended Return , next. Irs 2012 form 1040a If you are not allowed to make the correction on an amended return, you can change your accounting method to claim the correct amortization. Irs 2012 form 1040a See Changing Your Accounting Method , later. Irs 2012 form 1040a Amended Return If you deducted an incorrect amount for amortization, you can file an amended return to correct the following. Irs 2012 form 1040a A mathematical error made in any year. Irs 2012 form 1040a A posting error made in any year. Irs 2012 form 1040a An amortization deduction for a section 197 intangible for which you have not adopted a method of accounting. Irs 2012 form 1040a When to file. Irs 2012 form 1040a   If an amended return is allowed, you must file it by the later of the following dates. Irs 2012 form 1040a 3 years from the date you filed your original return for the year in which you did not deduct the correct amount. Irs 2012 form 1040a (A return filed early is considered filed on the due date. Irs 2012 form 1040a ) 2 years from the time you paid your tax for that year. Irs 2012 form 1040a Changing Your Accounting Method Generally, you must get IRS approval to change your method of accounting. Irs 2012 form 1040a File Form 3115, Application for Change in Accounting Method, to request a change to a permissible method of accounting for amortization. Irs 2012 form 1040a The following are examples of a change in method of accounting for amortization. Irs 2012 form 1040a A change in the amortization method, period of recovery, or convention of an amortizable asset. Irs 2012 form 1040a A change in the accounting for amortizable assets from a single asset account to a multiple asset account (pooling), or vice versa. Irs 2012 form 1040a A change in the accounting for amortizable assets from one type of multiple asset account to a different type of multiple asset account. Irs 2012 form 1040a Changes in amortization that are not a change in method of accounting include the following: A change in computing amortization in the tax year in which your use of the asset changes. Irs 2012 form 1040a An adjustment in the useful life of an amortizable asset. Irs 2012 form 1040a Generally, the making of a late amortization election or the revocation of a timely valid amortization election. Irs 2012 form 1040a Any change in the placed-in-service date of an amortizable asset. Irs 2012 form 1040a See Regulations section 1. Irs 2012 form 1040a 446-1(e)(2)(ii)(a) for more information and examples. Irs 2012 form 1040a Automatic approval. Irs 2012 form 1040a   In some instances, you may be able to get automatic approval from the IRS to change your method of accounting for amortization. Irs 2012 form 1040a For a list of automatic accounting method changes, see the Instructions for Form 3115. Irs 2012 form 1040a Also see the Instructions for Form 3115 for more information on getting approval, automatic approval procedures, and a list of exceptions to the automatic approval process. Irs 2012 form 1040a For more information, see Revenue Procedure 2006-12, as modified by Revenue Procedure 2006-37, and Revenue Procedure 2008-52, as amplified, clarified, and modified by Revenue Procedure 2009-39, as clarified and modified by Revenue Procedure 2011-14, as modified and amplified by Revenue Procedure 2011-22, as modified by Revenue Procedure 2012-39, or any successor. Irs 2012 form 1040a See Revenue Procedure 2006-12, 2006-3 I. Irs 2012 form 1040a R. Irs 2012 form 1040a B. Irs 2012 form 1040a 310, available at  www. Irs 2012 form 1040a irs. Irs 2012 form 1040a gov/irb/2006-03_IRB/ar14. Irs 2012 form 1040a html. Irs 2012 form 1040a  See Revenue Procedure 2006-37, 2006-38 I. Irs 2012 form 1040a R. Irs 2012 form 1040a B. Irs 2012 form 1040a 499, available at  www. Irs 2012 form 1040a irs. Irs 2012 form 1040a gov/irb/2006-38_IRB/ar10. Irs 2012 form 1040a html. Irs 2012 form 1040a  See Revenue Procedure 2008-52, 2008-36 I. Irs 2012 form 1040a R. Irs 2012 form 1040a B. Irs 2012 form 1040a 587, available at www. Irs 2012 form 1040a irs. Irs 2012 form 1040a gov/irb/2008-36_IRB/ar09. Irs 2012 form 1040a html. Irs 2012 form 1040a  See Revenue Procedure 2009-39, 2009-38 I. Irs 2012 form 1040a R. Irs 2012 form 1040a B. Irs 2012 form 1040a 371, available at  www. Irs 2012 form 1040a irs. Irs 2012 form 1040a gov/irb/2009-38_IRB/ar08. Irs 2012 form 1040a html. Irs 2012 form 1040a  See Revenue Procedure 2011-14, 2011-4 I. Irs 2012 form 1040a R. Irs 2012 form 1040a B. Irs 2012 form 1040a 330, available at  www. Irs 2012 form 1040a irs. Irs 2012 form 1040a gov/irb/2011-04_IRB/ar08. Irs 2012 form 1040a html. Irs 2012 form 1040a  See Revenue Procedure 2011-22, 2011-18 I. Irs 2012 form 1040a R. Irs 2012 form 1040a B. Irs 2012 form 1040a 737, available at  www. Irs 2012 form 1040a irs. Irs 2012 form 1040a gov/irb/2011-18_IRB/ar08. Irs 2012 form 1040a html. Irs 2012 form 1040a Also, see Revenue Procedure 2012-39, 2012-41 I. Irs 2012 form 1040a R. Irs 2012 form 1040a B. Irs 2012 form 1040a 470 available at www. Irs 2012 form 1040a irs. Irs 2012 form 1040a gov/irb/2012-41_IRB/index. Irs 2012 form 1040a html. Irs 2012 form 1040a Disposition of Section 197 Intangibles A section 197 intangible is treated as depreciable property used in your trade or business. Irs 2012 form 1040a If you held the intangible for more than 1 year, any gain on its disposition, up to the amount of allowable amortization, is ordinary income (section 1245 gain). Irs 2012 form 1040a If multiple section 197 intangibles are disposed of in a single transaction or a series of related transactions, treat all of the section 197 intangibles as if they were a single asset for purposes of determining the amount of gain that is ordinary income. Irs 2012 form 1040a Any remaining gain, or any loss, is a section 1231 gain or loss. Irs 2012 form 1040a If you held the intangible 1 year or less, any gain or loss on its disposition is an ordinary gain or loss. Irs 2012 form 1040a For more information on ordinary or capital gain or loss on business property, see chapter 3 in Publication 544. Irs 2012 form 1040a Nondeductible loss. Irs 2012 form 1040a   You cannot deduct any loss on the disposition or worthlessness of a section 197 intangible that you acquired in the same transaction (or series of related transactions) as other section 197 intangibles you still have. Irs 2012 form 1040a Instead, increase the adjusted basis of each remaining amortizable section 197 intangible by a proportionate part of the nondeductible loss. Irs 2012 form 1040a Figure the increase by multiplying the nondeductible loss on the disposition of the intangible by the following fraction. Irs 2012 form 1040a The numerator is the adjusted basis of each remaining intangible on the date of the disposition. Irs 2012 form 1040a The denominator is the total adjusted bases of all remaining amortizable section 197 intangibles on the date of the disposition. Irs 2012 form 1040a Covenant not to compete. Irs 2012 form 1040a   A covenant not to compete, or similar arrangement, is not considered disposed of or worthless before you dispose of your entire interest in the trade or business for which you entered into the covenant. Irs 2012 form 1040a Nonrecognition transfers. Irs 2012 form 1040a   If you acquire a section 197 intangible in a nonrecognition transfer, you are treated as the transferor with respect to the part of your adjusted basis in the intangible that is not more than the transferor's adjusted basis. Irs 2012 form 1040a You amortize this part of the adjusted basis over the intangible's remaining amortization period in the hands of the transferor. Irs 2012 form 1040a Nonrecognition transfers include transfers to a corporation, partnership contributions and distributions, like-kind exchanges, and involuntary conversions. Irs 2012 form 1040a   In a like-kind exchange or involuntary conversion of a section 197 intangible, you must continue to amortize the part of your adjusted basis in the acquired intangible that is not more than your adjusted basis in the exchanged or converted intangible over the remaining amortization period of the exchanged or converted intangible. Irs 2012 form 1040a Amortize over a new 15-year period the part of your adjusted basis in the acquired intangible that is more than your adjusted basis in the exchanged or converted intangible. Irs 2012 form 1040a Example. Irs 2012 form 1040a You own a section 197 intangible you have amortized for 4 full years. Irs 2012 form 1040a It has a remaining unamortized basis of $30,000. Irs 2012 form 1040a You exchange the asset plus $10,000 for a like-kind section 197 intangible. Irs 2012 form 1040a The nonrecognition provisions of like-kind exchanges apply. Irs 2012 form 1040a You amortize $30,000 of the $40,000 adjusted basis of the acquired intangible over the 11 years remaining in the original 15-year amortization period for the transferred asset. Irs 2012 form 1040a You amortize the other $10,000 of adjusted basis over a new 15-year period. Irs 2012 form 1040a For more information, see Regulations section 1. Irs 2012 form 1040a 197-2(g). Irs 2012 form 1040a Reforestation Costs You can elect to deduct a limited amount of reforestation costs paid or incurred during the tax year. Irs 2012 form 1040a See Reforestation Costs in chapter 7. Irs 2012 form 1040a You can elect to amortize the qualifying costs that are not deducted currently over an 84-month period. Irs 2012 form 1040a There is no limit on the amount of your amortization deduction for reforestation costs paid or incurred during the tax year. Irs 2012 form 1040a The election to amortize reforestation costs incurred by a partnership, S corporation, or estate must be made by the partnership, corporation, or estate. Irs 2012 form 1040a A partner, shareholder, or beneficiary cannot make that election. Irs 2012 form 1040a A partner's or shareholder's share of amortizable costs is figured under the general rules for allocating items of income, loss, deduction, etc. Irs 2012 form 1040a , of a partnership or S corporation. Irs 2012 form 1040a The amortizable costs of an estate are divided between the estate and the income beneficiary based on the income of the estate allocable to each. Irs 2012 form 1040a Qualifying costs. Irs 2012 form 1040a   Reforestation costs are the direct costs of planting or seeding for forestation or reforestation. Irs 2012 form 1040a Qualifying costs include only those costs you must capitalize and include in the adjusted basis of the property. Irs 2012 form 1040a They include costs for the following items. Irs 2012 form 1040a Site preparation. Irs 2012 form 1040a Seeds or seedlings. Irs 2012 form 1040a Labor. Irs 2012 form 1040a Tools. Irs 2012 form 1040a Depreciation on equipment used in planting and seeding. Irs 2012 form 1040a Qualifying costs do not include costs for which the government reimburses you under a cost-sharing program, unless you include the reimbursement in your income. Irs 2012 form 1040a Qualified timber property. Irs 2012 form 1040a   Qualified timber property is property that contains trees in significant commercial quantities. Irs 2012 form 1040a It can be a woodlot or other site that you own or lease. Irs 2012 form 1040a The property qualifies only if it meets all of the following requirements. Irs 2012 form 1040a It is located in the United States. Irs 2012 form 1040a It is held for the growing and cutting of timber you will either use in, or sell for use in, the commercial production of timber products. Irs 2012 form 1040a It consists of at least one acre planted with tree seedlings in the manner normally used in forestation or reforestation. Irs 2012 form 1040a Qualified timber property does not include property on which you have planted shelter belts or ornamental trees, such as Christmas trees. Irs 2012 form 1040a Amortization period. Irs 2012 form 1040a   The 84-month amortization period starts on the first day of the first month of the second half of the tax year you incur the costs (July 1 for a calendar year taxpayer), regardless of the month you actually incur the costs. Irs 2012 form 1040a You can claim amortization deductions for no more than 6 months of the first and last (eighth) tax years of the period. Irs 2012 form 1040a Life tenant and remainderman. Irs 2012 form 1040a   If one person holds the property for life with the remainder going to another person, the life tenant is entitled to the full amortization for qualifying reforestation costs incurred by the life tenant. Irs 2012 form 1040a Any remainder interest in the property is ignored for amortization purposes. Irs 2012 form 1040a Recapture. Irs 2012 form 1040a   If you dispose of qualified timber property within 10 years after the tax year you incur qualifying reforestation expenses, report any gain as ordinary income up to the amortization you took. Irs 2012 form 1040a See chapter 3 of Publication 544 for more information. Irs 2012 form 1040a How to make the election. Irs 2012 form 1040a   To elect to amortize qualifying reforestation costs, complete Part VI of Form 4562 and attach a statement that contains the following information. Irs 2012 form 1040a A description of the costs and the dates you incurred them. Irs 2012 form 1040a A description of the type of timber being grown and the purpose for which it is grown. Irs 2012 form 1040a Attach a separate statement for each property for which you amortize reforestation costs. Irs 2012 form 1040a   Generally, you must make the election on a timely filed return (including extensions) for the tax year in which you incurred the costs. Irs 2012 form 1040a 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). Irs 2012 form 1040a Attach Form 4562 and the statement to the amended return and write “Filed pursuant to section 301. Irs 2012 form 1040a 9100-2” on Form 4562. Irs 2012 form 1040a File the amended return at the same address you filed the original return. Irs 2012 form 1040a Revoking the election. Irs 2012 form 1040a   You must get IRS approval to revoke your election to amortize qualifying reforestation costs. Irs 2012 form 1040a Your application to revoke the election must include your name, address, the years for which your election was in effect, and your reason for revoking it. Irs 2012 form 1040a Please provide your daytime telephone number (optional), in case we need to contact you. Irs 2012 form 1040a You, or your duly authorized representative, must sign the application and file it at least 90 days before the due date (without extensions) for filing your income tax return for the first tax year for which your election is to end. Irs 2012 form 1040a    Send the application to: Internal Revenue Service Associate Chief Counsel Passthroughs and Special Industries CC:PSI:6 1111 Constitution Ave. Irs 2012 form 1040a NW, IR-5300 Washington, DC 20224 Geological and Geophysical Costs You can amortize the cost of geological and geophysical expenses paid or incurred in connection with oil and gas exploration or development within the United States. Irs 2012 form 1040a These costs can be amortized ratably over a 24-month period beginning on the mid-point of the tax year in which the expenses were paid or incurred. Irs 2012 form 1040a For major integrated oil companies (as defined in section 167(h)(5)), these costs must be amortized ratably over a 5-year period for costs paid or incurred after May 17, 2006 (a 7-year period for costs paid or incurred after December 19, 2007). Irs 2012 form 1040a If you retire or abandon the property during the amortization period, no amortization deduction is allowed in the year of retirement or abandonment. Irs 2012 form 1040a Pollution Control Facilities You can elect to amortize the cost of a certified pollution control facility over 60 months. Irs 2012 form 1040a However, see Atmospheric pollution control facilities for an exception. Irs 2012 form 1040a The cost of a pollution control facility that is not eligible for amortization can be depreciated under the regular rules for depreciation. Irs 2012 form 1040a Also, you can claim a special depreciation allowance on a certified pollution control facility that is qualified property even if you elect to amortize its cost. Irs 2012 form 1040a You must reduce its cost (amortizable basis) by the amount of any special allowance you claim. Irs 2012 form 1040a See chapter 3 of Publication 946. Irs 2012 form 1040a A certified pollution control facility is a new identifiable treatment facility used in connection with a plant or other property in operation before 1976, to reduce or control water or atmospheric pollution or contamination. Irs 2012 form 1040a The facility must do so by removing, changing, disposing, storing, or preventing the creation or emission of pollutants, contaminants, wastes, or heat. Irs 2012 form 1040a The facility must be certified by state and federal certifying authorities. Irs 2012 form 1040a The facility must not significantly increase the output or capacity, extend the useful life, or reduce the total operating costs of the plant or other property. Irs 2012 form 1040a Also, it must not significantly change the nature of the manufacturing or production process or facility. Irs 2012 form 1040a The federal certifying authority will not certify your property to the extent it appears you will recover (over the property's useful life) all or part of its cost from the profit based on its operation (such as through sales of recovered wastes). Irs 2012 form 1040a The federal certifying authority will describe the nature of the potential cost recovery. Irs 2012 form 1040a You must then reduce the amortizable basis of the facility by this potential recovery. Irs 2012 form 1040a New identifiable treatment facility. Irs 2012 form 1040a   A new identifiable treatment facility is tangible depreciable property that is identifiable as a treatment facility. Irs 2012 form 1040a It does not include a building and its structural components unless the building is exclusively a treatment facility. Irs 2012 form 1040a Atmospheric pollution control facilities. Irs 2012 form 1040a   Certain atmospheric pollution control facilities can be amortized over 84 months. Irs 2012 form 1040a To qualify, the following must apply. Irs 2012 form 1040a The facility must be acquired and placed in service after April 11, 2005. Irs 2012 form 1040a If acquired, the original use must begin with you after April 11, 2005. Irs 2012 form 1040a The facility must be used in connection with an electric generation plant or other property placed in operation after December 31, 1975, that is primarily coal fired. Irs 2012 form 1040a If you construct, reconstruct, or erect the facility, only the basis attributable to the construction, reconstruction, or erection completed after April 11, 2005, qualifies. Irs 2012 form 1040a Basis reduction for corporations. Irs 2012 form 1040a   A corporation must reduce the amortizable basis of a pollution control facility by 20% before figuring the amortization deduction. Irs 2012 form 1040a More information. Irs 2012 form 1040a   For more information on the amortization of pollution control facilities, see Code sections 169 and 291(c) and the related regulations. Irs 2012 form 1040a Research and Experimental Costs You can elect to amortize your research and experimental costs, deduct them as current business expenses, or write them off over a 10-year period (see Optional write-off method below). Irs 2012 form 1040a If you elect to amortize these costs, deduct them in equal amounts over 60 months or more. Irs 2012 form 1040a The amortization period begins the month you first receive an economic benefit from the costs. Irs 2012 form 1040a For a definition of “research and experimental costs” and information on deducting them as current business expenses, see chapter 7. Irs 2012 form 1040a Optional write-off method. Irs 2012 form 1040a   Rather than amortize these costs or deduct them as a current expense, you have the option of deducting (writing off) research and experimental costs ratably over a 10-year period beginning with the tax year in which you incurred the costs. Irs 2012 form 1040a For more information, see Optional Write-off of Certain Tax Preferences , later, and section 59(e) of the Internal Revenue Code. Irs 2012 form 1040a Costs you can amortize. Irs 2012 form 1040a   You can amortize costs chargeable to a capital account (see chapter 1) if you meet both of the following requirements. Irs 2012 form 1040a You paid or incurred the costs in your trade or business. Irs 2012 form 1040a You are not deducting the costs currently. Irs 2012 form 1040a How to make the election. Irs 2012 form 1040a   To elect to amortize research and experimental costs, complete Part VI of Form 4562 and attach it to your income tax return. Irs 2012 form 1040a Generally, you must file the return by the due date (including extensions). Irs 2012 form 1040a 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). Irs 2012 form 1040a Attach Form 4562 to the amended return and write “Filed pursuant to section 301. Irs 2012 form 1040a 9100-2” on Form 4562. Irs 2012 form 1040a File the amended return at the same address you filed the original return. Irs 2012 form 1040a   Your election is binding for the year it is made and for all later years unless you obtain approval from the IRS to change to a different method. Irs 2012 form 1040a Optional Write-off of Certain Tax Preferences You can elect to amortize certain tax preference items over an optional period beginning in the tax year in which you incurred the costs. Irs 2012 form 1040a If you make this election, there is no AMT adjustment. Irs 2012 form 1040a The applicable costs and the optional recovery periods are as follows: Circulation costs — 3 years, Intangible drilling and development costs — 60 months, Mining exploration and development costs — 10 years, and Research and experimental costs — 10 years. Irs 2012 form 1040a How to make the election. Irs 2012 form 1040a   To elect to amortize qualifying costs over the optional recovery period, complete Part VI of Form 4562 and attach a statement containing the following information to your return for the tax year in which the election begins: Your name, address, and taxpayer identification number; and The type of cost and the specific amount of the cost for which you are making the election. Irs 2012 form 1040a   Generally, the election must be made on a timely filed return (including extensions) for the tax year in which you incurred the costs. Irs 2012 form 1040a 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). Irs 2012 form 1040a Attach Form 4562 to the amended return and write “Filed pursuant to section 301. Irs 2012 form 1040a 9100-2” on Form 4562. Irs 2012 form 1040a File the amended return at the same address you filed the original return. Irs 2012 form 1040a Revoking the election. Irs 2012 form 1040a   You must obtain consent from the IRS to revoke your election. Irs 2012 form 1040a Your request to revoke the election must be submitted to the IRS in the form of a letter ruling before the end of the tax year in which the optional recovery period ends. Irs 2012 form 1040a The request must contain all of the information necessary to demonstrate the rare and unusual circumstances that would justify granting revocation. Irs 2012 form 1040a If the request for revocation is approved, any unamortized costs are deductible in the year the revocation is effective. Irs 2012 form 1040a Prev  Up  Next   Home   More Online Publications