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Irs 2012 Tax Forms 1040 Instructions

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Irs 2012 Tax Forms 1040 Instructions

Irs 2012 tax forms 1040 instructions Publication 15-B - Main Content Table of Contents 1. Irs 2012 tax forms 1040 instructions Fringe Benefit OverviewAre Fringe Benefits Taxable? Cafeteria Plans Simple Cafeteria Plans 2. Irs 2012 tax forms 1040 instructions Fringe Benefit Exclusion RulesAccident and Health Benefits Achievement Awards Adoption Assistance Athletic Facilities De Minimis (Minimal) Benefits Dependent Care Assistance Educational Assistance Employee Discounts Employee Stock Options Employer-Provided Cell Phones Group-Term Life Insurance Coverage Health Savings Accounts Lodging on Your Business Premises Meals Moving Expense Reimbursements No-Additional-Cost Services Retirement Planning Services Transportation (Commuting) Benefits Tuition Reduction Working Condition Benefits 3. Irs 2012 tax forms 1040 instructions Fringe Benefit Valuation RulesGeneral Valuation Rule Cents-Per-Mile Rule Commuting Rule Lease Value Rule Unsafe Conditions Commuting Rule 4. Irs 2012 tax forms 1040 instructions Rules for Withholding, Depositing, and ReportingTransfer of property. Irs 2012 tax forms 1040 instructions Amount of deposit. Irs 2012 tax forms 1040 instructions Limitation. Irs 2012 tax forms 1040 instructions Conformity rules. Irs 2012 tax forms 1040 instructions Election not to withhold income tax. Irs 2012 tax forms 1040 instructions How To Get Tax Help 1. Irs 2012 tax forms 1040 instructions Fringe Benefit Overview A fringe benefit is a form of pay for the performance of services. Irs 2012 tax forms 1040 instructions For example, you provide an employee with a fringe benefit when you allow the employee to use a business vehicle to commute to and from work. Irs 2012 tax forms 1040 instructions Performance of services. Irs 2012 tax forms 1040 instructions   A person who performs services for you does not have to be your employee. Irs 2012 tax forms 1040 instructions A person may perform services for you as an independent contractor, partner, or director. Irs 2012 tax forms 1040 instructions Also, for fringe benefit purposes, treat a person who agrees not to perform services (such as under a covenant not to compete) as performing services. Irs 2012 tax forms 1040 instructions Provider of benefit. Irs 2012 tax forms 1040 instructions   You are the provider of a fringe benefit if it is provided for services performed for you. Irs 2012 tax forms 1040 instructions You are considered the provider of a fringe benefit even if a third party, such as your client or customer, provides the benefit to your employee for services the employee performs for you. Irs 2012 tax forms 1040 instructions For example, if, in exchange for goods or services, your customer provides day care services as a fringe benefit to your employees for services they provide for you as their employer, then you are the provider of this fringe benefit even though the customer is actually providing the day care. Irs 2012 tax forms 1040 instructions Recipient of benefit. Irs 2012 tax forms 1040 instructions   The person who performs services for you is considered the recipient of a fringe benefit provided for those services. Irs 2012 tax forms 1040 instructions That person may be considered the recipient even if the benefit is provided to someone who did not perform services for you. Irs 2012 tax forms 1040 instructions For example, your employee may be the recipient of a fringe benefit you provide to a member of the employee's family. Irs 2012 tax forms 1040 instructions Are Fringe Benefits Taxable? Any fringe benefit you provide is taxable and must be included in the recipient's pay unless the law specifically excludes it. Irs 2012 tax forms 1040 instructions Section 2 discusses the exclusions that apply to certain fringe benefits. Irs 2012 tax forms 1040 instructions Any benefit not excluded under the rules discussed in section 2 is taxable. Irs 2012 tax forms 1040 instructions Including taxable benefits in pay. Irs 2012 tax forms 1040 instructions   You must include in a recipient's pay the amount by which the value of a fringe benefit is more than the sum of the following amounts. Irs 2012 tax forms 1040 instructions Any amount the law excludes from pay. Irs 2012 tax forms 1040 instructions Any amount the recipient paid for the benefit. Irs 2012 tax forms 1040 instructions The rules used to determine the value of a fringe benefit are discussed in section 3. Irs 2012 tax forms 1040 instructions   If the recipient of a taxable fringe benefit is your employee, the benefit is subject to employment taxes and must be reported on Form W-2, Wage and Tax Statement. Irs 2012 tax forms 1040 instructions However, you can use special rules to withhold, deposit, and report the employment taxes. Irs 2012 tax forms 1040 instructions These rules are discussed in section 4. Irs 2012 tax forms 1040 instructions   If the recipient of a taxable fringe benefit is not your employee, the benefit is not subject to employment taxes. Irs 2012 tax forms 1040 instructions However, you may have to report the benefit on one of the following information returns. Irs 2012 tax forms 1040 instructions If the recipient receives the benefit as: Use: An independent contractor Form 1099-MISC, Miscellaneous Income A partner Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Irs 2012 tax forms 1040 instructions For more information, see the instructions for the forms listed above. Irs 2012 tax forms 1040 instructions Cafeteria Plans A cafeteria plan, including a flexible spending arrangement, is a written plan that allows your employees to choose between receiving cash or taxable benefits instead of certain qualified benefits for which the law provides an exclusion from wages. Irs 2012 tax forms 1040 instructions If an employee chooses to receive a qualified benefit under the plan, the fact that the employee could have received cash or a taxable benefit instead will not make the qualified benefit taxable. Irs 2012 tax forms 1040 instructions Generally, a cafeteria plan does not include any plan that offers a benefit that defers pay. Irs 2012 tax forms 1040 instructions However, a cafeteria plan can include a qualified 401(k) plan as a benefit. Irs 2012 tax forms 1040 instructions Also, certain life insurance plans maintained by educational institutions can be offered as a benefit even though they defer pay. Irs 2012 tax forms 1040 instructions Qualified benefits. Irs 2012 tax forms 1040 instructions   A cafeteria plan can include the following benefits discussed in section 2. Irs 2012 tax forms 1040 instructions Accident and health benefits (but not Archer medical savings accounts (Archer MSAs) or long-term care insurance). Irs 2012 tax forms 1040 instructions Adoption assistance. Irs 2012 tax forms 1040 instructions Dependent care assistance. Irs 2012 tax forms 1040 instructions Group-term life insurance coverage (including costs that cannot be excluded from wages). Irs 2012 tax forms 1040 instructions Health savings accounts (HSAs). Irs 2012 tax forms 1040 instructions Distributions from an HSA may be used to pay eligible long-term care insurance premiums or qualified long-term care services. Irs 2012 tax forms 1040 instructions Benefits not allowed. Irs 2012 tax forms 1040 instructions   A cafeteria plan cannot include the following benefits discussed in section 2. Irs 2012 tax forms 1040 instructions Archer MSAs. Irs 2012 tax forms 1040 instructions See Accident and Health Benefits in section 2. Irs 2012 tax forms 1040 instructions Athletic facilities. Irs 2012 tax forms 1040 instructions De minimis (minimal) benefits. Irs 2012 tax forms 1040 instructions Educational assistance. Irs 2012 tax forms 1040 instructions Employee discounts. Irs 2012 tax forms 1040 instructions Employer-provided cell phones. Irs 2012 tax forms 1040 instructions Lodging on your business premises. Irs 2012 tax forms 1040 instructions Meals. Irs 2012 tax forms 1040 instructions Moving expense reimbursements. Irs 2012 tax forms 1040 instructions No-additional-cost services. Irs 2012 tax forms 1040 instructions Transportation (commuting) benefits. Irs 2012 tax forms 1040 instructions Tuition reduction. Irs 2012 tax forms 1040 instructions Working condition benefits. Irs 2012 tax forms 1040 instructions It also cannot include scholarships or fellowships (discussed in Publication 970, Tax Benefits for Education). Irs 2012 tax forms 1040 instructions $2,500 limit on a health flexible spending arrangement (FSA). Irs 2012 tax forms 1040 instructions   For plan years beginning after December 31, 2012, a cafeteria plan may not allow an employee to request salary reduction contributions for a health FSA in excess of $2,500. Irs 2012 tax forms 1040 instructions For plan years beginning after December 31, 2013, the limit is unchanged at $2,500. Irs 2012 tax forms 1040 instructions   A cafeteria plan offering a health FSA must be amended to specify the $2,500 limit (or any lower limit set by the employer). Irs 2012 tax forms 1040 instructions While cafeteria plans generally must be amended on a prospective basis, an amendment that is adopted on or before December 31, 2014, may be made effective retroactively, provided that in operation the cafeteria plan meets the limit for plan years beginning after December 31, 2012. Irs 2012 tax forms 1040 instructions A cafeteria plan that does not limit health FSA contributions to the dollar limit is not a cafeteria plan and all benefits offered under the plan are includible in the employee's gross income. Irs 2012 tax forms 1040 instructions   For more information, see Notice 2012-40, 2012-26 I. Irs 2012 tax forms 1040 instructions R. Irs 2012 tax forms 1040 instructions B. Irs 2012 tax forms 1040 instructions 1046, available at www. Irs 2012 tax forms 1040 instructions irs. Irs 2012 tax forms 1040 instructions gov/irb/2012-26_IRB/ar09. Irs 2012 tax forms 1040 instructions html. Irs 2012 tax forms 1040 instructions Employee. Irs 2012 tax forms 1040 instructions   For these plans, treat the following individuals as employees. Irs 2012 tax forms 1040 instructions A current common-law employee. Irs 2012 tax forms 1040 instructions See section 2 in Publication 15 (Circular E) for more information. Irs 2012 tax forms 1040 instructions A full-time life insurance agent who is a current statutory employee. Irs 2012 tax forms 1040 instructions A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Irs 2012 tax forms 1040 instructions Exception for S corporation shareholders. Irs 2012 tax forms 1040 instructions   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. Irs 2012 tax forms 1040 instructions A 2% shareholder for this purpose is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. Irs 2012 tax forms 1040 instructions Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. Irs 2012 tax forms 1040 instructions Plans that favor highly compensated employees. Irs 2012 tax forms 1040 instructions   If your plan favors highly compensated employees as to eligibility to participate, contributions, or benefits, you must include in their wages the value of taxable benefits they could have selected. Irs 2012 tax forms 1040 instructions A plan you maintain under a collective bargaining agreement does not favor highly compensated employees. Irs 2012 tax forms 1040 instructions   A highly compensated employee for this purpose is any of the following employees. Irs 2012 tax forms 1040 instructions An officer. Irs 2012 tax forms 1040 instructions A shareholder who owns more than 5% of the voting power or value of all classes of the employer's stock. Irs 2012 tax forms 1040 instructions An employee who is highly compensated based on the facts and circumstances. Irs 2012 tax forms 1040 instructions A spouse or dependent of a person described in (1), (2), or (3). Irs 2012 tax forms 1040 instructions Plans that favor key employees. Irs 2012 tax forms 1040 instructions   If your plan favors key employees, you must include in their wages the value of taxable benefits they could have selected. Irs 2012 tax forms 1040 instructions A plan favors key employees if more than 25% of the total of the nontaxable benefits you provide for all employees under the plan go to key employees. Irs 2012 tax forms 1040 instructions However, a plan you maintain under a collective bargaining agreement does not favor key employees. Irs 2012 tax forms 1040 instructions   A key employee during 2014 is generally an employee who is either of the following. Irs 2012 tax forms 1040 instructions An officer having annual pay of more than $170,000. Irs 2012 tax forms 1040 instructions An employee who for 2014 is either of the following. Irs 2012 tax forms 1040 instructions A 5% owner of your business. Irs 2012 tax forms 1040 instructions A 1% owner of your business whose annual pay was more than $150,000. Irs 2012 tax forms 1040 instructions Simple Cafeteria Plans Eligible employers meeting contribution requirements and eligibility and participation requirements can establish a simple cafeteria plan. Irs 2012 tax forms 1040 instructions Simple cafeteria plans are treated as meeting the nondiscrimination requirements of a cafeteria plan and certain benefits under a cafeteria plan. Irs 2012 tax forms 1040 instructions Eligible employer. Irs 2012 tax forms 1040 instructions   You are an eligible employer if you employ an average of 100 or fewer employees during either of the 2 preceding years. Irs 2012 tax forms 1040 instructions If your business was not in existence throughout the preceding year, you are eligible if you reasonably expect to employ an average of 100 or fewer employees in the current year. Irs 2012 tax forms 1040 instructions If you establish a simple cafeteria plan in a year that you employ an average of 100 or fewer employees, you are considered an eligible employer for any subsequent year as long as you do not employ an average of 200 or more employees in a subsequent year. Irs 2012 tax forms 1040 instructions Eligibility and participation requirements. Irs 2012 tax forms 1040 instructions   These requirements are met if all employees who had at least 1,000 hours of service for the preceding plan year are eligible to participate and each employee eligible to participate in the plan may elect any benefit available under the plan. Irs 2012 tax forms 1040 instructions You may elect to exclude from the plan employees who: Are under age 21 before the close of the plan year, Have less than 1 year of service with you as of any day during the plan year, Are covered under a collective bargaining agreement, or Are nonresident aliens working outside the United States whose income did not come from a U. Irs 2012 tax forms 1040 instructions S. Irs 2012 tax forms 1040 instructions source. Irs 2012 tax forms 1040 instructions Contribution requirements. Irs 2012 tax forms 1040 instructions   You must make a contribution to provide qualified benefits on behalf of each qualified employee in an amount equal to: A uniform percentage (not less than 2%) of the employee’s compensation for the plan year, or An amount which is at least 6% of the employee’s compensation for the plan year or twice the amount of the salary reduction contributions of each qualified employee, whichever is less. Irs 2012 tax forms 1040 instructions If the contribution requirements are met using option (2), the rate of contribution to any salary reduction contribution of a highly compensated or key employee can not be greater than the rate of contribution to any other employee. Irs 2012 tax forms 1040 instructions More information. Irs 2012 tax forms 1040 instructions   For more information about cafeteria plans, see section 125 of the Internal Revenue Code and its regulations. Irs 2012 tax forms 1040 instructions 2. Irs 2012 tax forms 1040 instructions Fringe Benefit Exclusion Rules This section discusses the exclusion rules that apply to fringe benefits. Irs 2012 tax forms 1040 instructions These rules exclude all or part of the value of certain benefits from the recipient's pay. Irs 2012 tax forms 1040 instructions The excluded benefits are not subject to federal income tax withholding. Irs 2012 tax forms 1040 instructions Also, in most cases, they are not subject to social security, Medicare, or federal unemployment (FUTA) tax and are not reported on Form W-2. Irs 2012 tax forms 1040 instructions This section discusses the exclusion rules for the following fringe benefits. Irs 2012 tax forms 1040 instructions Accident and health benefits. Irs 2012 tax forms 1040 instructions Achievement awards. Irs 2012 tax forms 1040 instructions Adoption assistance. Irs 2012 tax forms 1040 instructions Athletic facilities. Irs 2012 tax forms 1040 instructions De minimis (minimal) benefits. Irs 2012 tax forms 1040 instructions Dependent care assistance. Irs 2012 tax forms 1040 instructions Educational assistance. Irs 2012 tax forms 1040 instructions Employee discounts. Irs 2012 tax forms 1040 instructions Employee stock options. Irs 2012 tax forms 1040 instructions Employer-provided cell phones. Irs 2012 tax forms 1040 instructions Group-term life insurance coverage. Irs 2012 tax forms 1040 instructions Health savings accounts (HSAs). Irs 2012 tax forms 1040 instructions Lodging on your business premises. Irs 2012 tax forms 1040 instructions Meals. Irs 2012 tax forms 1040 instructions Moving expense reimbursements. Irs 2012 tax forms 1040 instructions No-additional-cost services. Irs 2012 tax forms 1040 instructions Retirement planning services. Irs 2012 tax forms 1040 instructions Transportation (commuting) benefits. Irs 2012 tax forms 1040 instructions Tuition reduction. Irs 2012 tax forms 1040 instructions Working condition benefits. Irs 2012 tax forms 1040 instructions See Table 2-1, later, for an overview of the employment tax treatment of these benefits. Irs 2012 tax forms 1040 instructions Table 2-1. Irs 2012 tax forms 1040 instructions Special Rules for Various Types of Fringe Benefits (For more information, see the full discussion in this section. Irs 2012 tax forms 1040 instructions ) Treatment Under Employment Taxes Type of Fringe Benefit Income Tax Withholding Social Security and Medicare (including Additional Medicare Tax when wages are paid in excess of $200,000) Federal Unemployment (FUTA) Accident and health benefits Exempt1,2, except for long-term care benefits provided through a flexible spending or similar arrangement. Irs 2012 tax forms 1040 instructions Exempt, except for certain payments to S corporation employees who are 2% shareholders. Irs 2012 tax forms 1040 instructions Exempt Achievement awards Exempt1 up to $1,600 for qualified plan awards ($400 for nonqualified awards). Irs 2012 tax forms 1040 instructions Adoption assistance Exempt1,3 Taxable Taxable Athletic facilities Exempt if substantially all use during the calendar year is by employees, their spouses, and their dependent children and the facility is operated by the employer on premises owned or leased by the employer. Irs 2012 tax forms 1040 instructions De minimis (minimal) benefits Exempt Exempt Exempt Dependent care assistance Exempt3 up to certain limits, $5,000 ($2,500 for married employee filing separate return). Irs 2012 tax forms 1040 instructions Educational assistance Exempt up to $5,250 of benefits each year. Irs 2012 tax forms 1040 instructions (See Educational Assistance , later in this section. Irs 2012 tax forms 1040 instructions ) Employee discounts Exempt3 up to certain limits. Irs 2012 tax forms 1040 instructions (See Employee Discounts , later in this section. Irs 2012 tax forms 1040 instructions ) Employee stock options See Employee Stock Options , later in this section. Irs 2012 tax forms 1040 instructions Employer-provided cell phones Exempt if provided primarily for noncompensatory business purposes. Irs 2012 tax forms 1040 instructions Group-term life insurance coverage Exempt Exempt1,4, 7 up to cost of $50,000 of coverage. Irs 2012 tax forms 1040 instructions (Special rules apply to former employees. Irs 2012 tax forms 1040 instructions ) Exempt Health savings accounts (HSAs) Exempt for qualified individuals up to the HSA contribution limits. Irs 2012 tax forms 1040 instructions (See Health Savings Accounts , later in this section. Irs 2012 tax forms 1040 instructions ) Lodging on your business premises Exempt1 if furnished for your convenience as a condition of employment. Irs 2012 tax forms 1040 instructions Meals Exempt if furnished on your business premises for your convenience. Irs 2012 tax forms 1040 instructions Exempt if de minimis. Irs 2012 tax forms 1040 instructions Moving expense reimbursements Exempt1 if expenses would be deductible if the employee had paid them. Irs 2012 tax forms 1040 instructions No-additional-cost services Exempt3 Exempt3 Exempt3 Retirement planning services Exempt5 Exempt5 Exempt5 Transportation (commuting) benefits Exempt1 up to certain limits if for rides in a commuter highway vehicle and/or transit passes ($130), qualified parking ($250), or qualified bicycle commuting reimbursement6 ($20). Irs 2012 tax forms 1040 instructions (See Transportation (Commuting) Benefits , later in this section. Irs 2012 tax forms 1040 instructions ) Exempt if de minimis. Irs 2012 tax forms 1040 instructions Tuition reduction Exempt3 if for undergraduate education (or graduate education if the employee performs teaching or research activities). Irs 2012 tax forms 1040 instructions Working condition benefits Exempt Exempt Exempt 1 Exemption does not apply to S corporation employees who are 2% shareholders. Irs 2012 tax forms 1040 instructions 2 Exemption does not apply to certain highly compensated employees under a self-insured plan that favors those employees. Irs 2012 tax forms 1040 instructions 3 Exemption does not apply to certain highly compensated employees under a program that favors those employees. Irs 2012 tax forms 1040 instructions 4 Exemption does not apply to certain key employees under a plan that favors those employees. Irs 2012 tax forms 1040 instructions 5 Exemption does not apply to services for tax preparation, accounting, legal, or brokerage services. Irs 2012 tax forms 1040 instructions 6 If the employee receives a qualified bicycle commuting reimbursement in a qualified bicycle commuting month, the employee cannot receive commuter highway vehicle, transit pass, or qualified parking benefits in that same month. Irs 2012 tax forms 1040 instructions 7 You must include in your employee's wages the cost of group-term life insurance beyond $50,000 worth of coverage, reduced by the amount the employee paid toward the insurance. Irs 2012 tax forms 1040 instructions Report it as wages in boxes 1, 3, and 5 of the employee's Form W-2. Irs 2012 tax forms 1040 instructions Also, show it in box 12 with code “C. Irs 2012 tax forms 1040 instructions ” The amount is subject to social security and Medicare taxes, and you may, at your option, withhold federal income tax. Irs 2012 tax forms 1040 instructions Accident and Health Benefits This exclusion applies to contributions you make to an accident or health plan for an employee, including the following. Irs 2012 tax forms 1040 instructions Contributions to the cost of accident or health insurance including qualified long-term care insurance. Irs 2012 tax forms 1040 instructions Contributions to a separate trust or fund that directly or through insurance provides accident or health benefits. Irs 2012 tax forms 1040 instructions Contributions to Archer MSAs or health savings accounts (discussed in Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans). Irs 2012 tax forms 1040 instructions This exclusion also applies to payments you directly or indirectly make to an employee under an accident or health plan for employees that are either of the following. Irs 2012 tax forms 1040 instructions Payments or reimbursements of medical expenses. Irs 2012 tax forms 1040 instructions Payments for specific injuries or illnesses (such as the loss of the use of an arm or leg). Irs 2012 tax forms 1040 instructions The payments must be figured without regard to any period of absence from work. Irs 2012 tax forms 1040 instructions Accident or health plan. Irs 2012 tax forms 1040 instructions   This is an arrangement that provides benefits for your employees, their spouses, their dependents, and their children (under age 27) in the event of personal injury or sickness. Irs 2012 tax forms 1040 instructions The plan may be insured or noninsured and does not need to be in writing. Irs 2012 tax forms 1040 instructions Employee. Irs 2012 tax forms 1040 instructions   For this exclusion, treat the following individuals as employees. Irs 2012 tax forms 1040 instructions A current common-law employee. Irs 2012 tax forms 1040 instructions A full-time life insurance agent who is a current statutory employee. Irs 2012 tax forms 1040 instructions A retired employee. Irs 2012 tax forms 1040 instructions A former employee you maintain coverage for based on the employment relationship. Irs 2012 tax forms 1040 instructions A widow or widower of an individual who died while an employee. Irs 2012 tax forms 1040 instructions A widow or widower of a retired employee. Irs 2012 tax forms 1040 instructions For the exclusion of contributions to an accident or health plan, a leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Irs 2012 tax forms 1040 instructions Special rule for certain government plans. Irs 2012 tax forms 1040 instructions   For certain government accident and health plans, payments to a deceased plan participant's beneficiary may qualify for the exclusion from gross income if the other requirements for exclusion are met. Irs 2012 tax forms 1040 instructions See section 105(j) for details. Irs 2012 tax forms 1040 instructions Exception for S corporation shareholders. Irs 2012 tax forms 1040 instructions   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. Irs 2012 tax forms 1040 instructions A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. Irs 2012 tax forms 1040 instructions Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. Irs 2012 tax forms 1040 instructions Exclusion from wages. Irs 2012 tax forms 1040 instructions   You can generally exclude the value of accident or health benefits you provide to an employee from the employee's wages. Irs 2012 tax forms 1040 instructions Exception for certain long-term care benefits. Irs 2012 tax forms 1040 instructions   You cannot exclude contributions to the cost of long-term care insurance from an employee's wages subject to federal income tax withholding if the coverage is provided through a flexible spending or similar arrangement. Irs 2012 tax forms 1040 instructions This is a benefit program that reimburses specified expenses up to a maximum amount that is reasonably available to the employee and is less than five times the total cost of the insurance. Irs 2012 tax forms 1040 instructions However, you can exclude these contributions from the employee's wages subject to social security, Medicare, and federal unemployment (FUTA) taxes. Irs 2012 tax forms 1040 instructions S corporation shareholders. Irs 2012 tax forms 1040 instructions   Because you cannot treat a 2% shareholder of an S corporation as an employee for this exclusion, you must include the value of accident or health benefits you provide to the employee in the employee's wages subject to federal income tax withholding. Irs 2012 tax forms 1040 instructions However, you can exclude the value of these benefits (other than payments for specific injuries or illnesses) from the employee's wages subject to social security, Medicare, and FUTA taxes. Irs 2012 tax forms 1040 instructions Exception for highly compensated employees. Irs 2012 tax forms 1040 instructions   If your plan is a self-insured medical reimbursement plan that favors highly compensated employees, you must include all or part of the amounts you pay to these employees in their wages subject to federal income tax withholding. Irs 2012 tax forms 1040 instructions However, you can exclude these amounts (other than payments for specific injuries or illnesses) from the employee's wages subject to social security, Medicare, and FUTA taxes. Irs 2012 tax forms 1040 instructions   A self-insured plan is a plan that reimburses your employees for medical expenses not covered by an accident or health insurance policy. Irs 2012 tax forms 1040 instructions   A highly compensated employee for this exception is any of the following individuals. Irs 2012 tax forms 1040 instructions One of the five highest paid officers. Irs 2012 tax forms 1040 instructions An employee who owns (directly or indirectly) more than 10% in value of the employer's stock. Irs 2012 tax forms 1040 instructions An employee who is among the highest paid 25% of all employees (other than those who can be excluded from the plan). Irs 2012 tax forms 1040 instructions   For more information on this exception, see section 105(h) of the Internal Revenue Code and its regulations. Irs 2012 tax forms 1040 instructions COBRA premiums. Irs 2012 tax forms 1040 instructions   The exclusion for accident and health benefits applies to amounts you pay to maintain medical coverage for a current or former employee under the Combined Omnibus Budget Reconciliation Act of 1986 (COBRA). Irs 2012 tax forms 1040 instructions The exclusion applies regardless of the length of employment, whether you directly pay the premiums or reimburse the former employee for premiums paid, and whether the employee's separation is permanent or temporary. Irs 2012 tax forms 1040 instructions Achievement Awards This exclusion applies to the value of any tangible personal property you give to an employee as an award for either length of service or safety achievement. Irs 2012 tax forms 1040 instructions The exclusion does not apply to awards of cash, cash equivalents, gift certificates, or other intangible property such as vacations, meals, lodging, tickets to theater or sporting events, stocks, bonds, and other securities. Irs 2012 tax forms 1040 instructions The award must meet the requirements for employee achievement awards discussed in chapter 2 of Publication 535, Business Expenses. Irs 2012 tax forms 1040 instructions Employee. Irs 2012 tax forms 1040 instructions   For this exclusion, treat the following individuals as employees. Irs 2012 tax forms 1040 instructions A current employee. Irs 2012 tax forms 1040 instructions A former common-law employee you maintain coverage for in consideration of or based on an agreement relating to prior service as an employee. Irs 2012 tax forms 1040 instructions A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Irs 2012 tax forms 1040 instructions Exception for S corporation shareholders. Irs 2012 tax forms 1040 instructions   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. Irs 2012 tax forms 1040 instructions A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. Irs 2012 tax forms 1040 instructions Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. Irs 2012 tax forms 1040 instructions Exclusion from wages. Irs 2012 tax forms 1040 instructions   You can generally exclude the value of achievement awards you give to an employee from the employee's wages if their cost is not more than the amount you can deduct as a business expense for the year. Irs 2012 tax forms 1040 instructions The excludable annual amount is $1,600 ($400 for awards that are not “qualified plan awards”). Irs 2012 tax forms 1040 instructions See chapter 2 of Publication 535 for more information about the limit on deductions for employee achievement awards. Irs 2012 tax forms 1040 instructions    To determine for 2014 whether an achievement award is a “qualified plan award” under the deduction rules described in Publication 535, treat any employee who received more than $115,000 in pay for 2013 as a highly compensated employee. Irs 2012 tax forms 1040 instructions   If the cost of awards given to an employee is more than your allowable deduction, include in the employee's wages the larger of the following amounts. Irs 2012 tax forms 1040 instructions The part of the cost that is more than your allowable deduction (up to the value of the awards). Irs 2012 tax forms 1040 instructions The amount by which the value of the awards exceeds your allowable deduction. Irs 2012 tax forms 1040 instructions Exclude the remaining value of the awards from the employee's wages. Irs 2012 tax forms 1040 instructions Adoption Assistance An adoption assistance program is a separate written plan of an employer that meets all of the following requirements. Irs 2012 tax forms 1040 instructions It benefits employees who qualify under rules set up by you, which do not favor highly compensated employees or their dependents. Irs 2012 tax forms 1040 instructions To determine whether your plan meets this test, do not consider employees excluded from your plan who are covered by a collective bargaining agreement, if there is evidence that adoption assistance was a subject of good-faith bargaining. Irs 2012 tax forms 1040 instructions It does not pay more than 5% of its payments during the year for shareholders or owners (or their spouses or dependents). Irs 2012 tax forms 1040 instructions A shareholder or owner is someone who owns (on any day of the year) more than 5% of the stock or of the capital or profits interest of your business. Irs 2012 tax forms 1040 instructions You give reasonable notice of the plan to eligible employees. Irs 2012 tax forms 1040 instructions Employees provide reasonable substantiation that payments or reimbursements are for qualifying expenses. Irs 2012 tax forms 1040 instructions For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. Irs 2012 tax forms 1040 instructions The employee was a 5% owner at any time during the year or the preceding year. Irs 2012 tax forms 1040 instructions The employee received more than $115,000 in pay for the preceding year. Irs 2012 tax forms 1040 instructions You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. Irs 2012 tax forms 1040 instructions You must exclude all payments or reimbursements you make under an adoption assistance program for an employee's qualified adoption expenses from the employee's wages subject to federal income tax withholding. Irs 2012 tax forms 1040 instructions However, you cannot exclude these payments from wages subject to social security, Medicare, and federal unemployment (FUTA) taxes. Irs 2012 tax forms 1040 instructions For more information, see the Instructions for Form 8839, Qualified Adoption Expenses. Irs 2012 tax forms 1040 instructions You must report all qualifying adoption expenses you paid or reimbursed under your adoption assistance program for each employee for the year in box 12 of the employee's Form W-2. Irs 2012 tax forms 1040 instructions Use code “T” to identify this amount. Irs 2012 tax forms 1040 instructions Exception for S corporation shareholders. Irs 2012 tax forms 1040 instructions   For this exclusion, do not treat a 2% shareholder of an S corporation as an employee of the corporation. Irs 2012 tax forms 1040 instructions A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. Irs 2012 tax forms 1040 instructions Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, including using the benefit as a reduction in distributions to the 2% shareholder. Irs 2012 tax forms 1040 instructions Athletic Facilities You can exclude the value of an employee's use of an on-premises gym or other athletic facility you operate from an employee's wages if substantially all use of the facility during the calendar year is by your employees, their spouses, and their dependent children. Irs 2012 tax forms 1040 instructions For this purpose, an employee's dependent child is a child or stepchild who is the employee's dependent or who, if both parents are deceased, has not attained the age of 25. Irs 2012 tax forms 1040 instructions On-premises facility. Irs 2012 tax forms 1040 instructions   The athletic facility must be located on premises you own or lease. Irs 2012 tax forms 1040 instructions It does not have to be located on your business premises. Irs 2012 tax forms 1040 instructions However, the exclusion does not apply to an athletic facility for residential use, such as athletic facilities that are part of a resort. Irs 2012 tax forms 1040 instructions Employee. Irs 2012 tax forms 1040 instructions   For this exclusion, treat the following individuals as employees. Irs 2012 tax forms 1040 instructions A current employee. Irs 2012 tax forms 1040 instructions A former employee who retired or left on disability. Irs 2012 tax forms 1040 instructions A widow or widower of an individual who died while an employee. Irs 2012 tax forms 1040 instructions A widow or widower of a former employee who retired or left on disability. Irs 2012 tax forms 1040 instructions A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Irs 2012 tax forms 1040 instructions A partner who performs services for a partnership. Irs 2012 tax forms 1040 instructions De Minimis (Minimal) Benefits You can exclude the value of a de minimis benefit you provide to an employee from the employee's wages. Irs 2012 tax forms 1040 instructions A de minimis benefit is any property or service you provide to an employee that has so little value (taking into account how frequently you provide similar benefits to your employees) that accounting for it would be unreasonable or administratively impracticable. Irs 2012 tax forms 1040 instructions Cash and cash equivalent fringe benefits (for example, use of gift card, charge card, or credit card), no matter how little, are never excludable as a de minimis benefit, except for occasional meal money or transportation fare. Irs 2012 tax forms 1040 instructions Examples of de minimis benefits include the following. Irs 2012 tax forms 1040 instructions Personal use of an employer-provided cell phone provided primarily for noncompensatory business purposes. Irs 2012 tax forms 1040 instructions See Employer-Provided Cell Phones , later in this section, for details. Irs 2012 tax forms 1040 instructions Occasional personal use of a company copying machine if you sufficiently control its use so that at least 85% of its use is for business purposes. Irs 2012 tax forms 1040 instructions Holiday gifts, other than cash, with a low fair market value. Irs 2012 tax forms 1040 instructions Group-term life insurance payable on the death of an employee's spouse or dependent if the face amount is not more than $2,000. Irs 2012 tax forms 1040 instructions Meals. Irs 2012 tax forms 1040 instructions See Meals , later in this section, for details. Irs 2012 tax forms 1040 instructions Occasional parties or picnics for employees and their guests. Irs 2012 tax forms 1040 instructions Occasional tickets for theater or sporting events. Irs 2012 tax forms 1040 instructions Transportation fare. Irs 2012 tax forms 1040 instructions See Transportation (Commuting) Benefits , later in this section, for details. Irs 2012 tax forms 1040 instructions Employee. Irs 2012 tax forms 1040 instructions   For this exclusion, treat any recipient of a de minimis benefit as an employee. Irs 2012 tax forms 1040 instructions Dependent Care Assistance This exclusion applies to household and dependent care services you directly or indirectly pay for or provide to an employee under a dependent care assistance program that covers only your employees. Irs 2012 tax forms 1040 instructions The services must be for a qualifying person's care and must be provided to allow the employee to work. Irs 2012 tax forms 1040 instructions These requirements are basically the same as the tests the employee would have to meet to claim the dependent care credit if the employee paid for the services. Irs 2012 tax forms 1040 instructions For more information, see Qualifying Person Test and Work-Related Expense Test in Publication 503, Child and Dependent Care Expenses. Irs 2012 tax forms 1040 instructions Employee. Irs 2012 tax forms 1040 instructions   For this exclusion, treat the following individuals as employees. Irs 2012 tax forms 1040 instructions A current employee. Irs 2012 tax forms 1040 instructions A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Irs 2012 tax forms 1040 instructions Yourself (if you are a sole proprietor). Irs 2012 tax forms 1040 instructions A partner who performs services for a partnership. Irs 2012 tax forms 1040 instructions Exclusion from wages. Irs 2012 tax forms 1040 instructions   You can exclude the value of benefits you provide to an employee under a dependent care assistance program from the employee's wages if you reasonably believe that the employee can exclude the benefits from gross income. Irs 2012 tax forms 1040 instructions   An employee can generally exclude from gross income up to $5,000 of benefits received under a dependent care assistance program each year. Irs 2012 tax forms 1040 instructions This limit is reduced to $2,500 for married employees filing separate returns. Irs 2012 tax forms 1040 instructions   However, the exclusion cannot be more than the smaller of the earned income of either the employee or employee's spouse. Irs 2012 tax forms 1040 instructions Special rules apply to determine the earned income of a spouse who is either a student or not able to care for himself or herself. Irs 2012 tax forms 1040 instructions For more information on the earned income limit, see Publication 503. Irs 2012 tax forms 1040 instructions Exception for highly compensated employees. Irs 2012 tax forms 1040 instructions   You cannot exclude dependent care assistance from the wages of a highly compensated employee unless the benefits provided under the program do not favor highly compensated employees and the program meets the requirements described in section 129(d) of the Internal Revenue Code. Irs 2012 tax forms 1040 instructions   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. Irs 2012 tax forms 1040 instructions The employee was a 5% owner at any time during the year or the preceding year. Irs 2012 tax forms 1040 instructions The employee received more than $115,000 in pay for the preceding year. Irs 2012 tax forms 1040 instructions You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. Irs 2012 tax forms 1040 instructions Form W-2. Irs 2012 tax forms 1040 instructions   Report the value of all dependent care assistance you provide to an employee under a dependent care assistance program in box 10 of the employee's Form W-2. Irs 2012 tax forms 1040 instructions Include any amounts you cannot exclude from the employee's wages in boxes 1, 3, and 5. Irs 2012 tax forms 1040 instructions Report both the nontaxable portion of assistance (up to $5,000) and any assistance above the amount that is non-taxable to the employee. Irs 2012 tax forms 1040 instructions Example. Irs 2012 tax forms 1040 instructions   Company A provides a dependent care assistance flexible spending arrangement to its employees through a cafeteria plan. Irs 2012 tax forms 1040 instructions In addition, it provides occasional on-site dependent care to its employees at no cost. Irs 2012 tax forms 1040 instructions Emily, an employee of company A, had $4,500 deducted from her pay for the dependent care flexible spending arrangement. Irs 2012 tax forms 1040 instructions In addition, Emily used the on-site dependent care several times. Irs 2012 tax forms 1040 instructions The fair market value of the on-site care was $700. Irs 2012 tax forms 1040 instructions Emily's Form W-2 should report $5,200 of dependent care assistance in box 10 ($4,500 flexible spending arrangement plus $700 on-site dependent care). Irs 2012 tax forms 1040 instructions Boxes 1, 3, and 5 should include $200 (the amount in excess of the nontaxable assistance), and applicable taxes should be withheld on that amount. Irs 2012 tax forms 1040 instructions Educational Assistance This exclusion applies to educational assistance you provide to employees under an educational assistance program. Irs 2012 tax forms 1040 instructions The exclusion also applies to graduate level courses. Irs 2012 tax forms 1040 instructions Educational assistance means amounts you pay or incur for your employees' education expenses. Irs 2012 tax forms 1040 instructions These expenses generally include the cost of books, equipment, fees, supplies, and tuition. Irs 2012 tax forms 1040 instructions However, these expenses do not include the cost of a course or other education involving sports, games, or hobbies, unless the education: Has a reasonable relationship to your business, or Is required as part of a degree program. Irs 2012 tax forms 1040 instructions Education expenses do not include the cost of tools or supplies (other than textbooks) your employee is allowed to keep at the end of the course. Irs 2012 tax forms 1040 instructions Nor do they include the cost of lodging, meals, or transportation. Irs 2012 tax forms 1040 instructions Educational assistance program. Irs 2012 tax forms 1040 instructions   An educational assistance program is a separate written plan that provides educational assistance only to your employees. Irs 2012 tax forms 1040 instructions The program qualifies only if all of the following tests are met. Irs 2012 tax forms 1040 instructions The program benefits employees who qualify under rules set up by you that do not favor highly compensated employees. Irs 2012 tax forms 1040 instructions To determine whether your program meets this test, do not consider employees excluded from your program who are covered by a collective bargaining agreement if there is evidence that educational assistance was a subject of good-faith bargaining. Irs 2012 tax forms 1040 instructions The program does not provide more than 5% of its benefits during the year for shareholders or owners. Irs 2012 tax forms 1040 instructions A shareholder or owner is someone who owns (on any day of the year) more than 5% of the stock or of the capital or profits interest of your business. Irs 2012 tax forms 1040 instructions The program does not allow employees to choose to receive cash or other benefits that must be included in gross income instead of educational assistance. Irs 2012 tax forms 1040 instructions You give reasonable notice of the program to eligible employees. Irs 2012 tax forms 1040 instructions Your program can cover former employees if their employment is the reason for the coverage. Irs 2012 tax forms 1040 instructions   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. Irs 2012 tax forms 1040 instructions The employee was a 5% owner at any time during the year or the preceding year. Irs 2012 tax forms 1040 instructions The employee received more than $115,000 in pay for the preceding year. Irs 2012 tax forms 1040 instructions You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. Irs 2012 tax forms 1040 instructions Employee. Irs 2012 tax forms 1040 instructions   For this exclusion, treat the following individuals as employees. Irs 2012 tax forms 1040 instructions A current employee. Irs 2012 tax forms 1040 instructions A former employee who retired, left on disability, or was laid off. Irs 2012 tax forms 1040 instructions A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Irs 2012 tax forms 1040 instructions Yourself (if you are a sole proprietor). Irs 2012 tax forms 1040 instructions A partner who performs services for a partnership. Irs 2012 tax forms 1040 instructions Exclusion from wages. Irs 2012 tax forms 1040 instructions   You can exclude up to $5,250 of educational assistance you provide to an employee under an educational assistance program from the employee's wages each year. Irs 2012 tax forms 1040 instructions Assistance over $5,250. Irs 2012 tax forms 1040 instructions   If you do not have an educational assistance plan, or you provide an employee with assistance exceeding $5,250, you must include the value of these benefits as wages, unless the benefits are working condition benefits. Irs 2012 tax forms 1040 instructions Working condition benefits may be excluded from wages. Irs 2012 tax forms 1040 instructions Property or a service provided is a working condition benefit to the extent that if the employee paid for it, the amount paid would have been deductible as a business or depreciation expense. Irs 2012 tax forms 1040 instructions See Working Condition Benefits , later, in this section. Irs 2012 tax forms 1040 instructions Employee Discounts This exclusion applies to a price reduction you give an employee on property or services you offer to customers in the ordinary course of the line of business in which the employee performs substantial services. Irs 2012 tax forms 1040 instructions However, it does not apply to discounts on real property or discounts on personal property of a kind commonly held for investment (such as stocks or bonds). Irs 2012 tax forms 1040 instructions Employee. Irs 2012 tax forms 1040 instructions   For this exclusion, treat the following individuals as employees. Irs 2012 tax forms 1040 instructions A current employee. Irs 2012 tax forms 1040 instructions A former employee who retired or left on disability. Irs 2012 tax forms 1040 instructions A widow or widower of an individual who died while an employee. Irs 2012 tax forms 1040 instructions A widow or widower of an employee who retired or left on disability. Irs 2012 tax forms 1040 instructions A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Irs 2012 tax forms 1040 instructions A partner who performs services for a partnership. Irs 2012 tax forms 1040 instructions Exclusion from wages. Irs 2012 tax forms 1040 instructions   You can generally exclude the value of an employee discount you provide an employee from the employee's wages, up to the following limits. Irs 2012 tax forms 1040 instructions For a discount on services, 20% of the price you charge nonemployee customers for the service. Irs 2012 tax forms 1040 instructions For a discount on merchandise or other property, your gross profit percentage times the price you charge nonemployee customers for the property. Irs 2012 tax forms 1040 instructions   Determine your gross profit percentage in the line of business based on all property you offer to customers (including employee customers) and your experience during the tax year immediately before the tax year in which the discount is available. Irs 2012 tax forms 1040 instructions To figure your gross profit percentage, subtract the total cost of the property from the total sales price of the property and divide the result by the total sales price of the property. Irs 2012 tax forms 1040 instructions Exception for highly compensated employees. Irs 2012 tax forms 1040 instructions   You cannot exclude from the wages of a highly compensated employee any part of the value of a discount that is not available on the same terms to one of the following groups. Irs 2012 tax forms 1040 instructions All of your employees. Irs 2012 tax forms 1040 instructions A group of employees defined under a reasonable classification you set up that does not favor highly compensated employees. Irs 2012 tax forms 1040 instructions   For this exclusion, a highly compensated employee for 2014 is an employee who meets either of the following tests. Irs 2012 tax forms 1040 instructions The employee was a 5% owner at any time during the year or the preceding year. Irs 2012 tax forms 1040 instructions The employee received more than $115,000 in pay for the preceding year. Irs 2012 tax forms 1040 instructions You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. Irs 2012 tax forms 1040 instructions Employee Stock Options There are three kinds of stock options—incentive stock options, employee stock purchase plan options, and nonstatutory (nonqualified) stock options. Irs 2012 tax forms 1040 instructions Wages for social security, Medicare, and federal unemployment (FUTA) taxes do not include remuneration resulting from the exercise, after October 22, 2004, of an incentive stock option or under an employee stock purchase plan option, or from any disposition of stock acquired by exercising such an option. Irs 2012 tax forms 1040 instructions The IRS will not apply these taxes to an exercise before October 23, 2004, of an incentive stock option or an employee stock purchase plan option or to a disposition of stock acquired by such exercise. Irs 2012 tax forms 1040 instructions Additionally, federal income tax withholding is not required on the income resulting from a disqualifying disposition of stock acquired by the exercise after October 22, 2004, of an incentive stock option or under an employee stock purchase plan option, or on income equal to the discount portion of stock acquired by the exercise, after October 22, 2004, of an employee stock purchase plan option resulting from any disposition of the stock. Irs 2012 tax forms 1040 instructions The IRS will not apply federal income tax withholding upon the disposition of stock acquired by the exercise, before October 23, 2004, of an incentive stock option or an employee stock purchase plan option. Irs 2012 tax forms 1040 instructions However, the employer must report as income in box 1 of Form W-2, (a) the discount portion of stock acquired by the exercise of an employee stock purchase plan option upon disposition of the stock, and (b) the spread (between the exercise price and the fair market value of the stock at the time of exercise) upon a disqualifying disposition of stock acquired by the exercise of an incentive stock option or an employee stock purchase plan option. Irs 2012 tax forms 1040 instructions An employer must report the excess of the fair market value of stock received upon exercise of a nonstatutory stock option over the amount paid for the stock option on Form W-2 in boxes 1, 3 (up to the social security wage base), 5, and in box 12 using the code “V. Irs 2012 tax forms 1040 instructions ” See Regulations section 1. Irs 2012 tax forms 1040 instructions 83-7. Irs 2012 tax forms 1040 instructions An employee who transfers his or her interest in nonstatutory stock options to the employee's former spouse incident to a divorce is not required to include an amount in gross income upon the transfer. Irs 2012 tax forms 1040 instructions The former spouse, rather than the employee, is required to include an amount in gross income when the former spouse exercises the stock options. Irs 2012 tax forms 1040 instructions See Revenue Ruling 2002-22 and Revenue Ruling 2004-60 for details. Irs 2012 tax forms 1040 instructions You can find Revenue Ruling 2002-22 on page 849 of Internal Revenue Bulletin 2002-19 at www. Irs 2012 tax forms 1040 instructions irs. Irs 2012 tax forms 1040 instructions gov/pub/irs-irbs/irb02-19. Irs 2012 tax forms 1040 instructions pdf. Irs 2012 tax forms 1040 instructions See Revenue Ruling 2004-60, 2004-24 I. Irs 2012 tax forms 1040 instructions R. Irs 2012 tax forms 1040 instructions B. Irs 2012 tax forms 1040 instructions 1051, available at www. Irs 2012 tax forms 1040 instructions irs. Irs 2012 tax forms 1040 instructions gov/irb/2004-24_IRB/ar13. Irs 2012 tax forms 1040 instructions html. Irs 2012 tax forms 1040 instructions For more information about employee stock options, see sections 421, 422, and 423 of the Internal Revenue Code and their related regulations. Irs 2012 tax forms 1040 instructions Employer-Provided Cell Phones The value of an employer-provided cell phone, provided primarily for noncompensatory business reasons, is excludable from an employee's income as a working condition fringe benefit. Irs 2012 tax forms 1040 instructions Personal use of an employer-provided cell phone, provided primarily for noncompensatory business reasons, is excludable from an employee's income as a de minimis fringe benefit. Irs 2012 tax forms 1040 instructions For the rules relating to these types of benefits, see De Minimis (Minimal) Benefits , earlier in this section, and Working Condition Benefits , later in this section. Irs 2012 tax forms 1040 instructions Noncompensatory business purposes. Irs 2012 tax forms 1040 instructions   You provide a cell phone primarily for noncompensatory business purposes if there are substantial business reasons for providing the cell phone. Irs 2012 tax forms 1040 instructions Examples of substantial business reasons include the employer's: Need to contact the employee at all times for work-related emergencies, Requirement that the employee be available to speak with clients at times when the employee is away from the office, and Need to speak with clients located in other time zones at times outside the employee's normal workday. Irs 2012 tax forms 1040 instructions Cell phones provided to promote goodwill, boost morale, or attract prospective employees. Irs 2012 tax forms 1040 instructions   You cannot exclude from an employee's wages the value of a cell phone provided to promote goodwill of an employee, to attract a prospective employee, or as a means of providing additional compensation to an employee. Irs 2012 tax forms 1040 instructions Additional information. Irs 2012 tax forms 1040 instructions   For additional information on the tax treatment of employer-provided cell phones, see Notice 2011-72, 2011-38 I. Irs 2012 tax forms 1040 instructions R. Irs 2012 tax forms 1040 instructions B. Irs 2012 tax forms 1040 instructions 407, available at  www. Irs 2012 tax forms 1040 instructions irs. Irs 2012 tax forms 1040 instructions gov/irb/2011-38_IRB/ar07. Irs 2012 tax forms 1040 instructions html. Irs 2012 tax forms 1040 instructions Group-Term Life Insurance Coverage This exclusion applies to life insurance coverage that meets all the following conditions. Irs 2012 tax forms 1040 instructions It provides a general death benefit that is not included in income. Irs 2012 tax forms 1040 instructions You provide it to a group of employees. Irs 2012 tax forms 1040 instructions See The 10-employee rule , later. Irs 2012 tax forms 1040 instructions It provides an amount of insurance to each employee based on a formula that prevents individual selection. Irs 2012 tax forms 1040 instructions This formula must use factors such as the employee's age, years of service, pay, or position. Irs 2012 tax forms 1040 instructions You provide it under a policy you directly or indirectly carry. Irs 2012 tax forms 1040 instructions Even if you do not pay any of the policy's cost, you are considered to carry it if you arrange for payment of its cost by your employees and charge at least one employee less than, and at least one other employee more than, the cost of his or her insurance. Irs 2012 tax forms 1040 instructions Determine the cost of the insurance, for this purpose, as explained under Coverage over the limit , later. Irs 2012 tax forms 1040 instructions Group-term life insurance does not include the following insurance. Irs 2012 tax forms 1040 instructions Insurance that does not provide general death benefits, such as travel insurance or a policy providing only accidental death benefits. Irs 2012 tax forms 1040 instructions Life insurance on the life of your employee's spouse or dependent. Irs 2012 tax forms 1040 instructions However, you may be able to exclude the cost of this insurance from the employee's wages as a de minimis benefit. Irs 2012 tax forms 1040 instructions See De Minimis (Minimal) Benefits , earlier in this section. Irs 2012 tax forms 1040 instructions Insurance provided under a policy that provides a permanent benefit (an economic value that extends beyond 1 policy year, such as paid-up or cash surrender value), unless certain requirements are met. Irs 2012 tax forms 1040 instructions See Regulations section 1. Irs 2012 tax forms 1040 instructions 79-1 for details. Irs 2012 tax forms 1040 instructions Employee. Irs 2012 tax forms 1040 instructions   For this exclusion, treat the following individuals as employees. Irs 2012 tax forms 1040 instructions A current common-law employee. Irs 2012 tax forms 1040 instructions A full-time life insurance agent who is a current statutory employee. Irs 2012 tax forms 1040 instructions An individual who was formerly your employee under (1) or (2). Irs 2012 tax forms 1040 instructions A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction and control. Irs 2012 tax forms 1040 instructions Exception for S corporation shareholders. Irs 2012 tax forms 1040 instructions   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. Irs 2012 tax forms 1040 instructions A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. Irs 2012 tax forms 1040 instructions Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. Irs 2012 tax forms 1040 instructions The 10-employee rule. Irs 2012 tax forms 1040 instructions   Generally, life insurance is not group-term life insurance unless you provide it to at least 10 full-time employees at some time during the year. Irs 2012 tax forms 1040 instructions   For this rule, count employees who choose not to receive the insurance unless, to receive it, they must contribute to the cost of benefits other than the group-term life insurance. Irs 2012 tax forms 1040 instructions For example, count an employee who could receive insurance by paying part of the cost, even if that employee chooses not to receive it. Irs 2012 tax forms 1040 instructions However, do not count an employee who must pay part or all of the cost of permanent benefits to get insurance, unless that employee chooses to receive it. Irs 2012 tax forms 1040 instructions A permanent benefit is an economic value extending beyond one policy year (for example, a paid-up or cash-surrender value) that is provided under a life insurance policy. Irs 2012 tax forms 1040 instructions Exceptions. Irs 2012 tax forms 1040 instructions   Even if you do not meet the 10-employee rule, two exceptions allow you to treat insurance as group-term life insurance. Irs 2012 tax forms 1040 instructions   Under the first exception, you do not have to meet the 10-employee rule if all the following conditions are met. Irs 2012 tax forms 1040 instructions If evidence that the employee is insurable is required, it is limited to a medical questionnaire (completed by the employee) that does not require a physical. Irs 2012 tax forms 1040 instructions You provide the insurance to all your full-time employees or, if the insurer requires the evidence mentioned in (1), to all full-time employees who provide evidence the insurer accepts. Irs 2012 tax forms 1040 instructions You figure the coverage based on either a uniform percentage of pay or the insurer's coverage brackets that meet certain requirements. Irs 2012 tax forms 1040 instructions See Regulations section 1. Irs 2012 tax forms 1040 instructions 79-1 for details. Irs 2012 tax forms 1040 instructions   Under the second exception, you do not have to meet the 10-employee rule if all the following conditions are met. Irs 2012 tax forms 1040 instructions You provide the insurance under a common plan covering your employees and the employees of at least one other employer who is not related to you. Irs 2012 tax forms 1040 instructions The insurance is restricted to, but mandatory for, all your employees who belong to, or are represented by, an organization (such as a union) that carries on substantial activities besides obtaining insurance. Irs 2012 tax forms 1040 instructions Evidence of whether an employee is insurable does not affect an employee's eligibility for insurance or the amount of insurance that employee gets. Irs 2012 tax forms 1040 instructions   To apply either exception, do not consider employees who were denied insurance for any of the following reasons. Irs 2012 tax forms 1040 instructions They were 65 or older. Irs 2012 tax forms 1040 instructions They customarily work 20 hours or less a week or 5 months or less in a calendar year. Irs 2012 tax forms 1040 instructions They have not been employed for the waiting period given in the policy. Irs 2012 tax forms 1040 instructions This waiting period cannot be more than 6 months. Irs 2012 tax forms 1040 instructions Exclusion from wages. Irs 2012 tax forms 1040 instructions   You can generally exclude the cost of up to $50,000 of group-term life insurance from the wages of an insured employee. Irs 2012 tax forms 1040 instructions You can exclude the same amount from the employee's wages when figuring social security and Medicare taxes. Irs 2012 tax forms 1040 instructions In addition, you do not have to withhold federal income tax or pay FUTA tax on any group-term life insurance you provide to an employee. Irs 2012 tax forms 1040 instructions Coverage over the limit. Irs 2012 tax forms 1040 instructions   You must include in your employee's wages the cost of group-term life insurance beyond $50,000 worth of coverage, reduced by the amount the employee paid toward the insurance. Irs 2012 tax forms 1040 instructions Report it as wages in boxes 1, 3, and 5 of the employee's Form W-2. Irs 2012 tax forms 1040 instructions Also, show it in box 12 with code “C. Irs 2012 tax forms 1040 instructions ” The amount is subject to social security and Medicare taxes, and you may, at your option, withhold federal income tax. Irs 2012 tax forms 1040 instructions   Figure the monthly cost of the insurance to include in the employee's wages by multiplying the number of thousands of dollars of all insurance coverage over $50,000 (figured to the nearest $100) by the cost shown in Table 2-2. Irs 2012 tax forms 1040 instructions For all coverage provided within the calendar year, use the employee's age on the last day of the employee's tax year. Irs 2012 tax forms 1040 instructions You must prorate the cost from the table if less than a full month of coverage is involved. Irs 2012 tax forms 1040 instructions Table 2-2. Irs 2012 tax forms 1040 instructions Cost Per $1,000 of Protection For 1 Month Age Cost Under 25 $ . Irs 2012 tax forms 1040 instructions 05 25 through 29 . Irs 2012 tax forms 1040 instructions 06 30 through 34 . Irs 2012 tax forms 1040 instructions 08 35 through 39 . Irs 2012 tax forms 1040 instructions 09 40 through 44 . Irs 2012 tax forms 1040 instructions 10 45 through 49 . Irs 2012 tax forms 1040 instructions 15 50 through 54 . Irs 2012 tax forms 1040 instructions 23 55 through 59 . Irs 2012 tax forms 1040 instructions 43 60 through 64 . Irs 2012 tax forms 1040 instructions 66 65 through 69 1. Irs 2012 tax forms 1040 instructions 27 70 and older 2. Irs 2012 tax forms 1040 instructions 06 You figure the total cost to include in the employee's wages by multiplying the monthly cost by the number of full months' coverage at that cost. Irs 2012 tax forms 1040 instructions Example. Irs 2012 tax forms 1040 instructions Tom's employer provides him with group-term life insurance coverage of $200,000. Irs 2012 tax forms 1040 instructions Tom is 45 years old, is not a key employee, and pays $100 per year toward the cost of the insurance. Irs 2012 tax forms 1040 instructions Tom's employer must include $170 in his wages. Irs 2012 tax forms 1040 instructions The $200,000 of insurance coverage is reduced by $50,000. Irs 2012 tax forms 1040 instructions The yearly cost of $150,000 of coverage is $270 ($. Irs 2012 tax forms 1040 instructions 15 x 150 x 12), and is reduced by the $100 Tom pays for the insurance. Irs 2012 tax forms 1040 instructions The employer includes $170 in boxes 1, 3, and 5 of Tom's Form W-2. Irs 2012 tax forms 1040 instructions The employer also enters $170 in box 12 with code “C. Irs 2012 tax forms 1040 instructions ” Coverage for dependents. Irs 2012 tax forms 1040 instructions   Group-term life insurance coverage paid by the employer for the spouse or dependents of an employee may be excludable from income as a de minimis fringe benefit if the face amount is not more than $2,000. Irs 2012 tax forms 1040 instructions If the face amount is greater than $2,000, the entire cost of the dependent coverage must be included in income unless the amount over $2,000 is purchased with employee contributions on an after-tax basis. Irs 2012 tax forms 1040 instructions The cost of the insurance is determined by using Table 2-2. Irs 2012 tax forms 1040 instructions Former employees. Irs 2012 tax forms 1040 instructions   When group-term life insurance over $50,000 is provided to an employee (including retirees) after his or her termination, the employee share of social security and Medicare taxes on that period of coverage is paid by the former employee with his or her tax return and is not collected by the employer. Irs 2012 tax forms 1040 instructions You are not required to collect those taxes. Irs 2012 tax forms 1040 instructions Use the table above to determine the amount of social security and Medicare taxes owed by the former employee for coverage provided after separation from service. Irs 2012 tax forms 1040 instructions Report those uncollected amounts separately in box 12 of Form W-2 using codes “M” and “N. Irs 2012 tax forms 1040 instructions ” See the General Instructions for Forms W-2 and W-3 and the Instructions for Form 941. Irs 2012 tax forms 1040 instructions Exception for key employees. Irs 2012 tax forms 1040 instructions   Generally, if your group-term life insurance plan favors key employees as to participation or benefits, you must include the entire cost of the insurance in your key employees' wages. Irs 2012 tax forms 1040 instructions This exception generally does not apply to church plans. Irs 2012 tax forms 1040 instructions When figuring social security and Medicare taxes, you must also include the entire cost in the employees' wages. Irs 2012 tax forms 1040 instructions Include the cost in boxes 1, 3, and 5 of Form W-2. Irs 2012 tax forms 1040 instructions However, you do not have to withhold federal income tax or pay FUTA tax on the cost of any group-term life insurance you provide to an employee. Irs 2012 tax forms 1040 instructions   For this purpose, the cost of the insurance is the greater of the following amounts. Irs 2012 tax forms 1040 instructions The premiums you pay for the employee's insurance. Irs 2012 tax forms 1040 instructions See Regulations section 1. Irs 2012 tax forms 1040 instructions 79-4T(Q&A 6) for more information. Irs 2012 tax forms 1040 instructions The cost you figure using Table 2-2. Irs 2012 tax forms 1040 instructions   For this exclusion, a key employee during 2014 is an employee or former employee who is one of the following individuals. Irs 2012 tax forms 1040 instructions See section 416(i) of the Internal Revenue Code for more information. Irs 2012 tax forms 1040 instructions An officer having annual pay of more than $170,000. Irs 2012 tax forms 1040 instructions An individual who for 2014 was either of the following. Irs 2012 tax forms 1040 instructions A 5% owner of your business. Irs 2012 tax forms 1040 instructions A 1% owner of your business whose annual pay was more than $150,000. Irs 2012 tax forms 1040 instructions   A former employee who was a key employee upon retirement or separation from service is also a key employee. Irs 2012 tax forms 1040 instructions   Your plan does not favor key employees as to participation if at least one of the following is true. Irs 2012 tax forms 1040 instructions It benefits at least 70% of your employees. Irs 2012 tax forms 1040 instructions At least 85% of the participating employees are not key employees. Irs 2012 tax forms 1040 instructions It benefits employees who qualify under a set of rules you set up that do not favor key employees. Irs 2012 tax forms 1040 instructions   Your plan meets this participation test if it is part of a cafeteria plan (discussed in section 1) and it meets the participation test for those plans. Irs 2012 tax forms 1040 instructions   When applying this test, do not consider employees who: Have not completed 3 years of service, Are part-time or seasonal, Are nonresident aliens who receive no U. Irs 2012 tax forms 1040 instructions S. Irs 2012 tax forms 1040 instructions source earned income from you, or Are not included in the plan but are in a unit of employees covered by a collective bargaining agreement, if the benefits provided under the plan were the subject of good-faith bargaining between you and employee representatives. Irs 2012 tax forms 1040 instructions   Your plan does not favor key employees as to benefits if all benefits available to participating key employees are also available to all other participating employees. Irs 2012 tax forms 1040 instructions Your plan does not favor key employees just because the amount of insurance you provide to your employees is uniformly related to their pay. Irs 2012 tax forms 1040 instructions S corporation shareholders. Irs 2012 tax forms 1040 instructions   Because you cannot treat a 2% shareholder of an S corporation as an employee for this exclusion, you must include the cost of all group-term life insurance coverage you provide the 2% shareholder in his or her wages. Irs 2012 tax forms 1040 instructions When figuring social security and Medicare taxes, you must also include the cost of this coverage in the 2% shareholder's wages. Irs 2012 tax forms 1040 instructions Include the cost in boxes 1, 3, and 5 of Form W-2. Irs 2012 tax forms 1040 instructions However, you do not have to withhold federal income tax or pay federal unemployment tax on the cost of any group-term life insurance coverage you provide to the 2% shareholder. Irs 2012 tax forms 1040 instructions Health Savings Accounts A Health Savings Account (HSA) is an account owned by a qualified individual who is generally your employee or former employee. Irs 2012 tax forms 1040 instructions Any contributions that you make to an HSA become the employee's property and cannot be withdrawn by you. Irs 2012 tax forms 1040 instructions Contributions to the account are used to pay current or future medical expenses of the account owner, his or her spouse, and any qualified dependent. Irs 2012 tax forms 1040 instructions The medical expenses must not be reimbursable by insurance or other sources and their payment from HSA funds (distribution) will not give rise to a medical expense deduction on the individual's federal income tax return. Irs 2012 tax forms 1040 instructions For more information about HSAs, visit the Department of Treasury's website at www. Irs 2012 tax forms 1040 instructions treasury. Irs 2012 tax forms 1040 instructions gov and enter “HSA” in the search box. Irs 2012 tax forms 1040 instructions Eligibility. Irs 2012 tax forms 1040 instructions   A qualified individual must be covered by a High Deductible Health Plan (HDHP) and not be covered by other health insurance except for permitted insurance listed under section 223(c)(3) or insurance for accidents, disability, dental care, vision care, or long-term care. Irs 2012 tax forms 1040 instructions For calendar year 2014, a qualifying HDHP must have a deductible of at least $1,250 for self-only coverage or $2,500 for family coverage and must limit annual out-of-pocket expenses of the beneficiary to $6,350 for self-only coverage and $12,700 for family coverage. Irs 2012 tax forms 1040 instructions   There are no income limits that restrict an individual's eligibility to contribute to an HSA nor is there a requirement that the account owner have earned income to make a contribution. Irs 2012 tax forms 1040 instructions Exceptions. Irs 2012 tax forms 1040 instructions   An individual is not a qualified individual if he or she can be claimed as a dependent on another person's tax return. Irs 2012 tax forms 1040 instructions Also, an employee's participation in a health flexible spending arrangement (FSA) or health reimbursement arrangement (HRA) generally disqualifies the individual (and employer) from making contributions to his or her HSA. Irs 2012 tax forms 1040 instructions However, an individual may qualify to participate in an HSA if he or she is participating in only a limited-purpose FSA or HRA or a post-deductible FSA. Irs 2012 tax forms 1040 instructions For more information, see Other employee health plans in Publication 969. Irs 2012 tax forms 1040 instructions Employer contributions. Irs 2012 tax forms 1040 instructions   Up to specified dollar limits, cash contributions to the HSA of a qualified individual (determined monthly) are exempt from federal income tax withholding, social security tax, Medicare tax, and FUTA tax. Irs 2012 tax forms 1040 instructions For 2014, you can contribute up to $3,300 for self-only coverage or $6,550 for family coverage to a qualified individual's HSA. Irs 2012 tax forms 1040 instructions   The contribution amounts listed above are increased by $1,000 for a qualified individual who is age 55 or older at any time during the year. Irs 2012 tax forms 1040 instructions For two qualified individuals who are married to each other and who each are age 55 or older at any time during the year, each spouse's contribution limit is increased by $1,000 provided each spouse has a separate HSA. Irs 2012 tax forms 1040 instructions No contributions can be made to an individual's HSA after he or she becomes enrolled in Medicare Part A or Part B. Irs 2012 tax forms 1040 instructions Nondiscrimination rules. Irs 2012 tax forms 1040 instructions    Your contribution amount to an employee's HSA must be comparable for all employees who have comparable coverage during the same period. Irs 2012 tax forms 1040 instructions Otherwise, there will be an excise tax equal to 35% of the amount you contributed to all employees' HSAs. Irs 2012 tax forms 1040 instructions   For guidance on employer comparable contributions to HSAs under section 4980G in instances where an employee has not established an HSA by December 31 and in instances where an employer accelerates contributions for the calendar year for employees who have incurred qualified medical expenses, see Regulations section 54. Irs 2012 tax forms 1040 instructions 4980G-4. Irs 2012 tax forms 1040 instructions Exception. Irs 2012 tax forms 1040 instructions   The Tax Relief and Health Care Act of 2006 allows employers to make larger HSA contributions for a nonhighly compensated employee than for a highly compensated employee. Irs 2012 tax forms 1040 instructions A highly compensated employee for 2014 is an employee who meets either of the following tests. Irs 2012 tax forms 1040 instructions The employee was a 5% owner at any time during the year or the preceding year. Irs 2012 tax forms 1040 instructions The employee received more than $115,000 in pay for the preceding year. Irs 2012 tax forms 1040 instructions You can choose to ignore test (2) if the employee was not also in the top 20% of employees when ranked by pay for the preceding year. Irs 2012 tax forms 1040 instructions Partnerships and S corporations. Irs 2012 tax forms 1040 instructions   Partners and 2% shareholders of an S corporation are not eligible for salary reduction (pre-tax) contributions to an HSA. Irs 2012 tax forms 1040 instructions Employer contributions to the HSA of a bona fide partner or 2% shareholder are treated as distributions or guaranteed payments as determined by the facts and circumstances. Irs 2012 tax forms 1040 instructions Cafeteria plans. Irs 2012 tax forms 1040 instructions   You may contribute to an employee's HSA using a cafeteria plan and your contributions are not subject to the statutory comparability rules. Irs 2012 tax forms 1040 instructions However, cafeteria plan nondiscrimination rules still apply. Irs 2012 tax forms 1040 instructions For example, contributions under a cafeteria plan to employee HSAs cannot be greater for higher-paid employees than they are for lower-paid employees. Irs 2012 tax forms 1040 instructions Contributions that favor lower-paid employees are not prohibited. Irs 2012 tax forms 1040 instructions Reporting requirements. Irs 2012 tax forms 1040 instructions   You must report your contributions to an employee's HSA in box 12 of Form W-2 using code “W. Irs 2012 tax forms 1040 instructions ” The trustee or custodian of the HSA, generally a bank or insurance company, reports distributions from the HSA using Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA. Irs 2012 tax forms 1040 instructions Lodging on Your Business Premises You can exclude the value of lodging you furnish to an employee from the employee's wages if it meets the following tests. Irs 2012 tax forms 1040 instructions It is furnished on your business premises. Irs 2012 tax forms 1040 instructions It is furnished for your convenience. Irs 2012 tax forms 1040 instructions The employee must accept it as a condition of employment. Irs 2012 tax forms 1040 instructions Different tests may apply to lodging furnished by educational institutions. Irs 2012 tax forms 1040 instructions See section 119(d) of the Internal Revenue Code for details. Irs 2012 tax forms 1040 instructions The exclusion does not apply if you allow your employee to choose to receive additional pay instead of lodging. Irs 2012 tax forms 1040 instructions On your business premises. Irs 2012 tax forms 1040 instructions   For this exclusion, your business premises is generally your employee's place of work. Irs 2012 tax forms 1040 instructions For special rules that apply to lodging furnished in a camp located in a foreign country, see section 119(c) of the Internal Revenue Code and its regulations. Irs 2012 tax forms 1040 instructions For your convenience. Irs 2012 tax forms 1040 instructions   Whether or not you furnish lodging for your convenience as an employer depends on all the facts and circumstances. Irs 2012 tax forms 1040 instructions You furnish the lodging to your employee for your convenience if you do this for a substantial business reason other than to provide the employee with additional pay. Irs 2012 tax forms 1040 instructions This is true even if a law or an employment contract provides that the lodging is furnished as pay. Irs 2012 tax forms 1040 instructions However, a written statement that the lodging is furnished for your convenience is not sufficient. Irs 2012 tax forms 1040 instructions Condition of employment. Irs 2012 tax forms 1040 instructions   Lodging meets this test if you require your employees to accept the lodging because they need to live on your business premises to be able to properly perform their duties. Irs 2012 tax forms 1040 instructions Examples include employees who must be available at all times and employees who could not perform their required duties without being furnished the lodging. Irs 2012 tax forms 1040 instructions   It does not matter whether you must furnish the lodging as pay under the terms of an employment contract or a law fixing the terms of employment. Irs 2012 tax forms 1040 instructions Example. Irs 2012 tax forms 1040 instructions A hospital gives Joan, an employee of the hospital, the choice of living at the hospital free of charge or living elsewhere and receiving a cash allowance in addition to her regular salary. Irs 2012 tax forms 1040 instructions If Joan chooses to live at the hospital, the hospital cannot exclude the value of the lodging from her wages because she is not required to live at the hospital to properly perform the duties of her employment. Irs 2012 tax forms 1040 instructions S corporation shareholders. Irs 2012 tax forms 1040 instructions   For this exclusion, do not treat a 2% shareholder of an S corporation as an employee of the corporation. Irs 2012 tax forms 1040 instructions A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. Irs 2012 tax forms 1040 instructions Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. Irs 2012 tax forms 1040 instructions Meals This section discusses the exclusion rules that apply to de minimis meals and meals on your business premises. Irs 2012 tax forms 1040 instructions De Minimis Meals You can exclude any occasional meal or meal money you provide to an employee if it has so little value (taking into account how frequently you provide meals to your employees) that accounting for it would be unreasonable or administratively impracticable. Irs 2012 tax forms 1040 instructions The exclusion applies, for example, to the following items. Irs 2012 tax forms 1040 instructions Coffee, doughnuts, or soft drinks. Irs 2012 tax forms 1040 instructions Occasional meals or meal money provided to enable an employee to work overtime. Irs 2012 tax forms 1040 instructions However, the exclusion does not apply to meal money figured on the basis of hours worked. Irs 2012 tax forms 1040 instructions Occasional parties or picnics for employees and their guests. Irs 2012 tax forms 1040 instructions This exclusion also applies to meals you provide at an employer-operated eating facility for employees if the annual revenue from the facility equals or exceeds the direct costs of the facility. Irs 2012 tax forms 1040 instructions For this purpose, your revenue from providing a meal is considered equal to the facility's direct operating costs to provide that meal if its value can be excluded from an employee's wages as explained under Meals on Your Business Premises , later. Irs 2012 tax forms 1040 instructions If food or beverages you furnish to employees qualify as a de minimis benefit, you can deduct their full cost. Irs 2012 tax forms 1040 instructions The 50% limit on deductions for the cost of meals does not apply. Irs 2012 tax forms 1040 instructions The deduction limit on meals is discussed in chapter 2 of Publication 535. Irs 2012 tax forms 1040 instructions Employee. Irs 2012 tax forms 1040 instructions   For this exclusion, treat any recipient of a de minimis meal as
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Tax Relief for Victims of Hurricane Sandy in Rhode Island

RI-2012-30, Nov. 15, 2012

BOSTON — Victims of Hurricane Sandy that began on Oct. 26, 2012 in parts of Rhode Island may qualify for tax relief from the Internal Revenue Service.

The President has declared Newport and Washington counties a federal disaster area. Individuals who reside or have a business in these counties may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Oct. 26, and on or before Feb. 1, have been postponed to Feb. 1, 2013.  

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after Oct. 26, and on or before Nov. 26, as long as the deposits are made by Nov. 26, 2012.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area need to call the IRS disaster hotline at 866-562-5227 to request this tax relief.

For a full description of the relief being provided by the IRS to the victims of Hurricane Sandy, visit IRS.gov.

Covered Disaster Area

The counties above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and are entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until Feb. 1 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Oct. 26 and on or before Feb. 1.

The IRS also gives affected taxpayers until Feb. 1 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), that are due to be performed on or after Oct. 26 and on or before Feb. 1.

This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after Oct. 26 and on or before Nov. 26 provided the taxpayer makes these deposits by Nov. 26.

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.

Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “Rhode Island/Hurricane Sandy” at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS website, irs.gov, or order them by calling 800-TAX-FORM (800-829-3676). The IRS toll-free number for general tax questions is 800-829-1040.

Related Information

Disaster Assistance and Emergency Relief for Individuals and Businesses

Recent IRS Disaster Relief Announcements

 

Page Last Reviewed or Updated: 05-Nov-2013

The Irs 2012 Tax Forms 1040 Instructions

Irs 2012 tax forms 1040 instructions Accelerated Cost Recovery System (ACRS) Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: ACRS Defined What Can and Cannot Be Depreciated Under ACRSRecovery Property Nonrecovery Property How To Figure the DeductionUnadjusted Basis Classes of Recovery Property Recovery Periods Alternate ACRS Method (Modified Straight Line Method) ACRS Deduction in Short Tax Year DispositionsEarly dispositions of ACRS property other than 15-, 18-, or 19-year real property. Irs 2012 tax forms 1040 instructions Dispositions — mass asset accounts. Irs 2012 tax forms 1040 instructions Early dispositions — 15-year real property. Irs 2012 tax forms 1040 instructions Early dispositions — 18- and 19-year real property. Irs 2012 tax forms 1040 instructions Depreciation Recapture Topics - This chapter discusses: The definition of ACRS What can and cannot be depreciated under ACRS How to figure the deduction Dispositions Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets 551 Basis of Assets 583 Starting a Business and Keeping Records Form (and Instructions) 3115 Application for Change in Accounting Method 4562 Depreciation and Amortization The Accelerated Cost Recovery System (ACRS) applies to property first used before 1987. Irs 2012 tax forms 1040 instructions It is the name given to tax rules for getting back (recovering) through depreciation deductions the cost of property used in a trade or business or to produce income. Irs 2012 tax forms 1040 instructions These rules are mandatory and generally apply to tangible property placed in service after 1980 and before 1987. Irs 2012 tax forms 1040 instructions If you placed property in service during this period, you must continue to figure your depreciation under ACRS. Irs 2012 tax forms 1040 instructions If you used listed property placed in service after June 18, 1984, less than 50% for business in 1995, see Predominant Use Test in chapter 3. Irs 2012 tax forms 1040 instructions Listed property includes cars, other means of transportation, and certain computers. Irs 2012 tax forms 1040 instructions Any additions or improvements placed in service after 1986, including any components of a building (such as plumbing, wiring, storm windows, etc. Irs 2012 tax forms 1040 instructions ), are depreciated using MACRS, discussed in chapter 3 of Publication 946. Irs 2012 tax forms 1040 instructions It does not matter that the underlying property is depreciated under ACRS or one of the other methods. Irs 2012 tax forms 1040 instructions ACRS Defined ACRS consists of accelerated depreciation methods and an alternate ACRS method that could have been elected. Irs 2012 tax forms 1040 instructions The alternate ACRS method used a recovery percentage based on a modified straight line method. Irs 2012 tax forms 1040 instructions The law prescribes fixed percentages to be uses for each class of property. Irs 2012 tax forms 1040 instructions Property depreciable under ACRS is called recovery property. Irs 2012 tax forms 1040 instructions The recovery class of property determines the recovery period. Irs 2012 tax forms 1040 instructions Generally, the class life of property places it in a 3-year, 5-year, 10-year, 15-year, 18-year, or 19-year recovery class. Irs 2012 tax forms 1040 instructions Under ACRS, the prescribed percentages are used to recover the unadjusted basis of recovery property. Irs 2012 tax forms 1040 instructions To figure a depreciation deduction, you multiply the prescribed percentage for the recovery class by the unadjusted basis of the recovery property. Irs 2012 tax forms 1040 instructions You must continue to figure your depreciation under ACRS for property placed in service after 1980 and before 1987. Irs 2012 tax forms 1040 instructions For property you placed in service after 1986, you must use MACRS, discussed in chapter 3 of Publication 946. Irs 2012 tax forms 1040 instructions What Can and Cannot Be Depreciated Under ACRS ACRS applies to most depreciable tangible property placed in service after 1980 and before 1987. Irs 2012 tax forms 1040 instructions It includes new or used and real or personal property. Irs 2012 tax forms 1040 instructions The property must be for use in a trade or business or for the production of income. Irs 2012 tax forms 1040 instructions Property you acquired before 1981 or after 1986 is not ACRS recovery property. Irs 2012 tax forms 1040 instructions For information on depreciating property acquired before 1981, see chapter 2. Irs 2012 tax forms 1040 instructions For information on depreciating property acquired after 1986, see chapter 3 of Publication 946. Irs 2012 tax forms 1040 instructions Recovery Property Recovery property under ACRS is tangible depreciable property placed in service after 1980 and before 1987. Irs 2012 tax forms 1040 instructions It generally includes new or used property that you acquired after 1980 and before 1987 for use in your trade or business or for the production of income. Irs 2012 tax forms 1040 instructions Nonrecovery Property You cannot use ACRS for property you placed in service before 1981 or after 1986. Irs 2012 tax forms 1040 instructions Nonrecovery property also includes: Intangible property, Property you elected to exclude from ACRS that is properly depreciated under a method of depreciation that is not based on a term of years, Certain public utility property, and Certain property acquired and excluded from ACRS because of the antichurning rules. Irs 2012 tax forms 1040 instructions Intangible property. Irs 2012 tax forms 1040 instructions   Intangible property is not depreciated under ACRS. Irs 2012 tax forms 1040 instructions Property depreciated under methods not expressed in a term of years. Irs 2012 tax forms 1040 instructions   Certain property depreciated under a method not expressed in a term of years is not depreciated under ACRS. Irs 2012 tax forms 1040 instructions This included any property: If you made an irrevocable election to exclude such property, and In the first year that you could have claimed depreciation, you properly used the unit-of-production method or any method of depreciation not expressed in a term of years (not including the retirement-replacement-betterment method). Irs 2012 tax forms 1040 instructions Public utility property. Irs 2012 tax forms 1040 instructions   Public utility property for which the taxpayer does not use a normalization method of accounting is excluded from ACRS and is subject to depreciation under a special rule. Irs 2012 tax forms 1040 instructions Additions or improvements to ACRS property after 1986. Irs 2012 tax forms 1040 instructions   Any additions or improvements placed in service after 1986, including any components of a building (plumbing, wiring, storm windows, etc. Irs 2012 tax forms 1040 instructions ) are depreciated using MACRS, discussed in chapter 3 of Publication 946. Irs 2012 tax forms 1040 instructions It does not matter that the underlying property is depreciated under ACRS or one of the other methods. Irs 2012 tax forms 1040 instructions How To Figure the Deduction After you determine that your property can be depreciated under ACRS, you are ready to figure your deduction. Irs 2012 tax forms 1040 instructions Because the conventions are built into the percentage table rates, you only need to know the following: The unadjusted basis of your recovery property, The classes of recovery property, The recovery periods, and Whether to use the prescribed percentages based on accelerated methods or percentages based on using the alternate ACRS method. Irs 2012 tax forms 1040 instructions Unadjusted Basis To figure your ACRS deduction, you multiply the unadjusted basis in your recovery property by its applicable percentage for the year. Irs 2012 tax forms 1040 instructions Unadjusted basis is the same amount you would use to figure gain on a sale, but it is figured without taking into account any depreciation taken in earlier years. Irs 2012 tax forms 1040 instructions However, reduce your original basis by the amount of amortization taken on the property and by any section 179 deduction claimed as discussed in chapter 2 of Publication 946. Irs 2012 tax forms 1040 instructions If you buy property, your unadjusted basis is usually its cost minus any amortized amount and minus any section 179 deduction elected. Irs 2012 tax forms 1040 instructions If you acquire property in some other way, such as by inheriting it, getting it as a gift, or building it yourself, you figure your unadjusted basis under other rules. Irs 2012 tax forms 1040 instructions See Publication 551. Irs 2012 tax forms 1040 instructions Classes of Recovery Property All recovery property under ACRS is in one of the following classes. Irs 2012 tax forms 1040 instructions The class for your property was determined when you began to depreciate it. Irs 2012 tax forms 1040 instructions 3-Year Property 3-year property includes automobiles, light-duty trucks (actual unloaded weight less than 13,000 pounds), and tractor units for use over-the-road. Irs 2012 tax forms 1040 instructions Race horses over 2 years old when placed in service are 3-year property. Irs 2012 tax forms 1040 instructions Any other horses over 12 years old when you placed them in service are also included in the 3-year property class. Irs 2012 tax forms 1040 instructions The ACRS percentages for 3-year recovery property are: Recovery Period Percentage 1st year 25% 2nd year 38% 3rd year 37% If you used the percentages above to depreciate your 3-year recovery property, your property, except for certain passenger automobiles, is fully depreciated. Irs 2012 tax forms 1040 instructions You cannot claim depreciation for this property after 1988. Irs 2012 tax forms 1040 instructions 5-Year Property 5-year property includes computers, copiers, and equipment, such as office furniture and fixtures. Irs 2012 tax forms 1040 instructions It also includes single purpose agricultural or horticultural structures and petroleum storage facilities (other than buildings and their structural components). Irs 2012 tax forms 1040 instructions The ACRS percentages for 5-year recovery property are: Recovery period Percentage 1st year 15% 2nd year 22% 3rd through 5th year 21% If you used the percentages above to depreciate your 5-year recovery property, it is fully depreciated. Irs 2012 tax forms 1040 instructions You cannot claim depreciation for this property after 1990. Irs 2012 tax forms 1040 instructions 10-Year Property 10-year property includes certain real property such as theme-park structures and certain public utility property. Irs 2012 tax forms 1040 instructions Manufactured homes (including mobile homes) and railroad tank cars are also 10-year property. Irs 2012 tax forms 1040 instructions You do not treat a building, and its structural components, as 10-year property by reason of a change in use after you placed the property in service. Irs 2012 tax forms 1040 instructions For example, a building (15-year real property) that was placed in service in 1981 and was converted to a theme-park structure in 1986 remains 15-year real property. Irs 2012 tax forms 1040 instructions The ACRS percentages for 10-year recovery property are: Recovery Period Percentage 1st year 8% 2nd year 14% 3rd year 12% 4th through 6th year 10% 7th through 10th year 9% If you used the percentages above, you cannot claim depreciation for this property after 1995. Irs 2012 tax forms 1040 instructions Example. Irs 2012 tax forms 1040 instructions On April 21, 1986, you bought and placed in service a new mobile home for $26,000 to be used as rental property. Irs 2012 tax forms 1040 instructions You paid $10,000 cash and signed a note for $16,000 giving you an unadjusted basis of $26,000. Irs 2012 tax forms 1040 instructions On June 8, 1986, you bought and placed in service a used mobile home for use as rental property at a total cost of $11,500. Irs 2012 tax forms 1040 instructions The total unadjusted basis of your 10-year recovery property placed in service in 1986 was $37,500 ($26,000 + $11,500). Irs 2012 tax forms 1040 instructions Your ACRS deduction was $3,000 (8% × $37,500). Irs 2012 tax forms 1040 instructions In 1987, your ACRS deduction was $5,250 (14% × $37,500). Irs 2012 tax forms 1040 instructions In 1988, your ACRS deduction was $4,500 (12% × $37,500). Irs 2012 tax forms 1040 instructions In 1989, 1990, and 1991, your ACRS deduction was $3,750 (10% × $37,500). Irs 2012 tax forms 1040 instructions In 1992, 1993, 1994, and 1995 your deduction for each year is $3,375 (9% × $37,500). Irs 2012 tax forms 1040 instructions 15-Year Real Property 15-year real property is real property that is recovery property placed in service before March 16, 1984. Irs 2012 tax forms 1040 instructions It includes all real property, such as buildings, other than that designated as 5-year or 10-year property. Irs 2012 tax forms 1040 instructions Unlike the 3-, 5-, or 10-year classes of property, the percentages for 15-year real property depend on when you placed the property in service during your tax year. Irs 2012 tax forms 1040 instructions You could group 15-year real property by month and year placed in service. Irs 2012 tax forms 1040 instructions In Table 1, at the end of this publication in the Appendix, find the month in your tax year that you placed the property in service in your trade or business or for the production of income. Irs 2012 tax forms 1040 instructions You use the percentages listed under that month for each year of the recovery period to determine your depreciation deduction each year. Irs 2012 tax forms 1040 instructions Example. Irs 2012 tax forms 1040 instructions On March 5, 1984, you placed an apartment building in service in your business. Irs 2012 tax forms 1040 instructions It is 15-year real property. Irs 2012 tax forms 1040 instructions After subtracting the value of the land, your unadjusted basis in the building is $250,000. Irs 2012 tax forms 1040 instructions You use the calendar year as your tax year. Irs 2012 tax forms 1040 instructions March is the third month of your tax year. Irs 2012 tax forms 1040 instructions Your ACRS deduction for 1984 was $25,000 (10% × $250,000). Irs 2012 tax forms 1040 instructions For 1985, the percentage for the third month of the second year of the recovery period is 11%. Irs 2012 tax forms 1040 instructions Your deduction was $27,500 (11% × $250,000). Irs 2012 tax forms 1040 instructions For the third, fourth, and fifth years of the recovery period (1986, 1987, and 1988), the percentages are 9%, 8%, and 7%. Irs 2012 tax forms 1040 instructions For 1989 through 1992, the percentage for the third month is 6%. Irs 2012 tax forms 1040 instructions Your deduction each year is $15,000 (6% × $250,000). Irs 2012 tax forms 1040 instructions For 1993, 1994, and 1995, the percentage for the third month is 5%. Irs 2012 tax forms 1040 instructions Your depreciation deduction is $12,500 (5% × $250,000) for 1993, 1994, and 1995. Irs 2012 tax forms 1040 instructions Low-Income Housing Low-income housing that was assigned a 15-year recovery period under ACRS includes the following types of property: Federally assisted housing projects where the mortgage is insured under section 221(d)(3) or 236 of the National Housing Act, or housing financed or assisted by direct loan or tax abatement under similar provisions of state or local laws. Irs 2012 tax forms 1040 instructions Low-income rental housing for which a depreciation deduction for rehabilitation expenditures is allowed. Irs 2012 tax forms 1040 instructions Low-income rental housing held for occupancy by families or individuals eligible to receive subsidies under section 8 of the United States Housing Act of 1937, as amended, or under the provisions of state or local laws that authorize similar subsidies for low-income families. Irs 2012 tax forms 1040 instructions Housing financed or assisted by direct loan or insured under Title V of the Housing Act of 1949. Irs 2012 tax forms 1040 instructions The ACRS percentages for low-income housing real property, like the regular 15-year real property percentages, depend on when you placed the property in service. Irs 2012 tax forms 1040 instructions Find the month in your tax year in Table 2 or 3 at the end of this publication in the Appendix that you first placed the property in service as rental housing. Irs 2012 tax forms 1040 instructions Use the percentages listed under that month for each year of the recovery period. Irs 2012 tax forms 1040 instructions Table 2 shows percentages for low-income housing placed in service before May 9, 1985. Irs 2012 tax forms 1040 instructions Table 3 shows percentages for low-income housing placed in service after May 8, 1985, and before 1987. Irs 2012 tax forms 1040 instructions Example. Irs 2012 tax forms 1040 instructions In May 1986, you acquired and placed in service a house that qualified as low-income rental housing under item 3) of the above listing. Irs 2012 tax forms 1040 instructions You use the calendar year as your tax year. Irs 2012 tax forms 1040 instructions You use Table C–3 because the property was placed in service after May 8, 1985. Irs 2012 tax forms 1040 instructions Your unadjusted basis for the property, not including the land, was $59,000. Irs 2012 tax forms 1040 instructions Your deduction for 1986 through 2001 is shown in the following table. Irs 2012 tax forms 1040 instructions Year Rate Deduction 1986 8. Irs 2012 tax forms 1040 instructions 9% $5,251 1987 12. Irs 2012 tax forms 1040 instructions 1% 7,139 1988 10. Irs 2012 tax forms 1040 instructions 5% 6,195 1989 9. Irs 2012 tax forms 1040 instructions 1% 5,369 1990 7. Irs 2012 tax forms 1040 instructions 9% 4,661 1991 6. Irs 2012 tax forms 1040 instructions 9% 4,071 1992 5. Irs 2012 tax forms 1040 instructions 9% 3,481 1993 5. Irs 2012 tax forms 1040 instructions 2% 3,068 1994 4. Irs 2012 tax forms 1040 instructions 6% 2,714 1995 4. Irs 2012 tax forms 1040 instructions 6% 2,714 1996 4. Irs 2012 tax forms 1040 instructions 6% 2,714 1997 4. Irs 2012 tax forms 1040 instructions 6% 2,714 1998 4. Irs 2012 tax forms 1040 instructions 6% 2,714 1999 4. Irs 2012 tax forms 1040 instructions 5% 2,655 2000 4. Irs 2012 tax forms 1040 instructions 5% 2,655 2001 1. Irs 2012 tax forms 1040 instructions 5% 885 18-Year Real Property 18-year real property is real property that is recovery property placed in service after March 15, 1984, and before May 9, 1985. Irs 2012 tax forms 1040 instructions It includes real property, such as buildings, other than that designated as 5-year, 10-year, 15-year real property, or low-income housing. Irs 2012 tax forms 1040 instructions The ACRS percentages for 18-year real property depend on when you placed the property in service in your trade or business or for the production of income during your tax year. Irs 2012 tax forms 1040 instructions There are also tables for 18-year real property in the Appendix. Irs 2012 tax forms 1040 instructions Table 4 shows the percentages for 18-year real property you placed in service after June 22, 1984, and before May 9, 1985. Irs 2012 tax forms 1040 instructions Table 5 is for 18-year real property placed in service after March 15, 1984, and before June 23, 1984. Irs 2012 tax forms 1040 instructions Find the month in your tax year that you placed the property in service in a trade or business or for the production of income. Irs 2012 tax forms 1040 instructions Use the percentages listed under that month for each year of the recovery period. Irs 2012 tax forms 1040 instructions Example. Irs 2012 tax forms 1040 instructions On April 28, 1985, you bought and placed in service a rental house. Irs 2012 tax forms 1040 instructions The house, not including the land, cost $95,000. Irs 2012 tax forms 1040 instructions This is your unadjusted basis for the house. Irs 2012 tax forms 1040 instructions You use the calendar year as your tax year. Irs 2012 tax forms 1040 instructions Because the house was placed in service after June 22, 1984, and before May 9, 1985, it is 18-year real property. Irs 2012 tax forms 1040 instructions You use Table 4 to figure your deduction for the house. Irs 2012 tax forms 1040 instructions April is the fourth month of your tax year. Irs 2012 tax forms 1040 instructions Your deduction for 1985 through 2003 is shown in the following table. Irs 2012 tax forms 1040 instructions Year Rate Deduction 1985 7. Irs 2012 tax forms 1040 instructions 0% $6,650 1986 9. Irs 2012 tax forms 1040 instructions 0% 8,550 1987 8. Irs 2012 tax forms 1040 instructions 0% 7,600 1988 7. Irs 2012 tax forms 1040 instructions 0% 6,650 1989 7. Irs 2012 tax forms 1040 instructions 0% 6,650 1990 6. Irs 2012 tax forms 1040 instructions 0% 5,700 1991 5. Irs 2012 tax forms 1040 instructions 0% 4,750 1992 5. Irs 2012 tax forms 1040 instructions 0% 4,750 1993 5. Irs 2012 tax forms 1040 instructions 0% 4,750 1994 5. Irs 2012 tax forms 1040 instructions 0% 4,750 1995 5. Irs 2012 tax forms 1040 instructions 0% 4,750 1996 5. Irs 2012 tax forms 1040 instructions 0% 4,750 1997 5. Irs 2012 tax forms 1040 instructions 0% 4,750 1998 4. Irs 2012 tax forms 1040 instructions 0% 3,800 1999 4. Irs 2012 tax forms 1040 instructions 0% 3,800 2000 4. Irs 2012 tax forms 1040 instructions 0% 3,800 2001 4. Irs 2012 tax forms 1040 instructions 0% 3,800 2002 4. Irs 2012 tax forms 1040 instructions 0% 3,800 2003 1. Irs 2012 tax forms 1040 instructions 0% 950 19-Year Real Property 19-year real property is real property that is recovery property placed in service after May 8, 1985, and before 1987. Irs 2012 tax forms 1040 instructions It includes all real property, other than that designated as 5-year, 10-year, 15-year, or 18-year real property, or low-income housing. Irs 2012 tax forms 1040 instructions The ACRS percentages for 19-year real property depend on when you placed the property in service in a trade or business or for the production of income during your tax year. Irs 2012 tax forms 1040 instructions Table 6 shows the percentages for 19-year real property. Irs 2012 tax forms 1040 instructions You find the month in your tax year that you placed the property in service. Irs 2012 tax forms 1040 instructions You use the percentages listed under that month for each year of the recovery period. Irs 2012 tax forms 1040 instructions Recovery Periods Each item of recovery property is assigned to a class of property. Irs 2012 tax forms 1040 instructions The classes of recovery property establish the recovery periods over which the unadjusted basis of items in a class is recovered. Irs 2012 tax forms 1040 instructions The classes of property are: 3-Year property 5-Year property 10-Year property 15-Year real property Low-income housing 18-Year real property 19-Year real property Alternate ACRS Method (Modified Straight Line Method) ACRS provides an alternate ACRS method that could be elected. Irs 2012 tax forms 1040 instructions This alternate ACRS method uses a recovery percentage based on a modified straight line method. Irs 2012 tax forms 1040 instructions This alternate ACRS method generally uses percentages other than those from the tables. Irs 2012 tax forms 1040 instructions If you elected the alternate ACRS method, you determine the recovery period by using the following schedule. Irs 2012 tax forms 1040 instructions This schedule is for other than 18- and 19-year real property and low-income housing: In the case of: You could have elected a recovery period of: 3-year property 3, 5, or 12 years 5-year property 5, 12, or 25 years 15-year real property 15, 35, or 45 years Percentages. Irs 2012 tax forms 1040 instructions   The straight-line percentages for the alternate ACRS method are: Recovery Period Percentage 5 years 20. Irs 2012 tax forms 1040 instructions 00% 10 years 10. Irs 2012 tax forms 1040 instructions 00% 12 years 8. Irs 2012 tax forms 1040 instructions 333% 15 years 6. Irs 2012 tax forms 1040 instructions 667% 25 years 4. Irs 2012 tax forms 1040 instructions 00% 35 years 2. Irs 2012 tax forms 1040 instructions 857%   You apply the percentage to the unadjusted basis(defined earlier) of the property to figure your ACRS deduction. Irs 2012 tax forms 1040 instructions There are tables for 18- and 19-year real property later in this publication in the Appendix. Irs 2012 tax forms 1040 instructions For 15-year real property, see 15-year real property, later. Irs 2012 tax forms 1040 instructions 3-, 5-, and 10-year property. Irs 2012 tax forms 1040 instructions   If you elected to use an alternate recovery percentage, you have to use the same recovery percentage for all property in that class that you placed in service in that tax year. Irs 2012 tax forms 1040 instructions This applies throughout the recovery period you selected. Irs 2012 tax forms 1040 instructions Half-year convention. Irs 2012 tax forms 1040 instructions   If you elected the alternate method, only a half-year of depreciation was deducted for the year you placed the property in service. Irs 2012 tax forms 1040 instructions This applied regardless of when in the tax year you placed the property in service. Irs 2012 tax forms 1040 instructions For each of the remaining years in the recovery period, you take a full year's deduction. Irs 2012 tax forms 1040 instructions If you hold the property for the entire recovery period, a half-year of depreciation is allowable for the year following the end of the recovery period. Irs 2012 tax forms 1040 instructions Example. Irs 2012 tax forms 1040 instructions You operate a small upholstery business. Irs 2012 tax forms 1040 instructions On March 19, 1986, you bought and placed in service a $13,000 light-duty panel truck to be used in your business and a $500 electric saw. Irs 2012 tax forms 1040 instructions You elected to use the alternate ACRS method. Irs 2012 tax forms 1040 instructions You did not elect to take a section 179 deduction. Irs 2012 tax forms 1040 instructions You decided to recover the cost of the truck, which is 3-year recovery property, over 5 years. Irs 2012 tax forms 1040 instructions The saw is 5-year property, but you decided to recover its cost over 12 years. Irs 2012 tax forms 1040 instructions For 1986, your ACRS deduction reflected the half-year convention. Irs 2012 tax forms 1040 instructions In the first year, you deducted half of the amount determined for a full year. Irs 2012 tax forms 1040 instructions Your ACRS deduction for 1986 is as follows: Light-duty truck   5 years straight line = 20% 20% ÷ $13,000 = $2,600 Half-year convention -½ of $2,600= $1,300. Irs 2012 tax forms 1040 instructions 00     Electric saw   12 years straight line = 8. Irs 2012 tax forms 1040 instructions 333% 8. Irs 2012 tax forms 1040 instructions 333% ÷ $500 = $41. Irs 2012 tax forms 1040 instructions 67 Half-year convention -½ of $41. Irs 2012 tax forms 1040 instructions 67= 20. Irs 2012 tax forms 1040 instructions 84 Total ACRS deduction for 1986 $1,320. Irs 2012 tax forms 1040 instructions 84       You take a full year of depreciation for both the truck and the saw for the years 1987 through 1990. Irs 2012 tax forms 1040 instructions Your ACRS deduction for each of those years is as follows: Light-duty truck   5 years straight line = 20% 20% ÷ $13,000 = $2,600     Electric saw     12 years straight line = 8. Irs 2012 tax forms 1040 instructions 333% 8. Irs 2012 tax forms 1040 instructions 333% ÷ $500 = $41. Irs 2012 tax forms 1040 instructions 67 Total annual ACRS deduction for 1987 through 1990 $2,641. Irs 2012 tax forms 1040 instructions 67       In 1991, you take a half-year of depreciation for the truck and a full year of depreciation for the saw. Irs 2012 tax forms 1040 instructions Your ACRS deduction for 1991 is as follows: Light-duty truck   5 years straight line = 20% 20% ÷ $13,000 = $2,600 Half-year convention -½ of $2,600= $1,300. Irs 2012 tax forms 1040 instructions 00     Electric saw   12 years straight line = 8. Irs 2012 tax forms 1040 instructions 333% 8. Irs 2012 tax forms 1040 instructions 333% ÷ $500 = $41. Irs 2012 tax forms 1040 instructions 67 Total ACRS deduction for 1991 $1,341. Irs 2012 tax forms 1040 instructions 67       The truck is fully depreciated after 1991. Irs 2012 tax forms 1040 instructions You take a full year of depreciation for the saw for the years 1992 through 1997. Irs 2012 tax forms 1040 instructions Your ACRS deduction for each of those years is as follows: Electric saw     12 years straight line = 8. Irs 2012 tax forms 1040 instructions 333% 8. Irs 2012 tax forms 1040 instructions 333% ÷ $500 = $41. Irs 2012 tax forms 1040 instructions 67 Total annual ACRS deduction for 1992 through 1997 $41. Irs 2012 tax forms 1040 instructions 67       You take a half-year of depreciation for the saw for 1998. Irs 2012 tax forms 1040 instructions Your ACRS deduction for 1998 is as follows: Electric saw   12 years straight line = 8. Irs 2012 tax forms 1040 instructions 333% 8. Irs 2012 tax forms 1040 instructions 333% ÷ $500 = $41. Irs 2012 tax forms 1040 instructions 67 Half-year convention -½ of $41. Irs 2012 tax forms 1040 instructions 67= 20. Irs 2012 tax forms 1040 instructions 84 Total ACRS deduction for 1998 $20. Irs 2012 tax forms 1040 instructions 84       The saw is fully depreciated after 1998. Irs 2012 tax forms 1040 instructions 15-year real property. Irs 2012 tax forms 1040 instructions   Under ACRS, you could also elect to use the alternate ACRS method for 15-year real property. Irs 2012 tax forms 1040 instructions The alternate ACRS method allows you to depreciate your 15-year real property using the straight line ACRS method over the alternate recovery periods of 15, 35, or 45 years. Irs 2012 tax forms 1040 instructions If you selected a 15-year recovery period, you use the percentage (6. Irs 2012 tax forms 1040 instructions 667%) from the schedule above. Irs 2012 tax forms 1040 instructions You prorate this percentage for the number of months the property was in service in the first year. Irs 2012 tax forms 1040 instructions If you selected a 35- or 45-year recovery period, you use either Table 11 or 15. Irs 2012 tax forms 1040 instructions Alternate periods for 18-year real property. Irs 2012 tax forms 1040 instructions   For 18-year real property, the alternate recovery periods are 18, 35, or 45 years. Irs 2012 tax forms 1040 instructions The percentages for 18-year real property under the alternate method are in Tables 7, 8, 10, 11, 14, and 15 in the Appendix. Irs 2012 tax forms 1040 instructions There are two tables for each alternate recovery period. Irs 2012 tax forms 1040 instructions One table shows the percentage for property placed in service after June 22, 1984. Irs 2012 tax forms 1040 instructions The other table has the percentages for property placed in service after March 15, 1984, and before June 23, 1984. Irs 2012 tax forms 1040 instructions Alternate periods for 19-year real property. Irs 2012 tax forms 1040 instructions   For 19-year real property, the alternate recovery periods are 19, 35, or 45 years. Irs 2012 tax forms 1040 instructions If you selected a 19-year recovery period, use Table 9 to determine your deduction. Irs 2012 tax forms 1040 instructions If you select a 35- or 45-year recovery period, use either Table 13 or 14. Irs 2012 tax forms 1040 instructions Example. Irs 2012 tax forms 1040 instructions You placed in service an apartment building on August 3, 1986. Irs 2012 tax forms 1040 instructions The building is 19-year real property. Irs 2012 tax forms 1040 instructions The sales contract allocated $300,000 to the building and $100,000 to the land. Irs 2012 tax forms 1040 instructions You use the calendar year as your tax year. Irs 2012 tax forms 1040 instructions You chose the alternate ACRS method over a recovery period of 35 years. Irs 2012 tax forms 1040 instructions For 1986, you figure your ACRS deduction usingTable 13. Irs 2012 tax forms 1040 instructions August is the eighth month of your tax year. Irs 2012 tax forms 1040 instructions The percentage from Table 13 for the eighth month is 1. Irs 2012 tax forms 1040 instructions 1%. Irs 2012 tax forms 1040 instructions Your deduction was $3,300 ($300,000 ÷ 1. Irs 2012 tax forms 1040 instructions 1%). Irs 2012 tax forms 1040 instructions The deduction rate from ACRS Table 13 for years 2 through 20 is 2. Irs 2012 tax forms 1040 instructions 9% so that your deduction in 1987 through 2005 is $8,700 ($300,000 ÷ 2. Irs 2012 tax forms 1040 instructions 9%). Irs 2012 tax forms 1040 instructions Alternate periods for low-income housing. Irs 2012 tax forms 1040 instructions   For low-income housing, the alternate recovery periods are 15, 35, or 45 years. Irs 2012 tax forms 1040 instructions If you selected a 15-year period for this property, use 6. Irs 2012 tax forms 1040 instructions 667% as the percentage. Irs 2012 tax forms 1040 instructions If you selected a 35- or 45-year period, use either Table 11, 12, or 15. Irs 2012 tax forms 1040 instructions Election. Irs 2012 tax forms 1040 instructions   You had to make the election to use the alternate ACRS method by the return due date (including extensions) for the tax year you placed the property in service. Irs 2012 tax forms 1040 instructions Revocation of election. Irs 2012 tax forms 1040 instructions   Your election to use an alternate ACRS method, once made, can be changed only with the consent of the Commissioner. Irs 2012 tax forms 1040 instructions The Commissioner grants consent only in extraordinary circumstances. Irs 2012 tax forms 1040 instructions Any request for a revocation will be considered a request for a ruling. Irs 2012 tax forms 1040 instructions ACRS Deduction in Short Tax Year For a tax year that is less than 12 months, the ACRS deduction is prorated on a 12-month basis. Irs 2012 tax forms 1040 instructions Figure the amount of the ACRS deduction for a short tax year as follows: First, you figure the ACRS deduction for a full year. Irs 2012 tax forms 1040 instructions You figure this by multiplying the unadjusted basis by the recovery percentage. Irs 2012 tax forms 1040 instructions You then multiply the ACRS deduction determined for a full tax year by a fraction. Irs 2012 tax forms 1040 instructions The numerator (top number) of the fraction is the number of months in the short tax year and the denominator (bottom number) is 12. Irs 2012 tax forms 1040 instructions For example, a corporation placed in service in June 1986 an item of 3-year property with an unadjusted basis of $10,000. Irs 2012 tax forms 1040 instructions The corporation files a tax return, because of a change in its accounting period, for the 6-month short tax year ending June 30, 1986. Irs 2012 tax forms 1040 instructions The full year's ACRS deduction for this item is $2,500 ($10,000 ÷ 25%), the first year percentage from the 3-year table. Irs 2012 tax forms 1040 instructions The ACRS deduction for the short tax year is $1,250 ($2,500 ÷ 6/12). Irs 2012 tax forms 1040 instructions You use the full ACRS percentages during the remaining years of the recovery period. Irs 2012 tax forms 1040 instructions For the first tax year after the recovery period, the unrecovered basis will be deductible. Irs 2012 tax forms 1040 instructions Exception. Irs 2012 tax forms 1040 instructions   For the tax year in which you placed 15-, 18-, or 19-year real property in service or in the tax year you dispose of it, you compute the ACRS deduction for the number of months that the property is in service during that tax year. Irs 2012 tax forms 1040 instructions You compute the number of months using either a full month or mid-month convention. Irs 2012 tax forms 1040 instructions This is true regardless of the number of months in the tax year and the recovery period and method used. Irs 2012 tax forms 1040 instructions Dispositions A disposition is the permanent withdrawal of property from use in your trade or business or in the production of income. Irs 2012 tax forms 1040 instructions You can make a withdrawal by sale, exchange, retirement, abandonment, or destruction. Irs 2012 tax forms 1040 instructions You generally recognize gain or loss on the disposition of an asset by sale. Irs 2012 tax forms 1040 instructions However, nonrecognition rules can allow you to postpone some gain. Irs 2012 tax forms 1040 instructions See Publication 544. Irs 2012 tax forms 1040 instructions If you physically abandon property, you can deduct as a loss the adjusted basis of the asset at the time of its abandonment. Irs 2012 tax forms 1040 instructions Your intent must be to discard the asset so that you will not use it again or retrieve it for sale, exchange, or other disposition. Irs 2012 tax forms 1040 instructions Early dispositions. Irs 2012 tax forms 1040 instructions   The disposal of an asset before the end of its specified recovery period, is referred to as an early disposition. Irs 2012 tax forms 1040 instructions When an early disposition occurs, the depreciation deduction in the year of disposition depends on the class of property involved. Irs 2012 tax forms 1040 instructions Early dispositions of ACRS property other than 15-, 18-, or 19-year real property. Irs 2012 tax forms 1040 instructions   Generally, you get no ACRS deduction for the tax year in which you dispose of or retire recovery property, except for 15-, 18-, and 19-year real property. Irs 2012 tax forms 1040 instructions This means there is no depreciation deduction under ACRS in the year you dispose of or retire any of your 3-, 5-, or 10-year recovery property. Irs 2012 tax forms 1040 instructions Dispositions — mass asset accounts. Irs 2012 tax forms 1040 instructions   The law provides a special rule to avoid the calculation of gain on the disposition of assets from mass asset accounts. Irs 2012 tax forms 1040 instructions A mass asset account includes items usually minor in value in relation to the group, numerous in quantity, impractical to separately identify, and not usually accounted for on a separate basis, but on a total dollar value. Irs 2012 tax forms 1040 instructions Examples of mass assets include minor items of office, plant, and store furniture and fixtures. Irs 2012 tax forms 1040 instructions   Under the special rule, if you elected to use a mass asset account, you recognize gain to the extent of the proceeds from the disposition of the asset. Irs 2012 tax forms 1040 instructions You leave the unadjusted basis of the property in the account until recovered in future years. Irs 2012 tax forms 1040 instructions If you did this, include the total proceeds realized from the disposition in income on the tax return for the year of disposition. Irs 2012 tax forms 1040 instructions Early dispositions — 15-year real property. Irs 2012 tax forms 1040 instructions   If you dispose of 15-year real property, you base your ACRS deduction for the year of disposition on the number of months in use. Irs 2012 tax forms 1040 instructions You use a full-month convention. Irs 2012 tax forms 1040 instructions For a disposition at any time during a particular month before the end of the recovery period, no deduction is allowed for the month of disposition. Irs 2012 tax forms 1040 instructions This applies whether you use the regular ACRS method or elected the alternate ACRS method. Irs 2012 tax forms 1040 instructions Example. Irs 2012 tax forms 1040 instructions You purchased and placed in service a rental house on March 2, 1984, for $98,000 (not including the cost of land). Irs 2012 tax forms 1040 instructions You file your return based on a calendar year. Irs 2012 tax forms 1040 instructions Your rate from Table 1 for the third month is 10%. Irs 2012 tax forms 1040 instructions Your ACRS deduction for 1984 was $9,800 ($98. Irs 2012 tax forms 1040 instructions 000 ÷ 10%). Irs 2012 tax forms 1040 instructions For 1985 through 1988, you figured your ACRS deductions using 11%, 9%, 8%, and 7% ÷ $98,000. Irs 2012 tax forms 1040 instructions For 1989 through 1992, you figured your ACRS deductions using 6% for each year. Irs 2012 tax forms 1040 instructions The deduction each year was $98,000 ÷ 6%. Irs 2012 tax forms 1040 instructions For 1993 and 1994, the ACRS deduction is ($98,000 ÷ 5%) $4,900 for each year. Irs 2012 tax forms 1040 instructions You sell the house on June 1, 1995. Irs 2012 tax forms 1040 instructions You figure your ACRS deduction for 1995 for the full year and then prorate that amount for the months of use. Irs 2012 tax forms 1040 instructions The full ACRS deduction for 1995 is $4,900 ($98,000 ÷ 5%). Irs 2012 tax forms 1040 instructions You then prorate this amount to the 5 months in 1995 during which it was rented. Irs 2012 tax forms 1040 instructions Your ACRS deduction for 1995 is $2,042 ($4,900 ÷ 5/12). Irs 2012 tax forms 1040 instructions Early dispositions — 18- and 19-year real property. Irs 2012 tax forms 1040 instructions   If you dispose of 18- or 19-year real property, you base your ACRS deduction for the year of disposition on the number of months in use. Irs 2012 tax forms 1040 instructions For 18-year property placed in service before June 23, 1984, use a full-month convention on a disposition. Irs 2012 tax forms 1040 instructions For 18-year property placed in service after June 22, 1984, and for 19-year property, determine the number of months in use by using the mid-month convention. Irs 2012 tax forms 1040 instructions Under the mid-month convention,treat real property disposed of any time during a month as disposed of in the middle of that month. Irs 2012 tax forms 1040 instructions Count the month of disposition as half a month of use. Irs 2012 tax forms 1040 instructions Example. Irs 2012 tax forms 1040 instructions You purchased and placed in service a rental house on July 2, 1984, for $100,000 (not including the cost of land). Irs 2012 tax forms 1040 instructions You file your return based on a calendar year. Irs 2012 tax forms 1040 instructions Your rate from Table 4 for the seventh month is 4%. Irs 2012 tax forms 1040 instructions You figured your ACRS deduction for 1984 was $4,000 ($100,000 ÷ 4%). Irs 2012 tax forms 1040 instructions In 1985 through 1994, your ACRS deductions were 9%, 8%, 8%, 7%, 6%, 6%, 5%, 5%, and 5% ÷ $100,000. Irs 2012 tax forms 1040 instructions You sell the house on September 24, 1995. Irs 2012 tax forms 1040 instructions Figure your ACRS deduction for 1995 for the months of use. Irs 2012 tax forms 1040 instructions The full ACRS deduction for 1995 is $5,000 ($100,000 ÷ 5%). Irs 2012 tax forms 1040 instructions Prorate this amount for the 8. Irs 2012 tax forms 1040 instructions 5 months in 1995 that you held the property. Irs 2012 tax forms 1040 instructions Under the mid-month convention, you count September as half a month. Irs 2012 tax forms 1040 instructions Your ACRS deduction for 1995 is $3,542 ($5,000 ÷ 8. Irs 2012 tax forms 1040 instructions 5/12). Irs 2012 tax forms 1040 instructions Depreciation Recapture If you dispose of property depreciated under ACRS that is section 1245 recovery property, you will generally recognize gain or loss. Irs 2012 tax forms 1040 instructions Gain recognized on a disposition is ordinary income to the extent of prior depreciation deductions taken. Irs 2012 tax forms 1040 instructions This recapture rule applies to all personal property in the 3-year, 5-year, and 10-year classes. Irs 2012 tax forms 1040 instructions You recapture gain on manufactured homes and theme park structures in the 10-year class as section 1245 property. Irs 2012 tax forms 1040 instructions Section 1245 property generally includes all personal property. Irs 2012 tax forms 1040 instructions See Section 1245 property in chapter 4 of Publication 544 for more information. Irs 2012 tax forms 1040 instructions You treat dispositions of section 1250 real property on which you have a gain as section 1245 recovery property. Irs 2012 tax forms 1040 instructions You recognize gain on this property as ordinary income to the extent of prior depreciation deductions taken. Irs 2012 tax forms 1040 instructions Section 1250 property includes most real property. Irs 2012 tax forms 1040 instructions See Section 1250 property in chapter 4 of Publication 544 for more information. Irs 2012 tax forms 1040 instructions This rule applies to all section 1250 real property except the following property: Any 15-, 18-, or 19-year real property that is residential rental property. Irs 2012 tax forms 1040 instructions Any 15-, 18-, or 19-year real property that you elected to depreciate using the alternate ACRS method. Irs 2012 tax forms 1040 instructions Any 15-, 18-, or 19-year real property that is subsidized low-income housing. Irs 2012 tax forms 1040 instructions For these recapture rules, you treat the section 179 deduction and 50% of the investment credit that reduced your basis as depreciation. Irs 2012 tax forms 1040 instructions See Publication 544 for further discussion of dispositions of section 1245 and 1250 property. Irs 2012 tax forms 1040 instructions Prev  Up  Next   Home   More Online Publications