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Senior tax rebate 7. Senior tax rebate   Ship Passenger Tax Table of Contents A tax of $3 per passenger is imposed on certain ship voyages, as explained later under Taxable situations. Senior tax rebate The tax is imposed only once for each passenger, either at the time of first embarkation or disembarkation in the United States. Senior tax rebate The person providing the voyage (the operator of the vessel) is liable for the tax. Senior tax rebate Voyage. Senior tax rebate   A voyage is the vessel's journey that includes the outward and homeward trips or passages. Senior tax rebate The voyage starts when the vessel begins to load passengers and continues until the vessel has completed at least one outward and one homeward passage. Senior tax rebate The tax may be imposed even if a passenger does not make both an outward and a homeward passage as long as the voyage begins or ends in the United States. Senior tax rebate Passenger. Senior tax rebate   A passenger is an individual carried on the vessel other than the Master or a crew member or other individual engaged in the business of the vessel or its owners. Senior tax rebate Example 1. Senior tax rebate John Smith works as a guest lecturer. Senior tax rebate The cruise line hired him for the benefit of the passengers. Senior tax rebate Therefore, he is engaged in the business of the vessel and is not a passenger. Senior tax rebate Example 2. Senior tax rebate Marian Green is a travel agent. Senior tax rebate She is taking the cruise as a promotional trip to determine if she wants to offer it to her clients. Senior tax rebate She is a passenger. Senior tax rebate Taxable situations. Senior tax rebate   There are two taxable situations. Senior tax rebate The first situation involves voyages on commercial passenger vessels extending over one or more nights. Senior tax rebate A voyage extends over one or more nights if it extends for more than 24 hours. Senior tax rebate A passenger vessel is any vessel with stateroom or berth accommodations for more than 16 passengers. Senior tax rebate   The second situation involves voyages on a commercial vessel transporting passengers engaged in gambling on the vessel beyond the territorial waters of the United States. Senior tax rebate Territorial waters of the United States are those waters within the international boundary line between the United States and any contiguous foreign country or within 3 nautical miles (3. Senior tax rebate 45 statute miles) from low tide on the coastline. Senior tax rebate If passengers participate as players in any policy game or other lottery, or any other game of chance for money or other thing of value that the owner or operator of the vessel (or their employee, agent, or franchisee) conducts, sponsors, or operates, the voyage is subject to the ship passenger tax. Senior tax rebate The tax applies regardless of the duration of the voyage. Senior tax rebate A casual, friendly game of chance with other passengers that is not conducted, sponsored, or operated by the owner or operator is not gambling for determining if the voyage is subject to the ship passenger tax. Senior tax rebate Exemptions. Senior tax rebate   The tax does not apply when a vessel is on a voyage of less than 12 hours between 2 points in the United States or if a vessel is owned or operated by a state or local government. Senior tax rebate Prev  Up  Next   Home   More Online Publications
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Senior tax rebate 12. Senior tax rebate   Other Income Table of Contents Introduction Useful Items - You may want to see: Bartering Canceled DebtsInterest included in canceled debt. Senior tax rebate Exceptions Host or Hostess Life Insurance ProceedsSurviving spouse. Senior tax rebate Endowment Contract Proceeds Accelerated Death Benefits Public Safety Officer Killed in the Line of Duty Partnership Income S Corporation Income RecoveriesItemized Deduction Recoveries Rents from Personal Property RepaymentsMethod 1. Senior tax rebate Method 2. Senior tax rebate RoyaltiesDepletion. Senior tax rebate Coal and iron ore. Senior tax rebate Sale of property interest. Senior tax rebate Part of future production sold. Senior tax rebate Unemployment BenefitsTypes of unemployment compensation. Senior tax rebate Governmental program. Senior tax rebate Repayment of unemployment compensation. Senior tax rebate Tax withholding. Senior tax rebate Repayment of benefits. Senior tax rebate Welfare and Other Public Assistance Benefits Other IncomeEmotional distress. Senior tax rebate Deduction for costs involved in unlawful discrimination suits. Senior tax rebate Energy conservation measure. Senior tax rebate Dwelling unit. Senior tax rebate Current income required to be distributed. Senior tax rebate Current income not required to be distributed. Senior tax rebate How to report. Senior tax rebate Losses. Senior tax rebate Grantor trust. Senior tax rebate Nonemployee compensation. Senior tax rebate Corporate director. Senior tax rebate Personal representatives. Senior tax rebate Manager of trade or business for bankruptcy estate. Senior tax rebate Notary public. Senior tax rebate Election precinct official. Senior tax rebate Difficulty-of-care payments. Senior tax rebate Maintaining space in home. Senior tax rebate Reporting taxable payments. Senior tax rebate Lotteries and raffles. Senior tax rebate Form W-2G. Senior tax rebate Reporting winnings and recordkeeping. Senior tax rebate Inherited pension or IRA. Senior tax rebate Employee awards or bonuses. Senior tax rebate Pulitzer, Nobel, and similar prizes. Senior tax rebate Payment for services. Senior tax rebate VA payments. Senior tax rebate Prizes. Senior tax rebate Strike and lockout benefits. Senior tax rebate Introduction You must include on your return all items of income you receive in the form of money, property, and services unless the tax law states that you do not include them. Senior tax rebate Some items, however, are only partly excluded from income. Senior tax rebate This chapter discusses many kinds of income and explains whether they are taxable or nontaxable. Senior tax rebate Income that is taxable must be reported on your tax return and is subject to tax. Senior tax rebate Income that is nontaxable may have to be shown on your tax return but is not taxable. Senior tax rebate This chapter begins with discussions of the following income items. Senior tax rebate Bartering. Senior tax rebate Canceled debts. Senior tax rebate Sales parties at which you are the host or hostess. Senior tax rebate Life insurance proceeds. Senior tax rebate Partnership income. Senior tax rebate S Corporation income. Senior tax rebate Recoveries (including state income tax refunds). Senior tax rebate Rents from personal property. Senior tax rebate Repayments. Senior tax rebate Royalties. Senior tax rebate Unemployment benefits. Senior tax rebate Welfare and other public assistance benefits. Senior tax rebate These discussions are followed by brief discussions of other income items. Senior tax rebate Useful Items - You may want to see: Publication 525 Taxable and Nontaxable Income 544 Sales and Other Dispositions of Assets 4681 Canceled Debts, Foreclosures, Repossessions, and Abandonments Bartering Bartering is an exchange of property or services. Senior tax rebate You must include in your income, at the time received, the fair market value of property or services you receive in bartering. Senior tax rebate If you exchange services with another person and you both have agreed ahead of time on the value of the services, that value will be accepted as fair market value unless the value can be shown to be otherwise. Senior tax rebate Generally, you report this income on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Senior tax rebate However, if the barter involves an exchange of something other than services, such as in Example 3 below, you may have to use another form or schedule instead. Senior tax rebate Example 1. Senior tax rebate You are a self-employed attorney who performs legal services for a client, a small corporation. Senior tax rebate The corporation gives you shares of its stock as payment for your services. Senior tax rebate You must include the fair market value of the shares in your income on Schedule C (Form 1040) or Schedule C-EZ (Form 1040) in the year you receive them. Senior tax rebate Example 2. Senior tax rebate You are self-employed and a member of a barter club. Senior tax rebate The club uses “credit units” as a means of exchange. Senior tax rebate It adds credit units to your account for goods or services you provide to members, which you can use to purchase goods or services offered by other members of the barter club. Senior tax rebate The club subtracts credit units from your account when you receive goods or services from other members. Senior tax rebate You must include in your income the value of the credit units that are added to your account, even though you may not actually receive goods or services from other members until a later tax year. Senior tax rebate Example 3. Senior tax rebate You own a small apartment building. Senior tax rebate In return for 6 months rent-free use of an apartment, an artist gives you a work of art she created. Senior tax rebate You must report as rental income on Schedule E (Form 1040), Supplemental Income and Loss, the fair market value of the artwork, and the artist must report as income on Schedule C (Form 1040) or Schedule C-EZ (Form 1040) the fair rental value of the apartment. Senior tax rebate Form 1099-B from barter exchange. Senior tax rebate   If you exchanged property or services through a barter exchange, Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, or a similar statement from the barter exchange should be sent to you by February 18, 2014. Senior tax rebate It should show the value of cash, property, services, credits, or scrip you received from exchanges during 2013. Senior tax rebate The IRS also will receive a copy of Form 1099-B. Senior tax rebate Canceled Debts In most cases, if a debt you owe is canceled or forgiven, other than as a gift or bequest, you must include the canceled amount in your income. Senior tax rebate You have no income from the canceled debt if it is intended as a gift to you. Senior tax rebate A debt includes any indebtedness for which you are liable or which attaches to property you hold. Senior tax rebate If the debt is a nonbusiness debt, report the canceled amount on Form 1040, line 21. Senior tax rebate If it is a business debt, report the amount on Schedule C (Form 1040) or Schedule C-EZ (Form 1040) (or on Schedule F (Form 1040), Profit or Loss From Farming, if the debt is farm debt and you are a farmer). Senior tax rebate Form 1099-C. Senior tax rebate   If a Federal Government agency, financial institution, or credit union cancels or forgives a debt you owe of $600 or more, you will receive a Form 1099-C, Cancellation of Debt. Senior tax rebate The amount of the canceled debt is shown in box 2. Senior tax rebate Interest included in canceled debt. Senior tax rebate   If any interest is forgiven and included in the amount of canceled debt in box 2, the amount of interest also will be shown in box 3. Senior tax rebate Whether or not you must include the interest portion of the canceled debt in your income depends on whether the interest would be deductible when you paid it. Senior tax rebate See Deductible debt under Exceptions, later. Senior tax rebate   If the interest would not be deductible (such as interest on a personal loan), include in your income the amount from Form 1099-C, box 2. Senior tax rebate If the interest would be deductible (such as on a business loan), include in your income the net amount of the canceled debt (the amount shown in box 2 less the interest amount shown in box 3). Senior tax rebate Discounted mortgage loan. Senior tax rebate   If your financial institution offers a discount for the early payment of your mortgage loan, the amount of the discount is canceled debt. Senior tax rebate You must include the canceled amount in your income. Senior tax rebate Mortgage relief upon sale or other disposition. Senior tax rebate   If you are personally liable for a mortgage (recourse debt), and you are relieved of the mortgage when you dispose of the property, you may realize gain or loss up to the fair market value of the property. Senior tax rebate To the extent the mortgage discharge exceeds the fair market value of the property, it is income from discharge of indebtedness unless it qualifies for exclusion under Excluded debt , later. Senior tax rebate Report any income from discharge of indebtedness on nonbusiness debt that does not qualify for exclusion as other income on Form 1040, line 21. Senior tax rebate    You may be able to exclude part of the mortgage relief on your principal residence. Senior tax rebate See Excluded debt, later. Senior tax rebate   If you are not personally liable for a mortgage (nonrecourse debt), and you are relieved of the mortgage when you dispose of the property (such as through foreclosure), that relief is included in the amount you realize. Senior tax rebate You may have a taxable gain if the amount you realize exceeds your adjusted basis in the property. Senior tax rebate Report any gain on nonbusiness property as a capital gain. Senior tax rebate   See Publication 4681 for more information. Senior tax rebate Stockholder debt. Senior tax rebate   If you are a stockholder in a corporation and the corporation cancels or forgives your debt to it, the canceled debt is a constructive distribution that is generally dividend income to you. Senior tax rebate For more information, see Publication 542, Corporations. Senior tax rebate   If you are a stockholder in a corporation and you cancel a debt owed to you by the corporation, you generally do not realize income. Senior tax rebate This is because the canceled debt is considered as a contribution to the capital of the corporation equal to the amount of debt principal that you canceled. Senior tax rebate Repayment of canceled debt. Senior tax rebate   If you included a canceled amount in your income and later pay the debt, you may be able to file a claim for refund for the year the amount was included in income. Senior tax rebate You can file a claim on Form 1040X if the statute of limitations for filing a claim is still open. Senior tax rebate The statute of limitations generally does not end until 3 years after the due date of your original return. Senior tax rebate Exceptions There are several exceptions to the inclusion of canceled debt in income. Senior tax rebate These are explained next. Senior tax rebate Student loans. Senior tax rebate   Certain student loans contain a provision that all or part of the debt incurred to attend the qualified educational institution will be canceled if you work for a certain period of time in certain professions for any of a broad class of employers. Senior tax rebate   You do not have income if your student loan is canceled after you agreed to this provision and then performed the services required. Senior tax rebate To qualify, the loan must have been made by: The Federal Government, a state or local government, or an instrumentality, agency, or subdivision thereof, A tax-exempt public benefit corporation that has assumed control of a state, county, or municipal hospital, and whose employees are considered public employees under state law, or An educational institution: Under an agreement with an entity described in (1) or (2) that provided the funds to the institution to make the loan, or As part of a program of the institution designed to encourage its students to serve in occupations with unmet needs or in areas with unmet needs and under which the services provided by the students (or former students) are for or under the direction of a governmental unit or a tax-exempt organization described in section 501(c)(3). Senior tax rebate   A loan to refinance a qualified student loan also will qualify if it was made by an educational institution or a qualified tax-exempt organization under its program designed as described in (3)(b) above. Senior tax rebate Education loan repayment assistance. Senior tax rebate   Education loan repayments made to you by the National Health Service Corps Loan Repayment Program (NHSC Loan Repayment Program), a state education loan repayment program eligible for funds under the Public Health Service Act, or any other state loan repayment or loan forgiveness program that is intended to provide for the increased availability of health services in underserved or health professional shortage areas are not taxable. Senior tax rebate    The provision relating to the “other state loan repayment or loan forgiveness program” was added to this exclusion for amounts received in tax years beginning after December 31, 2008. Senior tax rebate If you included these amounts in income in 2010, 2011, or 2012, you should file an amended tax return to exclude this income. Senior tax rebate See Form 1040X and its instructions for details on filing. Senior tax rebate Deductible debt. Senior tax rebate   You do not have income from the cancellation of a debt if your payment of the debt would be deductible. Senior tax rebate This exception applies only if you use the cash method of accounting. Senior tax rebate For more information, see chapter 5 of Publication 334, Tax Guide for Small Business. Senior tax rebate Price reduced after purchase. Senior tax rebate   In most cases, if the seller reduces the amount of debt you owe for property you purchased, you do not have income from the reduction. Senior tax rebate The reduction of the debt is treated as a purchase price adjustment and reduces your basis in the property. Senior tax rebate Excluded debt. Senior tax rebate   Do not include a canceled debt in your gross income in the following situations. Senior tax rebate The debt is canceled in a bankruptcy case under title 11 of the U. Senior tax rebate S. Senior tax rebate Code. Senior tax rebate See Publication 908, Bankruptcy Tax Guide. Senior tax rebate The debt is canceled when you are insolvent. Senior tax rebate However, you cannot exclude any amount of canceled debt that is more than the amount by which you are insolvent. Senior tax rebate See Publication 908. Senior tax rebate The debt is qualified farm debt and is canceled by a qualified person. Senior tax rebate See chapter 3 of Publication 225, Farmer's Tax Guide. Senior tax rebate The debt is qualified real property business debt. Senior tax rebate See chapter 5 of Publication 334. Senior tax rebate The cancellation is intended as a gift. Senior tax rebate The debt is qualified principal residence indebtedness. Senior tax rebate See Publication 525 for additional information. Senior tax rebate Host or Hostess If you host a party or event at which sales are made, any gift or gratuity you receive for giving the event is a payment for helping a direct seller make sales. Senior tax rebate You must report this item as income at its fair market value. Senior tax rebate Your out-of-pocket party expenses are subject to the 50% limit for meal and entertainment expenses. Senior tax rebate These expenses are deductible as miscellaneous itemized deductions subject to the 2%-of-AGI limit on Schedule A (Form 1040), but only up to the amount of income you receive for giving the party. Senior tax rebate For more information about the 50% limit for meal and entertainment expenses, see chapter 26. Senior tax rebate Life Insurance Proceeds Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price. Senior tax rebate This is true even if the proceeds were paid under an accident or health insurance policy or an endowment contract. Senior tax rebate However, interest income received as a result of life insurance proceeds may be taxable. Senior tax rebate Proceeds not received in installments. Senior tax rebate   If death benefits are paid to you in a lump sum or other than at regular intervals, include in your income only the benefits that are more than the amount payable to you at the time of the insured person's death. Senior tax rebate If the benefit payable at death is not specified, you include in your income the benefit payments that are more than the present value of the payments at the time of death. Senior tax rebate Proceeds received in installments. Senior tax rebate   If you receive life insurance proceeds in installments, you can exclude part of each installment from your income. Senior tax rebate   To determine the excluded part, divide the amount held by the insurance company (generally the total lump sum payable at the death of the insured person) by the number of installments to be paid. Senior tax rebate Include anything over this excluded part in your income as interest. Senior tax rebate Surviving spouse. Senior tax rebate   If your spouse died before October 23, 1986, and insurance proceeds paid to you because of the death of your spouse are received in installments, you can exclude up to $1,000 a year of the interest included in the installments. Senior tax rebate If you remarry, you can continue to take the exclusion. Senior tax rebate Surrender of policy for cash. Senior tax rebate   If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. Senior tax rebate In most cases, your cost (or investment in the contract) is the total of premiums that you paid for the life insurance policy, less any refunded premiums, rebates, dividends, or unrepaid loans that were not included in your income. Senior tax rebate    You should receive a Form 1099-R showing the total proceeds and the taxable part. Senior tax rebate Report these amounts on lines 16a and 16b of Form 1040 or lines 12a and 12b of Form 1040A. Senior tax rebate More information. Senior tax rebate   For more information, see Life Insurance Proceeds in Publication 525. Senior tax rebate Endowment Contract Proceeds An endowment contract is a policy under which you are paid a specified amount of money on a certain date unless you die before that date, in which case, the money is paid to your designated beneficiary. Senior tax rebate Endowment proceeds paid in a lump sum to you at maturity are taxable only if the proceeds are more than the cost of the policy. Senior tax rebate To determine your cost, subtract any amount that you previously received under the contract and excluded from your income from the total premiums (or other consideration) paid for the contract. Senior tax rebate Include the part of the lump sum payment that is more than your cost in your income. Senior tax rebate Accelerated Death Benefits Certain amounts paid as accelerated death benefits under a life insurance contract or viatical settlement before the insured's death are excluded from income if the insured is terminally or chronically ill. Senior tax rebate Viatical settlement. Senior tax rebate   This is the sale or assignment of any part of the death benefit under a life insurance contract to a viatical settlement provider. Senior tax rebate A viatical settlement provider is a person who regularly engages in the business of buying or taking assignment of life insurance contracts on the lives of insured individuals who are terminally or chronically ill and who meets the requirements of section 101(g)(2)(B) of the Internal Revenue Code. Senior tax rebate Exclusion for terminal illness. Senior tax rebate    Accelerated death benefits are fully excludable if the insured is a terminally ill individual. Senior tax rebate This is a person who has been certified by a physician as having an illness or physical condition that can reasonably be expected to result in death within 24 months from the date of the certification. Senior tax rebate Exclusion for chronic illness. Senior tax rebate    If the insured is a chronically ill individual who is not terminally ill, accelerated death benefits paid on the basis of costs incurred for qualified long-term care services are fully excludable. Senior tax rebate Accelerated death benefits paid on a per diem or other periodic basis are excludable up to a limit. Senior tax rebate This limit applies to the total of the accelerated death benefits and any periodic payments received from long-term care insurance contracts. Senior tax rebate For information on the limit and the definitions of chronically ill individual, qualified long-term care services, and long-term care insurance contracts, see Long-Term Care Insurance Contracts under Sickness and Injury Benefits in Publication 525. Senior tax rebate Exception. Senior tax rebate   The exclusion does not apply to any amount paid to a person (other than the insured) who has an insurable interest in the life of the insured because the insured: Is a director, officer, or employee of the person, or Has a financial interest in the person's business. Senior tax rebate Form 8853. Senior tax rebate   To claim an exclusion for accelerated death benefits made on a per diem or other periodic basis, you must file Form 8853, Archer MSAs and Long-Term Care Insurance Contracts, with your return. Senior tax rebate You do not have to file Form 8853 to exclude accelerated death benefits paid on the basis of actual expenses incurred. Senior tax rebate Public Safety Officer Killed in the Line of Duty If you are a survivor of a public safety officer who was killed in the line of duty, you may be able to exclude from income certain amounts you receive. Senior tax rebate For this purpose, the term public safety officer includes law enforcement officers, firefighters, chaplains, and rescue squad and ambulance crew members. Senior tax rebate For more information, see Publication 559, Survivors, Executors, and Administrators. Senior tax rebate Partnership Income A partnership generally is not a taxable entity. Senior tax rebate The income, gains, losses, deductions, and credits of a partnership are passed through to the partners based on each partner's distributive share of these items. Senior tax rebate Schedule K-1 (Form 1065). Senior tax rebate    Although a partnership generally pays no tax, it must file an information return on Form 1065, U. Senior tax rebate S. Senior tax rebate Return of Partnership Income, and send Schedule K-1 (Form 1065) to each partner. Senior tax rebate In addition, the partnership will send each partner a copy of the Partner's Instructions for Schedule K-1 (Form 1065) to help each partner report his or her share of the partnership's income, deductions, credits, and tax preference items. Senior tax rebate Keep Schedule K-1 (Form 1065) for your records. Senior tax rebate Do not attach it to your Form 1040, unless you are specifically required to do so. Senior tax rebate For more information on partnerships, see Publication 541, Partnerships. Senior tax rebate Qualified joint venture. Senior tax rebate   If you and your spouse each materially participate as the only members of a jointly owned and operated business, and you file a joint return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership. Senior tax rebate To make this election, you must divide all items of income, gain, loss, deduction, and credit attributable to the business between you and your spouse in accordance with your respective interests in the venture. Senior tax rebate For further information on how to make the election and which schedule(s) to file, see the instructions for your individual tax return. Senior tax rebate S Corporation Income In most cases, an S corporation does not pay tax on its income. Senior tax rebate Instead, the income, losses, deductions, and credits of the corporation are passed through to the shareholders based on each shareholder's pro rata share. Senior tax rebate Schedule K-1 (Form 1120S). Senior tax rebate   An S corporation must file a return on Form 1120S, U. Senior tax rebate S. Senior tax rebate Income Tax Return for an S Corporation, and send Schedule K-1 (Form 1120S) to each shareholder. Senior tax rebate In addition, the S corporation will send each shareholder a copy of the Shareholder's Instructions for Schedule K-1 (Form 1120S) to help each shareholder report his or her share of the S corporation's income, losses, credits, and deductions. Senior tax rebate Keep Schedule K-1 (Form 1120S) for your records. Senior tax rebate Do not attach it to your Form 1040, unless you are specifically required to do so. Senior tax rebate For more information on S corporations and their shareholders, see the Instructions for Form 1120S. Senior tax rebate Recoveries A recovery is a return of an amount you deducted or took a credit for in an earlier year. Senior tax rebate The most common recoveries are refunds, reimbursements, and rebates of deductions itemized on Schedule A (Form 1040). Senior tax rebate You also may have recoveries of non-itemized deductions (such as payments on previously deducted bad debts) and recoveries of items for which you previously claimed a tax credit. Senior tax rebate Tax benefit rule. Senior tax rebate   You must include a recovery in your income in the year you receive it up to the amount by which the deduction or credit you took for the recovered amount reduced your tax in the earlier year. Senior tax rebate For this purpose, any increase to an amount carried over to the current year that resulted from the deduction or credit is considered to have reduced your tax in the earlier year. Senior tax rebate For more information, see Publication 525. Senior tax rebate Federal income tax refund. Senior tax rebate   Refunds of federal income taxes are not included in your income because they are never allowed as a deduction from income. Senior tax rebate State tax refund. Senior tax rebate   If you received a state or local income tax refund (or credit or offset) in 2013, you generally must include it in income if you deducted the tax in an earlier year. Senior tax rebate The payer should send Form 1099-G, Certain Government Payments, to you by January 31, 2014. Senior tax rebate The IRS also will receive a copy of the Form 1099-G. Senior tax rebate If you file Form 1040, use the State and Local Income Tax Refund Worksheet in the 2013 Form 1040 instructions for line 10 to figure the amount (if any) to include in your income. Senior tax rebate See Publication 525 for when you must use another worksheet. Senior tax rebate   If you could choose to deduct for a tax year either: State and local income taxes, or State and local general sales taxes, then the maximum refund that you may have to include in income is limited to the excess of the tax you chose to deduct for that year over the tax you did not choose to deduct for that year. Senior tax rebate For examples, see Publication 525. Senior tax rebate Mortgage interest refund. Senior tax rebate    If you received a refund or credit in 2013 of mortgage interest paid in an earlier year, the amount should be shown in box 3 of your Form 1098, Mortgage Interest Statement. Senior tax rebate Do not subtract the refund amount from the interest you paid in 2013. Senior tax rebate You may have to include it in your income under the rules explained in the following discussions. Senior tax rebate Interest on recovery. Senior tax rebate   Interest on any of the amounts you recover must be reported as interest income in the year received. Senior tax rebate For example, report any interest you received on state or local income tax refunds on Form 1040, line 8a. Senior tax rebate Recovery and expense in same year. Senior tax rebate   If the refund or other recovery and the expense occur in the same year, the recovery reduces the deduction or credit and is not reported as income. Senior tax rebate Recovery for 2 or more years. Senior tax rebate   If you receive a refund or other recovery that is for amounts you paid in 2 or more separate years, you must allocate, on a pro rata basis, the recovered amount between the years in which you paid it. Senior tax rebate This allocation is necessary to determine the amount of recovery from any earlier years and to determine the amount, if any, of your allowable deduction for this item for the current year. Senior tax rebate For information on how to compute the allocation, see Recoveries in Publication 525. Senior tax rebate Itemized Deduction Recoveries If you recover any amount that you deducted in an earlier year on Schedule A (Form 1040), you generally must include the full amount of the recovery in your income in the year you receive it. Senior tax rebate Where to report. Senior tax rebate   Enter your state or local income tax refund on Form 1040, line 10, and the total of all other recoveries as other income on Form 1040, line 21. Senior tax rebate You cannot use Form 1040A or Form 1040EZ. Senior tax rebate Standard deduction limit. Senior tax rebate   You generally are allowed to claim the standard deduction if you do not itemize your deductions. Senior tax rebate Only your itemized deductions that are more than your standard deduction are subject to the recovery rule (unless you are required to itemize your deductions). Senior tax rebate If your total deductions on the earlier year return were not more than your income for that year, include in your income this year the lesser of: Your recoveries, or The amount by which your itemized deductions exceeded the standard deduction. Senior tax rebate Example. Senior tax rebate For 2012, you filed a joint return. Senior tax rebate Your taxable income was $60,000 and you were not entitled to any tax credits. Senior tax rebate Your standard deduction was $11,900, and you had itemized deductions of $14,000. Senior tax rebate In 2013, you received the following recoveries for amounts deducted on your 2012 return: Medical expenses $200 State and local income tax refund 400 Refund of mortgage interest 325 Total recoveries $925 None of the recoveries were more than the deductions taken for 2012. Senior tax rebate The difference between the state and local income tax you deducted and your local general sales tax was more than $400. Senior tax rebate Your total recoveries are less than the amount by which your itemized deductions exceeded the standard deduction ($14,000 − 11,900 = $2,100), so you must include your total recoveries in your income for 2013. Senior tax rebate Report the state and local income tax refund of $400 on Form 1040, line 10, and the balance of your recoveries, $525, on Form 1040, line 21. Senior tax rebate Standard deduction for earlier years. Senior tax rebate   To determine if amounts recovered in 2013 must be included in your income, you must know the standard deduction for your filing status for the year the deduction was claimed. Senior tax rebate Look in the instructions for your tax return from prior years to locate the standard deduction for the filing status for that prior year. Senior tax rebate Example. Senior tax rebate You filed a joint return on Form 1040 for 2012 with taxable income of $45,000. Senior tax rebate Your itemized deductions were $12,350. Senior tax rebate The standard deduction that you could have claimed was $11,900. Senior tax rebate In 2013, you recovered $2,100 of your 2012 itemized deductions. Senior tax rebate None of the recoveries were more than the actual deductions for 2012. Senior tax rebate Include $450 of the recoveries in your 2013 income. Senior tax rebate This is the smaller of your recoveries ($2,100) or the amount by which your itemized deductions were more than the standard deduction ($12,350 − $11,900 = $450). Senior tax rebate Recovery limited to deduction. Senior tax rebate   You do not include in your income any amount of your recovery that is more than the amount you deducted in the earlier year. Senior tax rebate The amount you include in your income is limited to the smaller of: The amount deducted on Schedule A (Form 1040), or The amount recovered. Senior tax rebate Example. Senior tax rebate During 2012 you paid $1,700 for medical expenses. Senior tax rebate From this amount you subtracted $1,500, which was 7. Senior tax rebate 5% of your adjusted gross income. Senior tax rebate Your actual medical expense deduction was $200. Senior tax rebate In 2013, you received a $500 reimbursement from your medical insurance for your 2012 expenses. Senior tax rebate The only amount of the $500 reimbursement that must be included in your income for 2013 is $200—the amount actually deducted. Senior tax rebate Other recoveries. Senior tax rebate   See Recoveries in Publication 525 if: You have recoveries of items other than itemized deductions, or You received a recovery for an item for which you claimed a tax credit (other than investment credit or foreign tax credit) in a prior year. Senior tax rebate Rents from Personal Property If you rent out personal property, such as equipment or vehicles, how you report your income and expenses is in most cases determined by: Whether or not the rental activity is a business, and Whether or not the rental activity is conducted for profit. Senior tax rebate In most cases, if your primary purpose is income or profit and you are involved in the rental activity with continuity and regularity, your rental activity is a business. Senior tax rebate See Publication 535, Business Expenses, for details on deducting expenses for both business and not-for-profit activities. Senior tax rebate Reporting business income and expenses. Senior tax rebate    If you are in the business of renting personal property, report your income and expenses on Schedule C or Schedule C-EZ (Form 1040). Senior tax rebate The form instructions have information on how to complete them. Senior tax rebate Reporting nonbusiness income. Senior tax rebate   If you are not in the business of renting personal property, report your rental income on Form 1040, line 21. Senior tax rebate List the type and amount of the income on the dotted line next to line 21. Senior tax rebate Reporting nonbusiness expenses. Senior tax rebate   If you rent personal property for profit, include your rental expenses in the total amount you enter on Form 1040, line 36. Senior tax rebate Also enter the amount and “PPR” on the dotted line next to line 36. Senior tax rebate   If you do not rent personal property for profit, your deductions are limited and you cannot report a loss to offset other income. Senior tax rebate See Activity not for profit , under Other Income, later. Senior tax rebate Repayments If you had to repay an amount that you included in your income in an earlier year, you may be able to deduct the amount repaid from your income for the year in which you repaid it. Senior tax rebate Or, if the amount you repaid is more than $3,000, you may be able to take a credit against your tax for the year in which you repaid it. Senior tax rebate Generally, you can claim a deduction or credit only if the repayment qualifies as an expense or loss incurred in your trade or business or in a for-profit transaction. Senior tax rebate Type of deduction. Senior tax rebate   The type of deduction you are allowed in the year of repayment depends on the type of income you included in the earlier year. Senior tax rebate You generally deduct the repayment on the same form or schedule on which you previously reported it as income. Senior tax rebate For example, if you reported it as self-employment income, deduct it as a business expense on Schedule C or Schedule C-EZ (Form 1040) or Schedule F (Form 1040). Senior tax rebate If you reported it as a capital gain, deduct it as a capital loss as explained in the Instructions for Schedule D (Form 1040). Senior tax rebate If you reported it as wages, unemployment compensation, or other nonbusiness income, deduct it as a miscellaneous itemized deduction on Schedule A (Form 1040). Senior tax rebate Repaid social security benefits. Senior tax rebate   If you repaid social security benefits or equivalent railroad retirement benefits, see Repayment of benefits in chapter 11. Senior tax rebate Repayment of $3,000 or less. Senior tax rebate   If the amount you repaid was $3,000 or less, deduct it from your income in the year you repaid it. Senior tax rebate If you must deduct it as a miscellaneous itemized deduction, enter it on Schedule A (Form 1040), line 23. Senior tax rebate Repayment over $3,000. Senior tax rebate   If the amount you repaid was more than $3,000, you can deduct the repayment (as explained under Type of deduction , earlier). Senior tax rebate However, you can choose instead to take a tax credit for the year of repayment if you included the income under a claim of right. Senior tax rebate This means that at the time you included the income, it appeared that you had an unrestricted right to it. Senior tax rebate If you qualify for this choice, figure your tax under both methods and compare the results. Senior tax rebate Use the method (deduction or credit) that results in less tax. Senior tax rebate When determining whether the amount you repaid was more or less than $3,000, consider the total amount being repaid on the return. Senior tax rebate Each instance of repayment is not considered separately. Senior tax rebate Method 1. Senior tax rebate   Figure your tax for 2013 claiming a deduction for the repaid amount. Senior tax rebate If you must deduct it as a miscellaneous itemized deduction, enter it on Schedule A (Form 1040), line 28. Senior tax rebate Method 2. Senior tax rebate   Figure your tax for 2013 claiming a credit for the repaid amount. Senior tax rebate Follow these steps. Senior tax rebate Figure your tax for 2013 without deducting the repaid amount. Senior tax rebate Refigure your tax from the earlier year without including in income the amount you repaid in 2013. Senior tax rebate Subtract the tax in (2) from the tax shown on your return for the earlier year. Senior tax rebate This is the credit. Senior tax rebate Subtract the answer in (3) from the tax for 2013 figured without the deduction (Step 1). Senior tax rebate   If method 1 results in less tax, deduct the amount repaid. Senior tax rebate If method 2 results in less tax, claim the credit figured in (3) above on Form 1040, line 71, by adding the amount of the credit to any other credits on this line, and entering “I. Senior tax rebate R. Senior tax rebate C. Senior tax rebate 1341” in the column to the right of line 71. Senior tax rebate   An example of this computation can be found in Publication 525. Senior tax rebate Repaid wages subject to social security and Medicare taxes. Senior tax rebate   If you had to repay an amount that you included in your wages or compensation in an earlier year on which social security, Medicare, or tier 1 RRTA taxes were paid, ask your employer to refund the excess amount to you. Senior tax rebate If the employer refuses to refund the taxes, ask for a statement indicating the amount of the overcollection to support your claim. Senior tax rebate File a claim for refund using Form 843, Claim for Refund and Request for Abatement. Senior tax rebate Repaid wages subject to Additional Medicare Tax. Senior tax rebate   Employers cannot make an adjustment or file a claim for refund for Additional Medicare Tax withholding when there is a repayment of wages received by an employee in a prior year because the employee determines liability for Additional Medicare Tax on the employee's income tax return for the prior year. Senior tax rebate If you had to repay an amount that you included in your wages or compensation in an earlier year, and on which Additional Medicare Tax was paid, you may be able to recover the Additional Medicare Tax paid on the amount. Senior tax rebate To recover Additional Medicare Tax on the repaid wages or compensation, you must file Form 1040X, Amended U. Senior tax rebate S. Senior tax rebate Individual Income Tax Return, for the prior year in which the wages or compensation were originally received. Senior tax rebate See the Instructions for Form 1040X. Senior tax rebate Royalties Royalties from copyrights, patents, and oil, gas, and mineral properties are taxable as ordinary income. Senior tax rebate In most cases you report royalties in Part I of Schedule E (Form 1040). Senior tax rebate However, if you hold an operating oil, gas, or mineral interest or are in business as a self-employed writer, inventor, artist, etc. Senior tax rebate , report your income and expenses on Schedule C or Schedule C-EZ (Form 1040). Senior tax rebate Copyrights and patents. Senior tax rebate   Royalties from copyrights on literary, musical, or artistic works, and similar property, or from patents on inventions, are amounts paid to you for the right to use your work over a specified period of time. Senior tax rebate Royalties generally are based on the number of units sold, such as the number of books, tickets to a performance, or machines sold. Senior tax rebate Oil, gas, and minerals. Senior tax rebate   Royalty income from oil, gas, and mineral properties is the amount you receive when natural resources are extracted from your property. Senior tax rebate The royalties are based on units, such as barrels, tons, etc. Senior tax rebate , and are paid to you by a person or company who leases the property from you. Senior tax rebate Depletion. Senior tax rebate   If you are the owner of an economic interest in mineral deposits or oil and gas wells, you can recover your investment through the depletion allowance. Senior tax rebate For information on this subject, see chapter 9 of Publication 535. Senior tax rebate Coal and iron ore. Senior tax rebate   Under certain circumstances, you can treat amounts you receive from the disposal of coal and iron ore as payments from the sale of a capital asset, rather than as royalty income. Senior tax rebate For information about gain or loss from the sale of coal and iron ore, see Publication 544. Senior tax rebate Sale of property interest. Senior tax rebate   If you sell your complete interest in oil, gas, or mineral rights, the amount you receive is considered payment for the sale of property used in a trade or business under section 1231, not royalty income. Senior tax rebate Under certain circumstances, the sale is subject to capital gain or loss treatment as explained in the Instructions for Schedule D (Form 1040). Senior tax rebate For more information on selling section 1231 property, see chapter 3 of Publication 544. Senior tax rebate   If you retain a royalty, an overriding royalty, or a net profit interest in a mineral property for the life of the property, you have made a lease or a sublease, and any cash you receive for the assignment of other interests in the property is ordinary income subject to a depletion allowance. Senior tax rebate Part of future production sold. Senior tax rebate   If you own mineral property but sell part of the future production, in most cases you treat the money you receive from the buyer at the time of the sale as a loan from the buyer. Senior tax rebate Do not include it in your income or take depletion based on it. Senior tax rebate   When production begins, you include all the proceeds in your income, deduct all the production expenses, and deduct depletion from that amount to arrive at your taxable income from the property. Senior tax rebate Unemployment Benefits The tax treatment of unemployment benefits you receive depends on the type of program paying the benefits. Senior tax rebate Unemployment compensation. Senior tax rebate   You must include in income all unemployment compensation you receive. Senior tax rebate You should receive a Form 1099-G showing in box 1 the total unemployment compensation paid to you. Senior tax rebate In most cases, you enter unemployment compensation on line 19 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ. Senior tax rebate Types of unemployment compensation. Senior tax rebate   Unemployment compensation generally includes any amount received under an unemployment compensation law of the United States or of a state. Senior tax rebate It includes the following benefits. Senior tax rebate Benefits paid by a state or the District of Columbia from the Federal Unemployment Trust Fund. Senior tax rebate State unemployment insurance benefits. Senior tax rebate Railroad unemployment compensation benefits. Senior tax rebate Disability payments from a government program paid as a substitute for unemployment compensation. Senior tax rebate (Amounts received as workers' compensation for injuries or illness are not unemployment compensation. Senior tax rebate See chapter 5 for more information. Senior tax rebate ) Trade readjustment allowances under the Trade Act of 1974. Senior tax rebate Unemployment assistance under the Disaster Relief and Emergency Assistance Act. Senior tax rebate Unemployment assistance under the Airline Deregulation Act of 1974 Program. Senior tax rebate Governmental program. Senior tax rebate   If you contribute to a governmental unemployment compensation program and your contributions are not deductible, amounts you receive under the program are not included as unemployment compensation until you recover your contributions. Senior tax rebate If you deducted all of your contributions to the program, the entire amount you receive under the program is included in your income. Senior tax rebate Repayment of unemployment compensation. Senior tax rebate   If you repaid in 2013 unemployment compensation you received in 2013, subtract the amount you repaid from the total amount you received and enter the difference on line 19 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ. Senior tax rebate On the dotted line next to your entry enter “Repaid” and the amount you repaid. Senior tax rebate If you repaid unemployment compensation in 2013 that you included in income in an earlier year, you can deduct the amount repaid on Schedule A (Form 1040), line 23, if you itemize deductions. Senior tax rebate If the amount is more than $3,000, see Repayments , earlier. Senior tax rebate Tax withholding. Senior tax rebate   You can choose to have federal income tax withheld from your unemployment compensation. Senior tax rebate To make this choice, complete Form W-4V, Voluntary Withholding Request, and give it to the paying office. Senior tax rebate Tax will be withheld at 10% of your payment. Senior tax rebate    If you do not choose to have tax withheld from your unemployment compensation, you may be liable for estimated tax. Senior tax rebate If you do not pay enough tax, either through withholding or estimated tax, or a combination of both, you may have to pay a penalty. Senior tax rebate For more information on estimated tax, see chapter 4. Senior tax rebate Supplemental unemployment benefits. Senior tax rebate   Benefits received from an employer-financed fund (to which the employees did not contribute) are not unemployment compensation. Senior tax rebate They are taxable as wages and are subject to withholding for income tax. Senior tax rebate They may be subject to social security and Medicare taxes. Senior tax rebate For more information, see Supplemental Unemployment Benefits in section 5 of Publication 15-A, Employer's Supplemental Tax Guide. Senior tax rebate Report these payments on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ. Senior tax rebate Repayment of benefits. Senior tax rebate   You may have to repay some of your supplemental unemployment benefits to qualify for trade readjustment allowances under the Trade Act of 1974. Senior tax rebate If you repay supplemental unemployment benefits in the same year you receive them, reduce the total benefits by the amount you repay. Senior tax rebate If you repay the benefits in a later year, you must include the full amount of the benefits received in your income for the year you received them. Senior tax rebate   Deduct the repayment in the later year as an adjustment to gross income on Form 1040. Senior tax rebate (You cannot use Form 1040A or Form 1040EZ. Senior tax rebate ) Include the repayment on Form 1040, line 36, and enter “Sub-Pay TRA” and the amount on the dotted line next to line 36. Senior tax rebate If the amount you repay in a later year is more than $3,000, you may be able to take a credit against your tax for the later year instead of deducting the amount repaid. Senior tax rebate For more information on this, see Repayments , earlier. Senior tax rebate Private unemployment fund. Senior tax rebate   Unemployment benefit payments from a private (nonunion) fund to which you voluntarily contribute are taxable only if the amounts you receive are more than your total payments into the fund. Senior tax rebate Report the taxable amount on Form 1040, line 21. Senior tax rebate Payments by a union. Senior tax rebate   Benefits paid to you as an unemployed member of a union from regular union dues are included in your income on Form 1040, line 21. Senior tax rebate However, if you contribute to a special union fund and your payments to the fund are not deductible, the unemployment benefits you receive from the fund are includible in your income only to the extent they are more than your contributions. Senior tax rebate Guaranteed annual wage. Senior tax rebate   Payments you receive from your employer during periods of unemployment, under a union agreement that guarantees you full pay during the year, are taxable as wages. Senior tax rebate Include them on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ. Senior tax rebate State employees. Senior tax rebate   Payments similar to a state's unemployment compensation may be made by the state to its employees who are not covered by the state's unemployment compensation law. Senior tax rebate Although the payments are fully taxable, do not report them as unemployment compensation. Senior tax rebate Report these payments on Form 1040, line 21. Senior tax rebate Welfare and Other Public Assistance Benefits Do not include in your income governmental benefit payments from a public welfare fund based upon need, such as payments to blind individuals under a state public assistance law. Senior tax rebate Payments from a state fund for the victims of crime should not be included in the victims' incomes if they are in the nature of welfare payments. Senior tax rebate Do not deduct medical expenses that are reimbursed by such a fund. Senior tax rebate You must include in your income any welfare payments that are compensation for services or that are obtained fraudulently. Senior tax rebate Reemployment Trade Adjustment Assistance (RTAA) payments. Senior tax rebate   RTAA payments received from a state must be included in your income. Senior tax rebate The state must send you Form 1099-G to advise you of the amount you should include in income. Senior tax rebate The amount should be reported on Form 1040, line 21. Senior tax rebate Persons with disabilities. Senior tax rebate   If you have a disability, you must include in income compensation you receive for services you perform unless the compensation is otherwise excluded. Senior tax rebate However, you do not include in income the value of goods, services, and cash that you receive, not in return for your services, but for your training and rehabilitation because you have a disability. Senior tax rebate Excludable amounts include payments for transportation and attendant care, such as interpreter services for the deaf, reader services for the blind, and services to help individuals with an intellectual disability do their work. Senior tax rebate Disaster relief grants. Senior tax rebate    Do not include post-disaster grants received under the Robert T. Senior tax rebate Stafford Disaster Relief and Emergency Assistance Act in your income if the grant payments are made to help you meet necessary expenses or serious needs for medical, dental, housing, personal property, transportation, child care, or funeral expenses. Senior tax rebate Do not deduct casualty losses or medical expenses that are specifically reimbursed by these disaster relief grants. Senior tax rebate If you have deducted a casualty loss for the loss of your personal residence and you later receive a disaster relief grant for the loss of the same residence, you may have to include part or all of the grant in your taxable income. Senior tax rebate See Recoveries , earlier. Senior tax rebate Unemployment assistance payments under the Act are taxable unemployment compensation. Senior tax rebate See Unemployment compensation under Unemployment Benefits, earlier. Senior tax rebate Disaster relief payments. Senior tax rebate   You can exclude from income any amount you receive that is a qualified disaster relief payment. Senior tax rebate A qualified disaster relief payment is an amount paid to you: To reimburse or pay reasonable and necessary personal, family, living, or funeral expenses that result from a qualified disaster; To reimburse or pay reasonable and necessary expenses incurred for the repair or rehabilitation of your home or repair or replacement of its contents to the extent it is due to a qualified disaster; By a person engaged in the furnishing or sale of transportation as a common carrier because of the death or personal physical injuries incurred as a result of a qualified disaster; or By a federal, state, or local government, or agency, or instrumentality in connection with a qualified disaster in order to promote the general welfare. Senior tax rebate You can exclude this amount only to the extent any expense it pays for is not paid for by insurance or otherwise. Senior tax rebate The exclusion does not apply if you were a participant or conspirator in a terrorist action or a representative of one. Senior tax rebate   A qualified disaster is: A disaster which results from a terrorist or military action; A federally declared disaster; or A disaster which results from an accident involving a common carrier, or from any other event, which is determined to be catastrophic by the Secretary of the Treasury or his or her delegate. Senior tax rebate   For amounts paid under item (4), a disaster is qualified if it is determined by an applicable federal, state, or local authority to warrant assistance from the federal, state, or local government, agency, or instrumentality. Senior tax rebate Disaster mitigation payments. Senior tax rebate   You also can exclude from income any amount you receive that is a qualified disaster mitigation payment. Senior tax rebate Qualified disaster mitigation payments are also most commonly paid to you in the period immediately following damage to property as a result of a natural disaster. Senior tax rebate However, disaster mitigation payments are used to mitigate (reduce the severity of) potential damage from future natural disasters. Senior tax rebate They are paid to you through state and local governments based on the provisions of the Robert T. Senior tax rebate Stafford Disaster Relief and Emergency Assistance Act or the National Flood Insurance Act. Senior tax rebate   You cannot increase the basis or adjusted basis of your property for improvements made with nontaxable disaster mitigation payments. Senior tax rebate Home Affordable Modification Program (HAMP). Senior tax rebate   If you benefit from Pay-for-Performance Success Payments under HAMP, the payments are not taxable. Senior tax rebate Mortgage assistance payments under section 235 of the National Housing Act. Senior tax rebate   Payments made under section 235 of the National Housing Act for mortgage assistance are not included in the homeowner's income. Senior tax rebate Interest paid for the homeowner under the mortgage assistance program cannot be deducted. Senior tax rebate Medicare. Senior tax rebate   Medicare benefits received under title XVIII of the Social Security Act are not includible in the gross income of the individuals for whom they are paid. Senior tax rebate This includes basic (part A (Hospital Insurance Benefits for the Aged)) and supplementary (part B (Supplementary Medical Insurance Benefits for the Aged)). Senior tax rebate Old-age, survivors, and disability insurance benefits (OASDI). Senior tax rebate   Generally, OASDI payments under section 202 of title II of the Social Security Act are not includible in the gross income of the individuals to whom they are paid. Senior tax rebate This applies to old-age insurance benefits, and insurance benefits for wives, husbands, children, widows, widowers, mothers and fathers, and parents, as well as the lump-sum death payment. Senior tax rebate Nutrition Program for the Elderly. Senior tax rebate    Food benefits you receive under the Nutrition Program for the Elderly are not taxable. Senior tax rebate If you prepare and serve free meals for the program, include in your income as wages the cash pay you receive, even if you are also eligible for food benefits. Senior tax rebate Payments to reduce cost of winter energy. Senior tax rebate   Payments made by a state to qualified people to reduce their cost of winter energy use are not taxable. Senior tax rebate Other Income The following brief discussions are arranged in alphabetical order. Senior tax rebate Other income items briefly discussed below are referenced to publications which provide more topical information. Senior tax rebate Activity not for profit. Senior tax rebate   You must include on your return income from an activity from which you do not expect to make a profit. Senior tax rebate An example of this type of activity is a hobby or a farm you operate mostly for recreation and pleasure. Senior tax rebate Enter this income on Form 1040, line 21. Senior tax rebate Deductions for expenses related to the activity are limited. Senior tax rebate They cannot total more than the income you report and can be taken only if you itemize deductions on Schedule A (Form 1040). Senior tax rebate See Not-for-Profit Activities in chapter 1 of Publication 535 for information on whether an activity is considered carried on for a profit. Senior tax rebate Alaska Permanent Fund dividend. Senior tax rebate   If you received a payment from Alaska's mineral income fund (Alaska Permanent Fund dividend), report it as income on line 21 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ. Senior tax rebate The state of Alaska sends each recipient a document that shows the amount of the payment with the check. Senior tax rebate The amount also is reported to IRS. Senior tax rebate Alimony. Senior tax rebate   Include in your income on Form 1040, line 11, any alimony payments you receive. Senior tax rebate Amounts you receive for child support are not income to you. Senior tax rebate Alimony and child support payments are discussed in chapter 18. Senior tax rebate Bribes. Senior tax rebate   If you receive a bribe, include it in your income. Senior tax rebate Campaign contributions. Senior tax rebate   These contributions are not income to a candidate unless they are diverted to his or her personal use. Senior tax rebate To be exempt from tax, the contributions must be spent for campaign purposes or kept in a fund for use in future campaigns. Senior tax rebate However, interest earned on bank deposits, dividends received on contributed securities, and net gains realized on sales of contributed securities are taxable and must be reported on Form 1120-POL, U. Senior tax rebate S. Senior tax rebate Income Tax Return for Certain Political Organizations. Senior tax rebate Excess campaign funds transferred to an office account must be included in the officeholder's income on Form 1040, line 21, in the year transferred. Senior tax rebate Car pools. Senior tax rebate   Do not include in your income amounts you receive from the passengers for driving a car in a car pool to and from work. Senior tax rebate These amounts are considered reimbursement for your expenses. Senior tax rebate However, this rule does not apply if you have developed car pool arrangements into a profit-making business of transporting workers for hire. Senior tax rebate Cash rebates. Senior tax rebate   A cash rebate you receive from a dealer or manufacturer of an item you buy is not income, but you must reduce your basis by the amount of the rebate. Senior tax rebate Example. Senior tax rebate You buy a new car for $24,000 cash and receive a $2,000 rebate check from the manufacturer. Senior tax rebate The $2,000 is not income to you. Senior tax rebate Your basis in the car is $22,000. Senior tax rebate This is the basis on which you figure gain or loss if you sell the car and depreciation if you use it for business. Senior tax rebate Casualty insurance and other reimbursements. Senior tax rebate   You generally should not report these reimbursements on your return unless you are figuring gain or loss from the casualty or theft. Senior tax rebate See chapter 25 for more information. Senior tax rebate Child support payments. Senior tax rebate   You should not report these payments on your return. Senior tax rebate See chapter 18 for more information. Senior tax rebate Court awards and damages. Senior tax rebate   To determine if settlement amounts you receive by compromise or judgment must be included in your income, you must consider the item that the settlement replaces. Senior tax rebate The character of the income as ordinary income or capital gain depends on the nature of the underlying claim. Senior tax rebate Include the following as ordinary income. Senior tax rebate Interest on any award. Senior tax rebate Compensation for lost wages or lost profits in most cases. Senior tax rebate Punitive damages, in most cases. Senior tax rebate It does not matter if they relate to a physical injury or physical sickness. Senior tax rebate Amounts received in settlement of pension rights (if you did not contribute to the plan). Senior tax rebate Damages for: Patent or copyright infringement, Breach of contract, or Interference with business operations. Senior tax rebate Back pay and damages for emotional distress received to satisfy a claim under title VII of the Civil Rights Act of 1964. Senior tax rebate Attorney fees and costs (including contingent fees) where the underlying recovery is included in gross income. Senior tax rebate   Do not include in your income compensatory damages for personal physical injury or physical sickness (whether received in a lump sum or installments). Senior tax rebate Emotional distress. Senior tax rebate   Emotional distress itself is not a physical injury or physical sickness, but damages you receive for emotional distress due to a physical injury or sickness are treated as received for the physical injury or sickness. Senior tax rebate Do not include them in your income. Senior tax rebate   If the emotional distress is due to a personal injury that is not due to a physical injury or sickness (for example, employment discrimination or injury to reputation), you must include the damages in your income, except for any damages you receive for medical care due to that emotional distress. Senior tax rebate Emotional distress includes physical symptoms that result from emotional distress, such as headaches, insomnia, and stomach disorders. Senior tax rebate Deduction for costs involved in unlawful discrimination suits. Senior tax rebate   You may be able to deduct attorney fees and court costs paid to recover a judgment or settlement for a claim of unlawful discrimination under various provisions of federal, state, and local law listed in Internal Revenue Code section 62(e), a claim against the United States government, or a claim under section 1862(b)(3)(A) of the Social Security Act. Senior tax rebate For more information, see Publication 525. Senior tax rebate Credit card insurance. Senior tax rebate   In most cases, if you receive benefits under a credit card disability or unemployment insurance plan, the benefits are taxable to you. Senior tax rebate These plans make the minimum monthly payment on your credit card account if you cannot make the payment due to injury, illness, disability, or unemployment. Senior tax rebate Report on Form 1040, line 21, the amount of benefits you received during the year that is more than the amount of the premiums you paid during the year. Senior tax rebate Down payment assistance. Senior tax rebate   If you purchase a home and receive assistance from a nonprofit corporation to make the down payment, that assistance is not included in your income. Senior tax rebate If the corporation qualifies as a tax-exempt charitable organization, the assistance is treated as a gift and is included in your basis of the house. Senior tax rebate If the corporation does not qualify, the assistance is treated as a rebate or reduction of the purchase price and is not included in your basis. Senior tax rebate Employment agency fees. Senior tax rebate   If you get a job through an employment agency, and the fee is paid by your employer, the fee is not includible in your income if you are not liable for it. Senior tax rebate However, if you pay it and your employer reimburses you for it, it is includible in your income. Senior tax rebate Energy conservation subsidies. Senior tax rebate   You can exclude from gross income any subsidy provided, either directly or indirectly, by public utilities for the purchase or installation of an energy conservation measure for a dwelling unit. Senior tax rebate Energy conservation measure. Senior tax rebate   This includes installations or modifications that are primarily designed to reduce consumption of electricity or natural gas, or improve the management of energy demand. Senior tax rebate Dwelling unit. Senior tax rebate   This includes a house, apartment, condominium, mobile home, boat, or similar property. Senior tax rebate If a building or structure contains both dwelling and other units, any subsidy must be properly allocated. Senior tax rebate Estate and trust income. Senior tax rebate    An estate or trust, unlike a partnership, may have to pay federal income tax. Senior tax rebate If you are a beneficiary of an estate or trust, you may be taxed on your share of its income distributed or required to be distributed to you. Senior tax rebate However, there is never a double tax. Senior tax rebate Estates and trusts file their returns on Form 1041, U. Senior tax rebate S. Senior tax rebate Income Tax Return for Estates and Trusts, and your share of the income is reported to you on Schedule K-1 (Form 1041). Senior tax rebate Current income required to be distributed. Senior tax rebate   If you are the beneficiary of an estate or trust that must distribute all of its current income, you must report your share of the distributable net income, whether or not you actually received it. Senior tax rebate Current income not required to be distributed. Senior tax rebate    If you are the beneficiary of an estate or trust and the fiduciary has the choice of whether to distribute all or part of the current income, you must report: All income that is required to be distributed to you, whether or not it is actually distributed, plus All other amounts actually paid or credited to you, up to the amount of your share of distributable net income. Senior tax rebate How to report. Senior tax rebate   Treat each item of income the same way that the estate or trust would treat it. Senior tax rebate For example, if a trust's dividend income is distributed to you, you report the distribution as dividend income on your return. Senior tax rebate The same rule applies to distributions of tax-exempt interest and capital gains. Senior tax rebate   The fiduciary of the estate or trust must tell you the type of items making up your share of the estate or trust income and any credits you are allowed on your individual income tax return. Senior tax rebate Losses. Senior tax rebate   Losses of estates and trusts generally are not deductible by the beneficiaries. Senior tax rebate Grantor trust. Senior tax rebate   Income earned by a grantor trust is taxable to the grantor, not the beneficiary, if the grantor keeps certain control over the trust. Senior tax rebate (The grantor is the one who transferred property to the trust. Senior tax rebate ) This rule applies if the property (or income from the property) put into the trust will or may revert (be returned) to the grantor or the grantor's spouse. Senior tax rebate   Generally, a trust is a grantor trust if the grantor has a reversionary interest valued (at the date of transfer) at more than 5% of the value of the transferred property. Senior tax rebate Expenses paid by another. Senior tax rebate   If your personal expenses are paid for by another person, such as a corporation, the payment may be taxable to you depending upon your relationship with that person and the nature of the payment. Senior tax rebate But if the payment makes up for a loss caused by that person, and only restores you to the position you were in before the loss, the payment is not includible in your income. Senior tax rebate Fees for services. Senior tax rebate   Include all fees for your services in your income. Senior tax rebate Examples of these fees are amounts you receive for services you perform as: A corporate director, An executor, administrator, or personal representative of an estate, A manager of a trade or business you operated before declaring Chapter 11 bankruptcy, A notary public, or An election precinct official. Senior tax rebate Nonemployee compensation. Senior tax rebate   If you are not an employee and the fees for your services from the same payer total $600 or more for the year, you may receive a Form 1099-MISC. Senior tax rebate You may need to report your fees as self-employment income. Senior tax rebate See Self-Employed Persons , in chapter 1, for a discussion of when you are considered self-employed. Senior tax rebate Corporate director. Senior tax rebate   Corporate director fees are self-employment income. Senior tax rebate Report these payments on Schedule C or Schedule C-EZ (Form 1040). Senior tax rebate Personal representatives. Senior tax rebate   All personal representatives must include in their gross income fees paid to them from an estate. Senior tax rebate If you are not in the trade or business of being an executor (for instance, you are the executor of a friend's or relative's estate), report these fees on Form 1040, line 21. Senior tax rebate If you are in the trade or business of being an executor, report these fees as self-employment income on Schedule C or Schedule C-EZ (Form 1040). Senior tax rebate The fee is not includible in income if it is waived. Senior tax rebate Manager of trade or business for bankruptcy estate. Senior tax rebate   Include in your income all payments received from your bankruptcy estate for managing or operating a trade or business that you operated before you filed for bankruptcy. Senior tax rebate Report this income on Form 1040, line 21. Senior tax rebate Notary public. Senior tax rebate    Report payments for these services on Schedule C or Schedule C-EZ (Form 1040). Senior tax rebate These payments are not subject to self-employment tax. Senior tax rebate See the separate instructions for Schedule SE (Form 1040) for details. Senior tax rebate Election precinct official. Senior tax rebate    You should receive a Form W-2 showing payments for services performed as an election official or election worker. Senior tax rebate Report these payments on line 7 of Form 1040 or Form 1040A or on line 1 of Form 1040EZ. Senior tax rebate Foster care providers. Senior tax rebate   Payments you receive from a state, political subdivision, or a qualified foster care placement agency for providing care to qualified foster individuals in your home generally are not included in your income. Senior tax rebate However, you must include in your income payments received for the care of more than 5 individuals age 19 or older and certain difficulty-of-care payments. Senior tax rebate   A qualified foster individual is a person who: Is living in a foster family home, and Was placed there by: An agency of a state or one of its political subdivisions, or A qualified foster care placement agency. Senior tax rebate Difficulty-of-care payments. Senior tax rebate   These are additional payments that are designated by the payer as compensation for providing the additional care that is required for physically, mentally, or emotionally handicapped qualified foster individuals. Senior tax rebate A state must determine that the additional compensation is needed, and the care for which the payments are made must be provided in your home. Senior tax rebate   You must include in your income difficulty-of-care payments received for more than: 10 qualified foster individuals under age 19, or 5 qualified foster individuals age 19 or older. Senior tax rebate Maintaining space in home. Senior tax rebate   If you are paid to maintain space in your home for emergency foster care, you must include the payment in your income. Senior tax rebate Reporting taxable payments. Senior tax rebate    If you receive payments that you must include in your income, you are in business as a foster care provider and you are self-employed. Senior tax rebate Report the payments on Schedule C or Schedule C-EZ (Form 1040). Senior tax rebate See Publication 587, Business Use of Your Home, to help you determine the amount you can deduct for the use of your home. Senior tax rebate Found property. Senior tax rebate   If you find and keep property that does not belong to you that has been lost or abandoned (treasure-trove), it is taxable to you at its fair market value in the first year it is your undisputed possession. Senior tax rebate Free tour. Senior tax rebate   If you received a free tour from a travel agency for organizing a group of tourists, you must include its value in your income. Senior tax rebate Report the fair market value of the tour on Form 1040, line 21, if you are not in the trade or business of organizing tours. Senior tax rebate You cannot deduct your expenses in serving as the voluntary leader of the group at the group's request. Senior tax rebate If you organize tours as a trade or business, report the tour's value on Schedule C or Schedule C-EZ (Form 1040). Senior tax rebate Gambling winnings. Senior tax rebate   You must include your gambling winnings in income on Form 1040, line 21. Senior tax rebate If you itemize your deductions on Schedule A (Form 1040), you can deduct gambling losses you had during the year, but only up to the amount of your winnings. Senior tax rebate Lotteries and raffles. Senior tax rebate   Winnings from lotteries and raffles are gambling winnings. Senior tax rebate In addition to cash winnings, you must include in your income the fair market value of bonds, cars, houses, and other noncash prizes. Senior tax rebate    If you win a state lottery prize payable in installments, see Publication 525 for more information. Senior tax rebate Form W-2G. Senior tax rebate   You may have received a Form W-2G, Certain Gambling Winnings, showing the amount of your gambling winnings and any tax taken out of them. Senior tax rebate Include the amount from box 1 on Form 1040, line 21. Senior tax rebate Include the amount shown in box 4 on Form 1040, line 62, as federal income tax withheld. Senior tax rebate Reporting winnings and recordkeeping. Senior tax rebate   For more information on reporting gam